Measuring Efficiency and Sustainable Growth in Spanish Football Teams

Abstract

Professional football clubs are special businesses since their performance is deemed from two different objectives: success on the field and success in business performance. Thus, efficiency levels can be measured by means of the sport performance from matches played or the financial performance from financial statements. Moreover, economic growth becomes a good indicator of company dynamic behaviour, by measuring the capacity of a company to improve its financial and commercial possibilities. In this context, the main objective of this paper is to assess the level of financial performance of Spanish football clubs and the relationship thereof with the target for growth based on a parameter of revenue. Efficiency measurements were analysed using a benchmark procedure developed by Charnes et al. (1978), data envelopment analysis (DEA) and also productivity levels by calculating the Malmquist productivity index based on DEA scores. Sustainable growth figures were also calculated using the Higgins (1977) model considering the measure of real growth to be the increase in the revenue for each period analysed. From a sample of Spanish professional football teams in the 2000–1 to 2002–3 seasons, our findings show that only a small number of clubs show improvements in technological change and in approaching the efficiency frontier. Moreover evidence was found that those clubs with the smallest difference between both growth ratios (real and sustainable) prove to be more efficient.