Spanish teams have been dominant in this season’s Champions League and Europa League. However, their mounting debt and financial worries might be good news for German teams.
Spanish teams have taken home two Europa League and two Champions League titles since the 2005/2006 season, making La Liga the most successful league in Europe over the course of the last 6 years. Germany has by comparison not taken a single international title since Bayern won the Champions League final in 2001. However, that might be about to change given the financial situation many of the Spanish teams involved in European competitions are in.
When Ernst & Young rated the fiscal situation in all European leagues, the Bundesliga managed to score 100 points out of a possible 100, while Spain ended up on a dire 39 points. The teams in Spain’s top two tiers have managed to create an impressive 4 billion euros of debt, making Spain the most indebted football nation in all of Europe. Europa League semi finalists Atletico Madrid and Valencia stand for a staggering 900 million euros of that debt alone.
Before the global economic melt down the Spanish government was more than willing to extend a helping hand to the clubs in the top two tiers often times lessening their economic burden, however, that has changed now. Spanish teams are currently owing 673 million Euros to the Spanish tax payers, and this time around they will be forced to pay back every penny of what they are owing. Given the difficult times, it will be hard to find investors who are capable and willing to help paying down those debts.
The German approach
The 50+1 rule has kept many investors away from the Bundesliga, and made Spanish and English teams more attractive investment targets for the rich. This might have held Bundesliga teams back in the more recent past, and led to the fact that most of the world-class stars have chosen to play football outside of Germany. Both Schalke and Hannover saw their hopes to win the Europa League crushed by Spanish opposition in this year’s quarter finals, while Bayer Leverkusen were diminished to shreds and pieces in the last 16 of the Champions League by Barca at the Camp Nou.
Despite the somewhat awful results German teams have produced in Europe the last few years, the league is still the most profitable in all of Europe. The newly negotiated deal for the TV rights sees German teams increase their revenue stream even more. The teams in the Bundesliga will receive 628 million Euros per season, compared to 412 million Euros in the years prior to 2013.
This increase in revenue will enable teams in the Bundesliga to pay higher wages, and in turn attract more star players to the Bundesliga. Teams in La Liga have tried to decrease their wage bills for the last couple of seasons, making the Bundesliga more competitive when it comes to signing star players. However, the Bundesliga has still a long way to go before it’ll be able to pay the sort of wages teams in the Premier League are paying at the moment.
Real Madrid and FC Barcelona in a league of their own
Despite the fact of the Bundesliga catching up to La Liga in terms of the revenue for TV rights, there is still a vital difference between Real Madrid and Barcelona and the teams in the Bundesliga: Real and Barca are currently able to negotiate their deals with TV stations all around the world themselves, leaving them with a combined income of 350 million Euros per season. This puts the two of them into an entirely different class compared to the rest of the Euopean top brass. By comparison, Bayern Munich’s income for last year’s Bundesliga season was only 39 million Euros.
Real Madrid’s and FC Barcelona’s revenue streams might give them an edge in the short run, however, it raises a number of questions for La Liga as a whole. Barca are currently 26 points ahead of Valencia, who are in third. Are football fans going to stick around and watch a competition between the two same sides year after year? And, what will happen when the other teams in La Liga will falter due to the tough economic times and Barca and Real won’t?
Officials at Real Madrid have started to become worried about the economic situation of La Liga according to the German paper Handelsblatt. The club is considering to re-negoiate the TV-rights distribution according to an anonymous source at the club. This would certainly be good news to teams from outside of Spain, which haven’t been able to get anywhere near the amount of revenue Real and Barca have had during the last few years.
If this were to happen, more star players could choose to play for German, English and Italian teams. Spanish teams are at the moment fighting for their economic survival, which in turn gives them less freedom to act on the transfer market. It is make or break time for many Spanish teams, and their economic crisis might just be the perfect moment for German teams to pounce on the opportunity to pick up good players on the transfer market, and to be successful in Europe once again.
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