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Thread: End of La Liga as we Know it?

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    End of La Liga as we Know it?

    It is the powerhouse of global football, home to its greatest players and a World Cup-winning national team, but Spain's soccer bubble looks set to explode as European authorities prepare to halt public funding of debt-ridden clubs.

    In a move that threatens to provoke the partial collapse of a football system built on unsustainable piles of debt, competition authorities in Brussels want Spain's government to explain why it has allowed clubs to build up vast, unpaid tax and social security debts.

    With many clubs in the top two divisions already having trouble paying bank debts totalling some €3.5bn (£3bn), the move would likely force some clubs into liquidation. Historic names such as Deportivo de La Coruña or Racing Santander could simply disappear. Other top clubs, such as Valencia, will have to sell players and face years of decline.

    Indignant MEPs are already demanding to know why Spain is happy to request €40bn in aid from eurozone taxpayers for its banks while allowing the clubs to build up a tax debt of €692m.

    "This is unfair since all other Spanish taxpayers, as well as the other European football clubs, must, of course, be up to date with their tax payments," said Willy Meyer, a Spanish MEP for the United Left coalition, in a recent question to the competition commissioner, Joaquín Almunia. Meyer pointed out that while clubs pay multimillion-euro salaries to star players, the cash-strapped government of Mariano Rajoy has imposed cuts on public services.

    "It is incomprehensible that while taxes such as VAT are being increased and hospitals and public companies are being privatised as a means of generating short-term resources, these private, recreational bodies are receiving preferential tax treatment," he said.

    Other European soccer clubs are also crying foul. "This beggars belief. We pay hundreds of millions of euros to keep Spain out of the shit and then they let the clubs off their debts," Uli Hoeness, the president of the German side Bayern Munich, complained when debt figures were made public last year.

    A spokesman for Almunia said a formal investigation – similar to one looking at public subsidies to Dutch soccer clubs – must wait until the Spanish government has replied to its inquiries.

    Analysts warn that action from Almunia to force Spain's tax authorities to recover debts will expose the chronic financing problem in Spanish soccer.

    Professor José María Gay de Liébana, of the University of Barcelona, said reckless lending – especially by former savings banks controlled by local politicians – had created a bubble that must eventually burst.

    "When people ask me what clubs could be in danger, I reply with the list of the only clubs that are not in any kind of danger. They are Barcelona, Real Madrid and Athletic Bilbao," said Gay de Liébana. "Hoeness is, basically, right. If I don't pay my taxes, then the authorities come after me. But that doesn't happen to the clubs, which are not treated like other companies."

    Twenty-two first- and second-division clubs are in insolvency proceedings or have been in recent years. Several are thought to be struggling to survive strict debt-repayment plans imposed by creditors. They include former league title-winners such as Deportivo de la Coruña and a long list of historic clubs such as Zaragoza, Racing Santander, Mallorca, Albacete and Betis.

    Deportivo – semi-finalists in he Champions League in 2004 – had been allowed to build up a tax debt of €96m, a report to an insolvency court this week revealed. "The real cause of the insolvency is a complete lack of realism in management, taking on spending and investment that is absolutely beyond the club's economic possibilities," the club's administrators wrote.

    Indirect funding of clubs via publicly owned TV stations and loan guarantees from regional governments are expected to come under scrutiny in Brussels.

    Valencia, one of Spain's top clubs, passed temporarily into public hands this year after it failed to pay back a loan guaranteed by the regional government. It is now in the hands of the Bankia bank, but this was nationalised after it ran up €19bn in losses last year, meaning the club – which has had to stop work on a vast, half-built stadium in the city – is now in effect owned by Spanish taxpayers.

    Two other clubs, Elche and Hercules, are also part-owned by Valencia's regional government, which guaranteed loans that they failed to pay back.

    "Is it the European commission's intention, in rescuing Spanish banks, to allow the practice of granting bank loans at subsidised rates to clubs in the Spanish professional football league – which is a form of favouritism – to continue?" the Italian MEP Mario Borghezio asked in a parliamentary question.

