LFP unveils new measures to tackle Spanish football’s financial troubles
MADRID: The Spanish football league (LFP) has revealed details of new rules designed to end clubs overspending on players, with Sports Minister Miguel Cardenal describing the regulations as a “profound cultural shift” for the Spanish game.
The rules 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 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 league 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.
UEFA regulations
In July 2011, the LFP agreed regulations which it said were in-line with UEFA’s financial fair play. In April 2012, the Spanish government and the LFP unveiled regulations aimed at assisting clubs in erasing combined tax debts of €750m.
The regulations prescribe that from the 2014-15 season clubs will be forced to set aside 35pc of their revenue from media rights as a guarantee against their tax obligations.
Clubs 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 €3.53bn at the end of last season, up from €3.43bn a year earlier.
With Segunda Division clubs owing a further €550m, Spanish football was said to be more than €4bn 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.”
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