Posted by admin | Posted in finances | Posted on 09-06-2012-05-2008
FF’s Elisa and VillarrealUSA’s Allen get into the deep, dark finances of Spanish Football. Enjoy!
ALLEN: so I think the topic of today’s chat is: no one in Spain has any money!
ELISA: well, we have seen that money or lack there of, has affected transfers thus far.
ALLEN: yes, we have. It’s interesting how quiet the market has been so far.
ELISA: most of the transfers have been very cheap or on a free.
ALLEN: yes, and they were players that were rumored to be moving for €2-3m a year ago (Chori Castro, for example).
ELISA: see Guardado, Emre (has been), Cebolla Rodriguez, Joao Pereira, and Diego Lopez.
ALLEN: well Guardado’s deal was tied up last year, but Diego Lopez is a good example. a year or two ago Villarreal could have gotten more for him, it’ s not just that they were relegated–it’s the market.
ELISA: Exactly! but I expect to see more of those type of transfer deals. also Laftia and Abraham are cheap buys.
ALLEN: What’s happening in Spain (and to some extent elsewhere as well) is the biggest clubs–RM and Barca–are off in their own world somewhere. they are wheeling and dealing at the €20-30m/player level, competing with Man Utd and Chelsea (and Man City), but for most everybody else the wheeling and dealing is at a very cheap level. There is no middle any more.
ELISA: plus the vultures are going after Sporting, Villarreal and clubs who are desperate for money IE Espanyol, etc.
ALLEN: Who has money in Spain? Malaga, I guess, when the sheik actually visits. Athletic? well, they will only buy Basques (as defined). Valencia seem to think they do, or at least they continue to churn a third of their club every year.
ELISA: …and the big two. Hopefully the other clubs will stick to their guns if a non Spanish club or the big two come calling and ask for full transfer value. I will be interested to see how much Jordi Alba goes for.
ALLEN: well, Alba is a perfect example. he goes either to Barca or RM, or to a big club overseas. but the tragedy is guys like Isco and who is the other youth star Valencia still have? I forget his name but apparently Malaga want him and now Barca wants Isco.
ELISA: well I don’t think Malaga will sell Isco, unless they get big bucks. he is their most improved player and the future.
ALLEN: (Btw the Nou Mestalla deal is, I believe, in real trouble now that Bankia has been nationalized and wants more money)
ELISA: well that is par for the course. I mean Valencia is still in the US, trying to make as much money as possible.
ALLEN: Yeah, plus the Houston stadium I guess is sponsored by BBVA so there is a tie in there.
ELISA: back to VCF, Bernat is being wooed by Rayo Vallencano on loan. Alcacer is wanted too.
ALLEN: Paco Alcacer, that’s the name I couldn’t remember.
ELISA: I hate to say it but, VCF and Sevilla really don,t know how to develop talent. It’s crazy how Valencia are selling Tino Costa and Topal. Matthieu, Pablo, who isn’t for sale?
ALLEN: Sevilla has developed some, but sold them off. at VCF if you don’t become a huge star quickly, they just sell you on, it seems to me.
ELISA: VCF are like Real Madrid, one chance and if you don’t shine then boom bye bye!
THIRD PARTY OWNERSHIP
ALLEN: I will also be curious to see if the match-fixing probe causes problems for Serie a clubs. before this came out, I was thinking Italian clubs to be very active this summer
ELISA: Exactly, who wants to go there now? Have you noticed that cheap stars from Portugal and France are the latest craze? Speaking of trends, the Doyen Group will be getting more involved with clubs again. looks like Depor will be another active party using third party investment.
ALLEN: My sense is what we are seeing is the Spanish economy just dragging everyone in the league down, and everyone has to either cut their budget or come up with creative ways to acquire players, like Doyen.
ELISA: so true, so many people out of work in Spain.
ALLEN: I mean Doyen are being linked with so many clubs now, even Espanyol.
