Football’s on Strike

In this summer of global economic uncertainty and instability, it should come as no surprise that contract disputes have erupted in major sports throughout the world.

Though the NFL and NBA have drawn most of the media attention in the United States, contract disputes have become a major problem internationally, especially in football. Most notably, the Association of Spanish Football Players (AFE) just ended its weeklong strike that postponed the beginning La Liga’s season.

The New York Times reported that: “Spanish club players representing all 42 teams in the top two divisions began the first work stoppage in 27 years on Friday in their demand for improved salary guarantees and the payment of $72 million clubs owe in unpaid salaries to more than 200 players.”

Though the AFE has reached an agreement and will begin the season this weekend, there is another dispute coming to the football world. The Italian players’ association (AIC) has delayed the beginning of the Serie A season that was scheduled to begin this weekend. Now, officials look to start the season on the weekend of September 10th.

So what do Spain and Italy and to a lesser extent, the United States all have in common? Major economic problems. The situation in Italy most sharply illustrates how labor disputes in sports and a troublesome economy are linked. What is the main gripe of the Italian strike? It is about a part of the Italian government’s austerity program, a tax called the solidarity contribution that affects people who make over €90,000 ($129,807) per year. Unsurprisingly, this includes soccer players. The teams want the players to pay the tax, instead of the clubs. With unemployment rates reaching record highs, especially in the age groups which many professional athletes fall (the young), it does not seem likely that the public will want to hear overpaid athletes complain about wages or unfair taxation.

While much of the Italian incident was centered on government economic reform, the Spanish strike was not so clearly linked. However, it was no secret that La Liga is in financial trouble, with the top 20 divisions having a total combined debt of over €3 billion. Dermot Corrigan also noted in an article: “Since 2004, 23 first and second division Spanish clubs have taken refuge in the Spanish ‘Ley Concursal’ which allows them to default on some or all of their debts…Some clubs blame this on the current troubled state of the general Spanish economy. Commercial revenues have fallen recently, with Atlético Madrid, Valencia, Villarreal and Sevilla all yet to find a shirt sponsor for the coming season. The traditional outlet for Spanish clubs in financial trouble – doing a deal with fans or friends at local banks, government or business – is now less likely to work for obvious reasons. The arrival of foreign owners with money has worked better at some clubs’ than others, but is hardly a sustainable solution for everyone.”

It is clear that the fiscal trouble that is pervasive throughout La Liga is restricting the funds available to pay players. The strike ended after Spain’s Professional Football League (LFP) agreed that it would pay the unpaid salaries owed to the players and players would be able to leave their club if they are owed three months wages or more. It is unclear how the money will be made available, but the good news for football fans is that the season will begin this weekend.

Sports are sometimes seen as a separate bubble, but this summer has made it clear that even they may not be able to escape the consequences of economic instability. During one of the most turbulent economic times on an international scale in the last couple years, everyone seems to be trying to work out a compromise.

blog comments powered by Disqus