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The Other Side of the “League of Stars”: Analysis of the Financial Situation of Spanish Football

Author

Listed:
  • Rudemarlyn Urdaneta-Camacho

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain)

  • Juan Carlos Guevara-Pérez

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain
    IGOID Research Group, Department of Physical Activity and Sport Sciences, University of Castilla-La Mancha, 45071 Toledo, Spain)

  • Emilio Martín Vallespín

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain)

  • Néstor Le Clech

    (Department of Economics and Business, National University of Quilmes, Roque Sáenz Peña 352, Bernal B1876, Buenos Aires, Argentina)

Abstract

This paper analyses the effectiveness of the financial control system implemented by the Spanish professional football League in 2015 as a tool to improve the governance of clubs in the first and second divisions as well as its probable impact on competition. Classic financial ratios are used to analyse the financial situation of the clubs both before and after the implementation of the Regulation, as well as during the first season affected by the COVID-19 pandemic. Next, the Herfindahl index is calculated to measure the concentration in the distribution of the main funding sources and is incorporated as a dependent variable in a regression model. Although a cause–effect relationship is not certain, the results suggest that the economic control measures imposed by LFP have contributed to improving the financial situation of Spanish football in the short term, but may promote imbalances between clubs that undermine the sustainability of the current management model and, therefore, of the competition system. Unlike in other sectors, the football business requires more competition to maximise profits. In this context, it would be advisable to reach agreements between clubs to weaken the bargaining position of footballers. The paper shows the effect of the intervention of a regulatory body, in this case, LFP, in the functioning of a competitive market.

Suggested Citation

  • Rudemarlyn Urdaneta-Camacho & Juan Carlos Guevara-Pérez & Emilio Martín Vallespín & Néstor Le Clech, 2022. "The Other Side of the “League of Stars”: Analysis of the Financial Situation of Spanish Football," IJFS, MDPI, vol. 11(1), pages 1-18, December.
    • Handle: RePEc:gam:jijfss:v:11:y:2022:i:1:p:3-:d:1011721
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    References listed on IDEAS

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