The History of La Liga

The origins of La Liga date back to 1927 when Jose Maria Acha offered the idea of having a Spanish national league.  Two years later Real Federación Española de Fútbol finally agreed upon ten teams who would constitute the league.  The previous winners of Copa del Rey, a nationwide championship, were all selected which included Barcelona, Real Madrid, Athletic Bilbao, Real Sociedad, Arenas Club de Getxo, and Real Unión. Two of the final three teams, Atlético Madrid, Espanyol, and Europa, were selected as Copa del Rey runners-up and Racing Santander was chosen through a knockout competition.  However, soon after its commencement, La Liga was interrupted due to the Spanish Civil War.

Following the war, Atlético Aviación (currently Atlético Madrid), Valencia, and Sevilla surfaced as the dominant forces.  Part of the reason for these teams dominance stemmed from the consequences of the war which included absent players due to injury or exile.  Though, towards the latter half of the century Barcelona began to once again excel in the league.

La Liga then took a turn upon the alteration of an existing rule.  Prior to this time a regulation had been in effect limiting the amount of international players to three per roster in most cases.  However, during this period of the 1950’s the restriction was altered which fueled Real Madrid and Barcelona who nationalized top players.  Later, between 1961 and 1980 the league was led by Real Madrid who only faced a single true competitor being Atlético Madrid.

The 1990’s rolled around and Barcelona came back to its true form proving its dominance within the league under the management of Johan Cruyff.  During his time at the club he fielded a group of remarkable players later dubbed the “Dream Team.”  The Club racked up six league titles during this time as well as winning the Euro Cup in 1992.

As the league progressed toward the new millennium Deportivo La Coruña and Valencia emerged or experienced resurgence within La Liga.  However, in recent years the league has been dominated by the two powerhouses of FC Barcelona and Real Madrid who far exceed the other organizations due to immense revenues and expenditures.  Currently, La Liga is experiencing a crisis as a result of economic downturns as well as clubs overall structural and financial decisions which leads us to the inspiration for the formation of this blog and all of its Messi topics.

-Nick

**Picture: Telmo Zarra was the most decorated scorer in La Liga history with 252 goals in 278 games primarily under Athletic Bilbao from 1940 to 1945.**

Goal of the Week

The goal of the week this week comes from yesterday’s Champions League match, FC Barcelona vs Celtic. Celtic was the first to strike in the 18th minute with a goal from Samaras. Iniesta knew it wasn’t good to go to the locker room down a goal so he evened the playing filed with a goal in the 45th minute. Celtic kept Barcelona out of the net for the second half and a draw looked like it was in their future. In the 90th minute David Villa struck the post and that seemed to be Barca’s last chance, the bar I was in went silent….Not so fast Bhoys! In the 94th minute Jordi Alba connected with a beautiful cross Adriano and beat Celtic’s keeper to give Barcelona the lead. Miracles have been the story of Barcelona’s season so far – let’s see if they continue!

Jordi Alba had enough fo the Bhoy’s Messi-ng around!

-Charlie  

Player Wages in La Liga

If you look at the list above of the highest paid players in the world, you will notice that three of the top ten are from La Liga alone. With Messi atop the list at a stunning 33 Million Euros (wages, bonuses and sponsorships included), followed by Cristiano Ronaldo at number three with 29.1 Million Euros and then Kaka at 15 raking in 15.5 Million Euros. Also, the two top paying clubs in the world are both La Liga teams, FC Barcelona (6.6 Million Euro average salary) and Real Madrid (6 Million Euro average salary). Such high wages in La Liga are confusing because of the horrible financial crisis that La Liga is in but without those big name players, what would La Liga be?

