Longitudinal Analysis of the Relationship between Financial Indicators and Sporting Performance in Brazilian Football

Abstract

This study investigates the relationship between financial performance and sporting performance among football clubs in Brazil. The central hypothesis is the existence of a time lag between financial management and on-field results. The sample comprises 21 clubs that participated in the Série A or Série B of the Brazilian Championship between 2016 and 2023. Clubs were grouped according to their average revenues and analyzed based on financial variables such as Total Assets, Current Liquidity, Return on Assets, and Overall Debt. A Relative Performance Index (RPI) was constructed to measure sporting performance adjusted to each club’s economic profile. Using a fixed effects model, the study finds that club indebtedness is the main factor affecting the RPI, even three years later. The results contribute to understanding the importance of financial management for the long-term competitiveness of football clubs.