In Segunda, it will be a disaster

A few months ago we talked about the financial status of some of the bigger clubs in La Liga and how regional clubs, the smaller clubs I might add, find it so hard to come straight back up in Spain. Alaves and Real Sociedad in the recent past have both struggled with financial difficulties after tumbling out of the first division. My club, RCD Espanyol are mired in a relegation battle that might sink them too, but they have something the others don't: a privately funded, 100 million euro stadium waiting to open officially in August of this year. It might as well be an expensive noose around their necks.

When Espanyol's old ground the Estadi de Sarria was demolished in 1997 the club moved into the nearby Olympic Stadium but fans never warmed to the oversized albatross at the Montjuic. They dreamed of a place of their own to rival the Nou Camp down the road. No one expected, as Jose Maria Gay an economist and a former advisor to the club recently stated in Marca, the effect that the new stadium would have on the club. "We have lived, eaten, and slept with the new stadium, but we didn't think that it would be the ruin of Espanyol in the second division" he said. The club have outstanding debts of over 150 million euros regarding the new stadium at Cornella-el Prat and have incurred about 20 million beyond that in production delays. The club have banked on increased revenues to offset that debt but it would be impossible to meet those payments playing in the second division. It would take years to recover sure, but is it any clearer for them if they do stay up?

As Sid Lowe said recently in the Guardian's football podcast, there is a financial storm coming in Spain that few are prepared to withstand. The financial health of the league itself is at stake. Professor Gay added that,"More than half the clubs in the Spanish league have yet to deposit their accounts in the Mercantile Register and a few clubs have gone years without revealing their records. Football clubs in Spain are in the same financial state as the Spanish economy: faced with a general loss of capital, little sponsorship or net funding, and a lot of debt." He also announced that UEFA are planning to release new regulations to curtail debt spending by European clubs.

That's a start. Clubs in Spain do carry a lot of debt, but the playing field is skewed. Clubs in England have no such worries right now. They can carry massive amounts of debt without repercussion or at least the same repercussions that restrict the manner in which equivalent French and German clubs do business. That places an incredible pressure on Spanish clubs to compete globally with English sides for advertising revenue. Global brand names like Real Madrid or FC Barcelona can survive and even thrive in that environment, but small regional clubs like mine will find it hard to maintain their place alongside for long unless some changes start happening domestically with the Spanish FA.