Another title for Spanish football: Champions of tax evasion

by r------ Thu Mar 15th, 2012 at 11:58:11 AM EST

The European Supercup has, for three year's running, been won by a Spanish side, as have the past six of ten. Four of the past eight Uefa cup winners have been Spanish, as have three of the past seven Champion's League title holders. No less than five Spanish clubs have regularly vied for top European honors: FC Barcelona and Réal Madrid, of course, but also Atletico Madrid, FC Sevilla, and Valencia. No other nation comes close in terms of honors won over the past decade of European club play, Italy a distant second with not even half the success measured in titles. And, financial crisis or no, five Spanish clubs have qualified for the quarterfinals of the two main European club championships, four of the aforementioned in addition to Atletico Bilbao.

(To put this into context France has seen no European club champion in any of the three cups since 1993).

But success isn't the only thing Spanish football sides have in common, far from it. In addition to sticking it to the competition over the years, Spanish footballers and their owners have also been sticking it to the taxman:

Nada menos que 752 millones de euros. Esta es la cifra que los clubes profesionales de fútbol adeudan a la Agencia Tributaria a fecha 1 de enero de 2012. En concreto, los equipos de Primera deben 489,93 millones; los de Segunda, 184,18, y los de otras categorías, 78,18, según los datos que el Gobierno facilitó ayer en respuesta a una pregunta de Izquierda Unida en la Comisión de Educación y Deporte del Congreso. A esa deuda de 752 millones habría que sumar la que tienen con la Seguridad Social, que no ha sido facilitada por el Ejecutivo, con lo que la cantidad total a buen seguro se disparará.

A whopping 752 million euros. This is the figure that elite Spanish professional football clubs owed to the Spanish taxman as of January 1, 2012. Specifically, First Division teams owe 489.93 million, Second Division another 184.18, and other teams a further 78.18 according to data provided by the Government yesterday in response to a question from the United Left during the Congress of the Education and Sports ministry. A 752 million bill that does not include arrears they likely also have with Social Security, also tolerated by the government, bringing the total amount up further still.

Austerity is for the chumps and only the chumps...social programmes can be cut to the bone, youth unemployment can skyrocket past 50%, social unrest on the streets and on campuses can be left to simmer or be suppressed by the police. But expect football club owners and players to pay their simple debts to the state? What are you, kidding me? We'd surely have a riot.

Perhaps we now know why Spanish clubs have been so dominant in European competition. A French side not pay their taxes? Shut down in short order.

Desde que se inició la crisis, allá por 2008, la deuda de los clubes no ha hecho sino crecer en casi 150 millones. Izquierda Unida recordó ayer, a través de un comunicado, que en la pasada legislatura su diputado Gaspar Llamazares ya preguntó al Gobierno de José Luis Rodríguez Zapatero por la deuda de los clubes, que el Ejecutivo calculó en 607 millones a 30 de abril de 2008. Tampoco entonces logró la formación que se facilitara el montante que se adeudaba a la Seguridad Social: "Los datos, informes o antecedentes obtenidos por la Administración de la Seguridad Social en el ejercicio de sus funciones tienen carácter reservado", recordó IU que respondió el Ejecutivo a la pregunta de Llamazares. "La Administración ha puesto siempre trabas para detallar de forma individualizada la deuda particular con Hacienda de cada uno de los equipos", insistió la formación en su nota de ayer.

Since the crisis began back in 2008, the debt of the club has grown by almost 150 million. United Left recalled yesterday through a statement that in its last term, the government of Jose Luis Rodriguez Zapatero estimated at 607 million the same debts of these clubs as of April 30, 2008. The amount that was owed to Social Security was not provided: "The data, reports or records obtained by the Social Security Administration in the exercise of their functions are restricted," said the IU. "The administration has always obstacles to detail individually the particular debt with the IRS for each of the teams," he said in his note training yesterday.

Why is it that the Socialist Party in Spain is not bringing these subjects to the fore, that we have to count only on the Communist-led left in Spain to look for tax equity?

Truth be told, tolerance of tax cheating in the football world, as is the case for much protection of the wealthy, is a bipartisan affair in Spain. They are in on it...just as they are in on neo-liberal reforms and on the austerity pact.

