Sam Wallace: Spanish clubs' unpaid tax bills are a disgrace – and a warning to all

Talking Football: This is money owed to the Spanish people. On a sporting level it is "financial doping" at its very worst

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.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger is in Argentina having chemotherapy

Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
peopleThe Times of India said actress should treat it as a 'compliment'
News
news

Watch this commuter wage a one-man war against the Circle Line
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week