Big debts lie behind Spanish football glory Options

[brasil5x]

Spanish football may be enjoying one of its most successful eras, powered by Barcelona and Real Madrid's charge through the Champions League, but the glittering success on the pitch hides a darker story.

As Real and Barca are through to the elite Champions League semi-finals, and three Spanish clubs are into the Europa League last four, a survey of the accounts of the country's top clubs reveals a tale of crippling debts and tax arrears.

Real Madrid lead Barcelona by four points at the top of La Liga, but the two global superstars also rival each other in the depth of their debts -- Real have accumulated 589 million euros ($772 million) to Barcelona's 578 million euros.

The archrivals' debts eclipse their revenues, which for 2010-2011 amounted to 479 million euros for Real Madrid and 450 million euros for Barcelona.

Europa League semi-finals Valencia and Atletico Madrid are also both awash with red ink, to the tune of 382 and 514 million euros respectively.

But the latest figure to hit the headlines in Spain is the 752 million euros that Spain's elite clubs owe to the tax man at a time when more than five million are unemployed and the government is asking citizens for more sacrifices.

The sports ministry announced a plan to ensure that football pays for its own debts. But for the moment it is unclear how they will do so.

Six of the 20 Liga clubs -- Rayo Vallecano, Racing Santander, Real Betis, Zaragoza, Granada and Mallorca -- are currently in bankruptcy proceedings, as are another six second-division teams.

"That figure alone shows that Spanish football is not well managed financially," said Barcelona University Professor of Economics Jose Maria Gay de Liebana, who specialises in football.

The analyst compared Spanish football's debts, which he estimated at 3.5 billion euros in total, to the frenzy of the country's property market bubble, which imploded in 2008.

"Football is a mirror of the general economy in Spain. For years we have been spending beyond our means, getting deeper and deeper into debt," he explained.

"For football it's the same: for years clubs have made colossal and inefficient investments. And as they did not have their own funds to finance these expenses, they went massively into debt."

A good example of the race to invest, no matter the cost, is Valencia's "New Mestalla" stadium.

In 2007, in the midst of the property boom, Valencia decided to buy itself a new 70,000-seat stadium -- even though it has only 39,000 members.

The 300-million-euro construction cost was supposed to be financed by the sale of the land from its old stadium for some 400 million euros.

Two years later, engulfed by the property market crisis, construction stopped when the club realized it could not find buyers for the old stadium property.

One other factor may have contributed to the accumulation of debts -- a lack of financial control by Spanish institutions.

Some blame a lax attitude by the Spanish football league, others the league's inability to impose tough sporting sanctions.

Until very recently the Spanish professional football league did not have the power to relegate a club in bankruptcy.

Some teams even used the bankruptcy law to their advantage, enjoying legal protection from their creditors while continuing to play football at the highest level.

"I think the new law that came into force in January 2012, which now authorizes the authorities to relegate a club in bankruptcy, will change things a lot," said sports lawyer Juan de Dios Crespo.

It is unclear, however, if the authorities would risk the public backlash of taking on a football club.

In the 1990s when the footballing authorities threatened to relegate Celta Vigo and Sevilla because of problems with their registration paperwork, they were forced to backpedal under huge pressure from fans.

http://sports.yahoo.com/news/big-debts-lie...11--soccer.html

[brasil5x]

(IMG:style_emoticons/default/ohmy.gif) surprised

[ZUMO]

Disgrace, haven't spent it on anything tangible except for pissing it away to get results. Shitty have their cocks firmly up abdullah the moron's ass, these cunts have a deeply corrupt financial and governmental system to bail them out from their ridiculous wastage. No wonder their lazy country is in the shit.

[magix]

Hopefully UEFA' financial fair play will ensure they get thrown out of European competitions..

[Avon]

I've been saying, We are going to have to sell Messi to Stay in Europe, due to FFP and most likely we'll have to sell a major player year after year.

I wise decision would be to sell all of the major players in July.

[fantasista]

(IMG:style_emoticons/default/ohmy.gif) surprised

Not really surprised personally, although I didn't know six clubs were in bankruptcy proceedings. Of the top 4 leagues Spain definitely has the loosest financial regulations.

[JuveJay]

Crash and burn, baby. Madrid and Barca can manage this for sure, the others are the worry.

[magix]

Crash and burn, baby. Madrid and Barca can manage this for sure, the others are the worry.

You mean Barca and RM will find some rich guy willing to take on the debt..

[ZUMO]

You mean Barca and RM will find some rich guy willing to take on the debt..