Actualmente, 12 equipos están en concurso de acreedores: Racing, Rayo Vallecano, Zaragoza, Mallorca, Betis y Granada,de Primera División, Hércules, Cádiz, Albacete, Recreativo, Xerez y Córdoba, de Segunda. Desde que en 2004 entrara en vigor la Ley Concursal, 23 equipos de Primera y Segunda se han acogido a ella para renegociar sus deudas. 11 clubes estuvieron intervenidos y ya han vuelto a manos de sus dueños. En algunos casos, como el del Atlético, sí se conoce cuál es la deuda con Hacienda, como ya adelantó este periódico en diciembre pasado: 215 millones...A todo ello habría que sumar los pasivos fiscales no contabilizados.

Currently, twelve teams are in bankruptcy: Racing, Rayo Vallecano, Zaragoza, Mallorca, Betis and Granada in the First Division, and Hercules, Cadiz, Albacete, Recreation, Xerez and Cordoba in the Second. Since a new Bankruptcy act came into force in 2004, 23 First and Second teams have benefited from it to renegotiate its debts. Of these, 11 clubs have already returned to their owners' hands. In some cases, an example being Atletico, a club is recapitalised via new debt financing, in Atletico's case to the tune of €215 million...the tax man being but one of the clubs many new creditors.

Las reacciones de las principales formaciones políticas no se hicieron esperar. El Partido Popular, en el Gobierno...aseguró que es "intolerable" la deuda de los clubes y reclamó que se les exija el cumplimiento de los pagos. "Si no se les exigen en el fútbol, entre eso y los derechos hinchados de televisión, explotará otra burbuja", comentó en su cuenta personal de Twitter.

A su vez, la portavoz del Grupo Socialista en el Congreso, Soraya Rodríguez, resaltó que "lo lógico es que deudas de esa cuantía sean exigidas [por parte del Gobierno] y puedan ser cobradas". El secretario de Estado para el Deporte, Miguel Cardenal, dijo, en declaraciones a la Cadena SER, que "pronto" se conocerá la fórmula que se va a utilizar para que se pague la deuda. "De momento, lo prudente es no decirlo", advirtió. "Sí anuncio que quizás es cuestión de días o de unas pocas semanas que se presente la manera en la que ello se va a abordar", añadió antes de insistir: "Las deudas del fútbol se van a pagar por el fútbol". "La capacidad que tiene el fútbol es de 1.800 millones anuales. Decir que [los clubes] no son capaces de pagar o que no hay fórmulas para que en el futuro esta deuda no vuelva a generarse es una premisa que se compadece mal con los propios datos del sector", subrayó.

Actualmente, 12 equipos, entre la Primera División y la Segunda, están en concurso de acreedores. El Congreso reformó en septiembre de 2011 la Ley Concursal, que ya no evitará el descenso de categoría cuando haya deudas con los futbolistas.

The reactions of the main political parties were swift. The governing Popular Party...said that clubs debt levels were "intolerable' and claimed they would be required to pay up...the Socialist Party spokesman in Congress, Soraya Rodriguez, said that "it is logical that debts of this amount are needed by the governement and can be collected". Secretary of State for Sport Miguel Cardinal said that the formula to be used to determine debt repayment would be announced soon, though "at present, it is prudent not to say," he said. "Yes, an announcement is perhaps a matter of days or a few weeks away ..." he said before insisting: "The debts of football will be used to pay for football." "Football's cashflow is €1,800 million annually. To say that the clubs are not able to pay just doesn't jibe with the industry's own financial data," he said.

Currently, 12 teams, between First and Second Division, are in bankruptcy. Congress amended in September 2011 the Insolvency Act, no longer avoid relegation when you have debts with the players.

An announcement on when the Spanish people can expect their wealthy club owners and footballers to pay their taxes like everybody else?

Ladies and gentlemen, I for one will not be holding my breath.

Another title for Spanish football: Champions of tax evasion | 11 comments (11 topical, 0 editorial, 0 hidden)

Austerity, yes. But only for the wealthy. (4.00 / 2)

Footballers, club owners, bankers, what have you.

Jail time if necessary too.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu Mar 15th, 2012 at 12:04:09 PM EST

Spanish football: Champions of tax evasion (4.00 / 2)

Also from El Pais: La Liga aclara que la deuda de los clubes con Hacienda está negociada

Ningún club de Primera y Segunda ha incumplido los acuerdos con la Agencia Tributaria, asegura la patronal
La Liga de Fútbol Profesional (LFP) que agrupa a los clubes de Primera y Segunda División ha aclarado hoy que el pago de los 672 millones de euros que sus miembros deben a Hacienda -752 incluyendo a los equipos de otras categorías- está negociado con la Agencia Tributaria, por lo que no es exigible de inmediato. "Todos los clubes han pactado un aplazamiento de su pago con las correspondientes garantías", asegura el comunicado.
Esto no quiere decir que la deuda con Hacienda no exista. Se trata del procedimiento habitual cuando la Agencia Tributaria detecta un impago. ...

