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Report: Atletico's Success Masks Financial Problems
Reuters, April 8th, 2014 1:53PM
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TAGS:  soccer business, spain, uefa champions league

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By any measure, Atletico Madrid is having a fantastic season: Los Colchoneros, as the team is affectionately known, are in first-place in La Liga (albeit just one point ahead of second-place Barcelona and three ahead of third-place Real Madrid), and currently locked in a 1-1 draw with Barca in the UEFA Champions League quarterfinal, which will be decided at Atleti’s Vicente Calderon stadium on Wednesday. While many attribute the team’s success this season to current coach and former Atleti player Diego Simeone, Reuters reports that the club’s future hangs in the balance because its finances are in woeful shape.

According to figures from University of Barcelona finance professor Jose Maria Gay, the club is saddled with debts of more than 500 million euros ($690 million), and the cost of paying players and staff alone already accounts for more than 90 percent of its annual earnings. Jaume Llopis, a professor at the IESE business school in Barcelona, notes that the club has only managed to stay afloat by convincing the Spanish government to let the club fall behind in its payment of more than 100 million euros in taxes.

Atleti’s threadbare finances means that if the club failed to qualify for next season’s UCL (although it will), it would instantly become insolvent. It also needs to renegotiate a bigger deal with shirt sponsor Azerbaijan, and to potentially negotiate new sponsor deals. "Atletico Madrid's financial situation is dramatic," Gay told Reuters. "But this year because of the team's excellent results their economic problems are not talked about. Only with their continued presence in the Champions League, locking in the sponsorship deal with Azerbaijan, attracting more sponsors and selling their best players can they improve their finances, although it will be very tough.”

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