Financial performance and sport performance: some insights from Italian football clubs

Recent years have shown great instability in the football industry that could be related to the need of investing large amount of money to be competitive. Since literature is characterized by mixed results that do not define a clear landscape, this paper aims to explore if a relationship between sporting performance and financial performance in professional football clubs exists, with a specific focus both on the Italian premier league but also in the minores ones. We tested our hypothesis using a panel regression on a dataset that includes financial and sporting data for 70 Italian professional football clubs which have competed in the three main national championships over a ten-year period (2010-2019). Results show a negative relationship between financial and sports performance and that football clubs with good financial performance reach lower sports outcomes. Hence our findings highlight that, both for the major Italian League and for the minority ones, clubs fail to pursue both high sports achievement and good financial outcomes. These results may suggest and encourage better managerial practices aimed to reduce failure. Better practices are need not only for the football teams in top championships but also in for the less prestigious ones. These results should also stimulate policy makers to provide regulations that can foster a better balance of the sport and financial dimensions of both top and minor leagues.