This paper is an examination of the football industry, more specifically, of the economic model of the Spanish football league and clubs in comparison with the Premier League (England), the Bundesliga (Germany) and Major League Soccer (United States).
A persistent lack of profitability is threatening European football and particularly clubs in Spain. This situation has been provoked by a sport model that has driven clubs to make great and uncontrolled investments in order to lift trophies. Study of different sport cultures and traditions suggests that certain features of business models used by football clubs in other countries may be successfully adapted to help stabilize and improve the profitability of those European leagues that have been struggling.
Recognizing that the profits of a sports league decrease as competitive balance declines, this paper will propose several measures in order to promote a certain degree of competitive balance which results in greater unpredictability about the result. Specifically, this paper proposes the (1) fairer distribution of broadcasting revenues among all the teams of the league, (2) implementation of a salary cap in order to reduce clubs’ costs and (3) coach stability in order to reduce clubs’ expenses and to build a long term business plan.
A persistent lack of profitability is threatening European football and particularly clubs in Spain. This situation has been provoked by a sport model that has driven clubs to make great and uncontrolled investments in order to lift trophies. Study of different sport cultures and traditions suggests that certain features of business models used by football clubs in other countries may be successfully adapted to help stabilize and improve the profitability of those European leagues that have been struggling.
Recognizing that the profits of a sports league decrease as competitive balance declines, this paper will propose several measures in order to promote a certain degree of competitive balance which results in greater unpredictability about the result. Specifically, this paper proposes the (1) fairer distribution of broadcasting revenues among all the teams of the league, (2) implementation of a salary cap in order to reduce clubs’ costs and (3) coach stability in order to reduce clubs’ expenses and to build a long term business plan.
