Spanish Game in Crisis as La Liga Debts Soar
La Liga is one of the football's most exciting domestic leagues, so it is easy to see how the news of the indebtedness of the league in which footballing giants like Real Madrid and Barcelona play would make a football fan cringe.
According to a study carried out by Professor Jose Maria Gay of the University of Barcelona, it was revealed that La Liga's debts have grown and at are at an all time high of €3.53 billion (£3.03 billion) this year.
The study also revealed that of the 20 clubs that play in La Liga, the top two clubs in terms of exposure and income - Real Madrid and Barcelona - and the relegated Numacia were the only three who made an operating profit this past year.
The reason for this imbalance is player wages, which are said to have made up 85% of the total operating cost of the clubs. In many clubs like Valencia, Sevilla and Atlético Madrid the outgoings on wages were far higher than the income.
The issue of player wages driving clubs into debt becomes increasingly disturbing when you hear about Barcelona's latest purchase of David Villa for £34.2 million and the anticipated signing of Cesc Fabregas for a similar amount, showing that the top clubs have no intention of curbing their spending.
Another fact adding to the imbalance is probably the fact that unlike English Premier League clubs who have a collective television deal with the broadcast income being divided equally among the 20 clubs depending on the number of appearances and final league position, the Spanish clubs negotiate their own media deals.
This once again means that the top two - Barcelona and Real Madrid get the best deals. Barcelona, for instance, was able to rake in half of their income from media rights. With more income from media deals and exposure, the top two have much more spending power than the rest of the league.Continued on the next page