Photograph: Luis Gene/AFP/Getty Images
Article by Sid Lowe
According to article 93 of law 35, originally introduced by the previous Partido Popular government in 2004, foreign executives earning more than €600,000 (£540,000) a year are taxed at 23%, rather than 43%. In theory, the aim was to encourage talent to come to Spain: in practice, following a modification in 2005, it gave Spanish football clubs, already boosted by the collapse of the pound, a huge advantage. Of the 60 people who qualify for the lower rate of tax, 43 are footballers.
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Tebas may even be right, and not only due to the Beckham Law, because beneath the glistening surface Spanish football is in crisis. According to José María Gay, Spain's leading expert on football finance and an adviser to Uefa: "La Liga is dying." The Osasuna president, Patxi Izco, admits: "I fear a financial meltdown." "Football," insists another director, "is seriously ill."
The €455m transfer spend disguises a troubling reality. Last year, despite winning the treble, Barcelona made only €8.8m and have a debt of €350m. Madrid signed €258m worth of players but only after their president, Florentino Pérez, turned to two friends who are both presidents of banks and who loaned Madrid €151.5m.
The argument is that their debts are serviceable. In fact, Pérez insists that high expenditure is necessary to generate money and Madrid have become the first club to take income beyond €400m. But doubts remain; costs outstrip income, shirt sales are lower than those of Liverpool and Chelsea; Bernabéu attendances are down 7%; and the debt stands at €683m. Publicly, Pérez insists: "Madrid must always remain a club owned by its members." Privately, the possibility of becoming a plc has been discussed.
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