When success means failure...Spanish football and its financial rules

A fascinating article that will get those of you who hate the game's money and those of you who hate the power of Barca and Real absolutely livid. I must admit that this article is all I know about the whole thing so I'll concede to anyone with better knowledge:

SMALL-TOWN EIBAR TO BE PUNISHED FOR THEIR SUCCESS ?

At Ipurua, the mist rolls down the green hillside, across the roofs and right over the pitch. The town of Eibar has a population of 27,000 people and sits halfway up the valley of the River Ego in the Basque Country, northern Spain.

At the top of the town, up steep streets, stands Ipurua, the picturesque home ground of Second Division club Eibar. It is surrounded by mountains to the north and south and the best view may just be the one from the two blocks of flats that tower over the stand. Not that they have to tower much to look over the short, squat side of this stadium.

On the back wall of one stand is a mural that shows a Basque flag alongside a Scotland one, plus the shield of Eibar with the slogan "Scotland the Brave." The Escocia la Brava supporters' club was born out of a trip in 2001 to watch the Five Nations rugby, during which a group of Eibar fans became enamoured with the atmosphere and tried to replicate it here. A couple of times a year, Scots join them in Eibar for games.

"Wearing kilts and wigs, taking photos by the mural," laughs the supporters' club president Joseba Combarro. They try to visit Scotland once a year, too.
Tiny Eibar is enjoying a superb season, albeit one that could be ruined by forces well beyond their control.


It seems fitting somehow. There's a small-town British feel to it but something very Basque about it as well -- in footballing terms, these are cultures that are intertwined. Here, it feels right to talk not of a stadium but a ground and the ground holds just 6,500, dwarfed by the landcsape around it, exposed to the elements. There's something about Ipurua and about Eibar, something locked in time, old fashioned but genuine, something built on sacrifice and humility.

This is the kind of place where young players from the Basque Country's bigger clubs would come on loan to toughen up. Xabi Alonso, for one. Ipurua is redolent of rain and mud going back through much of Eibar's 75-year history.

This may be the best moment in their history and yet supporters have mixed emotions. These are bitter-sweet days.

Eibar were promoted from Spain's regionalised, four group, 80-plus team Second Division B in the summer, coming up via the play-offs. They have the smallest ground and the smallest average attendance in the Second Division at around 3,000. They have the smallest budget too (3.5 million euros) and pay lower wages than anyone. And no team comes from a smaller town. But they are top. With each passing week a first-ever appearance in the First Division appears more likely. It is a miracle.

They are racking up their best statistics ever, overcoming even the Eibar team that came so close in 2004-05. That team was coached by José Luis Mendilíbar, who went on to coach Athletic Bilbao, Valladolid and Osasuna. It included Joseba Llorente, who later played for Real Sociedad, Gorka Iraizoz, Athletic Bilbao's goalkeeper, and a creative attacker called David Silva.

Silva was 18 and on loan, a Canary Islander a long way from home. Now he is a World Cup winner. Famously, he stopped rather than scoring because an opponent was down. It was the 91st minute of a vital game and it was 1-1. That was the goal, they say, that could have won promotion. But honour mattered. They still talk about that Eibar team as the side that "was in primera for ten minutes."

One of Silva's teammates that day was Gaizka Garitano. Now he is Eibar's manager and now, their chances of promotion may be greater than ever. The secret is no secret: it is sacrifice, just as it always was. Garitano talks about Silva learning about the "identity" of the club, rooted always in the group. No one thinks he is a star and not just because no one is a star: Eibar stay strictly within their budget, they do not spend to chase promotion. Instead, they build.

"One thing is non-negotiable, now and then: we're all the same, there are no splits and anyone who does not share that view has no place here," Garitano says. "That team came close. Now this team is too," he adds. It is an astonishing success story, as implausible as it is inspirational.

And yet relegation may be closer than promotion. Yes, really.

If what happens on the pitch delights Eibar's fans, what is happening off the pitch disgusts them. Unusually for a Spanish club, Eibar are financially
sound: they never spend what they do not have and there is money in the club account. The league's president Javier Tebas even described them as a "model club."

Unlike so many other clubs they had few financial problems until, that is, financial problems were imposed upon them through no fault of their own.

Now the situation is stark: if Eibar do not raise 1.7 million euros by August, they face being relegated back to the Second Division B.

According to the law -- Real Decreto 1251/1999, which became applicable to Eibar when they were promoted to the Second Division in the summer and thus took their place in what is formally classified as professional football -- every team has to have a capital equal to 25 percent of the average expenses of all the teams in the Second Division, not including the two clubs with the biggest outgoings and the two clubs with the smallest outgoings in the division.

In theory it is a way of guaranteeing the survival of clubs but in practice, it could cripple Eibar.

They are being punished precisely for being a small club that has always operated within its budget and for making the "mistake" of winning promotion to a division that is not only their historic place, but one in which they had not competed for five years.

They are being punished for earning the right to compete in a division where every team's budget dwarfs their own. They are forced to create a budget dictated by other clubs, more than fifty percent of whom are in or have been through administration.

Eibar's social capital is 422,253 euros. They are in the black, not the red.

They are healthy, they do not have debts, their players are paid -- and on time. But 422,253 euros is not enough. They have six months to increase their capital value in shares to 2,146,525, a figure set not by their budget or their ability to guarantee survival, but by everyone else's. And they may pay for that with their own survival.

Somehow, they have to find 1,724,272 euros and in only six months. It is a race against time -- with their legs bound together and their hands tied behind their backs.

A share issue will start in August; in the first phase, members will be allowed to buy shares at 50 euros per share. In the second phase, it will be opened up to others. But at Ipurua they are not optimistic. 1.7 million euros is a lot of money, especially for a small club in a small city with few fans, many of them under eighteen, over sixty or unemployed. This season around 3,000 are attending most games, almost double the average gate last season. They would have to buy 566 euros' worth of shares each or other fans would have to buy shares in the second phase.

The only solution, the last resort, may be an investor, which would probably mean the club slipping out of the control of those who truly care for it. A healthy, debt-free club forced into the hands of a new owner. The ultimate in cynicism.

If Eibar cannot raise the money, the immediate consequence would be relegation back to the Second Division B -- the division's best team dragged down by its worst ones. Furthermore, what they win on the pitch could be lost off it -- from Spain's top flight to its third tier in the blink of an eye.

It is, says the town's mayor with marked understatement, "totally unfair." Eibar may be punished for being well run in a league of clubs that are poorly run, a team that is overachieving on sacrifice and solidarity.

"A model club," the league’s president said. And this is their reward.

Yeah, it's a ridiculous story. Kind of understand the idea behind it, but in a country where the current champion is seen as a financial success because they're actually paying back the €170 million debt they ran up not paying their taxes, it's crazy to punish a team that actually has money in the bank and always pays its players on time.

Absolute madness, summed up brilliantly by LowlandBrit.

This can't actually be a serious story can it?

Absolute madness I tell thee