5 La Liga Sides Most Likely to Break the Madrid-Barcelona Duopoly in Spain

Michael CernaCorrespondent ISeptember 21, 2012

5 La Liga Sides Most Likely to Break the Madrid-Barcelona Duopoly in Spain

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    La Liga currently holds two of the four or five strongest clubs in football. Real Madrid and Barcelona are talented enough to win the Champions League almost any season they qualify.

    But beyond those two, the rest of the league is suffering.

    Almost dying.

    The gap between the big two and everyone else is so big that current fans are becoming less interested in the league, while the other 18 teams get very little respect from non-fans trying to get into the league.

    While the causes are many—see my three-part series on La Liga's broken TV revenue system for an overview—solutions are more important and right now, there is no clear answer.

     

     

    No End in Sight

     

    All signs point to the duopoly continuing for many, many years.

    More clubs are starting to speak out against the big two, including Sevilla and Atletico Madrid. The debt level in the league is almost insurmountable at this point.

    The current state of Spain's economy is so bad that teams and fans are suffering, only making the "other" 18 clubs weaker in comparison.

     

     

    From Top to Bottom

     

    Even Barcelona and Real Madrid are suffering, albeit to a far less extent.

    Both teams have enormous debt, but the magnitude is masked, and even covered, by having the two greatest revenue streams in football—which covers roughly 80 percent of the debt.

    Taxes are also a big issue for these two. La Blaugrana have the second-biggest tax burden in the league, while Real Madrid needed a shady deal with the government to get rid of its tax burden.

    For those unaware, Los Merengues sold their training grounds to the Spanish government to alleviate the tax debt, but the European Union investigated the sale.

    But as poor as the situation is for those two, it is the rest of the league that is really suffering. The difference in revenues is growing every season and the new 2014 TV deal will not significantly help.

     

     

    Any Hope for the Future?

     

    Despite La Liga seemingly on the verge of financial collapse, there are some small signs of hope that there are other teams that will break up the duopoly soon.

    Loan deals are starting to replace signings, the new Financial Fair Play (FFP) regulations are forcing frugality for many clubs and the total tax debt has lowered for the first time in decades.

    But will this be enough? Not right now.

    In no way is any other team capable of contending within the next half-decade, but there are at least five teams who, if all the right pieces fall into place, can close the gap in the next few seasons and add a third main power in Spain soon.

    What follows is a list of the five clubs in Spain that are in the best shape to break up the duopoly in La Liga within the next decade.

    After reading the list, please comment and let us know who you think is in the best position to challenge the big two.

    Note: Information regarding taxes, debt and revenues were taken from various studies shown by AS, Juse Maria Gay, Forza Futbol and the Swiss Ramble.

Sevilla

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    Why They Can

     

    While Sevilla are in debt like most other Spanish clubs, the amount is much smaller than other clubs.

    Jose Gay estimates that the Andalusian club currently has roughly €100 million worth of debt. While that is obviously a huge figure, an equally telling number is the percentage of tax covered.

    Before last season, Sevilla's revenue stream was so great that roughly 80 percent of their debt was covered.

    By comparison, Valencia's revenue from Champions League football, and the third-best revenue bracket from TV rights only covered 30 percent of their debt—which is over triple that of Sevilla's.

    Not playing in Europe this season hurt them, but they can still get back on track if they finish top six this season.

    Also, the sale of one or two big stars—Gary Medel, for example—would be a lot more helpful for them than it would be for most clubs.

     

     

    Why They Won't

     

    Having a small amount of debt compared to other Spanish clubs is sort of like being the fastest goldfish in a fish tank with a hole in it—they are still drowning and will still have the bottom fall out if they don't plug the hole quickly.

    Sevilla simply must qualify for Europe next season just to ensure they don't have to sell one of their biggest assets next summer.

    Right now they are able to do so well in large part because they have made some smart buys and have one of the greatest homegrown talents in the league in Jesus Navas.

    If they had to sell him to break even after the players bought this past summer, they'd be a far weaker team and wouldn't have enough money to bring in a lot of talent since the money from that sale would go to the government and towards debt payments.

     

     

    Chances of Breaking the Duopoly


    Sevilla are one of the more financially responsible clubs in the league, but that does not make them more of a threat to Barcelona or Real Madrid.

    If they are every going to have a real shot of winning La Liga, they first have to play in the Champions League or win the Europa League.

    Sevilla need to improve every season and not miss out on Europe again in the next five seasons.

