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School of Business | Department of Accounting | Accounting | 2016
Thesis number: 14331
Ownership and capital structure in European football clubs
Author: Ylönen, Jaakko
Title: Ownership and capital structure in European football clubs
Year: 2016  Language: eng
Department: Department of Accounting
Academic subject: Accounting
Index terms: laskentatoimi; accounting; urheilu; sports; yhteisöt; communities; omistus; ownership; pääoma; capital; Eurooppa; Europe
Pages: 56
Key terms: capital structure, ownership structure, football, ownership objectives

The main purpose of this study is to find whether there is a significant relationship between different ownership models and capital structures in European football clubs. The large number of European football clubs in financial distress and the recent arrival of foreign and billionaire owners into European football leagues motivated me to carry out this study. The different ownership models covered in this study are the public, foreign and billionaire ownership models.


The main sample consists of 490 fiscal years and 72 clubs in the seasons 2005/06-2013/14 from Europe's five biggest football markets: England, Spain, Italy, Germany and France. The organizational and financial data of the football clubs is mostly derived from the ORBIS -database and complemented with information acquired from the football clubs' webpages and annual reports. Ordinary Least Squares regression is used to examine the connection between capital structure, determined as the ratio of total debt to total assets, and independent variables, which are the three ownership models and chosen firm specific determinants of capital structure.


The results of the study show that football clubs under foreign majority ownership have higher leverage ratios and are less profitable than domestically owned football clubs, which suggests that foreign owners are rather win-maximizers than profit-maximizers. Being publicly listed or being under majority billionaire ownership doesn't show a statistically significant association with leverage. The results show that profitability and liquidity have strong negative connections with the leverage ratios of football clubs, which suggests that the pecking order theory is most suitable in explaining the capital structure formation of football clubs. Additionally, growth opportunities display a strong positive connection with leverage, which indicates that the growth of football clubs is mainly financed with debt.
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