ELISA: Banks are unwilling to loan monies anymore. Doyen always had Espanyol players on their website. Alvaro Vazquez is the flavor of the month, being linked with everyone
ALLEN: Sure, I think it was pretty clear last year the banks had put pressure on Sr. Roig to separate his business loans from Villarreal (which is why he converted his ‘advances’ to equity)
ELISA: It’s a slippery slope.
ALLEN: yes, Doyen had players on the website, but I think I see more teams willing to use third parties. it is a slippery slope and UEFA/FIFA are really concerned about this. what incentive do you have to manage your team properly when you can pull a deal like Zaragoza did for Roberto?
ELISA: FIFA and UEFA have so much to do in so many matters, they are reactive not proactive. The betting corruption shite has hit the fan!
ALLEN: Remember 3rd party ownership started in leagues that had lots of talent that was probably going to be eventually exported, but very little money (Brazil, for example). is La Liga going to become like that?
ELISA: unfortunately yes. Thankfully the cantera, and youth structures in Spain are superb.
ALLEN: or, is it going to become a league where the super agents like Mendes have such a large stable of players they can control, where a lot of talent goes? probably, yes again.
ELISA: well yeah, both. but what scares me is competition. is it manufactured in that type of league? is it easy to fall prey to betting business models and more corruption. But I digress…
ALLEN: Exactly, how do you know what is going on when Atletico and Getafe pay and say half the players out there are owned by Doyen Group or repped by Mendes?
ELISA: That’s why I asked Ravi to do his agent by club stats analysis on Spain, we might see more big players agent wise per club. We might see a monopoly. Serie a has farm clubs IE Juve, Udinese, the other striped team. In La Liga you have Real Madrid – Getafe – Castilla. Atletico – Rayo. Then you have the agents.
ALLEN: I think we will. I go back to what I said before when we did the podcast–the problem is Spain’s judicial system has not caught up with the “Wild West” mentality in sports these days
ELISA: The league nor the judicial system. Did you know that Zaragoza B also stayed up in Segunda B?
DOES ANYONE HAVE ANY MONEY IN SPAIN?
ALLEN: well, the league is simply the big two, really…they make the decisions.
ELISA: Exactly, but do you agree with what Raul said that in England or Germany the big two, would still be the big two?
ALLEN: well, not totally. in Germany there is much more of a “we are all in this together” mentality–the Bundesliga really does try to keep itself solvent as a league and make decisions for the benefit of all its members.
ELISA: Bayern is still the man.
ALLEN: Sure, but Bayern’s strength is due to their business acumen as much as it is the players on the pitch. That seems pretty fair to me.
ELISA: and their past glories or competitive edge. Some would say the marketing power of the big two makes a huge difference.
ALLEN: Sure, but they, RM, and to a lesser extent Barca, lead the way when it comes to revenues from sponsorship deals.
ELISA: but the tv revenues as we all know is the key.
ALLEN: Yeah, but they are not as big a key for the big two as they are for everyone else. RM especially has a really good revenue stream between match day revenues/TV/sponsorship. they market themselves very, very well.
ELISA: oh I know, but they are highly dependent on the monies, as part of the equation.
ALLEN: TV is critical for a team like Villarreal or many of the mid-level teams in the Primera that have limited match day revenues, and aren’t going to get the big sponsorship deals.
ELISA: That is why Malaga is choking. I think their new deal will help along with Europe.
ALLEN: Malaga’s problem is they are where Chelsea was years ago and where Man City was a couple of years ago. if they can build on CL, get out of the group stage and start developing a larger fan base, they can probably challenge Valencia for 3rd each year!
ELISA: That too, but the 12M TV revenues probably was a shocker this year.
ALLEN: That’s right. if Malaga were in the EPL, they’d have 50M+ TV revs, and I saw today the sheik says he’ll spend 40-50M. so basically he is kicking in the TV money they would get under a better system.
