Ecoonomic value added criterion and professional football clubs

Por: J. P. L. Minquet.

Athens 2004: Pre-olympic Congress

Send to Kindle


The understanding of the economic performances of the football clubs during these last ten years is related to the definition of their turnovers and of the production process of the risky outputs they generate in this specific area.


1. The theoretical framework. The usual economic indicator - the Earnings Before Interests, Taxes, Depreciation and Amortization (EBITDA) - is not valid according to the main intangible asset the football clubs use - the players’ capital - which is in the time the labour factor. The accurate one is the Earnings Before Interests and Taxes (EBIT) with a fitted calculation of the cost of football players. This indicator is used in the Steward and Stern’s Economic Value Added theory (EVA = EBIT -CE) with  the cost of Capital and CE the Capital Engaged (Shareholders’ equities and Net Debts).
2. The statistical application. Financial analysis of the European data of football clubs (Balance Sheets, Income Statements and Cash Flow Statements) from 2000 to 2003.


Considering the level of the EBIT, the first strategy for the football clubs is to minimize the Capital Engaged by a negative Working Capital Required and by negative Net Debts. They are consequently financed by Owners’ equities as far as their perimeter is precisely defined. The second one is to minimize the return on investment required by the Stockholders which could be realized thanks to the financial analysis of the market risk made by the investors with  coefficients equal to zero. It is not anymore the case and the official financing of the football clubs is becoming a problem.
1. Harmonization of the economic conditions of the football competition in Europe.
2. Creation of a European Commission of control of the financing of the football clubs at the UEFA.


[1]. Pariente S., 2000, Finance, Contrôle Stratégie, Vol.3, N°3, Pp 125-153.
[2]. Anthony R., Harvard Business Review 51, Pp 88-102.
[3]. Bogliolo F., 2000, Editions D’organisation, Paris.
[4]. French Professional Football League And Deloitte & Touche, Annual Reports (2003 And 2004).
[5]. Bloomberg Data Basis.







© 1996-2022 Centro Esportivo Virtual - CEV.
O material veiculado neste site poderá ser livremente distribuído para fins não comerciais, segundo os termos da licença da Creative Commons.