Football’s impact on Spanish economy

By February 7, 2019 Economic Activities

By Josu Kelly

General overlook

Football, apart from being the most popular sport and practically a religion for a considerable amount of the Spanish population, is also a huge business to be taken into account in the southern European country’s economy. According to the report in 2017 of the Business School OBM, of every 100€ generated in the Spanish economy, 2 of such are generated by the ‘La Liga’ which is the first tier of Spanish football while football itself grows at a higher pace than the national economy[1]. Moreover, it adds that more than 1% of the national GDP is composed by football income and that out of 1000 people who work in Spain, 7 of them do so in a job related to football. Furthermore, far from backing down, football is continuously growing as a popular sport which is portrayed in tangible business figures. During the last season (2017/2018) the Spanish Hacienda– the national tax offices- reached a record tax revenue accounting for 1.227 million euros[2].

Real Madrid and FC Barcelona

If Spanish football is to be mentioned, it is impossible not to focus on their two main teams of the two biggest cities in the country. Nevertheless, they are not only the two highest earners among Spanish football clubs, but they are currently the two teams with the highest revenues in the world. Real Madrid and FC Barcelona annually account 750’9M and 690’4M[3] respectively leaving historical teams such as Manchester United or Bayern Munich behind.

Football-DAC-BlogSource: Compilation based on the bibliographical sources

As to understand at what level these Spanish giants stand in the national economic sphere, firstly it must be mentioned that they respectively occupy the 195th and the 217th position in the National ranking of Spanish enterprises by annual income at a similar level- as it can be appreciated in the graph- of well-known companies such as Danone S.A., the Catalan beer company S.A. Damm or Siemens S.A.[4]

The small scale

On the smaller scale, for many cities and towns in Spain, being in the first or second division is extremely relevant for the football clubs and therefore, for all the employed people related to such clubs and other economic sectors. It is estimated that when the historical club Real Zaragoza relegated to the second division, the club accounted a loss of 20.6 million due to the loss of TV income which led to a substantial decrease of salaries in the club[5] as well as a decrease of tourism in the city due to the increasing irrelevance of the club which has repercussions in many sectors of the city’s economy such as the catering sector.

Sources:

[1] Online Business School. 2017. ‘El negocio del fútbol profesional en la economía española’. Last modification the 22nd of May 2017. Available online (link)

[2] Business Insider. 2018. ‘Hacienda logra el récord de recaudación con el fútbol: 1.227 millones de euros’. Written by Pavel Ramírez. Last modification the 6th of August 2018. Available online (link)

[3] Deloitte. 2019. ‘Football Money League’. Bullseye. Last modification in January 2019. Available online (link)

[4] El Economista. 2019. ‘Ranking Nacional de Empresas por Facturación’. Last modification the 4th of February 2019. Available online (link)

[5] El Economista. 2014. ‘El coste de bajar a Segunda División: así afecta a las ciudades y a su economía’. Last modification the 12th of May 2014. Available online (link)

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