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Players' strike - why is this happening?

With Spain in the throes of a deep recession, professional football clubs in this country are going through the worst financial crisis in recent history. Pressures to put out competitive squads in an overpriced market, reduced sponsorship money and other income, and the lack of financial compensation for teams who are relegated, are just some of the problems they have to face today.

As a result over half the clubs in the first and second division have had to seek protection from the courts over the last few years, normally by way of filing for protection from creditors under the recently issued "Ley Concursal". This bankruptcy law enables clubs to stave off relegation for financial reasons, as judges can overturn league rules which require teams not up to date with payments to players at the end of the season to go down a division. It also gives companies, including "sporting limited companies" (SADs - which most La Liga teams are) breathing space to renegotiate with creditors and keep on trading until they can sort things out. However the result usually is that players and staff lose out, with long delays in payment and greatly reduced settlements in the end.

AFE, the players' union, are clearly fed up with this, and say the situation cannot go on. The state salary guarantee fund (FOGASA) which insures cases of bankruptcy will not cover much of the debt, and the LFP have apparently set up their own fund of around €40 million, financed by the clubs, which guarantees up to €240,000 for first division players, and €120,000 for players from the second division. However much of the current debt is way in excess of this (Betis for example owe over €1 million to six players and €22.3 million in all), and AFE are reportedly holding out for a fund which guarantees the total amounts due. They also want the court protection on relegation of clubs to be eliminated and that clubs with outstanding debts not to be allowed to sign new players, and are also asking for their own running costs of around €3 million (an amount which has virtually doubled in recent years) to be paid for by the clubs,

The LFP argue that the AFE proposals are unreasonable, and that they cannot extend their guarantee fund further, especially with many clubs on the verge of bankruptcy. Also the concept of SADs (i.e. limited liability companies) in a regular financial situation being required to meet the debts of SADs with problems goes against the grain of any company law. And furthermore, forcing clubs with financial difficulties in to relegation virtually ensures their total bankruptcy and eventual disappearance, with the result that nobody wins. More than one club president has also expressed the opinion that they do not understand why they should pay the union costs, especially as the highest paid members of the union are earning in excess of €10 million a year.

What appears to be clear from all this is that, although things cannot go on as they are, any prolonged strike action will damage clubs further and could leave Spanish football in ruins. Few people were particularly upset to miss the first weekend, especially as this was brought forward a week (albeit to try and alleviate a busy calendar), as most fans were still on holiday, and many clubs had still not completed their squads. However if this carries on much longer the damage will be irreparable (not to mention that it will be impossible to reschedule the cancelled fixtures), and the effects on the game in Spain could be long lasting.

We just hope therefore that common sense will prevail now that the point has been made, and that the two sides can reach an agreement that allows us to carry on with the season, whilst at the same time searching for long term solutions rather than just plugging the holes. We've enough problems in Spain right now, companies closing every day and 20% unemployment, some say going on 30%, and the last thing the man on the Madrid omnibus (or "mejor dicho" dole queue) needs right now is to be deprived of his football. It's the only thing many of us have left! (23.08.11)