BEYOND THE PITCH: AN ANALYSIS OF THE RELATIONSHIP BETWEEN FINANCIAL SUSTAINABILITY AND ECONOMIC VALUE CREATION IN LA LIGA FOOTBALL CLUBS

This research will allow us to test the financial sustainability of the football companies of La Liga and the ability to create economic value in Spain. Spanish pro-football is recognised as a major component of the country\'s economic performance and, according to a study paid for by the Spanish federation of professional football (FEF), it accounts for 1.44% of the country\'s GDP. Much of the sports economics literature, however, is more skeptical of such assertions, and has been peer-reviewed. The paper tries to escape this polarity by considering not so much the question of whether or not there is economic value in football, but whether perhaps there is a better chance of it being financially sustainable, whilst also being able to create economic value that is more likely to persist. This study adopted multiple case research design and compared the research results, supplemented by quantitative analysis of financial ratios, secondary data only are used. The six La Liga clubs were deterministically chosen as analytical archetypes to sample a range of the types of treatment of the 2 governance models in Spain, and the financial information was collected for 5 seasons (2020-21 to 2024-25). Four dimensions are considered as ways of rendering financial sustainability, and are measured in a Financial Sustainability Index, which includes wage discipline, profitability, revenue resilience and regulatory headroom. Among the indicators in the index are the one also published by LaLiga, the regulator, the limit squald index, which is not included in other European leagues. Since there are observations which are made by using different bases of reporting (individual, consolidated and LaLiga) in the reporting of \"relevant revenue\" observations is not interchangeable, therefore they have not been included in the analysis. The index is then calculated on the basis of the ten club-season observations for the five clubs, while Valencia CF is analysed qualitatively. The findings show that there is a high correlation between Financial Sustainability and other measures of Club Economic value creation and that this is not dependent on sporting performance. In this period, Real Madrid managed to return 61.7% of wages against 43.4% and despite that, in none of the seasons, Real Madrid lost money; having covered about €1,4 billion on stadium investments. The latter was preceded by Athletic Club, which managed to record the same net loss on revenues of a little less than one-seventh that amount (€994 million). The three additional seasons had seen Sevilla FC fall from 51.5 on the index in 2023–24 to 29.5 largely because of an uptick in the contribution of personnel-related costs (81.7% to 99.1% of turnover) and a reduction in revenue (from €214.3m to €115m). Three other cases were identified: FC Barcelona\'s 2022-23 season was not covered by any of the indexes as it involved monetising non-recurring assets valued at approximately €800m. Study suggests that a focus on financial sustainability does not imply the creation of economic value in itself, but rather the ability of the organisation to sustain a club\'s investments, employment and business development over time. The ability appears to be developed, albeit to some extent, through sporting achievement but not in lieu of it. As an observational study of a small number of cases, the analysis provides patterns for contrasting cases and not estimated relationships.