The bottom line: after years of growth, a flailing world economy and staggering player salaries have forced some European and South American clubs to consider salary caps and, worse, bankruptcy - Statistical Data Included

Soccer Digest, June-July, 2002 by Clemente Lisi

The financial picture in South America is even bleaker. Argentina's 20 pro teams rake in $265 million a year from TV rights and gate receipts, but collectively those teams are $400 million in debt. Hard economic times and dwindling ticket sales over the past three years have hurt. Clubs have been unable to pay creditors and still owe former and current players back pay even though several teams have received a two-year advance from TV companies and advertisers. A nationwide economic and banking crisis--which resulted in three different presidents in less than six months and, eventually, necessitated setting the peso to the dollar--has crippled Argentina since Fall 2001. "People aren't going to games because they're scared that they don't have any money," says River Plate chief financial manager Roberto Jacobi.

Boca Juniors, Rosario Central, San Lorenzo, and River Plate accounted for $119 million of the league's total debt last year. With mounting costs, teams will have no choice but to sell their best players. While Buenos Aires burns, European clubs eagerly await the fire sale. Indeed, along with the tango and beef, the country's most successful export in recent years have been soccer players. Buenos Aires-based River Plate, one of the country's most storied teams, has topped the international list in player sales over the past three years in an effort to close in on its $50 million debt. "We have to sell [players] because of all our debts, says Jacobi. "And often when it is reported that a player was sold a certain sum, the club doesn't keep all of the money because percentages need to be paid to the athlete and the intermediaries."

Where has all the money gone? Several clubs invested in refurbishing their stadiums, but poor or corrupt management has been the primary culprit Clubs simply have a tendency to spend more money than they make. Plus, club officials have been accused of pocketing money from transfer fees--a problem highlighted last year after Boca Juniors sold midfielder Roberto Aimar to Spanish club Valencia for $22 million--and was still in the red.

Chile's economy may be in better shape, but its teams are in trouble for many of the same reasons. Colo Colo, the country's most popular club, was declared bankrupt in January with a $30 million debt Creditors even called on fans to make donations through its Web site so the team could stay afloat. The government had proposed that clubs become private companies, seeing it as a solution to their financial plight. But the country's 32 pro teams rejected the proposal, saying they resented the government's intervention. Even so, first division club Santiago Morning has become a private company. Even more odd, second division club Everton of Valparaiso was taken over by player agent Pablo Tallarico, who pumps $8 million a month into the team's bank account, but regains a large portion of that money earning his percentage on player sales.

Not all clubs are ready to take just anybody's money, however. Chile's O'Higgins refused an offer from another businessman to pay its $405,000 debt because the would-be buyer insisted the team change its name to Augusto Pinochet, in honor of the country's former dictator responsible for massacring thousands of Chileans.