Spanish football clubs' finances: crisis and player salaries.

Barajas, Angel ; Rodriguez, Placido

Introduction

During the last few years, Spanish professional football has been in a serious financial crisis. Lago et al. (2006) mark the difference between individual and general crisis. They added that the financial crisis coincided in time with increases in revenue. The problem is the imbalance between income and expenditures and, as a consequence, rising debt. The general financial crisis has implied increasing difficulties to meet funding. The real estate crisis has cut the possibility of getting extra cash flows from the stadia.

Ascari and Gagnepain (2006) point out some features of Spanish professional football. They argue that Spanish clubs are not profit maximizers. Most of the football clubs had to become companies. They are special companies called SAD (Sociedades Anonimas Deportivas, which means Sporting Limited Companies) but most of the rules for limited companies apply for them. Nevertheless, four football clubs still remain as members clubs. These clubs are Athletic de Bilbao, Barcelona, Real Madrid, and Osasuna. Two of the biggest clubs for budget, history, and performance on the pitch are not companies. Moreover, there are no Spanish clubs listed in the Stock Exchange as publicly quoted companies. Clubs are backed by the financial institutions and authorities of their regions. Finally, the individual bargaining of television rights and the outstanding expenditure on wages and transfers are the characteristics that complete the panorama of Spanish football.

In the last three decades, there have been two main plans for restructuring the finances of Spanish football. In 1985, the level of debt was around 124 millions [euro]. The public authorities decided to help the football industry in order to reduce that debt. But soon, in 1991, the situation was dramatic again. At that time the adopted decision was the conversion of clubs into companies. It was expected that, by running the clubs as conventional businesses, the owners should be more careful looking after their own economic interest. CSD (Superior Sport Council in Spain) and LFP (La Liga) signed an agreement in order to cancel the existing debt (192 mill. [euro]) with public administrations. This was cancelled through an increase of share in pools from 2.5% to 7.5%. Besides, clubs could postpone the payment of 48 million [euro] thanks to a loan guaranteed by LFP (Garcia & Rodriguez, 2003).

Barajas (2004) concludes that in Spanish professional football there is a lack of financial transparency. For example, there are often delays in the duty of presenting the Financial Statements. Moreover, there are numerous exceptions in the auditing reports. He points out some features of Spanish professional football like the high weight of expenses on players in costs, a clear difference between capacity of generating revenues in First and Second Division, the growing level of indebtedness (worse in Second Division), and that the "Yo-yo" clubs have higher debt than the other clubs of Second Division. Finally, the existence of an escape clause in the contracts of players is a peculiarity of Spanish football.

In the last few years, a total of nine clubs have suffered from serious financial distresses having to invoke club's rights under the 22/2003 law also known as Concursal Law. Those clubs are under administration once the creditors have agreed the conditions of the viability plan presented by the clubs. Administration is roughly analogous to Chapter 11 bankruptcy in USA.

In this context, it is interesting to probe deeper into the financial situation of Spanish football. Thus, first of all, in the following section we will show the lack of quality in financial information in Spanish clubs based on the audit reports that goes with the annual accounts. In this case, the analysis has been made for 2006-07 season accounts. Subsequently, we will show information about the clubs' financial statements as at June 30th 2008.

We look for reasons to explain the current financial situation in Spanish football. For that, we show some econometrics studies based on the model of Szymanski and Smith (1997) combined with Buraimo et al. (2007) in order to include the effects of the team wage bill and the team's market size. We also look for some justification through the main financial variables to explain the reasons why some clubs are under Administration. For that, we estimate a logistic regression model. Finally, the paper concludes with a summary of the results obtained and our conclusions.

The Quality of Financial Information in Spanish Football

The financial information given by Spanish football clubs suffers from a lack of quality. There are a lot of unqualified opinions in the audit reports. Particularly, in the annual accounts of the professional football clubs at the end of the 2006-07 season, we have observed that only the 20% of the clubs presented a clean audit report. In 45% of the reports there were one or two unqualified opinions, which extended to three or four in 25% of the reports and in the remaining 10% there were more than five unqualified opinions.

