Having previously explored the financial plights of several Spanish clubs including CD Lugo, CD Mirandes, UD Carboneras Sporting Villanueva, Polideportivo Ejido and most recently SD Eibar; we now find ourselves once again discussing a Spanish team on the brink of extinction. This time it is Albacete Balompie of the Segunda Division.
Many of the new budget control measures and business administration criteria implemented by the Spanish League (LFP) from 2010 to 2012, were designed to protect clubs from digging themselves into financial black holes while remaining competitive on the field. A host of measures including salary caps and capital requirements have certainly made the Segunda Division a more level playing field and prompted a culture of more responsible financial management. However, some clubs have found the transition process more difficult than others and Albacete is one club that is still facing a battle to put their financial troubles behind them.
After previously flirting with disaster and fending off creditors during a spell in Segunda B, the club known as Queso Mecánico (Clockwork Cheese) was taken over in 2013 by an investment Group led by renowned business troubleshooter José Miguel Garrido. As well as recieving investment from the group, the club also received more than €1m from Jose Antonio Iniesta, the father of Barcelona’s star midfielder Andres.
While the club has been able to satisfy creditors, fulfill LFP requirements, pay their staff and remain competitive in the Segunda Division, they still have an outstanding matter with the tax office to the tune of €1.3m. This is the one cloud hanging over a club that is now well-run and has been preparing for a brighter future. Having reached a position where the club can prove its viability as a business going forward, the board had hoped to agree a new payment schedule with the tax office. They presented a financial plan that would allow their debt obligations to be met while continuing to operate within their means. Unfortunately, the Spanish tax office does not share the same desire to negotiate.
The tax department has certainly shown that is willing to restructure the debts of other struggling corporations in Spain but when it comes to lower league football; they play by a different set of rules. A national tax deferral system introduced in 2009 to help Spanish companies has since been dissolved and as a result, they have now issued a demand for immediate payment of the money owed. Meeting this payment will put the future of the Castilla-La Mancha club in danger, and while the tax office does have the provision to further defer tax payments in circumstances such as these, they seem to be unwilling to compromise in this case.
The situation was complicated even further when TV rights money owed to the club were seized by the local council on the orders of the treasury. The amount seized is more than 2.5 times the debt owed and will prevent the club from meeting its operating costs and force liquidation.
This is a club that has been fully audited and acknowledged by the LFP as a financially sound business. They have already cleared more than €1.5m of debt and have proved their willingness and ability to clear the outstanding amount as quickly as possible. They have not requested that any debt be written-off, and under Spanish law they should be entitled to a deferment if their business is being put at risk.
As of today, Albacete will be in liquidation.
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