Capital structure of Iberian football clubs: does sport performance matter?

Abstract

The main objective of this paper is to study the capital structure determinants of the major Spanish and Portuguese football clubs, in particular the impact of their sport performance on leverage. Football clubs were chosen because of their public relevance and also because the sector’s capital structure has hardly been studied, in particular in the Iberian Peninsula. The obtained results could be useful to football clubs’ managers, particularly in regard to their capital structure management. Using panel data methodology and considering a sample of 32 football clubs organised as public limited sports companies, we study the capital structure determinants between 2010 and 2015, adding a set of sport performance variables. The results suggest that size, total liquidity and asset intangibility are key factors affecting the capital structure and that pecking order theory seems more suited to those companies, whereas sport performance variables are irrelevant.