ELISA: looks like the Dubai group have disappeared for Getafe.
ALLEN: yes, Getafe Team Dubai seems to have gone away.
ELISA: well I expect a lot of turmoil this year in La Liga. I read that athletic club made 16M from europa league, not bad!
ALLEN: 16M sounds awfully high for EL. Villarreal got 10M last year (OK, we lost in the semis) but we were the only Spanish team in the last 8, I think. The market pool runs by country and all the teams in the country that are still playing split it, and it’s not an even split–the team finishing 5th in La Liga gets more than the team that was 6th.
ELISA: The thing with Athletic is that they always had a full house and top rivals. plus Europa monies have increased this year. also, Athletic build ticket demand with this whole scarcity tactic. it is so hard to buy Athletic tickets!
ALLEN: The key thing for me is going to be do players like Llorente, Muinain (and Falcao for Atletico Madrid) stick around, or do they leave for England or somewhere?
ELISA: I think the most likely player to move could be Javi Martinez. I don’t think he likes to play at center back, so it could be Bielsa dependent. Athletic doesn’t need to sell. they are pretty financially sound. Atleti need to figure out how to keep Falcao at the club, because they owe a lot of money to Porto. they need to sell some players and replace them with cheaper versions. Well I expect a lot of turmoil this year in La Liga.
ALLEN: Yeah, turmoil for sure. Actually I think we may have seen the blueprint for this year, in last year’s competition. The big 2 are off in their own world, the other 18 are pretty much competing against each other. Yeah, there are some teams with better players than others (Valencia, Malaga), but in the end… back to Falcao and Llorente, if players like that leave, then La Liga starts to become a development league. As long as there are still stars being developed here who stay here, the league will be OK.
ELISA: BTW, Diego is not returning to Atletico. Right now La Liga still has the biggest payroll in the world, but yes that whole development league moniker is slowly becoming a reality.
ALLEN: Yeah, I saw Diego was leaving. AM has the problem of the money owed the government. Maybe in Spain you can keep the taxman at bay forever, but I wonder…
ELISA: The LFP and government talk as if they are going to keep 30% of transfer fees to cover debt owed to the taxman, but that’s why there are third party groups, another tax loophole.
ALLEN: La Liga has the biggest payroll, but take out the big 2 and then look at it. Sevilla have cut their budget by 30m; Villarreal the same. Espanyol says they have to cut their budget, Valencia already have cut salaries and probably will again.
ELISA: Atleti need to cut too. Athletic can handle their payroll and they have very little debt.
ALLEN: Yeah 30% of nothing is going to be nothing. and Osasuna want to pay off their debt over 50 years!! Right, Atleti need to cut. I guess Athletic are really about the only club in the “liga Justa’ that have no financial worries–plus they are moving into a new stadium.
ELISA: Interesting times to say the least, take out the big two, and there is parity and competition. Osasuna are considered to be a well run club for La Liga. But you won’t see the big players coming there if the money disappears, as you said earlier, a development league…
ALLEN: That’s right. (I guess Malaga don’t have financial worries if the sheik visits often enough; that seems to be the only time people get paid). Osasuna owe a bunch to the taxman though.
ELISA: How much is that?
ALLEN: Osasuna–I forget, but I know they presented a repayment plan that stretched for 50 years!
ELISA: well, most clubs have a payment plan til 2020. i didn’t think Osasuna’s was that big, my bad.
ALLEN: Segunda will be interesting with RM Castilla, Barca B, and Mirandes along with Villarreal and Sporting.
ELISA: La Liga will be stronger too with Depor and Celta Vigo.
ALLEN: I think Celta is financially OK, though they went bankrupt awhile ago. Depor I don’t know. Hercules and Valladolid, if they make it, are basket cases.
ELISA: Celta and Depor are not big spenders, but crafty and develop talent well. Depor is not in Ley Concursal aka administration. The Primera playoffs, well I would like to see a new team like Cordoba come up.
