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Spending in La Liga

 Posted by on January 29, 2014 at 1:38 am  La Liga, Real Madrid, Spain, The Ball is Flat
Jan 292014

We all know that the so-called specter of Financial Fair Play hovering over the heads of the largest European clubs, spending has actually dramatically increased. New investment has prodded up the English Premiere League and other clubs across Europe have spent accordingly to catch up. It's no surprise. Financial inequality in real-life is a very scary reality for most of us and why shouldn't it be reflected in the clubs we support. La Liga clubs, especially the top two are the ideal culprits in regards to public opinion, but are they really? Here's an infographic about that very situation.

It seems an outrageous amount all around, but in the high profile signings of Cristiano Ronaldo, Gareth Bale, Luka Modric and a slew of other for Real Madrid, not to mention the knee-jerk responses by arch-rivals Barca in securing Alexis Sanchez, Cesc Fabregas and Neymar, the Spanish clubs and the Spanish league are at first glance the most egregious culprits. Look at today's Copa del Rey second leg between Real Madrid and Espanyol. Los Blancos according to the above chart spent an ungodly 536 million euros versus Los Pericos who spent a meager 8.3 million.

It's a sore spot of contention because I'm an Espanyol supporter. We're generally one of the poorest clubs in La Liga considering our debts and our assets. To put our situation in perspective, the last place club in England spent 4 times what we spent. All but 3 clubs France and Italy did as well and all but 4 clubs in Germany did as well. We put up a fight losing out 2-0 on aggregate at Cornella last week and at the Santiago Bernabeu yesterday. I am so proud of my club but I am well aware that unless the financial situation changes, sooner or later we will suffer the utter tragedy of relegation in La Liga. It truly is a wilderness in Segunda A and/or Segunda B and for many clubs in Spain, except for the big two of course, it is as we speak inevitable.

Is it is as bleak as I say? La Liga clubs spent on the average of 57 million euros on their squads for a whopping 1.1 billion or so euros as a league. Sure, but almost 70% of that spending came from the top two clubs. The rest spent on an average of around 22 million euros per squad and that is still less than even what last place Crystal Palace spent on their squad to give you some perspective.

Then the argument is, well aren't Spanish clubs other than Real Madrid and Barcelona competing and winning European matches, taking home trophies and lifting the Spanish brand as a whole? Sure, and I will agree that clubs have become creative with taking on loanees, allowing second and third party ownerships and signing long-term projects on shoestring budgets, but to really assess this problem at the moment don't stretch the argument and track how squads have been built over the span of existing 5-6 year contracts. Narrow the focus and simplify the metric. Track net-spending over the last transfer window. So I referenced this graphic from El Pais from over the summer.

Net spending for the top two clubs in La Liga this past summer was around 70 to 75 million euros each, and that's including the Bale signing, and yes that's even factoring the infamous hidden price of Neymar's contract. Athletic Bilbao spent around 15.5 million and that's understandable because the club have a factory that spews out an assembly-line of gifted players from their youth-team. They have money to burn and even then it's a modest amount at 16 or so million euros; they sold Javi Martinez for more than double that. The next closest was newly-promoted Villarreal at 11.4 million net and that's because they also have stable ownership that weathered their year in the second division. The Pozzo family, who own Udinese in Italy and Watford in England, subsidize Granada as a feeder club but even they spent a minuscule 3 million euros net. The only other club that spent anything of significance was Elche and that was a microscopic 50,000 euros. That's the price of an upscale minivan.

The rest of La Liga is a complete buyer's market. Five top clubs were in the black big after the transfer window closed: Sevilla at 55.3 million euros, Atletico Madrid at 39.9, Real Sociedad at 36, Malaga at 35, and Valencia at 30.3. Getafe and Espanyol both recouped 10.8 million euros, but the rest: Real Betis, Rayo Vallecano, Levante, Celta Vigo, Real Valladolid, Osasuna and Almeria profited no more than 20 million euros as a whole, less than 3 million euro profits on the average.

Some would say that's a good thing. Young talent in Spain get an opportunity to show their potential replacing top-level talent leaving for big clubs across Europe. It's true, and when they do clubs capitalize on the high interest for La Liga talent in those big-money sales, but it doesn't necessarily make for a healthy league. The turnover at even the top clubs year-by-year is astonishing. As with any extra-income, something other than that which a club can manage from tickets and sales to supporters, something more volatile like bonuses from European competitions, i.e sponsorships (many La Liga clubs have played for years without consistent investment from even local businesses) or in this case selling players, the market fluctuates; sooner or later there will be a store-front that is better placed than the Spanish league for their resale value and where will that leave already cash-strapped Spanish clubs? Maybe then the league will step in and change things for the better.
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