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SBD Global/August 26, 2013/Finance
Spain's Economic Crisis Takes Toll On La Liga Football Clubs Ahead Of New Season
Published August 26, 2013
La Liga side Málaga has "come to symbolise the excesses of Spanish club football like few others," according to Tobias Buck of the FINANCIAL TIMES. At one point last season, "the cash-strapped club was unable to pay players' salaries." UEFA found Málaga's finances were in such disarray that it "banned the club from European competitions this year." The club's "fall from grace is mirrored in football grounds up and down the country." Spain's economic crisis has taken a heavy toll on La Liga "as it struggles to emerge from a debt-fuelled boom-and-bust cycle that gripped Spanish football just like it gripped the country." Weighed down by debts that stand at almost €4B ($5.3B) for the clubs in the first and second league, "teams have been forced to sell players, mothball plans for new arenas and slash spending." Eighteen top teams "have gone into administration over the past four years." Spanish Football League (LFP) President Javier Tebas, "likens recent events to Spain's notorious housing boom." Tebas said, "The sector became inflated. It grew through debts. Then the crisis brought an end to all this money -- and strangled us economically." Spanish Superior Sports Council (CSD) President Miguel Cardenal said the league is undergoing both "shock therapy" and a "drastic change in culture." He agrees that the sharp spending cuts enforced on weaker teams will cement the towering dominance of Real Madrid and Barcelona, "but sees no option." Cardenal: "Three years from now, when their debt is reduced, they will be able to compete again. But now they have to take their medicine and it is bitter medicine," (FT, 8/23).