Football & The Economic Crisis

[MC Prussian]

This is from a Swiss newspaper, translated by no other than myself:

Professional football in the land of the European Champion is close to facing bankruptcy.

Out of the 20 teams in La Liga, only three maintain solid finances - the Andalusian sides of Sevilla FC, Almeria UD and Recreativo Huelva.

All other clubs are in tremendous debts, especially with the Spanish state.

But regular money losses have always been an essential part of Spanish football. For decades, clubs lived above their means and signed so-called star players for large amounts of money, instead of paying social security contributions and taxes. As of right now, the total debt by all clubs has risen to an astonishing 2,1 billion Euro. Since there used to be a steady income with fresh money during the boom years, officals and government representatives often tended to look away. And there are no legal instruments for bad management in Spain, no playing licenses put on hold.

The backlash is happening now.

Hit worst by the crisis is former big player Valencia FC, whose newly-built Mestalla stadium has brought the club new debts of about half a billion Euro. A few years ago, Real Madrid had to sell their training ground for almost the same amount in order to compensate for some prior financial losses. Deportivo La Coruna is facing total extinction from the Spanish football map. With professional success part of history and no investor willing to take over the business, gone are the days where you'd simply employ a receiver, whilst still taking part in the National Championship. Now, there's no second chance in sight. And even the second division is struggling - it is said that a total of 20 million Euro is long overdue.

Hardly any other European country is hit by the financial crisis as hard as Spain. The massive property bubble has exploded a while ago. Property sales are down 90 percent compared to last year. Thousands of buildings are left unfinished or remain completely empty, the sector has come to an almost complete standstill. January alone has brought a rise of 200'000 people in unemployment, so Spaniards are now doing what they've never dreamt of - pushing African immigrants out of agriculture jobs, harvesting olives or greenhouse vegetables.

And this is having a direct impact on club football. On one hand, many owners are in construction, as well. Put under pressure by dwindling profits, they're no longer able to support their secondary love affair - football. On the other hand, supporters find it a lot harder wasting their hard-earned money and going to see the beautiful game. In order to stop the decline in attendances, clubs like Villareal FC have announced that they'd donate a season ticket to all fans currently without a job. A sudden change of fortune is not in sight. The property market will take years to recover.

And it is doubtful whether the majority of professional Spanish football clubs are going to see the end of it.

Here are the impressive debt numbers:

Numancia: 3 million Euro

Malaga FC: 16 million Euro

Sporting Gijon: 18 million Euro

Getafe: 25 million Euro

Valladolid: 30 million Euro

Racing Santander: 35 million Euro

Athletic Bilbao: 35 million Euro

Osasuna Pamplona: 35 million Euro

Real Mallorca: 40 million Euro

Espanyol Barcelona: 45 million Euro

Betis Sevilla: 55 million Euro

Villareal FC: 150 million Euro

Deportivo La Coruna: 160 million Euro

Barcelona FC: 189 million Euro

Atletico Madrid: 300 million AgüEuro

Real Madrid: 400 million Euro

Valencia FC: 550 million Euro

Not long and other clubs in the UK, Germany, Italy and France will suffer the same.

[MC Prussian]

And now for something completely similar, this time from your very own England:

Mawhinney fears for clubs' future

Lord Mawhinney says a League club could fold in the recession

The chairman of the Football League Lord Brian Mawhinney has said he fears that a League club may fold during the current economic crisis.

But he told BBC Radio Lincolnshire that the situation was hampered by clubs not disclosing their plight to the league.

Lord Mawhinney said: "Could we lose a club? Yes, we could. Am I expecting to lose a club? I don't know because they don't tell us what their finances are."

In the last 12 months four League Two clubs have gone into administration.

But Lord Mawhinney defended the League's policy of giving a 10-point penalty to clubs who enter administration.

He said: "The clubs that went into administration got penalised on the field precisely because one of the league's most important jobs, some would say its most important job, is to protect the integrity of the competition.

"If you have a club that's entered administration three times in 12 years, what that usually means is for a long time they've been paying out what they couldn't afford and that gives them an unfair advantage.

"There are really only two options, fine them or dock points, and if they're in administration there's no point in fining them."

Mawhinney's comments are not the first from a top football official warning of financial problems in the game.

In October Football Association chairman Lord Triesman said English clubs owed an estimated £3bn and warned they could be in "terrible danger" should the economic crisis deepen.

Triesman said the Premier League's four top clubs - Manchester United, Liverpool, Arsenal and Chelsea - are believed to account for a third of that debt.

Actually rather shocking.

http://newsimg.bbc.co.uk/sport1/hi/football/7977539.stm

[Ultra]

Even if there wasn't an economic crisis, many English clubs would still be in trouble. The obscene inequalities in TV revenue have seen to that.