The report suggests football lost competitive balance as the transfer market grew into a €3 billion ($4 billion) business across 27 European Union countries in the 2010-11 season.
Brussels-based consultant KEA suggests a growing link "between transfer expenditure and sports results" since 2001.
The Champions League "contributes to consolidating the existing supremacies" as non-participating teams share solidarity payments worth just six percent of revenues shared by the 32 group-stage teams, the report says.
The study also suggests European laws could regulate the third-party ownership of players' transfer rights by investors.
It proposes improving financial transparency by extending FIFA's monitoring system of international transfers to cover domestic deals.