The most common typology of the unqualified opinions is related to fiscal aspects (23%), followed by those referring to the valuation of assets, mainly the players' transfer values (22%). There are also several unqualified opinions concerning shareholders equity (16%) and the capability of sustaining the business (14%). Less frequent are other type of unqualified opinions like not allocating the correct provisions (11%), the accounting of income (7%) and expenses (5%), or not having done the consolidated annual accounts (2%).

Thus, to sum up, we can point out that the lack of quality in Spanish football financial information is summarized in the following aspects:

* Fixed assets exceptions

--Changes in the criteria of amortization of intangible assets

--Not endowed amortization

--Uncertainty in the agreement (payment in exchange for federative rights on players) with players

--Incorrect accounting of training costs of the players as assets

--Extraordinary profit for appraisements of intangible and material assets

--Rights of transfer doubtful reasonability

* Expenses exceptions

--Undervaluing of extraordinary expenses

--Undervaluing of early long-term taxes

* Continuity of the company

--Funding needed for the continuity of the company

--Uncertainty of the continuity of the company

* Provisions not endowed

* They have not formulated annual consolidated accounts

* Incomes exceptions

--Incorrect record of incomes

--Undervaluing of incomes to distributing in several exercises

--Extraordinary incomes for constitution of the subsidiary

* Liabilities and net patrimony exceptions

--Minoration of own funds

--Additional liabilities to register

--Incorrect record of obligations (it must be an expense and it was registered as an increase of the assets)

--Overvaluation of consolidated net worth

* Tax exceptions

--Value of tax inspections without imputing to expenses

--Incorrect activation of tax credit

--Uncertainty on not quantified liabilities relative to the public Administration

--Tax provisions not endowed

The conclusion is clear. When studying the financial situations of the clubs, it is necessary to be conscious of the limitations derived from the low quality of the information that they provide. However, it is better to study what is available for us than remain without trying to understand this industry. On the other hand, the fact that the exceptions are quite similar makes it possible to extract some valid conclusions to understand the sector as a whole.

The Financial Situation of Professional Football in Spain.

The financial situation in Spanish football has been poor in general along its history but has being getting worse during the last few years. Garcia and Rodriguez (2003) pointed out that the global debts of professional football rose to 1,644.9 million [euro] at the end of the 2000-01 season. Barajas (2004) warns that the indebtedness of the clubs follows an increasing pattern from 1998 to 2002. Moreover, he shows that the expenditure structure makes it very difficult to make profits. Subsequently, Ascari and Gagnepain (2006), with data up to 2003, show that the situation of Spanish football represents structural weaknesses in club accounts. But, according to them, the situation seems to be less serious than others from the most important European leagues, such as Italy. They point out that public funding is why the situation of Spanish clubs is slightly better.

Bosca et al. (2008) conclude that Spanish football suffer the same problems that the Italian and English leagues have. They also point out the convenience of using similar solutions in those countries for sustainability of the football industry.

Gay Saludas (2009a, 2009b) makes a detailed analysis of the accounts of First Division football clubs at the end of 2006-07 season. In his research, it stands out that clubs have excessive assets that lead them to indebtedness above reasonable levels. This leads to imbalance in the short run and also lack of reliability, liquidity tensions, and financial dependence. Operating expenses exceed their incomes. As a consequence, the economic model of Spanish football is hardly sustainable.

Following these works, it seems interesting to keep going deeper into the financial analysis of the Spanish professional football clubs' accounts. In our case, our innovation with respect to the cited studies is that we are going to analyze, not only Spanish First Division football clubs (Liga BBVA), but also almost all of the Second Division A clubs (Liga Adelante). The database we work with is made up of the annual reports of the clubs (balance sheet, income statement account). We have the financial reports of 19 clubs of Liga BBVA and 16 clubs of Liga Adelante. It means that we only miss one club of Fist Division and six of Second Division.

Financial ratios are commonly used in order to detect financial distresses. There are many of them but not each one fits for football industry.

We have had as references the papers about financial distress by Beaver (1966), Altman (1968), Altman et al. (1977), Dimitras et al. (1999), Philosophov and Philosophov (2002), and Alfaro-Cid et al. (2009). We have used some of the ratios employed by them. We have introduced also some other ratios used by ESIC in a study for the LFP, as well as their classification for qualify the clubs.

