Club news

DEPOR IN ADMINISTRATION?

08 Nov 2012
Several reports came out on Wednesday affirming that Deportivo is on the verge of entering into administration, this after the club failed to pay a debt of €32 million with the Spanish treasury. For the moment the club maintains silence.

On Wednesday, newspaper La Voz de Galicia reported that the Spanish treasury are sequestering the incomes of the club due to a debt of €32 million. That’s the amount of the debt reported by the club on last year’s financial reports; Deportivo already had an agreement in order to fulfill this debt making several payments, but according to the source Depor have been unable to pay and therefore the Treasury, pressed by the government and the current crisis in Spain, is taking additional measures against all the clubs.

Later in the day Radio Cadena Cope spread the news that Deportivo is on the verge of entering into administration, a figure that will allow the club to postpone and even cancel the debts with the creditors. The same source clarified that Deportivo and the Spanish treasury already reached an agreement in order to assume the mentioned debt, and that the agreement may include the possibility of the administration figure.

At the same time, Sportpaper Deporte Campeón confirmed a sort of agreement between Deportivo and the Treasury, though the paper denied the possibility of going in administration as the board of directors refuses this scenario. The club, meanwhile, has maintained silence on the issue; the spokesman of the club, Rafa Carpacho, was asked on the subject and he told reporters that “there’s nothing” and that he “hasn’t been informed about this case”

Therefore there are more unsolved questions than answers, what seems clear is that Deportivo and the Spanish treasury have been negotiating on the past days regarding the debt of the club, but there are contradictions about the issues that have been negotiated and if the club is really thinking in going in administration, a possibility that the club’s authorities have always denied.

The Galician club is dragging a huge debt from the Champions League years; last year the financial statement reported a global debt of €99,698,571.33. Of this amount around €32 million are owed to the Spanish Treasury. 

In countries like England to enter into administration is considered an offense that’s punished with point deductions and even the relegation; in Spain last year it was reported that the liga clubs and the Spanish treasury were searching for solutions in order to solve the big debt problems of the clubs at Primera and Segunda; Sportpaper AS calculated that the global debt is around the €700 million; of this amount the Treasury has only collected €132.9 million.

In past months it was mentioned the possibility of using the same punishments of other leagues in Europe against the club having big debts and the ones in administration, but the rules won’t be applied until 2013. This means that to enter into administration won’t affect Deportivo, at least in a competitive sense and in the short term.

Right now the only reason why a club could suffer the relegation is if there are unpaid wages with the players. In this sense it has been reported that Depor’s first team hasn’t been paid since the middle of September. This situation is “normal” as Deportivo often delays the payments of the players’ salaries, something that’s also common at other clubs. A club could suffer the relegation if by the end of the regular season it hasn’t fulfilled the obligations with the players.

Currently there are twenty-two European clubs in administration, 21 of them are located in Spain: Rayo Vallecano CF, Real Zaragoza, Real Betis, Granada CF, RCD Mallorca, Hércules CF, Cádiz, Poli Ejido, Recreativo de Hueelva, CD Xerez, Córdoba Cd and Levante UD

ARCHIVE NEWS NOV/12

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