You gotta pay to play. That is a phrase that many clubs are learning – and learning the hard way. The demand for high wages is incredible and many players push aside the pride or love for a certain club just to earn more money. Futbol is growing more and more popular in countries with rich economies such as China, Russia and Dubai and they are willing to pay top dollar to snag top talent. We saw this happen with Samuel Eto’o when he went to Anzhi, a Russian club that was willing to make him the highest paid player (not including sponsorships and bonuses). Clubs in La Liga are having to compete with this and are constantly being pressured to pay top wages to keep players on the pitch. Big names sell tickets and attract fans and the clubs realize that and are willing to sacrifice and be put in tough financial situations. With two of the most successful clubs in the world (Barcelona and Real Madrid), why La Liga is having such a difficult time sustaining financially? Be sure to read the articles in the blog below because lay out many issues that are causing the financial problem for La Liga.

As a big futbol fan it is hard to see players ignore club pride and focus on getting more money – we see this a lot in America and it is quickly changing many sports for the worst in my opinion.

-Charlie

I hope my financial situation is never this Messi. 

Sources: Click Here.

UEFA Fair Play Fosters Immediate Danger for Various La Liga Teams

UEFA is trying to promote successful business among the clubs by demoting massive cash injections without suitable revenue.  But wont this just further the separation in La Liga between the two dominant forces (FC Barcelona and Real Madrid) and the rest of the league?

-Nick

Malaga Surges Past Summer Scare

Malaga looks to be recovering from what many saw as a deep financial crisis. When the club was taken over by a Qatari royal family in June 2010 the club looked to be gaining rapid momentum. They ended the season qualifying for the Champions League for the first time due to their fourth place finish in La Liga. Just last summer a total of 50 million pounds were exhausted on players which topped both the powerhouses in La Liga being Barca and Real Madrid, and twelve million was assigned to establish a new facility for the club’s youth academy. However, with the Sheik’s interest weakening there was gossip that he was looking to bail out which paired with interrupted wage payments and sale of players projected a poor outlook for the future of the organization. Furthermore, the board’s chief advisor Jose Carlos Perez suddenly died in February of a stroke which further dismantled communication with Qatar and planning for the future. However, with the rumors of sale proven faulty and a recent boost in performance, qualifying yet again for the Champions League playoffs this year, the team looks to be back on track. Thus, despite lingering debt, Malaga looks to breaking away from that messi interim at least in terms of performance expectations.

-Nick

Sources: Click Here. Here.

Too Big To Fail?

In a capitalistic society firms thrive on competition and expansion. Companies are constantly failing if they cannot adapt to their surroundings and offer innovative ways to surpass their peers. But is there a point when a company becomes so large and depended upon that they are too big to fail? This is a trend which has frequently surfaced in recent times. Most notably in the United States during the financial crisis of 2008, multiple investment houses including Bear Stearns, Goldman Sachs, Morgan Stanley, and Citigroup were all awarded money to prevent their bankruptcy which would have accompanied chaos around the world. Through TARP, a 700 billion dollar bailout plan, these firms were effectively shocked back to life despite having created the very tools which collapsed the system in the first place.

While banks and soccer teams are entirely different they do share certain similarities. A failing bank commonly triggers a practice known as a “run on the bank.” As people are not expected to withdraw all their money at the same time, banks often only have a percentage of their total assets held in completely liquid accounts for reserve. However, when fear pollutes an environment, people begin to doubt the organizations ability to handle their money and thus everyone attempts to make withdrawals at the same time. Soccer teams share connections to this fear of bankruptcy but in an almost converse manner. As the economy enters a recession, a state which Spain is currently experiencing, the revenues behind many of these organizations begin to suffer. Moreover, the debt levels remain high and in many cases rise because of necessities to remain competitive or improve standings. Therefore various teams begin to surface as failing business. But one must wonder with the ties these teams have to Spanish citizens and cities could they ever fall. If a team like FC Barcelona who had record high revenue of 445 million in 2010 yet only netted 9 million in income while racking up 326 million in debt ever fell far into the red would Spain allow it to fail?

-Nick

 

Whether they would or not things would surely be Messi.

Sources: Click Here.

