‘Pandemic could have spelt disaster to smaller Spanish clubs 8 years ago’

It was announcement last month that the top two divisions — La Liga and Segunda Division — will provide 200 million euros in the next four years to help various sports federations and non-professional football leagues.

La Liga India's MD Jose Antonio Cachaza says the league's financial situation can be sustained only if the 2019-20 season can be completed.   -  Getty Images

At a time where football clubs are facing economic crises due to the coronavirus pandemic, La Liga India’s managing director has stated the Spanish clubs – La Liga, Segunda division, Tercera division and women’s football – are equipped to handle the financial situation despite the shutdown of the football industry.

Jose Antonio Cachaza pointed to La Liga’s announcement last month where the top two divisions — La Liga and Segunda Division — will provide 200 million euros in the next four years to help various sports federations and non-professional football leagues. La Liga has increased its donation to Spain’s Sports Ministry on the collective broadcast deal, which came in to effect from 2015, from 1 per cent to 2.5 per cent. It also stated that the league has doubled its contribution to the RFEF (National Football Federation) from 1 per cent to 2 per cent.

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League resumption vital

Cachaza, however, cautioned that financial situation can be sustained only if the 2019-20 season can be completed. It is estimated that the country’s football industry will lose as much as 1 billion euros if the season is voided. Matches behind closed doors would see the losses reduced to 300 million euros.

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“We reached an agreement with the government and the FA for which La Liga is increasing the money for Spanish non-professional football and also to smaller FAs through the Ministry of sport,” said Cachaza. “So the situation is just the opposite [on whether smaller clubs are struggling financially]. Everything will depend on if we are able to finish this year's competition or not. If we are able [to finish the competition], the impact will be less but still, you'll have clubs playing behind-closed-doors. So basically the matchday revenue and other indirect revenues, for example, the Barcelona or Atletico Madrid stadium tours — that's a huge revenue — and that probably will be gone for a while. So that's an impact.”

Safeguarded from economic collapse

Cachaza noted that the less-heralded clubs in the La Liga would have had an economic collapse if a similar situation occurred eight years ago.

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“The smaller La Liga clubs are in the best situation possible given the disaster we're facing now. Because part of what La Liga has been doing for the last five years was to control the economic collapse of the clubs. Their debt is reduced now and they are in a financially good situation for facing a crisis. That doesn’t mean they won't suffer but at least we are in a situation where the club's finance is under control. If this happened seven-eight years ago, the situation could be absolutely dramatic. They are all in a good financial situation because if they weren't, they couldn't be in La Liga. That's part of the financial control that Mr. Javier Tebas brought when he became chairman of the La Liga,” he said.

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