La Liga-Leading Atlético Madrid's Economic Foundations Remain Shaky
La Liga Atlético Madrid's emergence as "a third force in Spain and contenders among Europe's elite rests on wobbly economic foundations and the edifice could come crashing down if they cannot sustain their remarkable run," according to Iain Rogers of REUTERS. Atlético coach Diego Simeone has molded "an unspectacular squad into a unit capable of challenging the continent's richest clubs, including La Liga rivals Real Madrid and Barcelona," which both topped Deloitte's Football Money League ranking of the "world's wealthiest clubs by income." Atlético "squeaked into the top 20" with earnings of €120M ($166M). They currently lead La Liga "despite the huge gulf in resources." Step "back from the euphoria for a moment, however," and a glance at Atlético's accounts "makes for grim reading." University of Barcelona professor Jose Maria Gay, an "expert on football finances," collated figures from '11-12 that showed that the club is "saddled with debts" of more than €500M ($690M) and the "cost of paying their players and staff alone" is more than 90% of the club's annual earnings. IESE business school professor Jaume Llopis said that Atlético "had managed to stay afloat due to their unexpected winnings on the pitch and by convincing the government to let them fall behind in the payment" of more than €100M in taxes. Llopis added that the "sale of top players like Fernando Torres, David De Gea and Sergio Aguero to the Premier League, a partnership with the Azerbaijan tourist board," reported to be worth €12M ($16.6M) over 18 months, and a "deal with sporting goods maker Nike have also helped keep the wolves from the door." Llopis: "Atlético Madrid's financial situation is dramatic. But this year because of the team's excellent results their economic problems are not talked about. Only with their continued presence in the Champions League, locking in the sponsorship deal with Azerbaijan, attracting more sponsors and selling their best players can they improve their finances, although it will be very tough. Either they stay in the Champions League and win the odd title which keeps the sponsors happy or they won't be able to straighten out their precarious economic situation."
BRIGHT SPOT: Oviedo University Economics Professor Placido Rodriguez, a former chairman of Spanish second division side Sporting Gijon, "noted several examples of Spanish clubs with relatively limited resources that have challenged at the highest level before fading away again," including Valencia, Villarreal, Deportivo La Coruña and Sevilla, who all had "successful runs in Europe and either won or came close to winning La Liga in the past 15 years," but like Atlético, "have had to sell their top performers." Rodriguez said that "one potential bright spot" for the club, which would "boost revenue and help secure their future, was the planned move from their crumbling Calderon stadium to a new 70,000-capacity arena at La Peineta." The club also has "plans for a vast new training complex which would include offices, a 15,000-seater stadium for the second and third teams and facilities and shops for fans." Rodriguez: "If these two projects come off and they don't make any crazy financial decisions in the meantime, for example when results aren't going their way, Atlético's economic situation will be much improved" (REUTERS, 4/8).