Malaga CF

The story of Malaga Club de Futbal has been receiving an enormous amount of press recently, as the club that struggled financially for the past two years is having a comeback season. Purchased in 2010 by Sheik Abdullah bin Nasser-al Thani (a member of the ruling family of Qatar), Malaga CF has faced many ups and downs in recent seasons. The new owner first invested largely in the club- spending huge amounts of money on new players and considering building a new stadium for the mediocre team. In early summer of this year, Sheik Abdullah quickly stopped his outpour of money into the club without explanation. Later in the summer, four of the club’s best players claimed late salary payments, and other clubs filed complaints for unpaid transfer fees. The club then risked relegation.

After a management change this summer, the club has started off this season amazingly. Currently Malaga CF stands third in La Liga, and has had multiple Champions League wins as well. Many are beginning to believe that Malaga CF could be a contender in taking power from the two clubs dominating Spain, Real Madrid and FC Barca. Although some of their star players left after the financial troubles this summer, Malaga has been able to replace them cheaply with young players from the youth squad as well as players no longer contractually tied to clubs.

I think it would be interesting for a football club to come out from under the radar like Malaga has begun to do. Hopefully, the team can continue their success in this season and advance in the Champions League or Europa League, and possibly beat out Barca or Madrid for the La Liga title. The story behind the team in recent seasons has definitely caused a stir and is boosting morale for players as well as fans. It will be interesting to see how the club deals with the pressure of coming toward the top of the league, and if they can maintain their place.

-Julia

Sources: Click Here.

La Liga Sponsorship

Sponsors are one of the biggest revenue drivers in all of La Liga, paying huge amounts of money for a chance to be promoted on the shirts of the most popular and widely known teams. Corresponding to the revenue streams and power of Spanish teams, Real Madrid and FC Barca have the largest sponsorship deals, while many other teams in La Liga do not even have shirt sponsors.

In 2010, FC Barcelona agreed to a five year, €150,000,000 sponsorship with the Qatar Foundation- the first time in history the club will be paid to advertise on their jerseys. This deal was impressive due to the economic climate and proved the club’s strong presence and power in European football. The deal provided a record level of revenue for Barca, further increasing their ability to maintain their position as one of the best clubs in the world. The club was in some ways forced to take this deal because of their huge amounts of debt (upwards of €400,000,000) and move the Unicef logo to the back of their jerseys. Rival team Real Madrid has been partnered with Austrian company bwin since 2007, in a deal that is worth an estimated €20,000,000 per season. More lucrative offers have recently been made for shirt sponsorship from Emirates and other companies as the bwin sponsorship is set to expire at the end of this season.

Conversely, there are many teams in La Liga which are far less lucrative than Barca and Real who have had trouble in recent years finding shirt sponsors at a price they consider fair. Although the two major Spanish teams are still operating on a profit, many other teams in La Liga are seemingly more affected by Spain’s current financial crisis- and as a result have not secured sponsors and therefore are losing out on a huge revenue stream. A few examples are Atletico Madrid as well as Villarreal, whose previous sponsors did not renew their contracts. This is just another instance of the major differences between La Liga teams, and further proves that Barca and Madrid are on a different level. The sponsorship deals for FCB and Real are around €25-30 million euro a year, while other Spanish teams are able to secure sponsors are bring in about €1-2 million a season. This is yet another advantage that these already powerful clubs have, further propelling them to the top of the competition. It is almost impossible for smaller teams to gain an advantage against these big players when they have such differing incomes.

-Julia 

Champions League payout and Europa League payout comparison

In recent years, Spanish football clubs have had a strong presence in the UEFA Champions League- with Barca coming out on top in the ’05-’06, ’08-’09 and ’10-’11 seasons. This past season, four Spanish teams qualified for the tournament as Spain was the second ranked association according to their 2010 UEFA league coefficient (Barca automatically qualified for the ’11-’12 Champions League as a result of their club winning the previous year). The other teams that qualified were Valencia, Real Madrid and Villarreal.

