Spanish football faces 'disaster'.4/21/2009 10:24:16 AM
Professional football in Spain Fútbol or balompié is the most popular sport in Spain. The Real Federación Española de Fútbol is the national governing body and it organizes La Liga, the Copa del Rey and the Spain national football team. is at risk of financial disaster unless overspending clubs fight to reduce their debt, a Primera Liga president has warned.
Clubs that lack the vast earning power Earning power
Earnings before interest and taxes (EBIT) divided by total assets.
1. The earnings that an asset could produce under optimal conditions. For example, AT&T may currently be earning $2. of Real Madrid and Barcelona have been living beyond their means for too long and the economic model they use is badly flawed flaw 1
1. An imperfection, often concealed, that impairs soundness: a flaw in the crystal that caused it to shatter. See Synonyms at blemish.
2. , Real Osasuna president Francisco Izco said on Tuesday.
The comments by Izco, president of Pamplona-based Osasuna since 2002, come as many small and mid-sized clubs face the real prospect of bankruptcy and are struggling to cope with surging wage and transfer costs amid Spain's worst recession in at least half a century.
Valencia, twice European Champions League finalists in the past 10 years, have admitted they may have to sell some of their best players and have been forced to delay the payment of wages and halt construction on a new stadium.
"Unless there is sweeping change then I predict a genuine financial disaster," Izco said.
"There has been a great deal of excess in building up squads, clubs have not kept their spending in check and the situation has spiralled out of control."
Jose Maria Gay, an accounting professor at the University of Barcelona The University of Barcelona (Catalan: Universitat de Barcelona, UB) is a public university located in the city of Barcelona, Catalonia, Spain. It is a member of the Coimbra Group and Joan Lluís Vives Institute. , has calculated that the 20 clubs in the Primera Liga have a combined debt of around $3.9billion, roughly equal to the money owed to creditors by their English Premier League rivals.
"The world of football is not immune to the general economic situation," Izco said.
He predicted that the impact of the financial crisis would likely be clearer next season when clubs are forced to come to terms with dwindling dwin·dle
v. dwin·dled, dwin·dling, dwin·dles
To become gradually less until little remains.
To cause to dwindle. See Synonyms at decrease. revenue from ticket sales, sponsorship and television rights.
"We have to have a period of adjustment to the new conditions," he said.
"Spending must be controlled and brought in line with revenue."
The majority of Spain's professional clubs are run as so-called sociedades anonimas deportivas (SADs), or sporting limited companies.
Fans as owners
But a handful, like Osasuna, Real Madrid, Barcelona and Athletic Bilbao Athletic Club is a football club from Bilbao in Biscay, Basque Country, Spain. The club has played in the Primera División of La Liga since its start in 1928. Of the founding members, only Athletic, Real Madrid, and FC Barcelona have never been relegated. , are still run as sports clubs A sports club, athletics club or sports association is an eclectic institution oriented to multiple sports, which fields many teams and has varied sports departments in several sports, working under the same umbrella organization. , with thousands of members (socios) as owners rather than a small group of shareholders.
Izco said the SAD model needed to be overhauled and urged soccer authorities to introduce financial controls to force clubs to rein in to check the speed of, or cause to stop, by drawing the reins.
to cause (a person) to slow down or cease some activity; - to rein in is used commonly of superiors in a chain of command, ordering a subordinate to moderate or cease some activity deemed excessive.
See also: Rein Rein spending.
"As a model, the SAD is sound but it has not worked for the clubs and has not achieved the objective it was meant to," he said.
"Systems of financial safeguards must be established which genuinely control football and make it function properly."
Osasuna itself was in good financial shape, he added.
"In our case, we can count on substantial assets and we have various activities ongoing that will help us exploit them for profit," he said.
"The future of the club is not under threat but we do see the need to exploit these assets for profit.
"We are not immune (to the economic crisis) and it's possible that we will see a negative effect in the area of marketing and sponsorship."
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