Brussels is already dealing with Spanish football’s debts

Clubs’ obligations to the state have risen to 700 million euros.

La Liga, the top competition, is fighting for the position of Europe’s best league with the English Premier League.

They are the country of the last world and European football champions, and their top competition La Liga is competing with the English Premier League for the title of Europe’s best league. But when it comes to economics and responsible management, Spanish clubs are in disastrous shape. The debts of the clubs in the two elite competitions have already risen to 3.5 billion euros, with almost 700 million owed to the state in taxes and levies. This leniency toward football clubs’ debts is already being criticized by members of the European Parliament toward the Spanish government. “It’s unfair to other Spanish companies and European football clubs that must pay their taxes on time,” Spanish MEP Willy Meyer told The Guardian.

A tax on transfers is planned
More than half of the clubs in the two top competitions have debts of tens of millions of euros. And these are growing every day. Does the European Parliament even have options to force these irresponsible clubs into better management? “The options are the same as with Greece or Cyprus. If Spain officially requests help from the bailout fund, conditions will be set under which it will receive that help. And those could include better debt enforcement,” MEP Monika Flasikova-Benova told the Economic Daily. She also revealed that Brussels is considering introducing a special tax on lucrative million-euro football transfers. “It’s under discussion, but there have been no negotiations yet. And the situation in Spain was also raised during their first bailout. Even then many asked why the European Union should be bailing out banks that lent money to football clubs,” added Benova. Debates about the disastrous situation in Spanish football were sparked by last week’s publication of the financial results of Deportivo La Coruna, Spanish champions 12 years ago. The former European giant has debts of 156 million euros, of which 94 million are tax and levy obligations.

No rules or penalties
One of the main reasons why clubs on the Iberian Peninsula spend more than they can earn, according to a football agent, is the absence of rules for reasonable management in Spain. “Elsewhere in Europe, for not paying taxes, clubs would have points deducted or be relegated to lower competitions. For example, like Scotland’s Glasgow Rangers. But not in Spain – there, teams are not punished in that way,” Jozef Tokos told the Economic Daily. He also sees a problem in the unusual distribution of television rights income. In the top competition, the two clubs that receive the most are Real Madrid and FC Barcelona. “The others receive only a disproportionately smaller amount, and then have great problems repaying their obligations,” said Tokos. So how exactly is it with those television rights? While the two giants each receive 140 million euros, the other La Liga teams must settle for an average of only 20 million.