La Liga claims to be the best league in the world,
but beneath the glitz of the big two and lies a very different
picture.
Former president of Real Zaragoza, says: "This is
the dullest league in the world."
Barcelona have had plenty to celebrate of late but
La Liga is not so properous. Photograph: Luis Gene/AFP/Getty
Images
The headline was as alarmist as it was partisan. "The
government," declared Spain's best-selling newspaper, "is trying to
kill Spanish football." It was November 2009 and the Socialist
party prime minister, José Luis Rodríguez Zapatero, announced an
end to "the Beckham Law". The sports daily Marca, part of
the right-leaning El Mundo group, was furious.
Presidents of the country's biggest clubs threatened to lead a
strike. At the Spanish League they were talking as if the four
horsemen of the apocalypse had reared into view.
According to article 93 of law 35, originally introduced by the
previous Partido Popular government in 2004, foreign
executives earning more than €600,000 (£540,000) a year are taxed
at 23%, rather than 43%. In theory, the aim was to encourage talent
to come to Spain: in practice, following a modification in 2005, it
gave Spanish football clubs, already boosted by the collapse of the
pound, a huge advantage. Of the 60 people who qualify for the lower
rate of tax, 43 are footballers.
Beckham was the first beneficiary of the new rate, hence the
informal name. Or rather Real Madrid were, as he had agreed a net
salary. Another Englishman, Jermaine Pennant, reveals the practical
implications: Real Zaragoza pay him £49,200 a week; an English club
would have to pay £80,000 to match his net salary. Cristiano
Ronaldo's current salary would cost a Premier League club €5m more
than it costs Real Madrid.
Now, suddenly, that privilege is being removed. The consequences
will be dire. "If the government want a substandard league …"
warned the league's vice-president, Javier Tebas.
Figures quickly emerged claiming that Spanish football generates
85,000 jobs and turns over €9,000m a year. The real cost to La
Liga could be losing its hegemonic position, a
"superiority" in which it revels.
"Objectively, Spanish football is the best in the world,"
announced the league's president, José Luis Astiazarán. "Spain won
Euro 2008, Barça the European Cup, and our league's the best,
superior to England." The arrival of Cristiano Ronaldo, Kaká, Karim
Benzema and Zlatan Ibrahimovic last summer provided all the proof
he needed. The best players in England, Italy and France had
departed for Spain. More than €455m had been spent by Spanish clubs
on transfers – a 72% increase, more than any other country.
Ever.
But, insisted Astiazarán, those days could soon end. Never mind
the fact that 43% still puts Spain's tax band below the 50% in the
United Kingdom, revoking the Beckham Law will be the demise of the
domestic game. "In a few years our league will be average because
it won't attract the world's best," complained Tebas. "It is the
end of the league of the stars." The law will be repealed from the
new tax year but, at least, will not be applied retrospectively, so
existing contracts are protected.
Tebas may even be right, and not only due to the Beckham Law,
because beneath the glistening surface 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."
The €455m transfer spend disguises a troubling reality. Last
year, despite winning the treble, Barcelona made only €8.8m and
have a debt of €350m. Madrid signed €258m worth of players but only
after their president, Florentino Pérez, turned to two friends who
are both presidents of banks and who loaned Madrid €151.5m.
The argument is that their debts are serviceable. In fact, Pérez
insists that high expenditure is necessary to generate money and
Madrid have become the first club to take income beyond €400m. But
doubts remain; costs outstrip income, shirt sales are lower than
those of Liverpool and Chelsea; Bernabéu attendances are down 7%;
and the debt stands at €683m. Publicly, Pérez insists: "Madrid must
always remain a club owned by its members." Privately, the
possibility of becoming a plc has been discussed.
But would that solve anything? The evidence suggests not. In the
early 1990s, a new law obliged every club to become a plc, with
four exceptions – Real Madrid, Barcelona, Athletic Bilbao and
Osasuna, who were given special exemptions for socio-cultural
reasons. Shares were issued and the slate wiped clean. It was
supposed to be a panacea. The theory was simple: presidents would
be more careful risking their own money. They were not. Often their
fans would not let them.
"We're operating on a war economy," reveals one director, "but
supporters don't see it like that. They just want to win." Jorge
Pérez, the secretary of the Spanish Football Federation, admits
that one director told him: "If I do a good job economically, we'll
go down and they'll kill me." So he spent money he did not have.
Only 8% of what football clubs spend on average can be covered by
liquid assets.
Look back over the clubs who have competed in the Champions
League recently and the situation is alarming: Valencia's debt is
more than €600m. Like Real Madrid (who sold the their training
ground for €447m to the council in 2001, wiping out their €278m
debt), a property deal was supposed to be their salvation. However,
the market crashed at just the wrong time. Now Valencia have two
stadiums – one they cannot sell and another they cannot afford to
finish building.
According to the third largest shareholder at Atlético Madrid,
their debt is above €300m. Villarreal have just failed to pay their
players for the first time because the ceramics industry from which
their owner, Fernando Roig, makes his money has been hit hard by
the crisis. Deportivo La Coruña are more than €120m in debt.
Mallorca are desperately seeking a buyer and preparing for
administration. Celta Vigo and Real Sociedad have been relegated
and, with no parachute payment to break the fall, went into
administration. Real Sociedad's president at the time was a certain
Astiazarán, now the league's president.
"We need to avoid trying to compete with Madrid and Barcelona
and sinking ourselves," says Ramón Monchi, sporting director at
Sevilla. His club have been successful but there is concern, too:
their success has been built on player sales, which requires
continued success and a buoyant market. The latter has disappeared;
the former depends on European qualification, hence last week's
sacking of their coach, Manolo Jiménez.
