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Spanish Football Clubs Finances: Crisis and Player Salaries

Author

Listed:
  • Ángel Barajas

    () (University of Vigo, Observatorio Económico del Deporte)

  • Plácido Rodríguez

    () (Oviedo University, Observatorio Económico del Deporte)

Abstract

This paper shows the current financial situation of Spanish professional football. Different financial ratios are used in order to classify the financial position of the different teams. The study has been split between clubs in First or Second division. We also analyze the relationships between the size of market, team payrolls, and team performance. We demonstrate the financial problems created by the arms race that clubs have started for getting the most talented players for trying to get the best possible sporting outcome. The new Spanish Law for companies in financial distress has implied that nine clubs are technically insolvent and under administration. We have searched for possible explanations of that situation. Nevertheless, our financial variables do not explain the likelihood that a club goes into administration.

Suggested Citation

  • Ángel Barajas & Plácido Rodríguez, 2010. "Spanish Football Clubs Finances: Crisis and Player Salaries," International Journal of Sport Finance, Fitness Information Technology, vol. 5(1), pages 52-66, February.
  • Handle: RePEc:jsf:intjsf:v:5:y:2010:i:1:p:52-66
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    Citations

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    Cited by:

    1. Saldsieder Nina & Wentzel Dirk, 2014. "Ordnungsfragen des europäischen Profifußballs: Das Konzept des Financial Fair Play und seine Erfolgsaussichten / The Concept of Financial Fair Play and his prospects of success," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 65(1), pages 229-262, January.
    2. repec:hal:journl:halshs-00971782 is not listed on IDEAS
    3. Pamela Wicker & John C. Whitehead & Bruce K. Johnson & Daniel S. Mason, 2016. "Willingness-To-Pay For Sporting Success Of Football Bundesliga Teams," Contemporary Economic Policy, Western Economic Association International, vol. 34(3), pages 446-462, July.
    4. Colin Green & Fernando Lozano & Rob Simmons, 2015. "Rank-Order Tournaments, Probability of Winning and Investing in Talent: Evidence from Champions' League Qualifying Rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232(1), pages 30-40, May.
    5. Stephen Morrow, 2014. "Football finances," Chapters,in: Handbook on the Economics of Professional Football, chapter 6, pages 80-99 Edward Elgar Publishing.
    6. Pamela Wicker & John C. Whitehead & Bruce K. Johnson & Daniel S. Mason, 2016. "The Effect of Sporting Success and Management Failure On Attendance Demand In The Bundesliga: A Revealed and Stated Preference Travel Cost Approach," Working Papers 16-02, Department of Economics, Appalachian State University, revised 2016.
    7. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    8. Stefan Szymanski, 2011. "Sport Financing and Governance in Europe," Chapters,in: Contemporary Issues in Sports Economics, chapter 4 Edward Elgar Publishing.
    9. Andrews, Matt & Harrington, Peter, 2016. "Off Pitch: Football's Financial Integrity Weaknesses, and How to Strengthen Them," Working Paper Series 16-009, Harvard University, John F. Kennedy School of Government.
    10. repec:bla:scotjp:v:64:y:2017:i:4:p:419-444 is not listed on IDEAS
    11. Scelles, Nicolas & Szymanski, Stefan & Dermit-Richard, Nadine, 2016. "Insolvency in French Soccer," MPRA Paper 71219, University Library of Munich, Germany.
    12. Stefano Vecchione & Francesco Addesa, 2012. "Il Regime Fiscale Dei Calciatori: Un’Analisi Economica Comparata," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 8(3), pages 49-71, dicembre.
    13. Di Minin, Alberto & Frattini, Federico & Bianchi, Mattia & Bortoluzzi, Guido & Piccaluga, Andrea, 2014. "Udinese Calcio soccer club as a talents factory: Strategic agility, diverging objectives, and resource constraints," European Management Journal, Elsevier, vol. 32(2), pages 319-336.

    More about this item

    Keywords

    finance; player salaries; performance; financial distress; soccer; under administration;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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