Espanyol and the risk of falling to Segona without an economic parachute

2023-04-20 21:30:16

Barcelona“Whoever thinks that we have lowered our arms does not know what it is to be a parakeet”. Espanyol takes this phrase from its coach, Luis García, to appeal to the epic that has rescued it so many times throughout history. The white-and-blue club is looking to start a comeback this Friday against Cadiz (9 p.m., M. LaLiga) that will allow them to continue in the First Division. There are nine finals left to avoid a relegation that the Spanish club would have to face with much less financial resources than what it suffered in the 2019-20 season.

Then, Espanyol was able to respond to the move to Segona thanks to a series of incomes that, among other factors, allowed it to keep almost all its stars. A scenario that would hardly be repeated this year, since the white-and-blue club would not have the same parachute. In the 2019-20 season, Espanyol managed to invoice 102 million euros and generate a profit of 9 million thanks to its European participation. For this year, he had planned to enter 93.5 million and some red numbers of 9.6 million that would raise the accumulated losses in the last three years above 40 million. This last data is not futile, since unlike what happened in the summer of 2021, when Chen Yansheng capitalized 38 million euros that he had lent to the club, now the Chinese owner no longer has room to execute new extensions of capital That is to say, that Espanyol would be forced to face the passage through Segona with the own resources it was able to generate or with external debt.

In this sense, it is necessary to take into account the implications of a decrease in ordinary income. In the 2020-21 season, the white-and-blue club saw its turnover cut by 82.7%, to 16.9 million. Most of this drop was explained by the 86% drop in audiovisual rights, to 10.6 million. Advertising and commercial revenue fell 60% to 5.33 million. Three years ago now, Espanyol found some economic oxygen as a result of the compensation that the League pays to clubs that lose the category. This concept is calculated taking into account an average of the television and total revenues obtained by the clubs in the last five seasons, as well as the seniority of each entity in Primera. In 2020, Espanyol was able to enter as much as possible for this concept, since it accumulated 26 uninterrupted seasons in the top category. In total, this mechanism brought him 30 million, the highest figure contributed by the League. The rest of the clubs that have gone down to Segona have received between 9.6 and 19.6 million. It should be borne in mind that now Espanyol could only multiply the percentage corresponding to this concept by two, and not by 25.

The white-and-blue club, on the other hand, got oxygen to strengthen itself thanks to three sponsors and the funds received by CVC. The club had close to 12 million to spend on strengthening the staff within three years, but spent the 2021-22 and 2022-23 seasons. Now, not only would he not have access to these funds, but he would have to cede 10.95% of his audiovisual rights to the investment fund. The hypothesis of a further decline, moreover, would cause a further drop in the salary cap similar to that of the 2020-21 season. At the time, the club had to cut staff spending by 21 million, 30%, to be able to enroll the staff in Second Division. A further decline would force wages to be cut and, probably, to assume some sales. In 2020 it was Marc Roca’s turn, who left for Bayern Munich for 9 million plus variables. The departure of Pedrosa for free to Sevilla implies that other assets would be at risk in the event of a relegation which, fortunately for Espanyol, is still avoidable.