ALLEN: yes they do. You know Iago Aspas wanted to come to Villarreal last summer, Celta would not let him go. Depor as I recall ran a breakeven budget the last year in Primera.
ELISA: Celta is smart, don’t sell your crown jewels like Mallo and Aspas.
ALLEN: Cordoba have been playing well but Valladolid have been the most impressive, at least the two games I saw against Villarreal B.
ELISA: The playoffs are a crap shoot.
ALLEN: Celta have an excellent attacking midfield and front; defense is only OK. yes, the playoffs are always iffy. Alcorcon could get in, they have had a good run of late.
ELISA: Yeah that would 5 madrid teams in the top flight! Hmm, Florentino has one more chance to make good with Castilla and the cantera in Segunda a, as well, but I worry that Mendes might get his grubby hands all over it!
ALLEN: Time to wrap our chat. Here’s my parting thoughts: It’s going to be interesting for me to watch the Primera with my team not in it, and I think this could be a watershed year for the league depending on what happens in the EU. La Liga’s foundations may be built on sand, I’m afraid. I hope not, but if the economy implodes….. I worry about Mendes and his ilk too. and Doyen. I just think Spain doesn’t understand the danger (competition, betting, etc) these sorts of things set them up for.
ELISA: Yeah are you really going to be excited with Villarreal in Segunda to watch Primera?
ALLEN: yes, well, I think if Celta go up I will probably try to see how they do. and hopefully Villarreal will get off to a decent start in the Segunda (no one has any money there either, and the B teams can’t get promoted!)
ELISA: funny how it seems to be status quo – two B teams in 2A.
ALLEN: it will be strange though not watching the Primera with an eye toward seeing players we need to watch out for or who we might want to acquire. By the way, we forgot Russia supposedly Borja Valero may go to Rubin Kazan.
ELISA: I wonder if Ravi will be enthused. plus we have the new provider Al Jazeera. I heard you guys sold Marcano to Rubin. Russia is a buyer for sure.
ALLEN: Ravi’s been a fan for a long time, but I think this season took a lot out of all of us. Yeah, supposedly we sold Marcano for €6m which is amazing if true.
ELISA: I think the whole sponsorship transfer market like that in Brasil might come to Spain too. Yeah the end of the season for Villarreal was so very sad. A well-run club like Villarreal going down, really makes you despise the league organization and problems.
ALLEN: Yeah, really. and there are going to be more cases like Racing where crooks and charlatans play trusting politicians for all they’re worth. I still can’t believe they can’t get rid of Ali Syed!
ELISA: That is disgusting! When I was down there in March, the Villarreal staff was so nervous. they already had the fear of relegation.
ALLEN: at the end of the day being well run doesn’t matter if you can’t perform on the pitch. but it does leave a bitter taste when Zaragoza stay up and their best player (Roberto), they shouldn’t have been allowed to have. and Granada the feeder club of Udinese….
ELISA: We might see more setups like Granada.
ALLEN: it seemed to me the Villarreal players were nervous from about August on. When did we play well? I can’t remember a match.
ELISA: but talking doom and gloom? in March? I really don’t like Granada
ALLEN: well, development league is the Granada model. None of our players had ever been through anything like this at Villarreal. Even when Valverde got fired, the team was mid table.
ELISA: but normally teams stay positive?
ALLEN: I don’t like Granada either. but I like Zaragoza less.
ELISA: Yeah when a team (with no relegation fighting experience) gets in the scrap heap, I feel that it could all go down hill. BTW, I keep hearing that Agapito will step down at Zaragoza, but I just really doubt it.
ALLEN: Normally teams do stay positive. I don’t think we had a team leader though, and with Santi and Joan Capdevila gone, we didn’t have the jokers to lighten things up. Agapito won’t leave.
ELISA: Yeah, Agapito is king of the hill.