Atletico's dubious tax history overshadows domestic and European success

Atletico's dubious tax history overshadows domestic and European success
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Published April 14th, 2014 - 14:37 GMT via SyndiGate.info

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Atletico have been cast as one of the most deserving clubs in Europe, but their dubious tax history suggests otherwise
Atletico have been cast as one of the most deserving clubs in Europe, but their dubious tax history suggests otherwise

They are billed as the Robin Hood club of Spanish football, the challengers to the old hegemony of Real Madrid and Barcelona. Now Atletico Madrid have a chance to strike at the heart of the new money in English football too, when they face Chelsea in the Champions League semi-finals, adding to the lustre of Diego Simeone's team as the great outsiders.

You could say that all but the supporters of the three other clubs in the Champions League semi-finals feel an affinity with Atletico and a closer look at their tax affairs would tell you just how close that affinity runs. Since a seven-year court case in Spain finally reached a verdict in 2011, Atletico have begun paying back a jaw-dropping €171m (£141m) in unpaid taxes to the Spanish purse. By any standards it is a remarkable sum and it comes against the backdrop of the €41bn European Union bailout that has been extended to the Kingdom of Spain.

It is not just that the neutrals will be backing Atletico in the Champions League. Rather more than that, if you're an EU taxpayer, you could even claim to have funded them, indirectly.

The story of Atletico is one of those troubling tales of God-awful governance and extreme liberties taken with the payment of taxes, in a country where youth unemployment alone now stands at 55 per cent. Were it not for the ability of Simeone to build a competitive team on a relative shoestring, just as Raddy Antic did with his double-winning Atletico side of 1996, the club's capacity to pay tax debts - to survive - would be greatly reduced.

At the start of this season, the tax debt of Atletico stood at €167m, which fell to €125m by the end of last year. A further €30m is due before the end of the season, which may or may not have yet been paid. Even so, they are not expected to have cleared their tax debts until the end of 2018.

The Robin Hood of European football? That would be stretching it. No one could deny that there have been some bandits in charge at Atletico over the years but it is a far from glorious history.

The worst of Atletico's history dates back to the change in Spanish law in 1992 that dictated all but four clubs - Real Madrid, Barcelona, Athletic Bilbao and Osasuna - had to convert into plcs. The Independent revealed in August that this law is the subject of a European Commission state aid investigation, which could well force Real and Barcelona to give up their advantageous membership-based models.

In 1992, Atletico were owned by Jesus Gil and the club required €13m (in today's currency), a significant sum then, mostly because of the debts run up by their owner. Gil did indeed put money into the club, but only long enough to gain control of the shares. A Spanish court found almost 12 years later that, having deposited it to gain control, he removed it within a few hours.

Over the following years, the Spanish establishment gave Gil much leeway and only came knocking when his political party looked like it could be a threat (Gil was a mayor of Marbella in his time, and publicised the resort city on Atletico's shirts).

In the meantime there was the league and cup double under Antic and the signings of Christian Vieri and Juninho the following summer, although the Italian was sold to Lazio after only a year. By 1999, the club was placed in the Spanish equivalent of administration, with the Guardia Civil encircling the Vicente Calderon Stadium in their patrol cars on the morning of the ruling. In 2000, Atletico were relegated.

Gil was reinstated as club president but died in May 2004, shortly before the courts finally ruled on the club's tax affairs from 1992 to 1999, a period which included the conversion to a plc. The judgment described that conversion as a "fraud" and suggested that the club was being used for money-laundering, not least in the signing of five African players for €15m who all conspicuously failed to make the grade.

Since 2004, the club has fought a long, debilitating battle against its tax liabilities in the courts, which only reached their first judgment in 2011, arriving at a final figure a year later of €171m. Now, more than 20 years on since their conversion to a plc, Atletico are finally facing their responsibilities and paying the tax they owe, albeit in a very different economic landscape in Spain to the one when all this began.

They are, without a doubt one of the worst-run European clubs of modern times, and testament to the old wisdom that when the politicians and accountants have done their worst, it is the ingenious football men like Simeone who save a club. They were burdened with Gil before the plc conversion (his son Miguel is still involved) although that iniquitous ruling undoubtedly made things worse.

As for the process Real and Barcelona were exempt from, it can only be hoped that the European Commission's competitions' commission finally takes action and levels the playing field in Spanish football. One of the advantages of their non-plc sports club status is that Barcelona can pursue Joan Laporta, their former president, personally for the €47m losses he allegedly racked up in his time. As a plc, there is no recourse for Atletico to do the same.

Can Atletico maintain their position fighting the duopoly of Spanish football? Their annual revenue is €120m compared with the €500m of Real and Barcelona. They earn just €50m from television, less than a third of the big two. They will struggle to escape the fate that engulfed the likes of Deportivo La Coruña, Valencia and Villarreal, who have all briefly challenged but then fell away. And that is before we examine the issue of third-party ownership as it relates to so many of Atletico's players.

Given the shocking manner in which Atletico have sought to avoid their tax liabilities, right up until the last few years, it is hard to see them as the glorious rebels of Spanish football. Their recent success has had most to do with the talent of their Argentinian manager and not forgetting Quique Flores, who won the 2010 Europa League. But for most of their modern recent history, they fought as dirty as anyone, and are only now paying their dues.

Keane's cutting criticism of Wenger's Arsenal is merited

Roy Keane once said as a player that he resented the ceremony of trophy presentations so much that he would rather the team were given them in the dressing room, so his verdict on Arsenal's reaction to their FA Cup semi-final penalty shoot-out victory was hardly a surprise. "These Arsenal players need a reality check," he said on ITV. "They're celebrating beating a Championship team.

"We saw last year when they got in the top four, they celebrated at Newcastle," he went on. "We're talking about Arsenal football club here. It's about winning trophies." Put it this way, you would never have caught Keane taking a selfie on the pitch (unlike Santi Cazorla and Aaron Ramsey).

It has been pointed out, not unreasonably, that Arsenal were celebrating reaching the FA Cup final, rather than reflecting the calibre of their opposition. But Keane has a point. It has been so long for Arsène Wenger's players that none of them knows what it is like to win a trophy for the club, hence the reaction at Wembley. The Arsenal football club that Keane remembers is a lot more potent than the one of Wenger's players now.

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