Showing posts with label German taxpayer would be obliged to subsidise the wages of Lionel Messi and Cristiano Ronaldo.. Show all posts
Showing posts with label German taxpayer would be obliged to subsidise the wages of Lionel Messi and Cristiano Ronaldo.. Show all posts

Monday, 19 March 2012

 

When faced with the prospect of the Spanish government waiving the collective €752m debt the nation's football clubs owe to the country's tax authorities, the reaction in Europe last week was one of outrage. The German tabloid Bild even asked how long the German taxpayer would be obliged to subsidise the wages of Lionel Messi and Cristiano Ronaldo. What they meant was that while the European Union members bailed out the Spanish economy, successful Spanish clubs were failing to meet their own tax obligations. Strictly speaking, Real Madrid have no tax debt among the €170m debt that the club carry, but Barcelona owe €48m of their overall €364m debt to the Spanish taxman. Uli Hoeness, the outspoken president of Bayern Munich, got to the point rather more quickly when asked about the proposal to excuse Spanish clubs their tax debt. "This is unthinkable," he said. "We pay them hundreds of millions to get them out the shit and then the clubs don't pay their debts." It is a uniquely modern European dilemma, encompassing EU bail-out funds and the competitiveness of the continent's respective leading clubs, all of which ultimately adds another fiendishly complex element to the concept of Financial Fair Play, as proposed by Uefa president Michel Platini. It is further proof that while Spanish football is undoubtedly top dog in Europe, with five teams in the quarter-finals of the two Uefa competitions, it is not without problems. As The Independent's Pete Jenson reported in these pages on Saturday, a government report in Spain last week disclosed that the equivalent of £625m is owed by Spanish clubs to the country's public purse, with £353m of that due from 14 of the 20 clubs in the top division. This is not money owed to banks, investors or owners. It is owed to the Spanish people. On a sporting level it is "financial doping" at its very worse. On a social level it is nothing short of a disgrace in a country where youth unemployment currently runs at 50 per cent. Not all top Spanish clubs are culpable and it was reassuring to read in the breakdown of club debt by AS newspaper that Athletic Bilbao, the team of largely home-grown Basque stars who left English football spellbound with their schooling of Manchester United last week, do not owe the taxman a cent. So too Real Sociedad, Getafe, Villarreal and Sporting Gijon. On the other hand, Atletico Madrid, currently eighth in La Liga and drawn against Hannover 96 in the quarter-finals of the Europa League, owe the Spanish public purse €155m (£128m), more than any other club. The money from the €50m sale of Sergio Aguero to Manchester City last summer went straight to the tax authorities. Valencia, who play AZ Alkmaar in the same stage of the competition, owe €6m in unpaid tax. When Hoeness expressed German football's bitterness that their government is, indirectly, subsidising the success of Spanish clubs it is the likes of Hannover he was talking about. Atletico's big signing was Falcao from Porto last summer, a £33m signing financed by third-party ownership deals. Hannover bought Mame Biram Diouf from Manchester United. Enough said. No one would pretend that British football is the perfect financial model, especially given Rangers' and Portsmouth's debts to HMRC. Even the Germans have had their problems with Borussia Dortmund and Schalke. But unpaid taxes at a time when public services are being cut and jobs lost are particularly repugnant. Real Betis, Real Zaragoza, Racing Santander, Levante and Mallorca (denied a place in last season's Europa League because of their finances) owe a total of €118m to the Spanish tax authorities between them. There are also suggestions that unpaid social security contributions by some Spanish clubs rival those eye-watering figures for unpaid tax. In the past, Spanish football has been protected by the assumption that punishing badly-run clubs would cause such a backlash against government by voters that it would not be politically expedient. There is no points penalty in Spain for going into the equivalent of financial administration as there is in England. But attitudes are changing. The governing political group Partido Popular has described the situation as "intolerable". The government was forced to disclose the figures of unpaid tax because of an official request by Caridad Garcia of the Izquierda Unida (IU) party. A spokesman for IU, José Luis Centella, made the connection last week between the financial hardship felt by the Spanish people and the clubs' failure to pay. "This is bad news for all the people who have lost homes and suffered from the cutbacks while there is this tremendous generosity towards football." Wisely, the Spanish sports minister Miguel Cardenal announced last week that the government had dropped any consideration of giving football clubs a clean slate on their tax debts. There has even been a call from the centre-left party PSOE to ban clubs with tax debts from competing in the league, a rule that, already in place in Italian football, would change the face of La Liga overnight. Were the Spanish tax authorities to call in their debts tomorrow, Barcelona would surely be able to find, or borrow, the €48m they owe. Atletico, on the other hand, would find themselves in the kind of dire situation currently enveloping Rangers. There is a lesson for English football that in the risky game of investment and borrowing that most clubs enter as they attempt to fulfil the ambitions of supporters and owners, there are certain obligations that are non-negotiable. Football clubs command such loyalty and affection that they are too often cut slack, but, as the situation in Spain is starting to show, there is always a limit. Ridicule of Richards the last straw Down the years, Sir Dave Richards has given every appearance of being invulnerable to criticism or error of judgement. He has survived adversaries in the Football Association such as Lord Triesman and Ian Watmore in recent years. The financial problems of Sheffield Wednesday, where he was chairman, do not seem to have had an impact on his reputation. He walked out on the 2018 World Cup bid in a huff and it all blew over. Which makes it all the more incredible that an ornamental fountain, and a slightly unhinged but largely irrelevant speech on football, should prove his undoing. It just goes to shows that a divisive figure in football administration can survive a great deal but once their mistakes start to make people laugh – it's over. Will City seize their chance to get Mourinho? When Manchester City meet Chelsea on Wednesday, the shadow of one man falls over both clubs. Jose Mourinho is the last card that the most ambitious football club owners can play. If all else fails, then give Mourinho the job and if that does not bring success then you really are out of options. In Spain, the mood is that Mourinho may stay at Real Madrid in the penultimate year of his contract next season or he may go back to England if the right job presents itself. Is that Chelsea or could it be City? If Roberto Mancini fails to win the title this season and Mourinho is willing to come then it places an idea in the heads of City's owners. It is not as if he is available every summer.

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