Regarding financial distress and financial crisis, the works by Beaver (1966), Altman (1968), Altman et al. (1977), and Dimitras et al. (1999) have been useful in order to choose some of the ratios employed in this paper. The work of Morrow (1999) provides some specific ratios for football industry.

Considering the cited papers, we have selected some financial ratios commonly used and added some more related to the football industry and some general criteria linked to dissolution causes included in the "Concursal Law." The Annual Accounts of the clubs analyzed are the ones that are closed the June 30, 2008. These are the last ones presented by the clubs and the Sporting Limited Companies (SAD) until the present. For comparative purposes, accounts from June 30, 2007, have been also analyzed.

Specifically, the ratios used have been the Financing rate, indebtedness ratio, capacity of refunding the debt, coverage of interests, ROA and ROE, the weigh of the expenses on players in the operating results, and the wealth situation according to Article 260 of the Spanish Law for Firms [Ley de Sociedades Anonimas (LSA)].

The financing rate reflects the relationship between current liabilities and current asset. It is the reverse of the liquidity ratio and reports the amount of financing in the short run for each euro from the current assets. This means that any value exceeding one points out that part of the non-current assets are financed with short-term resources and, in consequence, that the company does not have liquid or semi-liquid assets to face the payments in the short run.

The indebtedness ratio shows the proportion that Total Debts of the club represent relative to its Total Assets. This ratio should be less than one in any case because if not, the company will not be able to face its debt using the assets it owns. This situation would indicate that the shareholders' equity is negative.

We consider it interesting to measure the relationship existing between Total Income of the company and its Total Indebtedness. In some way, this ratio gives us an idea of how long it would take for the company to amortize the debt if it uses the total turnover for debt service. Obviously, none of the clubs will be able to use that total amount because it will have to face the different necessary expenses to obtain those incomes. However, it is illustrative of the proportion of the debt regarding the size of the company measured by its incomes.

The economic and financial return (ROA and ROE, respectively) relate the operating results or the net benefits to the investment made. The big problem that arises when we work with football clubs is that many of them announce losses, which minimize the meaning of this ratio.

The production function of football is linked to the sports entertainment to audiences offered in the matches. Players are, therefore, essential elements to develop team production. So, they represent one of the main parts of the expenses including the wages and the amortization of their transfers. Thus, it is useful to look at the proportion of resources used to maintain sporting performance. We examine this through the ratio of staff expenses to total revenues. Kesenne (2009) argues that this proportion must be placed under the 67% for profit maximizing clubs. This parameter can be a good reference, at least for clubs that aspire to have no losses.

Finally, we will check if clubs present situations like the one contemplated in Article 260 of the Limited Companies Law (LSA). This shows the causes of dissolution of the limited companies (SA). Among them, for the purposes of our research, the following stands out: By consequence of losses that leave the net wealth reduced to an amount inferior to the half of the capital stock, unless this is not increased or decreased in enough measure, and always that it is not appropriate to request the declaration of administration according to what is exposed in the Concursal Law.

So, we can offer clear criteria to know which are the clubs under a critical situation and, also, which clubs should adopt the opportune measures to re-establish the wealth balance of the company. Otherwise, they would be doomed to dissolution.

The results obtained from the calculation of these ratios reveal a discouraging panorama of the financial situation of Spanish football clubs. The diagnostic can be done in an individual or aggregated way. Table 1 shows the average situation of First and Second Division clubs, according to some of the ratios exposed previously. According to this, the situation of the First Division average is a warning with regard to the financing rate. There are also even more concerns regarding indebtedness and the expenses of players by operating revenue. The situation is seen as critical if we look at the capacity to refund club debts. The situation gets worse for the Second Division due to the worrying financing data as well as the excessive expenses on players. The situation in the Second Division is critical with respect to club indebtedness and the capacity of clubs to refund the debt.

Table 2 shows the percentage of clubs that are in each situation according to each ratio, under the established parameters. It is clear that few clubs show a good situation. Specially, if we look at three of the ratios, the main situation of the clubs is critical: 45.7% is much too high a number for indebtedness (TD/TA). Also, 57.1% of the clubs have very low capacity to refund the debt (TD/TR) and 40% of the clubs have an excessively high ratio of expenses on players relative to operating revenues.