    Almunia's commission confirmed that it had asked Spain to provide it with figures on clubs' public debts.

    "The commission agrees that, under the state aid rules, tax and social security debts of professional football clubs must not be treated differently from similar debts of other economic actors," Almunia said. Rajoy has ordered tax authorities to tighten control of clubs and the sports minister, José Ignacio Wert, says debt has begun to fall.

    Several clubs, including Deportivo de La Coruña, have seen television or football pools income embargoed. The debt has been reduced since early last year, but progress is slow.

    "This cannot be sorted out overnight," said one source close to the Spanish tax authorities.

    "Soccer is a very highly charged affair. If you go after a club too much, then the supporters may rise against you," said Gay de Liébana.

    He believes that is why authorities are targeting Deportivo de La Coruña rather than a highly indebted but well-supported club such as Atlético Madrid. "Deportivo fans are not going to block the streets of Madrid," he said.

    As clubs tighten their belts, players will be sold and the quality of soccer in Spain will likely fall. "Talent will flee to the Premier League in Britain or elsewhere," said Gay de Liébana.

    The Spanish case and the Brussels inquiry into €10m of public aid to several Dutch clubs, including PSV Eindhoven, threatens to spill over in to other countries.

    "If you start asking Italian and French clubs whether they are paying market rents for municipally owned stadiums, we will get into a very big tangle," said Gay de Liébana.
    http://www.guardian.co.uk/football/2...football-clubs


    I wonder if this would be enough to finally force an equitable tv deal.

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    Quote Originally Posted by messid10s View Post
    http://www.guardian.co.uk/football/2...football-clubs


    I wonder if this would be enough to finally force an equitable tv deal.
    The short answer is it won't be even close enough to solve the problems. Even if they divide the money completely equally then the worst paid PL club will earn about 3-4 times as much...

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    Or a European Super League.


    "Impavido Pectore"


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    What's happening to those clubs is sad. Historic clubs such as Deportivo falling by the wayside.

    Personally I doubt if Real or Barca care because sooner or later - if more clubs around europe collapse - a european super league will be a reality. So they'll be sleeping easy at night.

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    I'd be mega pissed if this was a big factor for a European Super League

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    Quote Originally Posted by Ode to Django View Post
    I'd be mega pissed if this was a big factor for a European Super League
    Wouldn't bet against it would you.....

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    I pray everyday for the Super League to become a reality.


    "Impavido Pectore"


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    Quote Originally Posted by Poor_Sunyol View Post
    I pray everyday for the Super League to become a reality.
    Why? I'd stop watching football if thay ever became a reality.

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    Quote Originally Posted by AnfieldEd View Post
    Why? I'd stop watching football if thay ever became a reality.
    +1000 awful.

  10. #10
    Gannicus
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    sure, lets start a euro super league cos shit is hitting the fan in spain....i don't understand why anyone would be in favour of a euro super league other than couch potatoes, would be impossible to go to every away game and travel would be a nightmare for players going to different countrys every few days, its the fans who would suffer mainly though.
    Last edited by Gannicus; 21st March 2013 at 10:31 PM.

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    The future of La Liga may well depend on how much they get for the collective deal starting in 2014.

    Can only see the league becoming more competitive and clubs having a better future if Barca and Madrid take a smaller slice of the pie and the number of teams in the league is reduced.

    Barcelona and Real are on course to kill Spanish football.

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    Quote Originally Posted by Poor_Sunyol View Post
    Or a European Super League.
    Why would healthy leagues such as EPL and Bundesliga agree to that just because Spain is in a mess?

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    Yes but do Barca and Real care - that is the question.

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    Quote Originally Posted by Ursegor View Post
    Why would healthy leagues such as EPL and Bundesliga agree to that just because Spain is in a mess?
    Greed perhaps...

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    Quote Originally Posted by AnfieldEd View Post
    Yes but do Barca and Real care - that is the question.
    They care to a point as they agreed on the collective tv deal, although the money they will receive will still dwarf the rest.