Eibar – So Nearly Punished for being Debt Free


Eibar, who just last season were promoted from the Segunda B to the Segunda in the Spanish 2nd tier, miraculously managed to get promoted to La Liga in the 13/14 campaign. However, due to the debt ridden nature of the Spanish system, a team will go further if they have more debt. To be promoted and take part in the division above you must have the capital of 25% average budget of each side – minus the top two and bottom two. Wit h the likes of Mallorca, Deportivo, Gijon and more, that’s a lot of money!

In the case of the Segunda division, it was £2.1m. Eibar, a tiny place in the Basque region, had a yearly budget of £400,000. By August 6th, they had to raise £1.4m otherwise they faced demotion to the 3rd tier, where they were two seasons ago. Luckily, the likes of Xabi Alonso and David Silva were part of the club many years ago (they used social media to raise the profile of the club), and along with a sale of shares, they raised the money, no thanks to the Spanish FA, who were more than happy to uphold laws that allow teams to accumulate hundreds of millions of debt, yet punish the small teams to make an example of them.

This is a team with £0 debt, who operate within their means. No wasting money, every penny is accounted for. Here are rough figures from the end of the season in terms of debt in La Liga:

  1. Real Madrid – 300m Euro’s
  2. Barcelona – 300m Euro’s
  3. Valencia – 300m Euro’s
  4. Atletico Madrid – 180m Euro’s
  5. Deportivo – 156m Euro’s
  6. Racing Santander – 156m Euro’s (Segunda B, but until very recently were in La Liga)

In total the debt in Spanish football is around 4 billion euro’s – with sides such as Malaga and Vallecano banned from Europe in the past couple of seasons. Teams drastically overspend to try and break into the top 6, but like Deportivo and Santander ending up getting relegated. Mallorca have a lot of debt and were relegated in the 2012/13 season.

The problem is that when these small teams get into the league, these laws force them to spend more. Bar the top two/three teams who make millions from selling their own TV right, the rest are left to scrap for pennies. Eibar’s budget has gone from 400k to £17m euro’s this season, with the owner bringing in professionals to help maximise revenue’s of the club whilst in the league – these of course are rolling 1 year deals should the team remain in La Liga. Cordoba have also been promoted for the first time in 40 years, with teams such as Salamanca gone bust, Albacete would have without £240,000 from Andres Iniesta and Santander went most of last season without paying their players, which ended up with them refusing to play against Sociedad in the Copa Del Rey.

Eibar no doubt need to buy players to try and stay in the league, which will put them under financial stress. Loan deals from other La Liga teams like Bilbao could be a sensible way to go, but spending £20-30m could be a huge mistake. Even if they survive a couple of seasons, they may well end up like the others – millions in debt and barely surviving in the lower leagues.