To summarize other ratios not reported in Table 2, 88.6% of the clubs have a very low capacity of payment of interest on debt with their operating expenses (1). We see that the same percentage has operating losses (ROA), and that 40% of clubs show losses at the bottom line (ROE). Thus, the diagnostic of the financial health of Spanish professional football appears to be very serious. Moreover, 51.4% of the clubs are close to dissolution according to Article 260 of the LSA.

Independently of the ratios obtained, it is also interesting to know the global volume of the debt that the professional Spanish football clubs have. Here we show an estimation of the main liabilities of the whole of the professional football clubs. That estimation has been made by extrapolating from the data of the 19 clubs of First Division and the 16 clubs of Second Division for which we have obtained their Annual Accounts.

Table 3 summarizes the results of the estimation of the debt in Spanish football. The information is presented broken down into short and long term as well as according to the Divisions. Debt with staff at June 30, 2008, would rise to approximately 300 million [euro], of which almost the 90% belongs to the First Division clubs. If we compare this to what happened just one year before, we observe that has been duplicated. As of June 30, 2007, the clubs in total owed their staff more than 140 million [euro]. We have to consider that almost all of these debts are owed to players.

The debt with the public institutions like the Tax Authority or Social Security is almost 630 million [euro], of which more than half of them had a short-term due date. First Division clubs owe 82% of this total. In a financial year, the debt of professional football with public administrations increased by nearly 227 millions [euro].

In 2007, total debt levels among Spanish clubs or with other sporting

firms were 265 million [euro] and rose to 561 million [euro] in 2008. More than the 98% of this debt belong to First Division clubs. This is reasonable because, to a large extent, this type of indebtedness has its origin in the sales of players in the transfer market for cash, and the more expensive transfers were made by First Division clubs.

However, the debts of the clubs with credit institutions have been reduced slightly. As at June 2007, clubs owed more than 750 million [euro] to the financial institutions, and in one year, this has been reduced slightly to 732 million [euro]. In a parallel way, a bigger cut in the short-term debt has occurred while there has been a slight increase in the long-term debt. Thus, the liquidity crisis that has affected the financial system has touched Spanish football. The consequences are clear. Part of the short-term indebtedness has been restructured to the long term and no new financing has been achieved. The effect is that the clubs have been forced to find other ways of obtaining monetary resources. The simplest way is to go to the so-called "forced resources," which means those resources that are not negotiable and are obtained in a more or less spontaneous way. An example is to lengthen the terms of payment, or, simply to not pay by the due date. As consequence, we observe an increase of the debts with public administrations, with the employees and with other sporting bodies.

The Effect of Team Payrolls on Revenues Through Team Performance

Following the model of Szymanski and Smith (1997), and adding the market size effect according to Buraimo et al. (2007), we have estimated the following model with Spanish data (season 2007-08).

The model is:

Revenue = f(club performance, market size), (1)

and

Performance = g(wage bill, market size) (2)

An adaptation of Szymanski's Ranking (RS) (Szymanski & Smith, 1997) has been taken as measure of the club performance to our database which includes only clubs from First and Second Division. This means 42 teams. In that expression, p represents the final position that each club reached at the end of the season from 1 (the first of top Division) to 42 (the last one).

Rs - -ln([p/[43 - p]])

Another much-used measure of club performance is the total accumulated points in the League competition. This entails adding the points of the winning club in the Second Division to the points achieved by each club in First Division.

We work with two proxy variables for market size: population of the municipality and the population of the province of the team. Both have been adjusted when two or more clubs are in the same council or province. This adjustment has been done considering the attractiveness of the team according to the average attendance of the club in the previous season.

The variable that reflects the expenses on players is measured by the relative wage bill following Szymanski and Kuypers (1999). This means that we use a particular team's expenses on player' salaries divided by the League average (RWB[WP]). But we also consider the expenses on players' salaries and amortization of players (RWB[W+A]). We also consider the logarithm of players' wages (lnW) and the logarithm of player's wages and their amortization (ln[W+A]).

Working with revenues, we use the total ordinary revenue (TOR), the revenue coming from sporting activities (SA), the revenues from sales on television right (TV), and revenues from matchday.

We estimate our model for 35 First and Second Division clubs as a single season cross-section. The data referring to population, attendance at the stadia and the financial variables all belong to 2008.

