Intellectual capital and financial performance of European professional football club: the mediating role of financial innovation

This study investigates the impact of intellectual Capital on European professional football clubs’ financial performance, with financial innovation as a mediating factor. Using Ordinary Least Squares (OLS) regression, we analyse panel data from 70 European professional football clubs over a ten-year period, encompassing the ‘Big Five’ leagues (English Premier League, Spanish La Liga, German Bundesliga, Italian Serie A, and French Ligue 1), with 350 yearly observations from 2013 to 2022. The mediating effect of financial innovation is further supported by the Sobel Z test, highlighting its significant role in translating intellectual capital into improved financial performance. A one standard deviation increase in intellectual capital efficiency is associated with a 9.4% increase in ROA. Additionally, financial innovation mediates the relationship between intellectual capital and financial performance, highlighting its crucial role in translating intangible assets into tangible financial outcomes. These findings contribute to the growing body of literature on intellectual capital in the sports industry, providing valuable insights for football club managers and policymakers on enhancing and developing human, structural, and capital employed efficiencies, alongside financial innovation strategies. They should focus on building staff expertise to strengthen club profitability and financial sustainability.