Academic journal article International Journal of Sport Finance

Guest Editor's Note: The Financial Crisis in European Football: Proceedings of the Conference on Football and Finance

Academic journal article International Journal of Sport Finance

Guest Editor's Note: The Financial Crisis in European Football: Proceedings of the Conference on Football and Finance

Article excerpt

The revenues of professional football clubs in Europe have increased enormously over the last decades. The big five European leagues (England, France, Germany, Italy, and Spain) in 2007-08 generated revenues of almost [euro]10 billion, of which [euro]3 billion have to be attributed to the English Premier League and [euro]1.8 billion each to the Spanish "La Liga," the Italian "Serie A," and the German "Bundesliga."

According to Deloitte & Touche LLP, individual clubs such as Manchester United, Real Madrid, FC Barcelona, Bayern Munich, and FC Chelsea now have annual revenues exceeding [euro]400 million. Moreover, according to the most recent Forbes soccer team valuations, these clubs have market values of more than [euro]800 million each. However, in some cases the increase in revenues and market values was by far exceeded by the growth in debts-liabilities as a percentage of market value is now at more than 50% at Manchester United, 90% at Chelsea, and 25% at Madrid. Of the top five clubs in Europe, only Bayern Munich is free of any liabilities.

English Premier League clubs have accumulated liabilities exceeding [euro]4 billion, of which almost two thirds are related to Arsenal, Chelsea, Liverpool, and Manchester United. Although somewhat different, the situation in the German Bundesliga, usually considered economically healthy, has also deteriorated recently. …

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