The results obtained are summarized in Tables 4 and 5. We can assert that the team League outcome, measured by the Szymanski Ranking, is significantly explained by the expenses on players (see Table 4). Nevertheless, in general, the explanatory power of the regression equation is relatively low, with an [R.sup.2] of 64%. The variable that best explains the sporting outcome is the logarithm of the total expenses on players (including the wages and the amortizations).

Regarding the revenues (Table 5), we can say that these are explained by both the market size (the population of the province adjusted for number of teams) and the sporting outcome. This applies both to the total operating revenues with an [R.sup.2] of 82% by the sport outcome and also explains the revenues from the sales of TV rights, with an [R.sup.2] of 78%.

Besides, there exists a correlation (significant at the 0.01 on a two-way test) between total revenues and expenses on players of 0.972.

This result is consistent with the idea of an arms race that clubs have started for getting the most talented players to try to get the best possible League position and, subsequently, taking account of their market size, obtaining the higher revenues possible, which are then re-invested in playing talent through team payrolls. However, a great difference exists in the effort that the clubs can make to pay the most talented players between both divisions. The best teams in terms of League position are those that have made a greater effort in hiring players who get higher wages. It is also evident that in general terms expenses on players in Liga Adelante clubs (Second Division) are much less than in Liga BBVA (First Division). Finally, it is noteable how some clubs have been inefficient when they spend their money on players. An example of this from the First Division is Valencia, whose league position is below the level that our model predicts for its team payroll.

Why Some Clubs are Under Administration

One of the consequences of the investment effort and the expenses on players made by the clubs to try to achieve the best possible sport outcomes is that the clubs are suffering from serious financial difficulties as shown above. At this point, we attempt to find out if there is a variable or number of variables that explain the fact of a club being under administration.

It can be supposed that the main financial ratios will be good indicators of the possibility of the existence of a business failure. The papers of Alfaro-Cid et al. (2009) and Mora et al. (2007) suggest some possible indicators. Following these papers, we have decided to choose as explanatory variables of the business failure, some of the variables that we have discussed in previous sections.

The logistic regression has been commonly used to try to explain or predict the financial failure of companies (Balcaen & Ooghe, 2006; Dimitras et al. 1999). The regression model we use is the following. The dependent variable is a categorical variable that call 'Failure' (F). This has the value of 0 if a club is not under administration and 1 if it is. Among the sample of 35 clubs, there are six that were under administration in 2008, which is the single year that we study. This is going to be a limitation for the model and future work should establish a panel data model. This logistic regression model does not work well with a small sample size and this is an obvious limitation of our analysis.

Our model is:

Failure = f(financial variables, division) (3)

Usually, financial ratios have been employed in business analysis and researchers have created forecast models of financial failure using these ratios (McGurr & Devaney, 1998). For that reason, the selected explanatory variables are mainly financial ones. We have chosen financing rate, indebtedness, total revenues over the debt, and expenses on staff over the operating revenues, as defined earlier. In addition to these, we have added the ratio that relates the short-term debt to the long-term debt and, finally a dummy variable that, without being financial, seems to be relevant for the football industry. This is the division that

a given club belongs to. We expect that this variable has explanatory power, as until the date, all the clubs under administration have come into this situation when they were relegated to the Liga Adelante (Second Division). This categorical variable takes value 1 (Liga BBVA) in 19 cases and value 2 (Liga Adelante) in 16 cases.

We estimate our logistic regression model by forward steps in which variables with insignificant coefficients are deleted. Table 6 shows that in step 1 only the Division variable has a significant coefficient and consequently it is retained in the model for the next step. Nevertheless, in the final step, when we included the Division dummy, it returns an insignificant coefficient.

The result obtained differs from the one that would be expected a priori in an analysis of ordinary companies because none of the variables explains in a significant way the event that any club is under administration. However, if we think about this result, it is easy to find a rational explanation. Football clubs in Spain are able to support a situation of legally financial insolvency while they play in the Liga BBVA (First Division). First of all, their capacity for generating revenues is sufficiently high for creditors to have a reasonable expectation of being able to collect the debts. Second, the creditors do not want to take a measure so unpopular with their customers as requesting the bankruptcy situation for a football club. This involves a great number of clubs that have financial ratios that correspond to companies with a bankruptcy situation or payment suspension. However, despite these poor ratios, creditors have not requested that clubs go into administration under the Concursal Law. This is the reason why the financial variables are not significant. Regarding the Division variable, we have to point out that a club under administration may have been promoted to the Liga BBVA (First Division), as, in fact, has occurred to teams like Sporting de Gijon or Malaga.

