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News from Argentina while you wait

You may think you missed the start of the Argentine football season, you would be wrong. The league canceled its first week in an effort to save money. The tough economic times hit Argentina as hard as anyone, maybe harder.

Now the AFA is going to break their TV contract to try and double their cash, because even teams like Boca and River are heavily in debt. Sure this all seems fairly innocuous, but in this case things are a little different.

Argentina is often regarded as a top 10 league (I've seen them ranked as high as sixth) and their best clubs are known throughout the world. Boca Juniors, River Plate, Independiente and Racing are truly SuperClubs. Argentine clubs have won Copa Libertadores 21 times and hold the Copa Sudamericana four times since its start in 2002.

There is an interesting twist though to the cause of the debt in Argentina

Boca Juniors, along with other first division clubs such as River Plate, Independiente and Racing, are mired in debt because of broadcast rights, government controls and payments they make to official fan clubs known as "barras bravas."

AFA president Julio Grondona has said seven first division teams and 10 second division clubs owe their players money.

The first division clubs, which have racked up debts of some $184 million, say the world economic downturn has forced them to sell players to European teams for a fraction of their true market value.

Emphasis my own

While American fans are discussing the Corporate v Organic supporters culture, let us all remember that BOTH are used throughout the world. Let's also never see a club fail to make payroll and instead pay its fans.

When 35% of First Division clubs are missing payroll, there is a significant problem. With financial troubles plaguing Scotland as well, there are plenty of players that can move on to fiscally sound leagues, oddly Major League Soccer is one of those right now.

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If I were Boca I’d probably prioritize paying my Ultras too. Those dudes are nuts.
This is happening all over the world — clubs failing to meet payroll. I know of a few stories from La Liga (yes, La Liga) that would make you question the entire financial structure of world football.
There is an opportunity now for middling leagues to go after bigger names and improve their standing. MLS is at a crossroads. It really needs to get a little more aggressive, otherwise it will be what it is forever.

by Duane Rollins on Aug 13, 2009 5:44 AM PDT reply actions   0 recs

Its funny that while other leagues are in discussions to control player costs through either/both of Salary Cap/Roster Caps MLS has moved away from the cap if only by an inch (DP).

For MLS to capture some of this talent it will either take expanded DP rules, or a version of luxury tax so that the haves of MLS can support the have nots in their payroll costs. Maybe I say this because I am a fan of a team that is clearly a have, but if the Cap was 3M$ with no player max and a 50% increase in the minimum and then teams were allowed to spend up to thrice the cap (9M$ total) but required to pay 1:1 for every dollar over towards the next season’s Salary Cap number the league would still be profittable, and there would be a few SuperClubs (at least in payroll).

Seattle – Toronto – LA – RedBull – Houston – DC United – Chicago

Those teams would likely be in favor. It allows them greater financial flexibility and would put there 20 man roster at an 450K$ average. It would put MLS salaries on par with upper (non-Firm) Scotland, upper League One/Championship, Norway, etc at least for the clubs wiling to go into the Luxury Tax.

If all 7 clubs go into that at 7M$ rosters for their 20 that would be 28 Million into the next years (2011) Cap pool. Splitting that 19 ways (1 part straight to league operations) would bump the cap to 4.5M$.

2011 would also add at two teams to the list that would want to go into the Luxury Tax. Yes, parity would die a little, but the overall quality of play in the league would improve.

by Dave Clark on Aug 13, 2009 9:56 AM PDT up reply actions   0 recs

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