A Financial Health Therapy for Spanish Football: Stop the Bleeding and Capital Injection

This working paper, after changes, has been published as: 'Spanish Football in Need of Financial Therapy: Cut Expenses and Inject Capital', International Journal of Sport Finance, Vol. 9 (1), February 2014

26 Pages Posted: 11 Feb 2014

See all articles by Ángel Barajas

Ángel Barajas

National Research University Higher School of Economics, SPB; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Plácido Rodriguez

Universidad de Oviedo - Facultad de Economicas

Date Written: March 18, 2013

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. A programming model is developed to estimate the values of the different variables included in the model required for clubs to demonstrate a sound financial condition. 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, Z-score

JEL Classification: G33, J30, M4

Suggested Citation

Barajas Alonso, Ángel and Rodriguez Guerrero, Plácido, A Financial Health Therapy for Spanish Football: Stop the Bleeding and Capital Injection (March 18, 2013). This working paper, after changes, has been published as: 'Spanish Football in Need of Financial Therapy: Cut Expenses and Inject Capital', International Journal of Sport Finance, Vol. 9 (1), February 2014. Available at SSRN: https://ssrn.com/abstract=2392533 or http://dx.doi.org/10.2139/ssrn.2392533

Ángel Barajas Alonso (Contact Author)

National Research University Higher School of Economics, SPB ( email )

3A Kantemiroskaya
Saint Petersburg, 194100
Russia

HOME PAGE: http://https://www.hse.ru/en/org/persons/127023073

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

Plácido Rodriguez Guerrero

Universidad de Oviedo - Facultad de Economicas ( email )

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

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