Friday, October 19, 2007

Spanish Football For Beginners....The Home Strip

All football teams have, as I’m sure you know, a home strip and an away strip. Some teams have more than this and Atlético Madrid is a case in point; for they also have an asset strip. Last time I wrote about their use of the pelotazo I expressed some doubts about the benefits of this operation for the football club itself. They had jumped onto the supposedly highly lucrative train that takes them to a shiny new stadium whilst the old site gets redeveloped with thousands of new flats and big profits. However, having read the latest on what is being planned it seems fair to say that Atleti could be about to enter the record books as the only football club to engage in this kind of operation and not actually make any money out of it at all. They could even lose money. Now it's almost customary when I write about the club for me to describe their supporters as being "long suffering" or something similar. However, given what seems to be happening I have to wonder whether it's just plain masochism that makes someone follow the team.

So what’s wrong with the Atleti pelotazo? In the end it’s quite a simple case of mathematics, unless I have seriously misinterpreted what I read in the press. So let’s take a look at the balance sheet:

The club is expected to net €250 million from the redevelopment of the Vicente Calderón stadium - sounds pretty impressive but we haven't got to the other side of the sheet yet

  • €160 million (paid in advance) to redevelop the existing stadium - La Peineta - that will be their new home. Seems quite a lot to convert a stadium, you could probably build a new one for that money.
  • €80 million as the contribution to burying the stretch of the M30 ring road that currently passes the Vicente Calderón
  • €20 million on the athletics track at the new stadium if Madrid is awarded the 2016 Olympics. That has to be a really good running track for that price! I bet they use top quality gravel.

So now let’s work out the profi.....oh dear, either my maths are wrong or it is not looking good for Atleti. It also appears that the agreement on the redevelopment includes a clause that adjusts all of these costs for inflation, with - you've got it - Atleti paying the extra whack if the paperwork takes a long time to go through. An additional "detail" is that they will not even be the owners of the land on which the redeveloped stadium sits. So they could end up paying almost 200 million euros for redeveloping an existing stadium that will not even belong to the club after work has finished. Now I can offer an explanation for why those who run the club might want to pursue an operation that could leave it losing money. It seems that about 3 years ago two property companies and the Caja Madrid bank bought into the ownership of the club, which was already in the name of yet another property company. What I cannot explain is why the fans of the club seem willing to put up with what looks like being a huge scam carried out at their expense. It’s a funny old game, football.

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