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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]

Author

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  • Barajas, Angel

Abstract

I have designed a valuation method adjusted to the specific characteristics of Spanish professional soccer clubs under the hypothesis that clubs behave financially reasonably. I analyse the factors that define the context where soccer business takes place. I have built a conceptual model that links support, squad quality (proxy by financial criteria), sports results, revenues, investment and socio-economic variables with cash flows, from wich. I obtain the club value. The work is structured in three sections. The first one is a historic and strategic analysis of the sector. The second one deals with the study of the essential factors for value creation in football and the las one shows the valuation methos based on the discounted cash-flow model, using the estimated free cash-flow claculated according to the relationships reached in the previous chapters. I have checked the existence of a high tange of beta value in function of the period of time used on their calculation. So, I propose the use of qualitative betas that gather aspects linked to business risk, financial structure and the characteristics of the managerial team. Afterwards, I determine the weighted average cost of capital and, with it, reach the value of a benchmark club. Finally, I show the viability of the model, not only for valuation, but also in order to manage professional football clubs to create value for shareholders.

Suggested Citation

  • 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.
  • Handle: RePEc:pra:mprapa:13158
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    References listed on IDEAS

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    Cited by:

    1. Mercedes Mareque & Angel Barajas & Francisco Lopez-Corrales, 2018. "The Impact of Union of European Football Associations (UEFA) Financial Fair Play Regulation on Audit Fees: Evidence from Spanish Football," IJFS, MDPI, vol. 6(4), pages 1-20, November.
    2. 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.
    3. 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.

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    More about this item

    Keywords

    Valuation; football; soccer; finances;
    All these keywords.

    JEL classification:

    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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