That's all right, then... I'm sure ordinary citizens are granted the same forbearance by the Tax Agency.

La Liga clarifies that the Clubs' debt with the Finance ministry has been negotiated

No First or Second division club has broken the agreements with the Tax Agency, assures the owners' association
The Professional Football League (LFP) which gathers First and Second Division clubs, has clarified today that the payment of the 672 million Euros that its members owe to the State Finances -752 including other clubs from other categories- has been negotiated with the Tax Agency, therefore it's not due immediately. "All the clubs have agreed a deferment of their payment with the corresponding guarantees", the communique claims.
This does not mean the debt with the State Finances doesn't exist. It's a common procedure whtn the Tax Agency detects a lack of payment. ...

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Mar 15th, 2012 at 12:26:10 PM EST

Re: Spanish football: Champions of tax evasion (4.00 / 5)

I'm sure ordinary citizens are granted the same forbearance by the Tax Agency.

If they have comparable income, they probably are. No discrimination here.

by gk (gk (gk quattro due due sette @gmail.com)) on Thu Mar 15th, 2012 at 01:01:43 PM EST
[ Parent ]

Spanish football: Champions of tax evasion (4.00 / 6)

(To put this into context France has seen no European club champion in any of the three cups since 1993).

From an open letter to a famous Spanish politician...

Los franceses ganaron el Nobel de Química en 2005, pero Nadal les arrebató el Rolland Garros de aquel año. Los franceses ganaron el Nobel de Física en 2007, pero Contador se llevó el Tour. Los franceses ganaron el Nobel de Medicina en 2008, pero la Eurocopa fue nuestra. Volvieron a ganar el Nobel de Medicina en 2011, pero el Barça conquistó la Champions.
Están desesperados, ya no saben qué hacer para vencernos.

The French won the Chemistry Nobel Prize in 2005, but Nadal snatched the Rol[]and Garros from them last year. The French won the Physics Nobel Prize in 2007, but Contador took the Tour away. The French won the Medicine Nobel Prize in 2008, but the EuroCup was ours. They won the Medicine Nobel again in 2011, but Barça conquered the Champions [League].
They're desperate, they don't know what to do to beat us.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Mar 15th, 2012 at 12:58:08 PM EST

Bankruptcy (none / 0)

means automatic relegation in France (or the UK, I beleive). Apparently not the case in Spain?

Aside from the question of whether the due tax or social security bill is actually paid, is the question of the rate of social security paid on the big salaries of the stars. My understanding is that French teams are not competitive in Champions League simply because they can't afford the top players : unlike almost every other European nation, apparently, France doesn't grant exemptions or loopholes on payroll taxes to sports organisations.

That's a considerable consolation to me. (and didn't stop Marseille eliminating Inter.)

(Likewise, the fact that no French rider has been within a rifle shot of winning the Tour de France for decades is a matter of national pride for me. Their health is protected by effective anti-doping strategies.)

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Thu Mar 15th, 2012 at 01:38:03 PM EST

Re: Bankruptcy (none / 1)

After a little research, the situation is that the Spanish Football Federation relegates teams that owe arrears to their players on June 30th each year. Where the diary says

Currently, 12 teams, between First and Second Division, are in bankruptcy. Congress amended in September 2011 the Insolvency Act, no longer avoid relegation when you have debts with the players.

Prior to the legal change, teams attempted to avoid relegation by starting bankruptcy proceedings just before June 30, which technically meant a stay of their debts, including the players' salaries.

On previous years, the Football federation had on occasion ruled that even the bankruptcy proceedings didn't protect teams from relegation. Then, some teams would pay the arrears to their players and file for bankruptcy on the rest of their creditors.

Insolvent clubs from First or Second Division are automatically relegated to the "Second Division B", which is outside the LFP. That is, a team could theoretically go from First to 2B in one go. Once in 2B, indebted clubs generally go into a death spiral as their income plummets (only First and Second Division clubs partake in TV rights, for instance).

