Debts of Spanish football clubs rise to almost two and a half billion

by Lorraine Williamson
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Since the pandemic, Spanish football’s debt has risen by 56% to more than €2.3 billion. Despite CVC’s multi-billion investment, American Moody’s warns that revenues may be disappointing now that the Super League is unlikely to take place. 

As is well known, the corona pandemic caused a crisis in many sectors of the world, including professional football. For a long time no matches could be played. Then when it was a again,possible again, no spectators were allowed to sit in the stands for months. Only recently, watching a football match, either in front of the TV or in the stadium, seemed like old times. 

This period ensured the football world missed the income from ticket sales. And furthermore, the millions of euros that are earned from television rights broadcasting matches. All this results in sky-high debts of the Spanish football clubs to banks and other financial institutions. 

Not only debts but also unpaid transfer fees 

In total, the clubs that are part of La Liga have more than €2.3 billion in debt with these entities. The current debt is 56% higher than before the pandemic, according to a financial report from the Spanish Football Association. The current €2.3 billion includes not only debts to banks, but also transfer fees that have not yet been paid (in full) to other clubs. That amount amounts to €900 million. 

Creative accounting kills football clubs after pandemic 

In the financial report on La Liga, a distinction is made between ‘debts with credit institutions’ and ‘other financial debts’. The latter includes debts with investment funds and other non-financial institutions, which currently amount to €1.24 billion. 

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Also within this sector, this is referred to as ‘shadow banking’ and is – after debts to banks and unpaid transfer fees to other clubs – the third largest source of debt for football clubs. The report therefore warns that clubs are increasingly indebted to non-financial entities. 

FC Barcelona responsible for 60% total loss of Spanish football clubs 

Last year, the La Liga clubs jointly suffered a loss of €892 million. The Spanish federation points out that one club is responsible for 60% of this. Although he is not mentioned by name, the Spanish news site Eldiario.es writes that it is about FC Barcelona. 

Billion dollar injection into Spanish football does not help La Liga out of debt yet 

At the end of 2021, Spanish football received a significant boost; CVC investment fund then made a capital injection of almost €2 billion in exchange for 10% of La Liga. This investment is converted into loans for the clubs. The vast majority of the 42 clubs agreed to this. Yet three clubs, Real Madrid, FC Barcelona and Athletic Club de Bilbao, opposed the deal and tried to reverse it through court. Ultimately, it was agreed that these clubs are outside CVC’s investment and thus do not share in any potential profits to be made within La Liga after the investment. 

Although this investment was more than welcome in Spanish football, Moody’s, the American business and financial services company, does issue a warning to this investor. Given that the much-discussed Super League will probably not take place, this means that the expected returns could be a lot lower. 

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