In all, Gay calculates Spanish football's debt to be €3.5bn. The
Spanish federation still owe the players' union €6.8m and,
according to the former president of the union, Gerardo Movilla, an
estimated €100m is still owed to footballers in unpaid wages. The
state loses out, too: Atlético owe the tax man €15m; 50% of their
transfer income is embargoed.
Michel Platini says there are five or six top-flight Spanish
clubs in danger. Yet the danger is relative. The irony is that the
lack of control also helps to protect the clubs from going out of
business – in the short term at least.
As Spain's secretary of state for sport, Jaime Lissavetzky, puts
it: "We need to be able to hand clubs yellow cards, a warning. But
we have no coercive force. It's one thing taking the temperature,
it's another handing out medicine." Even administration does not
necessarily mean applying the brakes. While it is a last resort it
is often a handy one, open to abuse. Unlike in England, there is no
footballing penalty for going into administration.
The federal nature of the Spanish state, made up of autonomous
communities, also offers a crutch upon which to lean. Madrid,
Barcelona and Sevilla have all benefited from favourable property
deals involving their local councils; Atlético plan to move to
Madrid's municipally owned Olympic Stadium, selling the site upon
which the Vicente Calderón stands to the council. Many clubs do not
have that option: Sporting, Racing, Almería, Getafe, Deportivo,
Málaga, and Valladolid all play in municipal stadiums.
Valencia have been propped up by Bancaja, their principal
creditor, to whom they owe €220m and who, despite the club's
mounting debt, backed a share issue to the tune of €95m. "Without
them we would have gone down to Second Division B," admits their
president, Manolo Llorente. Bancaja are a savings bank and they do
not want to upset customers by sending their club to the wall. As
one director of another savings bank puts it: "Clubs have an
emotional power they use as a kind of blackmail." When Sporting
Gijón went into administration, Gijón council bought their "brand
image". As one insider puts it: "The council could not let us
disappear; Gijón without Sporting is not Gijón."
Whether or not clubs go into administration, they can never
compete with the big two. Remove Madrid and Barcelona and there was
a 40% decrease in summer spending. Only five clubs spent over €5m.
During the winter transfer window only three clubs spent anything.
But how can you ignore Madrid and Barcelona? They are La Liga. That
is the problem.
According to reliable statistics Madrid have 13.2m fans while
Barcelona have 10.4m. Valencia are third with 2.1m. Nearly
two-thirds of all football fans in Spain support one of the big
two. And supporters of other clubs almost invariably choose Madrid
or Barcelona as a "second" team.
The Madrid-Barça dichotomy is self-perpetuating. The media
insist they are giving people what they want, that theirs is a
business decision. The editor of one newspaper admits: "Every
Madrid win is 10,000 more in sales." El País's match
reports for Sevilla and Villarreal the day after the
clásico contained a total of no words. The director of one
television channel insists it would be a "disaster" for the channel
if anyone other than Madrid or Barça won the league.
The dominance is felt most on TV – and that is the crux of the
issue, the precarious foundation upon which Spanish football is
built. Unlike elsewhere – and even Italy is going collective –
Spanish clubs negotiate individual television deals. "The lack of a
centralised deal is the biggest problem we face," Tebas says. The
reason is clear. Madrid and Barcelona will earn approximately €120m
in rights each year until 2013. Last season's third-placed side,
Sevilla earn around €20m; Valencia, currently third, make under
€30m – less than Portsmouth. Right throughout the league, the
imbalance is extraordinary. Competing is impossible.
The problem is the league are powerless to impose a collective
deal, although they continue trying. Just as their plans –
announced last week – to impose salary cuts and wage limits on
clubs can only get the go-ahead if the clubs themselves, and Madrid
and Barcelona in particular, agree to them.
"It's not normal to have two clubs earning 15 times more," says
Villarreal's Roig, "and it's going to be very hard to get the clubs
to agree to change now. There's no unity, the league has a very
difficult role. I'm not worried about Sheikhs [pumping money into
England], I'm worried about our own organisation."
An insider at Sevilla adds: "The mentality of every club is
always purely selfish and we're not sure that it would be
beneficial for us [to campaign for change]. If we push for unity we
might lose our position as the third or fourth biggest club: we
could get closer to Madrid and Barcelona, but we would also see
smaller clubs come closer to us."
Perhaps the most fearful remark about La Liga's "big two"
problem comes from Sevilla's sporting director, Monchi. "Spain," he
says "reminds me of Scotland."
In 2008, the then British culture secretary Andy Burham warned
of the risk of the Premier League becoming too predictable. "In the
US, the most free-market country in the world, they understand that
the equal distribution of money creates genuine competition," he
said. Spain provides further proof from the other end of the scale.
But few see it and few debate it – after all, much of the media
lives off the duopoly too.
One headline in Spain recently declared: "La Liga becomes the
best in Europe." The "evidence" was two-fold: Madrid and
Barcelona's place at the head of Deloitte & Touche's rich list;
and the "big two" racking up more points than any other team in
Europe. A closer read suggests the exact opposite. Madrid and
Barcelona were at the top but there was not one other Spanish club
among the leading 20 and their points totals – a record at both
clubs – suggest that while they are good sides, maybe the teams
they are playing against are not. Valencia, third going into this
weekend, were 18 points behind. No other major league has such a
gap.
"We need to recognise that the smaller clubs are necessary for
the competition," says Roig. "After all, 15 clásicos at
the Bernabéu and 15 at the Camp Nou would be a bit boring wouldn't
it?"
Some of his counterparts believe it is already too late.
Eduardo Bandrés, a former president of Real Zaragoza, says:
"This is the dullest league in the world."
