Insolvencies in Professional Football: A German Sonderweg?

Szymanski, Stefan; Weimar, Daniel

doi:10.32731/ijsf.141.022019.05

Cited by 44 publications

(63 citation statements)

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“…It is further argued that football clubs face a soft budget constraint (following Kornai 1979Kornai , 1980) that drives the overinvestment environment since, from a social perspective, clubs are too big to fail and stakeholders will bail out those clubs in financial distress (Andreff 2007;Storm and Nielsen 2012). A related topic discusses the circumstances for insolvencies in football, the key drivers for which are shocks (e.g., player injuries, relegation) that affect the clubs' financial stability (Scelles et al 2018;Szymanski 2017;Szymanski and Weimar 2019). Beech et al (2010) name(1) relegation, (2) outstanding tax payments, (3) soft debt turning into hard debt, (4) loss of stadium ownership and (5) repeat offenders as the main reasons for insolvency.…”

Section: Overview and Related Literature On Club Financing And Profitmentioning

confidence: 99%

The sky is the limit?! Evaluating the existence of a speculative bubble in European football

et al. 2020

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In light of increasing salaries and transfer fees, the present study investigates the existence of a speculative bubble in European football. By applying the Kindleberger-Minsky model to football, we show that developments in recent years do not meet the criteria of a classic bubble. Although transfer fee spending in recent years does meet the typical pattern seen in historical bubbles, the case of football rather resembles an atypical bubble. This is because the rise in transfer fees for most clubs is largely backed by cash inflows, prompting an elevator effect for transfer fees. Typical bubbles, on the other hand, contain heavy debt-financing in the absence of respective and sustainable cash inflows. Nevertheless, despite the absence of a speculative bubble on the aggregated league level, some individual clubs seem to "live in a bubble". Furthermore, the French and especially Italian leagues should be cautious about overspending. We further discuss the main risk factors that can lead to a turning point in European football's constant revenue growth, including potential implications of a financial downturn.

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Section: Overview and Related Literature On Club Financing And Profitmentioning

confidence: 99%

The sky is the limit?! Evaluating the existence of a speculative bubble in European football

et al. 2020

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“…Einerseits ist es als beachtliches Resultat des etablierten Lizensierungsverfahrens anzuerkennen, dass seit 1963 noch kein Klub der Fußball-Bundesliga während einer laufenden Spielzeit Insolvenz anmelden musste – anders als z. B. in der HBL (Müller ( 2019 ), zu Insolvenzen im professionellen Fußball jüngst Szymanski und Weimar ( 2019 )). Andererseits offenbarte die gegenwärtige Krise die Schwachpunkte einer Fokussierung auf die Illiquidität als Insolvenzgrund.…”

Section: öKonomische Aspekte Der Covid-19-pandemie Im Deutschen Profiunclassified

Consequences of the COVID-19 pandemic for sports economics: The example of German professional soccer

2020

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Zusammenfassung Die COVID-19-Pandemie hat unter anderem auch erheblichen Auswirkungen auf die wirtschaftliche Situation des Sports im Allgemeinen und dem professionellen Fußball im Besonderen. Dieser Beitrag macht sich zur Aufgabe, die wesentlichen Auswirkungen der Pandemie auf den Profifußball in Deutschland zu beleuchten. Hierzu werden die allgemeinen Auswirkungen der Pandemie auf den Sport kurz umrissen, um anschließend die Konsequenzen für den deutschen Profifußball auszuleuchten. Dabei wird ausgehend von den Rahmenbedingungen und Besonderheiten der Teamsportindustrie auf mögliche Lösungswege, wie mit etwaig entstehenden Problemen aufgrund der Pandemie umgegangen werden kann, eingegangen. Im Ergebnis sehen die Autoren klare Vorteile für brancheninterne Lösungen wie einen Solidarfonds oder Maßnahmen der Selbstregulierung gegenüber möglicherweise angestrebten staatlichen Subventionierungen.

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“…The previous research about financial difficulties of football clubs is quite well developed. One of the key authors who researched insolvency of main football leagues in Europe is Szymanski [5,6,7]. He co-published three papers based on English, French and German insolvency in the football league.…”

Section: Introductionmentioning

confidence: 99%

“…The extent to how far down the pyramid the problem of insolvency is concentrated varies by country, but for England, France and Germany the phenomenon is almost unknown for clubs when they play in the top division. By contrast, it is quite common in the third tier in each country [7].The countries which have long imposed regulatory constraints on club finances, such as France and Germany, are no less susceptible to this pattern of financial distress of football clubs than countries which traditionally have not (England).…”

Section: Introductionmentioning

confidence: 99%

Football Clubs Drowned by Players

Perechuda

2020

Polish Journal of Sport and Tourism

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Introduction. The insolvency in football was explained by the underperformance of a football club, either in terms of its ability to achieve playing results which depends on the quality of players on the staff, or in terms of its ability to generate a level of revenue consistent with performance in the league. Hence, two questions were addressed in the study: how deep will the European football crisis be after 2020 and are payrolls the most sensitive factor of football business performance?Material and Methods. The study was based on the European football clubs data derived from the annual financial statement. A descriptive statistics analysis was performed in order to find out how significant salary indicators are in comparison to other football clubs’ performance measures. In order to establish the scale of changes in football finance in 2020, a basic stress test analysis was implemented.Results. The study established that salary to revenue indicator is one of the most significant for football clubs’ performance. Thus, as the first step, the analysis of revenue reduction was elaborated and in the second step, the analysis of the reduction of salaries was performed. The presented stress test scenario implied that the situation of European football would change dramatically under the assumption of 50% reduction of the annual revenue.Conclusions. The study established that the football clubs’situation is too serious not to be carefully managed due to cost and revenue performance.

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Insolvencies in Professional Football: A German Sonderweg?

Cited by 44 publications

References 0 publications

The sky is the limit?! Evaluating the existence of a speculative bubble in European football

The sky is the limit?! Evaluating the existence of a speculative bubble in European football

Consequences of the COVID-19 pandemic for sports economics: The example of German professional soccer

Football Clubs Drowned by Players

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