3. Scotland in the sun: How La Liga’s problems are more than just skin deep

Financial Matters
 

Spain has never had more people unemployed. Currently, that figure stands at five million.

Even Latin Americans who moved to the Iberian peninsular in search of work are seemingly desperate to return home, much like the Polish exodus from English shores in the last couple of years.

Government ministers insist it has reached a peak and that it won’t get any worse but the people of Spain are not convinced.

Football mirrors these troubles.

Spanish football writer Sid Lowe wrote on the website cbc.ca in 2010:

Luis Manuel Rubiales, the new president of the Spanish players union, the AFE, explained that 85 per cent of footballers in Spain's top three divisions either get paid late or not at all. Then there's the fact that the Spanish Football Federation, the RFEF, still owes the AFE €8 million.

According to Rubiales's predecessor, €100 million are still owed to footballers in unpaid wages.
The situation, Rubiales said, is the worst it has ever been.

Spanish football is in crisis according to José María Gay, Spain's leading expert on football finance and an adviser to Uefa: "La Liga is dying."

The Osasuna president, Patxi Izco, admits: "I fear a financial meltdown."

"Football," insists another director, "is seriously ill."

Real Madrid were saved from the threat of bankruptcy a few years ago only when the municipality of Madrid agreed to pay a large sum for the land on which their training ground sat.

The fact that the Spanish government and the country’s banks have helped Real is greeted with little more than a sigh from the other clubs in Spain. Can you really imagine the outcry in England if the government helped Manchester United stay on top or Barclays, at their customers’ expense, came in to rescue Liverpool from the oblivion of relegation? How would fans of Portsmouth, Leeds United and Southampton react to such news? These last three clubs have had to bite the bullet and accept their fate as they slid down the divisions due to the enforced sale of their best players, enabling them to stay in business. Manchester United would be expected to do the same. The Spanish government, seeing a similar fate bestowed on its most famous club, bought their training ground.

In England such actions are treated with a mixture of suspicion and bemusement. In Iberia, and perhaps throughout the Latin countries, it is treated as the norm.

Sid Lowe argues that it was in the country’s interests to help Real Madrid in their time of need, though he concedes it was not without some underhand tactics.

He said: "Institutional support in Spain is relatively normal but Real Madrid would argue the support is reciprocated as they do a lot of work for the community in terms of tourism and image. They would also argue that as the club represents the community they should get support."

And what about the deal whereby Madrid sold their training ground to the local government only to get it back again? "This is the big bone of contention. Real Madrid will say that the council got a good deal in terms of what they paid but it was Florentino Perez (the club President) who enabled the deal to happen. He, with the government, re-classified the land so that it was apt for construction.

"Perez is a construction magnate whose contacts are very strong in local government. This kind of tactic, though, is relatively normal. It has been used before and it will no doubt be used again."

Barcelona are not without their own problems on a financial front. Last summer they were late in paying the players’ wages and had to take out an emergency loan to help alleviate their difficulties in meeting their wage bill.

Sports lawyer Javier Tebas believed neither case was comparable to the troubles at the smaller clubs. "Barcelona and Real are a money making machine. They don’t have significant problems," he said. "Certain newspapers eight years ago said Real Madrid were going to go bankrupt and look at them now."

Well, with the government’s help and the aid of Madrid’s banks is it any wonder they survived?

"It was a help,” Tebas agreed, with a gesture suggesting inverted commas when he said ‘help’. "But with the help the competition can become distorted," he admitted

"The problem is not just that the big two have a greater budget than the rest," Tebas explains. "It is that all the other clubs have a lot of debt. There some smaller clubs where the interest repayments on their debts alone could pay for the salaries of Lionel Messis and Cristiano Ronaldo combined." In other words, €15 million in interest.