Vast levels of borrowing and a lack of transparency in the transfer
market over the last 20 years make the Atleti story far less romantic
than some would have us believe
There are a fair few fans across the continent willing Atletico Madrid
to go even further in this season's Champions League as Diego Simeone's
team prepare to take on Chelsea in the second leg of their semi-final on
Wednesday night. Their evolution from Europa League winners to
Champions League contenders under the Argentine coach has earned them a
great deal of respect.
Simeone has forged a committed and
diligent unit capable of disrupting the very best teams in the world.
That's the company in which they belong after taking four points from
Real Madrid in La Liga - as well as beating them in last season's Copa
del Rey final - and eliminating Barcelona from the Champions League this
season. As things stand they are favourites to win the Spanish top
flight too.
This, however, cannot be seen as a defiant victory for the little man in the face of the immense strength of the Clasico
duo. While Simeone's on-field turnaround merits credit, Atletico are
not deserving of their billing of people's champions. That would be to
whitewash their recent history. The capital club have come to represent,
in recent years, much which is troubling about the modern game:
third-party ownership, spiralling debts and an abdication of
responsibility.
Atletico are
Spain's third biggest team - in terms of revenue and support - but have
struggled to keep their house in order since converting to a PLC in
1992. Ever since Jesus Gil became chief shareholder, Atletico's
financial management has been open to question.
This is a club
that has shown disregard for the regulations and fiscal prudence
throughout its modern history. They were relegated in 2000 not long
after their offices were raided in the infamous Caso Atletico. That
eventually led to Gil's jail sentence of three-and-a-half years as well
as punishments for Enrique Cerezo and Miguel Angel Gil Marin - who
remain at the club. Following relegation, they simply stopped paying
their taxes for two years. In that way they avoided around €46m worth as
they expedited their escape from the Segunda Division.
By 2011 they owed a scarcely conceivable €517 million to creditors -
including as much as €171m to the tax authorities alone. The Spanish
government could have done more to call in the debt instead of offering
Atletico a favourable rate of 4.5 per cent interest per annum while they
paid off €15m of their tax bill every year.
Perversely, the
economic meltdown in Spain, where unemployment stands at around 26 per
cent, gave Atletico the opportunity to alleviate their own predicament.
"The government cannot demand payment without crippling clubs and
leaving supporters very upset," economics and finance professor Jose
Maria Gay told Die Welt in 2012. "Considering the situation our
country is facing, it is unreasonable to start introducing
dysfunctional steps into the championship that could affect its image,
which has a commercial value."
That rationale meant that laxity
prevailed. Uli Hoeness, then president of Bayern Munich, expressed his
frustration when referring to the EU bailout of Spain in 2012. "This is
unthinkable," he said. "We pay hundreds of millions to get them out of
the sh*t, and then the clubs don’t pay their debts."
Not paying
their debts was Atletico's modus operandi under Gil. Although they have
finally begun to pay down their tax debt, in theory, they will have not
paid what they owe until some time early in the next decade. Instead of
taking it on the chin and, perhaps, living within their means, Atletico
simply carry on spending. Uefa temporarily withheld their Europa League
prize money for breaching Financial Fair Play regulations in 2012.
Atletico were among the first teams to be sanctioned although their
punishment was eventually overturned. It is not difficult to see why
they came on the radar.
Not long after sending Sergio Kun Aguero
on his way to Manchester City to stave off the tax man, a deal worth
€40m to bring in Radamel Falcao from Porto was agreed. It was apparent
that Atletico were unable to fund the deal themselves and so the Doyen
Sports Group - a hedge fund - reportedly picked up around 50 per cent of
the fee.
Falcao may well have enjoyed his best years at
Atletico but they never deserved to have him. They could not afford it
from within their means. That didn't stop them. Falcao was not the only
one. According to one investigation in 2013, it was found that only six
players on their first-team books were owned outright by the club.
Despite the circumstances in which they found themselves, Atleti still
spent over €160m net on transfer fees from 2002 to 2009. To chase deals
for the best players in the world while owing so much in back payments
smacks of astonishing hubris.
Even being assisted by Doyen in paying for Falcao, Atletico could still
not maintain their obligations to Porto. The Portuguese club, according
to reports, were close to asking Fifa for a resolution when the Rojiblancos fell behind in their instalments. Shortly after that complaint, Doyen's name began appearing on the Atleti kit.
And
on the subject of kit sponsors, Atletico are currently into their
second agreement with the Azerbaijan tourist board - a deal which raised
eyebrows. It paid a reputed €12m for an initial 18-month deal. The
well-documented human rights abuses in that country stirred debate about
the suitability of this sponsor.
Furthermore, in 2011 it was also reported that Atletico owed €52m in
wages to their own club staff. That was around 81 per cent of the total
wage bill. During his last spell at the club, playmaker Diego filed an
unpaid wages complaint for around €59,000.
There is, at the
moment, a sense of stability around the Vicente Calderon ahead of the
club's move to the Olympic Stadium in 2016. This is, however, an empire
built on rickety foundations. How long will Simeone be around? Will he
be afforded the funds to strengthen the team? Will their best performers
like Aguero, David de Gea and Diego Costa be continually sold to keep
the wolves from the door?
This is likely to be Atletico's one and
only shot at the big time at home and abroad for a long period. They
best make the most of it because they spent long enough living the high
life while someone else picked up the tab. Austerity looms on the
horizon.
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