Like most sports events and competitions, Spanish football has been disturbed due to coronavirus. In this article, we will see what is going on with the clubs and examine the plans of the main stakeholders to get out of this situation.
First of all, what are the opinions of La Liga and the Spanish Federation? The bylaws establish that in circumstances of force majeure, it is the league that has the power to decide how to continue. There are a number of options. Firstly, finish the league as it is right now (this is the option the RFEF wants). The Spanish league has played 27 games so far this season. Alternatively, conclude the league as it finished the first leg. In this case, only the first 19 games would count. These possibilities would be very controversial, not only because of the champion (FC Barcelona in both cases by a little margin), but because of relegations, promotions and entry to the European competitions for next season. This being said, most participants think that the league must end, meaning that next season would be the altered one, like playing only one leg from the beginning; giving the possibility to play the European Championship and the America Cup, both postponed to summer 2021. Finally, it has been decided that the league will continue on 11 June and finish on 19 July. This means, teams will play eleven games in 40 days, about one game every three or four days.
FIFA points out that national leagues must finish whatever it takes, but it is national governments that have the last word, given the fact that they are the ones, who are implementing the necessary policies depending on how Covid-19 is progressing in each country. These policies will determine when and how the competitions will be played (no attendance at all, one third of the capacity or full attendance). It should be underlined that some teams such as Getafe or Brescia in Italy have refused to play until there is total security for the players. For the moment, the stadiums are going to be without fans.
At this point, if the national leagues change their system for next season, international competitions would also have to change theirs, making them shorter, despite the economic loss. We have to recall that FIFA has already cancelled the 2021 Club World Cup. For the time being, UEFA wants for all national competitions to end on August 3rd, so that the Champions League and Europa League can be played. Nevertheless, as we said, the timing varies among countries and there is little hope to satisfy UEFA’s desire.
Coming back to Spanish football, the RFEF has approved assistance of €4m to non-professional leagues so they can pay the salaries of players and coaches. The beneficiaries will be the third and fourth category of mens’ football, the three first divisions of mens’ futsal and the two first categories of women’s’ futsal. The precise amount depends on the total wage bill of the club.
Due to the pandemic, the players union (AFE) and La Liga have had a few meetings. Even though there has been no economic agreement, there is an intermediate solution: the players negotiate with their own club a possible salary reduction to diminish the losses. Also, some clubs have done an ERTE.
What is an ERTE and what are Spanish clubs doing to manage the crisis?
The first thing to ask about football clubs in relation to this question is – what is their most important source of income?
- TV rights: this varies depending on the club, but generally is more than 50 % of their revenues.
- Marketing: such as sponsorship deals.
- Match Day: revenues generated on match day, primarily ticketing.
If the Spanish league would have not finished, the financial losses were established in March at €678m. In April, the loss was determined at €957m. If the competition returns, there are two possible scenarios. On one hand, if the games are played without any spectators, the loss would be €303m. On the other hand, if they allow spectators, the loss would be reduced to €150m. As we previously said, the competition will continue without any fans on the stands.
The high level of uncertainty about the return of the competitions means many clubs have been affected due to the stoppage. They have opted to do an ERTE (Temporary Employment Regulation File). It is a device that the company/club can use to temporarily adjourn the contracts of their employees or reduced the time and/or the salary, with the purpose of helping the viability of the company or club. Generally, is made because of objective causes, such as the financial problems, but in this case, it has been made because of force majeure (Covid-19). Thanks to this, the clubs’ costs are reduced; 70 % of the salary is paid by the State (up to €1098), and it stays like this during the whole State of Alarm.
From the point of view of the player, he/she cannot rescind the contract, although the rights and obligations between the parties are suspended until the ERTE is finished. It is important to note that the remuneration affected is the one of that period, so any other bonus or payment that is due at another point in the year is not included. Some example of clubs that made an ERTE are FC Barcelona, who promised to pay 30% of the players’ salary, Sevilla FC, Atlético Madrid, Betis FC and Alavés FC.
Real Madrid is a different case. They stated that an ERTE is not an option, but they have reached an agreement with the first team. The players have renounced 10% of their annual salary, but this percentage could be increased to 20% if the competitions cannot be continued. The executives of the club have also reached a financial agreement. Most of the teams have followed this example, agreeing a reduction in salary with the players so others can continue to be paid and jobs are not lost. In Spanish professional football, only two teams of 42 have decided not to reduce players and workers salaries; Getafe CF in the First Division and Oviedo FC in the Second Division.
To conclude, I would like to say that even though we love football and we want it to be played again, the health of players, and fans is the most important thing. That is why we must respect the rules and stay at home. #StayAtHome.
Junior Legal at Martinez-Echeverría Abogados, where he started the department of Sports Law. Previously he worked at Grupo RLD in the area of Sports Law. Law graduate from Universidad Europea de Madrid and of the Masters in International Sports Law at ISDE. He had been in Law Internships in different countries, such as Israel, England and Germany.