Signaling credibility in Spain

by on May 5, 2012 at 12:12 pm in Law, Sports | Permalink

A deal announced last week between the Spanish government and the soccer league (LFP) aims to force soccer clubs…to pay off the 752 million euros they owe in taxes, along with a further 600 million euros in social security payments by 2020. Those that fail to follow the guidelines face expulsion from competition, says the LFP.

It may not be easy:

José María Gay…says that the 20 clubs in Spain’s top division had total combined debts of about 3.53 billion euros at the end of the 2010-11 season, up from 3.48 billion euros the previous year. Much of the debt dates back to before the first of Spain’s most recent two recessions began in 2008, and is linked to disputes the clubs lost against tax authorities, he says.

Zachary May 5, 2012 at 12:38 pm

Thanks Tyler! This is HILARIOUS!!

Jonathan M.F. Catalán May 5, 2012 at 12:48 pm

As I understand it, what makes things worse is that most of the clubs in the LPF are not profitable (or profitable enough), apart from Real Madrid, Barcelona, and maybe Atlético de Madrid. The LPF is just a disaster.

The hinge that squeks May 5, 2012 at 2:08 pm

All the major leagues in Europe are except, of course, the German Bundesliga.

Super distaster awaits English football.

Rafa Paz May 5, 2012 at 2:05 pm

Atletico de Madrid, you must kidding! Even Barcelona F.C. has negative net worth (total assets minus total liabilities)

During the bubble football clubs took advantage of zoning. Real Madrid case it’s the most notorius but not the only one.

Here, football is a religion…

The new goverment has no balls to expulse anyone. Riots would smash the country

Panem et circenses

Rafa Paz May 5, 2012 at 2:07 pm

By the way, Mr. Cowen your work has been very useful to me during my PHd which was related with culture and pessimism.

Midnight in Paris by W.A. summarize perfectly my point of view of the Golden Age

Thanks for defending commercial culture

bob May 5, 2012 at 5:38 pm

So Nero is going to cancel the circus?

Spain only gets a semblance of optimism when soccer is on TV. If the clubs sunk, will it all rest on the national team’s result in UEFA this summer?

Maybe they should get Italy to subsidize Ferrari, since they’ve only produced F1 dogs since they hired the Asturian.

So Much For Subtlety May 6, 2012 at 3:54 am

So maybe they need to go in and seize the assets. If they auction off the football clubs themselves I would be happy to offer $10 for Barcelona. It is, I suspect, more money than the government is going to otherwise see.

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