Report Claims Spain’s La Liga in Over USD5bn Debt
June 22, 2011
According to a report by University of Barcelona professor José Maria Gay into the state of Spanish soccer finances, the country’s elite La Liga division has reached US$5.1bn in debt, as the league’s President confirmed plans to control spending.
The Premier League is still the most indebted league in Europe with a combined debt of $6.4bn, but the Spanish game has been warned that it is in danger of slipping into an “economic coma”.
League giants Barcelona and Real Madrid make up $1.7bn of the debt alone, though they also take in half of the $862m the Spanish league generates in overall TV revenue each year.
That inequality in revenues taken by Spanish top flight clubs has led many of its teams lower down in the league to spend significant sums in order to remain competitive.
After the top two, Valencia and Atletico Madrid are the clubs with the most debt, whilst a number of other teams are plagued by financial problems. Real Zaragoza applied for voluntary administration last month, whilst Racing Santander are struggling to pay off their debts.
All three teams promoted to La Liga this season, Real Betis, Rayo Vallecano and Granada, are also in administration. In addition, last season, Real Mallorca went into administration and were barred from playing in the Europa League.
To tackle the problem, La Liga will create a commission to monitor and control club finances, according Spanish Football League President Jose Luis Astiazaran who stated: “Spanish football needs to make progress towards an exemplary state of solvency.
“Among the clubs that form the LFP we currently have some dysfunctions which we have to get under control and we will make some decisions that will not be pleasant,” he added.
“It’s time to marry the sporting excellence we have achieved with financial excellence.
“Spanish soccer, and La Liga to be exact, has gained global admiration and we have to earn this distinction for economic management as well.”