Valencia...

[peteblue]

I wonder what the financial fair play rules make of this.....

http://www.guardian.co.uk/football/2013/jan/21/valencia-cf-debt-city-takeover


The local government of Valencia, one of Spain's most cash-strapped regions and owner of several infamous public white elephants, has added a La Liga football club, Valencia, to its portfolio.

With local health and education services hit by austerity programmes, the regional government's effective takeover of Valencia and its squad of highly paid soccer players has provoked fury. But it became inevitable after the club defaulted on interest payments on an €81m (£68m) loan which was only granted after the regional government offered to stand as guarantor. The total debt is now €86m. The acquisition presents yet another administrative headache for the regional government, whose properties include the new but unused airport of Castellon and a hospital at Lliria that it cannot afford to open.

The regional government, which has long been run by Spanish prime minister Mariano Rajoy's People's party (PP), part-owns two local second division clubs, Elche and Hercules, which also failed to service their debts. In all, it guaranteed football club loans of about €110m in 2009 and 2010, a time when Spain's public finances were in deep trouble. It is unclear how the authority, which has said it will try to sell the club as soon as possible, will service the loans because its own debt has been given junk status by ratings agencies, effectively shutting it out of the markets. The money is owed to Bankia, which is owned by the Spanish state after being rescued with €20bn loaned by the eurozone's rescue funds."We are aware of the importance that Valencia CF has to Valencian society and we will work so that the club can go forward in the best possible fashion," said the regional government's deputy head, José Císcar.

There was no mention of selling stars such as striker Roberto Soldado or promising youngster Sergio Canales, part of a team that is seventh in the Spanish league. Valencia was the first region to ask for bailout money from central government in July when it required an estimated €2.5bn to help it get through 2012. It is expected to ask for more this year.

 

[Bob Latchford]

Ok so?

Valencia owes Bankia a small fortune.

Valencia are skint and owe Govt a fortune

Valencia fail to repay and are taken over by Govt.

Bankia owe Govt a fortune and are then bailed out, effectively becoming state owned.

Govt is also skint and gets EU bail out and is shut out of markets.

What a mess.... Thats one way to call in a debt. They must be praying for a massive Arab bid come in to help bail out the region.

 

[davids]

Nothing new in Spain.This is from 2001.
Real Madrid's members have voted to approve the club's plan to sell its city-centre training facilities in order to clear debts of £165m.In an extraordinary general meeting held on Sunday, 92% of those who voted supported the deal between the club, Madrid's city council and the regional government.
Club president Florentino Perez said the deal, which is expected to generate about £206m, has assured the economic future of the club.
"Today is an historic day for Real Madrid because the plan has been approved by a vast majority and it will banish forever the cursed debt that has been hanging over the club.
"Decisions like this will allow the club to establish itself as the best club in the world in the 21st century," he added.
Perez made the scheme to sell the training ground a key part of his election manifesto when he was campaigning for the presidency last July.
He also expressed repeated concern about the scale of Real's debt and made it clear on Sunday that urgent action was needed if the club was to continue to function normally.
"The monstrous debt has left the club in a state of economic intensive care," Perez told the members as he urged them to support the deal.
Madrid theme park
According to the terms of the agreement, Real Madrid will retain the rights to a section of land which it will sell for office construction.
The club will then be able to clear its debt and still have enough cash left over to build a completely new training facility on cheaper land on the edge of the city.
The new training ground, which will also include a Real Madrid theme park and accommodation for young players, is expected to be completed for the start of the 2004 season.
The agreement will also mean that the city council will be able to use the present Real training ground in order to build a state-of-the-art sports stadium which will act as the centre-piece of the city's proposed bid for the 2012 Olympics.
As well as securing approval for the plan to sell the training ground Perez has also finalised a series of marketing and image deals that have secured the short-term financial future of the club.

Madrid council is still in huge debt which they are attempting to service by illegally raising prescription fees,charging for ambulance trips etc.This sort of thing is ingrained in Spanish culture,we are Europes official Banana Republic

 

[Bruce Wayne]

What a mess.

 

[tsubaki]

Spanish football is as broken as Spanish society is, though the effect of Real's sale of the training ground is overstated - for instance if Chelsea ever sold Stamford Bridge* they would probably be able to clear most of even their debts thanks to the idiocy of local property prices.

* as they tried to, but were prevented by fans