The weakest performing teams from Spain were Villarreal and Valencia who both made it to the group stage, earning €13,909,000 and €18,825,000 euro, respectively. Real Madrid and FC Barcelona both did extremely well, both making it to the semi-finals- with Barca earning €40,550,000 euro and Real €38,434,000 euro. The amount of money teams can make for even qualifying for the Champions League is astounding, and the main reason for its importance. Many Spanish teams would prefer to compete in the Champions League as opposed to the La Liga final because of the financial payout and worldwide recognition. As many of these large clubs are in huge amounts of debt, the payout from this tournament is very important in order to keep clubs where they want to be- and allow them to acquire the strongest players.

UEFA announced this summer that they will distribute €910,300,000 euro to the teams participating in the 2012-2013 season, an increase of €156,200,000 euro from this year’s competition. I personally believe the entire payout system of the Champions League to be ridiculous, as the teams who are winning the most money are still hundreds of millions of euros in debt, and this payout does not even make a dent in it. UEFA should absolutely not increase the amount of euros awarded this season and should more intensely promote and enact the Financial Fair Play act created in 2009. Until UEFA makes huge changes in this process and is strict with implementation, clubs will not see a need to cut back on spending.

Similarly, the less prestigious Europa League had four Spanish competitors in the 2011-2012 season (3 which qualified and 1 transferred from the Champions League). Atletico Madrid, Sevilla and Athletic Bilbao qualified for the Europa league while Valencia was transferred after being eliminated from the Champions League. This season brought about an unusual all Spanish final, with Atletico Madrid and Athletic Bilbao competing for the title. Atletico Madrid prevailed and received a payout of around €10,500,000 euro while Bilbao was given €9,500,000.Valencia came out with €3,000,000 in addition to their payout from the Champions League. Comparatively, the Europa league is a much less inflated competition with a payout of €10,500,000 euro to the winner, although it is not comparable to the premier club competition of the Champions League. The disparity between the prizes distributed in the Champions League and Europa League only further the competitive imbalance between many teams throughout Europe. The huge amounts of money distributed by the Champions League will only further the ability of large clubs to dominate the competition by allowing them to purchase the best players and therefore remain on top. I think by reducing the disparity between the two leagues, European football could become more interesting, exciting and less predictable from season to season.

-Julia

Sources: Click Here.

A Futbol Fans’ Nightmare: Nou Mestalla

I don’t know what could be more frustrating for a futbol fan in Valencia than a brand new 75,000 person soccer stadium that has been partially built since 2007. The incredible design for “Nou Mestalla” was publicly announced in 2006 and the announcement had the city of Valencia buzzing. Futbol fans were more than excited and this was a great way for Valencia to welcome over 20,000 more people into each game. If ticket sales are successful, that extra 20,000 people every game would bring in massive revenue for the club. Everything seemed to be perfect – the city was excited, the club was excited, the financial benefits looked incredible…what could go wrong?

Well, the most important step went horribly wrong. That step was financing the construction of the new stadium. The plan set the price of this massive new stadium to be between 250-300 million euros. Construction started in August of 2007 and was expected to take around 2 years but as suddenly halted in 2009 due to financial problems. The world wide financial crisis caused Valencia to not be able to pay the bank in a timely fashion and the bank quickly stopped financing. The basic concrete structure was built before the bank halted the construction and now it is just taunting the fans of Valencia.

Luckily, in 2011 the Spanish Bank, Bankia agreed to finish the stadium and reduce the club’s debt of nearly 600 million Euros in exchange for the extremely value land where the old stadium lies. Valencia fans get ready, Nou Mesalla will be ready for the 2014-15 season (hopefully)!

Sound off in the comments section about who you think is at fault for the halted construction!

Construction is not usually this Messi. 

-Charlie

SOURCES: Click Here. Here.