Club news

THE FINANCES OF DEPORTIVO

01 Apr 2021
The club sent the financial reports to the shareholders. The loss for the campaign is €316,632, but ABANCA faced a deficit of €9 million that will be covered with debt. The first team cost €6.6 million, a superior amount to 13 of the 22 clubs at Segunda A.

The shareholders meeting of 2020 will take place on April 27, and the club already sent the financial reports to the shareholders. The result that’s presented is a loss of €316,632. But the true is that the difference between incomes (€11.94 million) and the expenses (€20.96 million) is bigger: €9 million.

ABANCA explained that the reason for this difference is that the incomes suffered a big reduction, while the major expenses didn’t change too much. The TV income passes from €8.08 million to €1.14 million, which is explained by the fact that Depor passed from receiving the income of a Segunda A club to be charging pennies for been participation at Segunda B. The pandemic also hit the club as Deportivo only collected €1.87 million for ticket selling and socios, which is a reduction of 55.08% compared to the season 2019/20.

Meanwhile, the expenses haven’t suffered a big reduction despite the relegation to the third tier. If the club spent €11.9 million in the teams (first team, female team and academy teams) during the season 2019/20, that amount was only reduced in 23% for the current campaign (€9.11 million).

This situation creates a gap of €9 million that ABANCA is covering, which means more debt for the club. This is explained in a note sent to the shareholders saying that, “The impact is of such magnitude that, despite the fact that a restructuring of the Company has begun, it will have to resort to debt to address future financial deviations for the year. Thus, the current majority shareholder of the Company, ABANCA, has committed to providing the necessary funds to guarantee the company's budget during the 2020-2021 fiscal year.”

A fact to have in mind is that, from the €9.11 million that the club invested in the teams, €6.6 million correspond to the first team. This is not only the highest budget among the other 102 clubs at Segunda División B, but it’s even bigger than the amount of the salary cap for 13 of the 22 clubs at Segunda A (Albacete, Alcorcón, Cartagena, Castellón, Fuenlabrada, Sporting, Sabadell, Logroñés, Lugo, Girona, Mirandés, Ponferradina and Málaga).

This comparison helps to measure the reality of Deportivo’s failure during the season 2020/21, because it isn’t only that Depor failed to clinch the promotion to the second tier, but it didn’t even pass the first cut as the team didn’t’ qualify among the first three places during the first round.

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