Market Overview

How Spain Could Use Its Soccer Team to Solve Its Debt Problem

On Sunday, the Spanish National Soccer Team won the 2012 UEFA European Championship, becoming the first team to win three major championships in a row since the inception of the World Cup in 1930. Spain previously won the 2008 UEFA European Championship and the 2010 FIFA World Cup.

In contrast, at the same time, Spain's economy has performed abysmally. As its soccer team wins championship after championship, Spain has plunged into the epicenter of the European debt crisis.

In light of this predicament, it is interesting to consider the economic value of Spain's soccer team and how it could be used to bolster the Spanish government's finances. Using data from Bloomberg, the CIA World Factbook, and transfermarkt.co.uk, it can be seen that, if Spain were to theoretically nationalize and sell off key players, it could have a small, but notable impact on its finances.

The value of each player can be estimated based on recent contract signings and the overall health of the "transfer market," which transfermarkt.co.uk has estimated. Spain's starting eleven, consisting of some of the world's best talents, has a measly price target of 400 million euros. Including the reserves, the total squad's value climbs to 658 million euros, which represents 0.05 percent of Spanish GDP. Thus, selling these players as assets (or using them as collateral) could help Spain ease its finances if the government were to nationalize the soccer clubs.

Expanding this thought experiment to the two biggest club teams in Spain, the effect is even more pronounced. Spain is home to two of the world's most popular soccer clubs, F.C. Barcelona and Real Madrid C.F. These two clubs attract some of the world's greatest talent.

F.C. Barcelona is home to both the Player of the 2012 UEFA European Championship--Andres Iniesta--and prolific goal-scorer Lionel Messi. Combined, they have a roster value of 603.5 million euros. Real Madrid's roster is just behind their rivals, with its roster valued at 546.5 million euros, including the likes of Cristiano Ronaldo and Mesut Ozil. Together, the two clubs have rosters valued at about 1.15 billion euros, or approximately 0.14 percent of Spanish debt.

For the soccer fans, here are the values of some other key players:


  • Cesc Fabregas: 50 million euros.
  • Xavi Hernandez: 35 million euros.
  • Andres Iniesta: 65 million euros.
  • David Silva: 46 million euros.
  • Xabi Alonso: 35 million euros.
  • Iker Casillas: 35 million euros.
  • Fernando Torres: 35 million euros.

Posted-In: European Debt Crisis FC Barcelona Real Madrid CF spain UEFA EURO 2012Bonds News Global Economics Markets Best of Benzinga

 

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