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
Date Written: March 18, 2013
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: Suggested Citation