The Spanish Football Crisis

Abstract

This article analyses the economic results of Spanish professional football teams using data collected over the past few years. These data differ substantially from the information presented in the annual reports of the “Liga de Fútbol Profesional” (Spanish professional football league), which are obtained from the initial budgets elaborated each season. Special attention is paid to the two most important teams in the Spanish league: Real Madrid and FC Barcelona. The results of this research show that Spanish football has the same problems as those evidenced by the Italian and English football leagues and, therefore, requires similar solutions in order to be able to survive in forthcoming years.

Notes

1. These caveats include, among others, references to the important differences between initial and end of period budgets; to the way teams reflect payments of image rights of players; to the way teams handle value added tax payments in certain operations or to the way teams account the amortization of players’ signing fees.

2. The Liga reports (“Memorias”) displayed detailed information about initial budgets of the clubs until the 2002–2003 season. This information is no longer available since then. See (Liga de Futbol Profesional, several years).

3. These authors have also written a series of seminal works on Spanish football clubs and league.

4. “Reliable Spanish club financial information has not been available for us. Whilst we have obtained a sufficient number of clubs’ accounts to estimate overall turnover, wages and salaries cost for the Primera Liga, it has not been possible to give an indication of turnover breakdown or operating performance. We hope Spanish club financial data will be forthcoming in the future in to order provide accurate comparisons in editions of Deloitte Annual Review of Football Finance” (Deloitte, 2004, p 13).

5. Official documents presented and audited by companies chosen by the club.

6. Not all the profit and loss accounts and annual reports were available in three cases: (i) Small clubs are not obliged to present such documentation as they have not become public limited companies. One example is CD Osasuna; (ii) Clubs that, following relegation, stopped publishing or distributing such accounts in some seasons. One example is Rayo Vallecano; (iii) Extraordinary cases of big clubs such as Deportivo de la Coruña in 2000 and 2001. In any case, the database available is sufficiently robust (it contains real and accurate information covering more than 90% of the necessary total) and makes it possible to fine tune conclusions.

7. Examples of clubs engaged in operations of sales of real estate assets are: Real Madrid sold a sport complex and a corner site on its stadium grounds; Barcelona sold a property in Sant Joan d'Espi; Español and Mallorca have sold their stadiums; Valencia has sold its stadium and is planning a new sports complex where they are going to build houses to sell later. Other clubs like Zaragoza, Bilbao and Atlético Madrid are actually negotiating the sale of their stadiums.

8. In the other sports sections, transfer and signing fees are minimal in relation to the wages and salaries of the players, marking a difference with respect to footballers.

9. This team has won one “Liga ACB” (Spanish Basketball League) and a ULEB Cup in the last five years.

10. The team has won three “Ligas ACB”, three “Copas del Rey” (King's Cups) and one Euroleague Final over the last five years.

11. Which are the data of Liga de Futbol Profesional (LFP) reported by Ascari and Gagnepain (2006).

12. As an illustration, Table A2 in the Appendix gives an itemized knowledge of the situation of each club in the 2000–2001 season.

13. See also Table A2 in the Appendix for detailed club information for the 2000–2001 season.

14. In Football Money League 2006, Real Madrid held first place in total income 2004–2005, while FC Barcelona was in sixth place.

15. Mr Joan Laporta was elected President of FC Barcelona that season.