Not even that... They both have immense political power both locally and centerally and will find some corrupt cunts to downgrade their debt, or even better, amke the public pay for it (IMG:style_emoticons/default/laugh.gif)

[Thorisgodpoo]

Hopefully UEFA' financial fair play will ensure they get thrown out of European competitions..

this is whatthrows me off is that they're allowed to go above and beyond the scope of what they can spend but no reprimand

[magix]

this is whatthrows me off is that they're allowed to go above and beyond the scope of what they can spend but no reprimand

That will end in 2013, at least that's what the plan is...

[M. Piedlourde]

Each major league has this problem. In England, it's Man Utd that needs to be kicked out, and that has been the case for years as it has never really been profitable (marketing to penniless danes and oregonians doesn't generate a profit. Neither does fielding a squad of of physically repulsive clutzes). In Italy it was Inter, and they have been jettisoning talent over the past few years to avoid any sanctions (if anything they are excellent at avoiding risk of relegation). Obviously PSG is going to be one of the major offenders. They are virtually undesirable outside of France, but they spend a budget the size of Real Madrid.

So while I understand that these Spanish teams are winning in the red, they aren't alone. Everyone else is doing it too. But only the Spanish teams do it well, as ridiculous spenders Man U and PSG couldn't hack it in the CL this year...

[magix]

Each major league has this problem. In England, it's Man Utd that needs to be kicked out, and that has been the case for years as it has never really been profitable (marketing to penniless danes and oregonians doesn't generate a profit. Neither does fielding a squad of of physically repulsive clutzes). In Italy it was Inter, and they have been jettisoning talent over the past few years to avoid any sanctions (if anything they are excellent at avoiding risk of relegation). Obviously PSG is going to be one of the major offenders. They are virtually undesirable outside of France, but they spend a budget the size of Real Madrid.

So while I understand that these Spanish teams are winning in the red, they aren't alone. Everyone else is doing it too. But only the Spanish teams do it well, as ridiculous spenders Man U and PSG couldn't hack it in the CL this year...

Bullshit. It's always the same countries where this type of shit happens: Spain, Portugal, Greece, Italy..It's never the Netherlands, Austria, Germany or Denmark, wonder why that is...

[ZUMO]

Each major league has this problem. In England, it's Man Utd that needs to be kicked out, and that has been the case for years as it has never really been profitable (marketing to penniless danes and oregonians doesn't generate a profit. Neither does fielding a squad of of physically repulsive clutzes).

worst illinformed clueless windup I've seen for quite some time. Amateur

[Mr. Hand]

It's obviously a huge concern. The entire state of club football is a big concern for me. Billionaire owners, insane debts, etc.

I personally am very skeptical about the financial fair play rules and how strictly they will be enforced. <enter "creative" accountants>

[M. Piedlourde]

Bullshit. It's always the same countries where this type of shit happens: Spain, Portugal, Greece, Italy..It's never the Netherlands, Austria, Germany or Denmark, wonder why that is...

It doesn't happen in Holland, and for the most part Germany (not sure with Bayern Munich since they never seem to sell their good players), but my point stands - Spain is hardly the greatest offender of this problem. Man United and Chelsea are way worse.

[fantasista]

Bullshit. It's always the same countries where this type of shit happens: Spain, Portugal, Greece, Italy..It's never the Netherlands, Austria, Germany or Denmark, wonder why that is...

No mention of England there? I think I know what you're trying to say here. (IMG:style_emoticons/default/rolleyes.gif)

[Furia Roja]

worst illinformed clueless windup I've seen for quite some time. Amateur

439 millions in debt is not wind-up, you have to be fucking stupid not to see it.

http://www.bbc.co.uk/news/business-17116060

(IMG:style_emoticons/default/rolleyes.gif)

[CK]

It doesn't happen in Holland, and for the most part Germany (not sure with Bayern Munich since they never seem to sell their good players)

Bayern are #4 on revenue, behind Madrid, Barcelona and Manchester United. This is largely due to factors such as commerical revenue, where they are the biggest club in the world.

Date shown below is as of 2010, I do not have more current, but it speaks to how much sponsorship funds Bayern is loaded with.

(IMG:http://1.bp.blogspot.com/_jLlqDrcSYeQ/TAZJ279tw7I/AAAAAAAABu0/Rc5rR6eAYjw/s1600/Commercial%20Revenue.jpg)

[Juan]

Imagine how strong Valencia and Atletico would be if their debts didn't make them sell their best players.