How Atletico Madrid Built a World-Class Team On a Foundation of Spiraling Debt

Atletico Madrid’s evolution from Europa League winner to UEFA Champions League contenders under their Argentine coach Diego Simeone has earned them a valuable amount of respect.

Simeone has forged a focused and committed unit that is capable of disrupting almost any team in the world. Looking at their statistics, one can surely be very impressed from the way their results have turned out – taking four points from Real Madrid in La Liga this season and beating them in last season’s Copa Del Rey final, and recently eliminating Barcelona from Champions League. If Atleti’s flow of wins does not see any major upset, they surely look to clinch this year’s Spanish League title.

This, however, can’t be seen as a defiant victory for the little man in the face of the immense strength of Classico duo. Atletico do not deserve their billing as the people’s Champions, no matter how Simeone’s on-field turnaround merits credit. The Spanish capital club have come to represent, in recent years, something that is hampering the modern game of soccer: spiraling debts, third party ownerships and an abdication of responsibility.

In terms of revenue and support, Atletico remain the third biggest team in Spain, but have struggled to keep their own house in order since converting to a PLC in 1992. Atleti’s financial management has come under scrutiny ever since Jesus Gil became the chief shareholder.

This remains the club that has disregarded regulations and fiscal prudence throughout its modern history. They suffered relegation in 2000 not long after their offices were raided in the infamous Caso Atletico, which eventually led Gil to be sent behind bars for three and a half years as well as punishments for Enrique Cerezo and Miguel Angel Gil Marin – who remained at the club. The club stopped paying taxes for two years following relegation. In this way, they avoided around €46 million as they expedited their escape from the Segunda Division.

Atletico Madrid, by 2011, owed a scarcely conceivable €517 million to creditors – including almost €171 million to the tax authorities. The Spanish government could have threatened to call in the debt instead of offering them a 4.5% interest per annum while making Atletico pay €15 million of their tax bill every year.

The unfortunate economic meltdown in Spain, which has driven the unemployment rate to around 26 percent, provided Atletico the opportunity to alleviate their own predicament. Economics and finance professor Jose Maria Gay told Die Welt in 2012,

“The government cannot demand payment without crippling clubs and leaving supporters very upset.

“Considering the situation of our country is facing, it is unreasonable to start introducing dysfunctional steps into the championship that could affect its image, which has a commercial value.”

That rationale meant that laxity prevailed. The ex-president of Bayern Munich, Uli Hoeness, showed his frustration while referring to the EU bailout of Spain in 2012. He said, “This is unthinkable. We pay hundreds of millions to get them out of the sh*t, and then the clubs don’t pay their debts.”

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