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

International Journal of Sport Finance, Vol. 9 (1)

Posted: 2 Feb 2014

See all articles by Ángel Barajas

Ángel Barajas

University of Vigo - Faculty of Business Administration and Tourism; affiliation not provided to SSRN

Plácido Rodriguez

Universidad de Oviedo - Facultad de Economicas

Date Written: February 1, 2014

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.

Keywords: insolvencies, financial crisis, professional soccer, administration, Altman Z-score

JEL Classification: L83

Suggested Citation

Barajas, Ángel and Rodriguez Guerrero, Plácido, Spanish Football in Need of Financial Therapy: Cut Expenses and Inject Capital (February 1, 2014). International Journal of Sport Finance, Vol. 9 (1), Available at SSRN: https://ssrn.com/abstract=2389293

Ángel Barajas (Contact Author)

University of Vigo - Faculty of Business Administration and Tourism ( email )

Campus as Lagoas
Ourense, Ourense 32004
Spain
0034 988368713 (Phone)
0034 988368923 (Fax)

affiliation not provided to SSRN

Plácido Rodriguez Guerrero

Universidad de Oviedo - Facultad de Economicas ( email )

Campus del Cristo, s/n
Oviedo, Asturias 33071
Spain

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