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Spanish Football in Need of Financial Therapy: Cut Expenses and Inject Capital

Author

Listed:
  • Ángel Barajas

    () (University of Vigo)

  • Plácido Rodríguez

    () (University of Oviedo)

Abstract

European football in general and Spanish football in particular is experiencing huge financial difficulties. This paper analyzes Spanish clubs during the period from 2007 until 2011, using Altman’s models to classify clubs according to their Z-score values. Through these models, the determinants of the clubs’ poor financial situation are identified. The evidence suggests that Spanish football is in very poor financial condition. To improve its situation what is required is a substantial injection of capital funding through issuing shares or asking for substantial contributions from members, increasing revenues, reducing wages and salaries, and working to reduce current liabilities.

Suggested Citation

  • Ángel Barajas & Plácido Rodríguez, 2014. "Spanish Football in Need of Financial Therapy: Cut Expenses and Inject Capital," International Journal of Sport Finance, Fitness Information Technology, vol. 9(1), pages 73-90, February.
  • Handle: RePEc:jsf:intjsf:v:9:y:2014:i:1:p:73-90
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    Citations

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    Cited by:

    1. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
    2. 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.
    3. Scelles, Nicolas & Szymanski, Stefan & Dermit-Richard, Nadine, 2016. "Insolvency in French Soccer," MPRA Paper 71219, University Library of Munich, Germany.

    More about this item

    Keywords

    insolvencies; financial crisis; professional soccer; administration; Z-score;

    JEL classification:

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

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