Conclusions

When studying the financial situations of the clubs, it is necessary to be conscious of the limitations derived from the low quality of the information that they provide. Nevertheless, according to the data from the financial statements at June 2008, the Spanish Football Industry Business model presents a serious structural deficiency. The data from the top two divisions of Spanish League football are worrying, if not critical. Debt is higher than the total amount of assets in 34.3% of the clubs. Even worse, debt exceeds total revenues in 71.4% of the cases. Some 88.6% of the clubs have operational losses. That implies that the average situation of the First Division is on warning regarding to the financing rate, worrying regarding indebtedness and the ratio of expenses of players to operating revenue, and critical if we look at the capacity to refund debts. The situation gets worse for the Second Division due to the fact that the financing data are classified as worrying as well. The financial situation in the Second Division is critical with respect to the indebtedness and the capacity to refund the debt. Moreover, 51.4% of the clubs are technically insolvent as contemplated in Article 260 of the LSA. It means that the diagnostic of the financial health of Spanish professional football appears to be very serious.

It is also evident that in general terms expenses on players in Liga Adelante clubs (Second Division) is much less that in Liga BBVA (First Division). Finally, it is worthy to remark how some clubs have been inefficient when they expended their money on players.

Our logistic regression model does not offer an explanation for financial reasons that drive clubs under administration. None of the financial variables offered significant coefficients. There is a problem with the small sample size but, nevertheless, our regression results seem to be reasonable given the existence of other factors that push clubs into the situation of insolvency. There are many clubs with serious financial distress but remaining in First Division yet are capable of avoiding judicial administration. Creditors and public administration are not in favor of asking for unpopular measures to shut down insolvent Spanish football clubs.

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Endnotes

(1) This ratio is calculated as EBIT/Interest payments, where EBIT is the operating profit (before taxes and rate interests). The problem gets worse due to the fact that many clubs have a negative operating result, so they do not have enough generated resources to pay the interest on their debts.

Angel Barajas [1] and Placido Rodriguez [2]

[1] University of Vigo, Observatorio Economico del Deporte

[2] Oviedo University, Observatorio Economico del Deporte

Angel Barajas is an associate professor of financial management in the Department of Accountancy and Finance at the University of Vigo, Spain, and a researcher for the Spanish Economic Observatory for Sport (Observatorio Economico del Deporte). His research interests include investment valuation and finance of sports, particularly professional football.

