LFP unveils new measures to tackle Spanish football’s financial troubles

31 Jan 2013

The Spanish Football League (LFP) has revealed details of new rules designed to end clubs overspending on players, with the country’s Secretary of State for Sport Miguel Cardenal stating the regulations are a “profound cultural shift” for the Spanish game.

The rules will take effect from July 1 and have been drawn up by the LFP and the Spanish Sports Council (CSD). They include powers to limit the total cost of a club’s squad and to refuse to register players if they are deemed too expensive.  Deportivo La Coruna this month became the latest Primera Division club to seek assistance to avoid going out of business after announcing that it had filed for bankruptcy protection. The Galician club won the Primera Division as recently as 2000, but submitted documents to the courts to request that it be permitted to re-negotiate its outstanding debts. “This is a profound cultural shift in Spanish football,” Cardenal said of the new rules, according to Reuters. “The rules are a tool capable of serving as an instrument to get us back to reality in the face of some of the most significant problems confronting Spanish football.”

Wednesday’s announcement is the latest move from Spanish authorities to clear up the debt crisis in the domestic game. In July 2011, the LFP agreed regulations which it said were in-line with UEFA’s financial fair play (FFP) regulations. In April 2012, the Spanish government and the LFP unveiled regulations that aimed to assist clubs in erasing combined tax debts of Eur750 million. The regulations prescribe that from the 2014-15 season clubs will be forced to set aside 35% of their revenue from media rights as a guarantee against their tax obligations. Clubs found to be in breach of the rules could even be forced to sell players to pay their debts, with the new regulations set to be overseen by a joint commission made up of government, LFP and club officials.

A study published in April 2012 by Jose Maria Gay, professor of accounting at the University of Barcelona, showed the 20 clubs in the Primera Division had combined debts of some Eur3.53 billion at the end of last season, up from Eur3.43 billion a year earlier. With Segunda Division clubs owing a further Eur550 million, Spanish football was said to be more than Eur4 billion in debt. The latest measures to be introduced include an obligation for clubs to provide projected budgets for the following season, including information on income and costs, profit and loss and investments or asset sales. “It is a system that goes beyond UEFA’s FFP rules,” said LFP president Jose Luis Astiazaran. “It is about establishing a procedure to guarantee the sustainability of clubs in the short, medium and long term and reinforcing sporting equality so that football is ever more competitive.”