So, basically, the situation is that, as long as you pay your players, you can remain in the top division. This is from the end of last season:

El diario LA VANGUARDIA acaba de publicar un reportaje en el que pone de manifiesto cómo la crisis y los impagos a jugadores afectan ya a 24 equipos de la Segunda División B del fútbol español, colocándolos al borde de la quiebra. Los grandes clubes de la Primera División del fútbol español acumulan alrededor de 4.000 millones de euros en deudas, pero siguen adelante por el apoyo institucional, los multimillonarios ingresos por los derechos de televisión y la confianza de la banca. Pero no ocurre lo mismo en dos categorías inferiores. La sociedad deportiva Real Jaén está haciendo todo lo posible para conseguir financiación y esta semana ha planteado un novedoso crédito participativo para lograr recursos de la banca. La página web del club andaluz asegura que "pondrá en breves fechas una operación de solicitud de préstamos participativos con un plazo de devolución de 5 años con dos de carencia a la sociedad jiennense, con el fin de poder cubrir todos los gastos que se han generado posteriores a la presentación del concurso de Acreedores".

The daily LA VANGUARDIA just published an article on how the crisis and nonpayment to players affect already 24 clubs of the 2B Division, putting them on the brink of bankruptcy. The big clubs of the First Division accumulate about 4 billion Euros in debt, but they carry on with institutional support, income form TV rights, and the confidence of banks...

At the end of the season, 12 teams were relegated. 5 of them would have been relegated due to their sporting results, so they lost two categories.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Mar 15th, 2012 at 03:45:10 PM EST
[ Parent ]

No more (none / 1)

For once you agree with the CDU? ;-)

EUobserver.com / Economic Affairs / Spain's football clubs cause stir in Germany

BRUSSELS - In a sign of how much EU states influence one another's affairs in the current eurozone crisis, Spain pulled back from allowing debt relief to its football clubs in reaction to German disapproval.
...Bild's sports page on Tuesday ran with the headline "Will German taxpayers eventually have to fork out for Messi and Ronaldo?" Lionel Messi receives €2.5 million a month from Real Madrid, while Cristiano Ronaldo earns over €1 million a month from the same football club.
And German MEP Elmar Brok, a close ally of Chancellor Angela Merkel, told the same paper that he will ask the EU commission to ask the Spanish government for an official reaction. "Debt restructuring means state aid and violates competition rules. The EU commission has to look into it," he said, encouraging German football clubs to file complaints.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Sat Mar 17th, 2012 at 06:22:54 AM EST

Re: No more (4.00 / 2)

...Bild's sports page on Tuesday ran with the headline "Will German taxpayers eventually have to fork out for Messi and Ronaldo?" Lionel Messi receives €2.5 million a month from Real Madrid, while Cristiano Ronaldo earns over €1 million a month from the same football club.

What!?

Messi plays for Barcelona!

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 06:26:58 AM EST
[ Parent ]

Re: No more (none / 1)

From EUObserver:

Clubs like Real Madrid and Barca also owe some other €600 million in social contributions.

Oh, that's nothing. Everyone owes social security contributions in Spain, even upscale private schools

A Diana Carrillo, que tiene un hijo de 11 años en el centro, le preocupa que un nuevo embargo pudiera producirse, lo que ve fuera de lugar, pese a que no justifica la deuda del centro. "El problema no es lo que debe este señor [el director, Iñaki Santa], pero no se puede permitir este atropello".

Diana Carrillo, who has an 11-year-old son in the school, is worried that a new repossession could take place, which she sees as out of place, even though she doesn't justify the school's debt. "The problem is not what this man [the school's director, Iñaki Santa] owes, but that such trampling cannot be allowed".

This is about a private school which owes about 1 million euros in social security contributions (a debt accumulated over 20 years) and which was evicted with the school in session, to great shock. Parents pay 400 euros a month, but then that's only "so cheap" because the school doesn't pay social security contributions.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 06:49:34 AM EST
[ Parent ]

Re: No more (none / 0)

At least the school is not subsidised directly by the public purse. It is a "private" school, not a "concerted" school (the latter are privately run but are partly funded by the public system and their curriculum is identical to the public one - essentially PPP).

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 06:58:55 AM EST
[ Parent ]

Re: No more (none / 1)

This is fantastic, any populist rage generated by teams being relegated "in the offices and not on the pitch" can be deflected towards Germany!

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sat Mar 17th, 2012 at 06:54:28 AM EST
[ Parent ]

Another title for Spanish football: Champions of tax evasion | 11 comments (11 topical, 0 editorial, 0 hidden)

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Another title for Spanish football: Champions of tax evasion

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