Spanish Football Clubs Finances: Crisis and Player Salaries

Angel Barajas and Plácido Rodríguez ()
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Plácido Rodríguez: Oviedo University, Observatorio Económico del Deporte

International Journal of Sport Finance, 2010, vol. 5, issue 1, 52-66

Abstract: This paper shows the current financial situation of Spanish professional football. Different financial ratios are used in order to classify the financial position of the different teams. The study has been split between clubs in First or Second division. We also analyze the relationships between the size of market, team payrolls, and team performance. We demonstrate the financial problems created by the arms race that clubs have started for getting the most talented players for trying to get the best possible sporting outcome. The new Spanish Law for companies in financial distress has implied that nine clubs are technically insolvent and under administration. We have searched for possible explanations of that situation. Nevertheless, our financial variables do not explain the likelihood that a club goes into administration.

Keywords: finance; player salaries; performance; financial distress; soccer; under administration (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2010
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International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

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