Spanish Football Clubs’ Finances: Crisis and Player Salaries

Ángel Barajas

1

and Plácido Rodríguez

2

1

University of Vigo, Observatorio Económico del Deporte

2

Oviedo University, Observatorio Económico del Deporte

Ángel Barajas is an associate professor of financial management in the Department

of Accountancy and Finance at the University of Vigo, Spain, and a researcher for

the Spanish Economic Observatory for Sport (Observatorio Económico del

Deporte). His research interests include investment valuation and finance of sports,

particularly professional football.

Plácido Rodríguez is a professor of economics in the Department of Economics at

Oviedo University and director of the Spanish Economic Observatory for Sport

(Observatorio Económico del Deporte). His research interests include sport eco-

nomics, gambling economics, and economic impact.

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 dif-

ferent 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 per-

formance. 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 vari-

ables do not explain the likelihood that a club goes into administration.

Keywords: finance, player salaries, performance, financial distress, soccer, under

administration

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Antonio D. Muñoz

Jesús Acebes

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