CRISIS IN LA LIGA?
20 Jun 2010
The corporation that’s controls the TV rights of the major part of the Primera clubs is apparently in bankruptcy, which could mean big problems for the Primera clubs. For the moment Lendoiro asks for patience.
The bomb exploded this week and threatens to destroy la liga, The company that controls the TV rights of almost all the professional football clubs in Spain, including Deportivo La Coruña, has requested an application to the Insolvency Act, i.e. bankruptcy. The money that fluids from the television is what sustains the indebted Spanish football, and the bubble seems about to explode.
What happened is that Mediapro, the company that owns the rights of almost all the Spanish clubs, was declared in bankruptcy during the week, a surprising announcement that shook Spain, a country submerged in a economical and financial crisis. The situation is of uncertainty and concern at the professional clubs, which directly depend on the income from television to keep on going, despite the huge debts that weigh down their economies.
The key to this huge mess is in the direct confrontation between Mediapro and Sogecable, this last one a competitor in the world of the TV rights. The first one accuses the latter of "a serious breach of contract", ensuring that they haven’t fulfilled the payment of the commitment agreed between the two sides. The truth is that Sogecable had to pay 90 million Euros to Mediapro before June 15 (first payment of the league rights for next season), but hasn’t done so, arguing that there was no assurance that Mediapro was going to fulfill their obligations.
What are these obligations? According to the court ruling of last March, Sogecable must pay to Mediapro 104 million Euros, this for breaking the 2006 agreement that set the conditions for the exploitation of the television rights of the Spanish football clubs. Some sources indicate that Mediapro, after knowing that Sogecable would not pay the previous mentioned 90 million, has decided to declare itself in bankruptcy as an important strategy to delay the payment to which was condemned in the sentence.
Now, a judge must appoint three directors, an auditor, an attorney and a creditor. These three persons will study and evaluate the situation and will decide if Mediapro is able to pay its debts. And this is where the clubs come into play, because they are the main creditors of the company. Mediapro insists that there is no problem in fulfilling the 600 million Euros owed to the clubs, but the general feeling in la liga is of deep concern.
And Deportivo could be one of the bigger victims in this situation; the budget for the season is up to €55.8 million, and the 35% of it is coming from the TV rights (€19,472,500), without that money president Augusto César Lendoiro will be in deep problems trying to survive in a situation that’s already complicated due to the global debt of the club (€121,992,624.)
But for the moment Depor’s boss wants to remain quiet and ask for patience and to know more things during the liga meeting that will take place on Monday, “ "We will have more information on Monday’s meeting in la liga; we don’t know what really happened. We have the information of Mediapro and Sogecable, but we have to put it together and must remain calm" He said during the presentation of Desmarets.
For those who don't speak French and prefer the discussion in Shakespeare's language
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