    If they can do that and if a better TV revenue deal can be brokered in the next three years, Los Nervionenses could challenge for a title within the next decade.

Valencia

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    Why They Can

     

    Valencia are one of the most resilient football clubs in the world. It is really a miracle that they are anywhere near as good as they are right now.

    In the last half-decade or so, Los Che have had to deal with over €400 million worth of debt, close to €10 million worth of taxes owed to the government, losing their most elite players every season, and a stadium deal that is continuously put on hold.

    Despite all that, the team still manages to stay in third place year after year and is always a tough opponent in the Champions League.

    This continued success allows Valencia to field a strong team while also slowly digging itself out of debt.

    The trending relief should get even better starting in 2014 when La Liga teams will take a larger share of TV revenue from Barcelona and Real Madrid.

    Also beginning in 2014, teams have agreed to set aside 35 percent of their TV and radio revenue directly to tax relief.

     

     

    Why They Won't

     

    As respectable as the resilient spirit of Los Che is, we have to believe that it will die out sooner or later. Valencia are slowly getting more solvent, but so are other teams across the league.

    The gap between the top two and the rest of the league may be increasing, but the competitive balance between the other 18 teams is only getting better.

    There are at least four other teams that have enough talent to legitimately challenge Valencia for third place.

    Missing Champions League qualification three years ago really set Los Che back, but they still managed to finish third—in part because the rest of the league suffered even more.

    But that was a bigger lifesaver than many realize or want to admit.

    The club was one of the best in this summer's transfer window, but they were only able to do so well because of revenue from European play and the sale of Jordi Alba.

    If they were to fail to clinch a top four finish in the next few years, it could set them back so greatly that they drop out of the top four for a long time.

     

     

    Chances of Breaking the Duopoly

     

    Without the revenue from Champions League play, Valencia are in serious trouble, even with the new TV deal set to start in 2014.

    They have to continue to play better than what their finances allow them to and now they have to do it without a new stadium deal.

    The hope is that Los Che can continue to finish top four and pay down its debts, but one slip-up could be all that is afforded to them and with other teams only getting stronger, it seems only a matter of time before that happens.

Malaga

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    Why They Can

     

    As embarrassing as this past summer was for Malaga and as much as it weakened the squad to have to sell their best player, they are still in decent shape looking forward.

    Their rich owner may not have been willing to pump money into the club without more rewards, but he is at least still the owner and the club's vision for the future remains intact.

    As of today, they are sitting atop their group in the Champions League with a strong chance of making the actual tournament.

    If that happens, they would potentially be able to bring in more quality depth next season. That squad improvement would be even greater if they could somehow manage a top six or even a top four finish in the league.

    As of now, the dire nature of the club's finances has gotten under control which should allow them to hold on to the current crop of players.

    They have almost come even and paid off all outstanding debts which means UEFA will reward them their earned revenue by the end of the year.

     

     

    Why They Won't

     

    As promising as fans would like to see the club's future, they are not totally out of the woods yet.

    UEFA is likely to pay the club its winnings soon, but even then, there is no guarantee that Malaga will continue to have a high revenue stream going forward.

    They are a very light squad, which will make a top-six finish very difficult if they are managing multiple competitions in the second half of the season.

    Without consistent added revenue from those added competitions, Los Boquerones will only move backwards in the next few seasons.

     

     

    Chances of Breaking the Duopoly

     

    Beyond this season, they are still not getting much TV revenue. Even though they were a top-four team last season and can repeat that feat this season, they are not even one of the four highest earners of media revenue.

    Only Valencia and Atletico Madrid earn more than 10 percent of that pie or will after 2014. Malaga will have to rely only on a high finish in the league and solid showing in Europe.

    They also have to rely on an owner who seems much less committed now than he did a year ago.

    If they can stay a top-six team for the next five seasons and make smart financial decisions in the transfer window, Malaga can slowly start to reach the expectations they built for themselves last season.

Athletic Bilbao

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    Why They Can

     

    Ignore the current standings and try to put Bilbao's cantera policy at the back of your mind for a minute. With just a few tweaks, this club can contend for a title.

    Even after selling Javi Martinez, Athletic Club remain one of the most talented sides in Spain. They showed how great they can be last year when they reached two finals.

    But the most positive sign for this club is finances. In so many ways, Los Leones are the most stable club in the league right now.

    The sell of Javi Martinez to Bayern Munich basically eliminated all of the club's debt. Selling Fernando Llorente this winter could put the club in the green for the first time in years.

