VALENCIA, Spain (AP) — At the height of Spain’s crushing
economic crisis, the Villarreal soccer club sported an eye-catching logo
across its jerseys: Aeroport Castello. The local government paid the
club 20 million euros ($27 million) to promote what was to become
Spain’s most notorious "ghost airport" — one that hasn’t seen a single
flight since it opened in 2011.
The deal illustrates one of the
peculiarities of Spain’s meltdown: As austerity measures sap the life
from health, education and welfare programs, Spain’s soccer teams have
been receiving hundreds of millions of dollars in government aid. The
government says soccer subsidies are simply part of a policy of
supporting sports around the country.
An Associated Press review
of official documents shows that Spain’s highly autonomous regions are
helping to keep some soccer teams alive through massive direct cash
injections. The financing has some politicians and ordinary Spaniards
questioning the support.
The 20 clubs in Spain’s top soccer league
received at least 332 million euros in direct public aid between 2008 —
the beginning of Spain’s financial meltdown — and 2012, according to
the AP review. The funds were allocated through public agencies and
companies run by the country’s 17 regional governments. In the same time
period, the clubs have also benefited from an additional 476 million
euros in indirect aid, such as allowing clubs to run up tax and social
security debts.
That makes the total 810 million euros in the years reviewed — $1.1 billion.
The
AP tally is based on club accounts, the budgets of local and regional
authorities, and documents submitted to regional audit courts that
oversee public expenditure.
"Soccer puts the fear of God into
politicians," said Sandalio Gomez, a sports management expert at the
IESE Business School in Madrid. "They find ways of getting money to the
clubs without which (the clubs) would not survive."
The European
Union is investigating whether government loan guarantees for seven
Spanish clubs violate EU competition law, designed in part to prevent
businesses from enjoying unfair advantage through state intervention.
The probe is examining tax breaks granted to the Real Madrid, Barcelona,
Athletic Bilbao and Osasuna soccer clubs.
Ten of the 23 members
of Spain’s national team — the reigning champion playing its opening
World Cup match Friday — belong to those clubs. So do many of the World
Cup’s other biggest stars: Brazil’s Neymar, Portugal’s Cristiano Ronaldo
and Argentina’s Leonel Messi all draw their salaries from clubs being
investigated, though the great bulk of their income comes from
sponsorship deals rather than government subsidies.
But that’s just a part of government assistance to Spain’s soccer league, according to the AP review.
The
largest case of government subsidies can be found in the city of
Valencia, on Spain’s eastern seaboard. The AP found that over the
2008-12 period, the Valencia region pumped 169 million euros into its
four top-flight soccer clubs: Valencia, Elche, Levante and Villarreal.
Those
direct injections came in the form of sponsorship contracts, television
rights and subsidies. Three sports finance experts consulted by AP,
including Gomez, said all three constitute direct government aid.
In
one of the most striking cases, Villarreal entered into two sponsorship
contracts to advertise Spain’s notorious "ghost airport" on its team
jerseys. The publicly owned airport, an hour’s drive from the city’s
other airport, opened in March 2011 at a cost of 150 million euros. The
advertising deal provided the team with almost 20 million euros between
2008 and July 2011.
The issue of taxpayer money handed to Spanish
clubs is "legally murky," said Juan Carlos Hernandez, a professor of
administrative law at the University of Navarra, and any judicial
assessment would need to be made on a case-by-case basis.
Miguel
Cardenal, president of the Spanish government’s Superior Sports Council,
said there was no wrongdoing, as did club officials.
"Generally
speaking, the amount paid by public bodies is a little above the market
price" of advertising, said Ignacio Garcia Gil, Levante’s finance
director. "But the Spanish league has a global reach."
Soccer
clubs Valencia and Villarreal, and officials with the Valencia regional
government, all declined to reply to AP’s questions.
Meanwhile,
Valencia laid off more than 5,000 teachers while cutting budgets between
2009-12. Those who kept their jobs have taken pay cuts of up to 15
percent, according to the General Workers’ Union. Some sanitary services
were privatized, and 262 hospital beds were cut. The regional
government fell behind on social services payments of 110 million euros
for 30,000 people who could not get by on their own. Some Valencia
associations catering to the needy lost 95 percent of their public
funding.
Most countries spend some public money on soccer. Public
funds have been used to build stadiums from England to Italy to the
United States. But outside of Spain it’s hard to find a league that gets
so many sweetheart deals.
Apart from Real Madrid and Barcelona,
titans that are healthy enough to survive on their own, public money
provided a lifeline for all the top-flight clubs.
Still, soccer teams have not been immune to Spain’s economic meltdown.
Since
2004, close to 30 Spanish clubs have filed for bankruptcy protection.
All of Valencia’s teams — except for Villarreal — came close to
collapse. To keep themselves afloat, the Valencia teams borrowed a total
of 119 million euros. The banks demanded a guarantor for the loans, and
the regional government filled that role.
When the clubs couldn’t
meet payments on the loans, authorities stepped in to prevent the bank
from foreclosing by using taxpayer money — 28 million euros of it so
far.
"The Valencia case is a covert rescue operation," said
Francesc Pujol, a professor of sports and business at the University of
Navarra.
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AP reporters Raf Casert in Brussels, Barry Hatton in Lisbon and Graham Dunbar in Geneva contributed to
this story.