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Deficits of accounting in the valuation of rights to exploit the performance of professional players in football clubs. A case study

Author

Listed:
  • Francisco Martín Lozano

  • Amalia Carrasco Gallego

Abstract

Football players’ transfer rights are the main and core assets in Football Clubs Public Companies (S.A.D.). They are partially recognized as intangible fixed assets in accounting. Internally generated players’ exploitation rights are not reflected in the balance sheet. Only the acquired players’ transfers fees are disclosed but at their historic acquisition cost. These deficits of the accounting standards often lead to net book values remarkably lower than those of transfer market. Through a Case Study, we try to prove the evidence of the enormous hidden values the assets of these firms contain, which are especially patent just a few months later after year end, when players’ transfers are sold from one club to another. Under our opinion, the new Spanish Accounting Standards according to the new underlying principles on which they are based should allow the possibility to amend these deficits of accounting. Copyright Springer Verlag 2011

Suggested Citation

  • Francisco Martín Lozano & Amalia Carrasco Gallego, 2011. "Deficits of accounting in the valuation of rights to exploit the performance of professional players in football clubs. A case study," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(3), pages 335-357, November.
    • Handle: RePEc:spr:metrik:v:22:y:2011:i:3:p:335-357
    DOI: 10.1007/s00187-011-0135-6
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    References listed on IDEAS

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    1. Stephen Morrow, 1999. "The New Business of Football," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37174-3, June.
    2. Carmichael, Fiona & Forrest, David & Simmons, Robert, 1999. "The Labour Market in Association Football: Who Gets Transferred and For How Much?," Bulletin of Economic Research, Wiley Blackwell, vol. 51(2), pages 125-150, April.
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    4. Barajas, Angel, 2004. "Modelo de valoración de clubes de fútbol basado en los factores clave de su negocio [Valuation model for football clubs based on the key factors of their business]," MPRA Paper 13158, University Library of Munich, Germany.
    5. Eli Amir & Gilad Livne, 2005. "Accounting, Valuation and Duration of Football Player Contracts," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(3‐4), pages 549-586, April.
    6. Lev, Baruch & Sougiannis, Theodore, 1996. "The capitalization, amortization, and value-relevance of R&D," Journal of Accounting and Economics, Elsevier, vol. 21(1), pages 107-138, February.
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    Cited by:

    1. Matt Andrews & Peter Harrington, 2016. "Off Pitch: Football’s Financial Integrity Weaknesses, and How to Strengthen them," CID Working Papers 311, Center for International Development at Harvard University.
    2. Warren Maroun & Wayne van Zijl & Rottok Chesaina & Robert Garnett, 2022. "The Beautiful Game: Fair Value, Accountability and Accounting for Player Registrations," Australian Accounting Review, CPA Australia, vol. 32(3), pages 334-351, September.

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