Financial condition of football clubs in the Polish Ekstraklasa

Abstract

In the turbulent market conditions, proper financial management in companies is a key part of the efficient management process. The observed transformation of football clubs into business entities, introducing licensed access criteria to football events by the Union of European Football Associations and national football associations bring new challenges to football clubs. Facing these challenges requires taking actions that ensure a good and stable economic condition. In this respect, this study concerns a valid and important problem of general financial and assets situation of football clubs participating in the Polish Ekstraklasa events. The following research methods have been used to achieve the assumed research goal: descriptive, comparative, subject literature analysis, legal acts analysis and index analysis of financial statements. The index analysis has been focused on the assessment of liquidity, debt and profitability of the analysed football clubs, considering the threats to the continuation of their activity. The obtained results gave a specific profile of activity, in a financial approach. The insight into financial statements in terms of liquidity, debt and profitability also highlighted the reservations concerning the financial condition in a large group of the analysed entities. Most football clubs reported relatively low values of liquidity indexes, which may indicate difficulties in current settlement of liabilities. Additionally, the analysis of debt indexes has indicated significant figures, often exceeding the values of all assets held. It indicates the occurrence of negative values of net assets and equity, which is a sign of improper shaping of the structure of activity-funding equity. However, in terms of profitability it has been found that only a few entities had been able to reach positive operating or net profitability as a result of generation of operating or net profit. The analysis of results of the study has shown current and potential insolvency problems as well as symptoms of threat to the continuation of business activity.