Placido Rodriguez is a professor of economics in the Department of Economics at Oviedo University and director of the Spanish Economic Observatory for Sport (Observatorio Economico del Deporte). His research interests include sport economics, gambling economics, and economic impact. Table 1. Summary of Main Financial Ratios by Division Current Liabilities/ Total Debt/ Total Debt/ Current Assets Total Assets Total Revenue Average 1st Division 1.86 0.81 1.61 Average 2nd Division 2.44 2.83 2.27 Current Liabilities/ Expenses on Players/ Current Assets Operating Revenue Average 1st Division 1.86 0.99 Average 2nd Division 2.44 0.98 Source: self production from Annual Accounts Table 2. Financial Situation of Spanish Clubs According to the Ratios Situation Current Total Debt/ Total Debt/ Expenses on Liabilities/ Total Total Players/ Current Assets Assets Revenue Operating Revenue Good 17.1% 8.6% 5.7% 14.3% Warning 54.3% 28.6% 22.9% 25.7% Worrying 11.4% 17.1% 14.3% 20.0% Critical 17.1% 45.7% 57.1% 40.0% Source: self production from Annual Accounts Table 3. Estimation of the Main Debt Accounts of Professional Football with Date 06/30/08 Debt with staff 1st Div. Estimation 263,289,557 2nd Div. Estimation 32,428,298 Total 295,717,855 Long Term Short Term Debt with Public Public Public Administration Administration Administration 1st Div. Estimation 267,324,048 248,039,519 515,363,567 2nd Div. Estimation 32,014,049 81,323,408 113,337,457 Total 299,338,097 329,362,927 628,701,024 Long Term Short Term Total Sporting Sporting Sporting Creditors Creditors Creditors 1st Div. Estimation 236,778,774 313,839,394 550,618,168 2nd Div. Estimation 4,228,386 6,246,917 10,475,304 Total 241,007,160 320,086,311 561,093,472 Long Term Short Term Total Financial Financial Financial Institutions Institutions Institutions 1st Div. Estimation 440,970,888 211,675,832 652,646,720 2nd Div. Estimation 43,543,710 36,092,516 79,636,225 Total 484,514,598 247,768,348 732,282,945 Long Term Short Term Total Creditors Creditors Creditors 1st Div. Estimation 1,226,875,3801 1,772,071,825 2,998,947,206 2nd Div. Estimation 274,803,204 219,011,895 493,815,099 Total 1,501,678,584 1,991,083,720 3,492,762,305 Source: self production from Annual Accounts Table 4. OLS Regression of League Performance on Wage Bill and Market Size Dependent Population Coefficient Wage Bill variable Measure (p-value) Measure RS Municipality -0.187 (.448) RWB(WP) RS Province -0.334 (.208) RWB(WP) RS Municipality -0.346 (.171) RWB(W+A) RS RWB(W+A) RS Province -0.395 (.118) RWB(W+A) Acum.Points Province -0.537 (.055) RWB(W+A) Acum.Points Province -0.505 (.079) RWB(WP) Acum.Points Municipality -0.302 (.264) RWB(WP) RS Province 0.003 (.982) LnWP RS LnProvince -0.156 (.277) LnWP RS LnProvince -0.152 (.266) Ln(W+A) Dependent Coefficient [R.sup.2] F Sig. variable (p-value) RS 0.870 (.001) * 0.481 16.774 .000 RS 1.004 (.001) * 0.498 17.842 .000 RS 1.034 (.000) * 0.531 20.224 .000 RS 0.729 (.000) * 0.517 37.403 .000 RS 1.077 (.000) * 0.539 20.892 .000 Acum.Points 1.118 (.000) * 0.448 14.784 .000 Acum.Points 1.078 (.001) * 0.421 13.359 .000 Acum.Points 0.892 (.002) * 0.386 11.703 .000 RS 0.787 (.000) * 0.599 26.420 .000 RS 0.891 (.000) * 0.614 28.039 .000 RS 0.901 (.000) * 0.638 30.954 .000 (*) significant coefficient on each variable Table 5. Output for Revenue Explained by Performance and Market Size Dependent Points Coefficient Population variable Measure (p-value) Measure TOR Acum.Points 0.218 Municipality (.025) * TOR RS 0.284 Municipality (.005) * SA RS 0.334 Municipality (.004) * TOR RS 0.281 Province (.003) * SA RS 0.307 Province (.003) * DTV RS 0.220 Province (.030) * Matchday RS 0.381 Province (.036) * Dependent Coefficient [R.sup.2] F Sig. variable (p-value) TOR 0.763 0.772 58.642 .000 (.000) * TOR 0.705 0.791 65.384 .000 (.000) * SA 0.629 0.728 46.410 .000 (.000) * TOR 0.722 0.815 75.986 .000 (.000) * SA 0.689 0.791 65.479 .000 (.000) * DTV 0.750 0.780 61.293 .000 (.000) * Matchday 0.268 0.288 7.873 .002 (.133) (*) significant coefficient on each variable Table 6. Variables Deleted from Equation (Step 1) Points gl Sig. Step 1 Variables Financing rate .125 1 .724 Indebtedness 3.447 1 .063 TR over TD 2.624 1 .105 CD over LTD .832 1 .362 DIV(1) 4.545 1 (*) .033 global statistics 8.475 5 .132 Table 7. Variables Remaining in the Equation (Step 2) B E.T. Wald gl Sig. Exp(B) Step DIV(1) -2.197 1.164 3.561 1 .059 .111 1(a) interception -.693 .548 1.602 1 .206 .500 (a) Introduced Variable(s) in step 1: DIV.