    They are also one of the very few Spanish clubs who are free of tax debt. Along with fellow Basque side Real Sociedad, Bilbao owe nothing to the government, which is currently in dire straits itself.

    The advantage of this financial freedom cannot be overstated. Going into next season, there is a chance that Athletic Club will be able to spend money on strengthening the squad without having to make a single sale.

    They could also use that money to finish the new stadium. This is where the tweaks are required, though.

     

     

    Why They Won't

     

    As admirable as it is that the club continues to produce so much top talent consisting only of Basque players, that policy will never win them trophies. They simply have to loosen the policy if they are going to contend.

    Barcelona have shown that striving to rely on youth academies and even targeting a select group of people can be highly successful, but only if needs are filled from outside the club when necessary.

    There would be no current Barcelona greatness without the likes of Ronaldinho, Samuel Eto'o and David Villa. That is where the difference is.

     

     

    Chances of Breaking the Duopoly

     

    The point about the cantera policy is not that it is flawed, the point is that it can be changed.

    If Bilbao can open their doors to players from other regions and countries, they have the infrastructure in training and management to build a title-contending team.

    Add in the fact that Athletic Club could be Spain's most financially stable club in a few years and the chances of breaking up the duopoly are higher than it may initially seem.

Atletico Madrid

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    Why They Can

     

    The starting XI is one of the top 10 or 15 in all of Europe. Stars like Radamel Falcao and Arda Turan make this team a serious contender if only La Liga was played and focused on.

    Los Colchoneros are also slowly getting themselves financially balanced. They paid all €50 million from the Sergio Aguero sale straight to the tax man to bring their owed amount of back taxes down to roughly €150 million.

    New FFP regulations have already ensured that Atleti have to balance the books and that will prevent them from creating any more debt than they already have.

    If they can qualify for the Champions League next season and do well in the Europa League, that gives a lot more money to work with going forward without unbalancing books. This means strengthening the squad even more.

    Finally, as poor as the TV rights currently are in La Liga, Atletico Madrid currently get the fourth-best rate in the league—13 percent, before taking into account league positions.

     

     

    Why They Won't

     

    As great as it is that the club is reducing taxes and debt, it is happening far too slowly for them to even dream of being legit contenders in the next few years.

    No matter how you spin it, €150 million in taxes is enormous. If the club sold their five best players tomorrow, they still would not be out of the woods. Roughly €500 million worth of total gross debt is no laughing matter either.

    FFP regulations are helping them not going further into debt, but the current balance is so unsettled that Madrid are not even getting their rewards at this points.

    Los Rojiblancos have so far received nothing for winning the Europa League and UEFA Super Cup. The winnings from those two trophies would help take some pressure off the club, but they cannot even get that money until they balance payments.

    Even if they receive that money soon, the current revenue stream, including revenue from continental competitions, covers barely a fifth of their total debt.

    Lastly, while it is nice to have the fourth-best rate regarding TV rights, that cut will actually drop from 13 percent to 11 percent in 2014 when the new deal is enacted.

     

     

    Chances of Breaking the Duopoly

     

    Right now, there is almost no chance of Atletico Madrid breaking up the duopoly in La Liga.

    While Diego Simeone manages an extremely talented starting XI, it is not that close to the level of Barcelona or Real Madrid. Furthermore, the talent in depth leaves an even bigger gap and that is where titles are won.

    If Atleti can play in the Champions League every season for the next three to five years, keep the current squad together, keep the squad improving and not let stadium debt overtake them, they could become legitimate contenders in the next half-decade.

Conclusion

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    Like I said in the introduction, there is simply no way any of these teams or another in Spain will challenge the big two of Real Madrid and Barcelona—no time soon anyway.

    The gap in talent and revenue is simply too great right now. More importantly, you may have noticed a trend with what is needed from all of these clubs.

    I explained how these five teams could, potentially, at some point, challenge the big two again. But note the requirements.

    In order to compete, these five clubs have to be financially responsible, play in the Champions or Europa League every season, maintain and improve the current team and not let Spain's financial situation cause their tax debt to become insurmountable.

    Let's be honest here. Most of these things will not happen for every club. In fact, chances are that they will not all happen for any club.

    The current financial situation in La Liga makes for a very small, closing window of opportunity for the other 18 Spanish teams.

    If they are even going to contend down the road, they have to be ever so careful now and in the immediate future lest they let the gap grow too big to overcome.

    If that happens, every club will suffer, including the big two. But most of all, fans will have to suffer by watching a league with no competitions at the top and few clubs even able to retain their talent.

    Let's all hope the league is saved before that happens.