Levante, La Liga’s financial model?

At a meeting of shareholders scheduled for December 11, Levante expect to announce a profit of €2.9m after tax for last season, although there is even better news surrounding the club’s debt. Standing at €88m five years ago, it has now been reduced to €41.2m, while Los Granotes have also settled the majority of their ordinary credit and now owe around €6m from an initial €20m, which was double that figure before agreement with creditors. With any luck that will be paid off next year, with payments of €16.7m to the tax authorities and around €18m to various banks next on the agenda.

It is all a far cry from when current President Quico Catalan took over in January 2010, having worked as general manager since April 2009 when the club was in financial turmoil and subsequently entered administration. Indeed, just 18 months earlier the players were owed a reported €18m in wages and publicly protested by refusing to move for several seconds after the opening whistle in a game against Deportivo de La Coruna. However, an exceptional lesson in financial management over the past three or four years has ensured Los Granotes have learned to not only survive financially, but to remain more than competitive where it matters most – on the pitch.

Levante operate on one of the smallest budgets in La Liga – last season it was €25m compared to Real Madrid’s €517m and Barcelona’s €470m – yet this term are into their fourth successive La Primera campaign. A best-ever 14th place finish in 2010-11 under Luis Garcia Plaza was followed by a sixth-place finish the following year and subsequent Europa League qualification, with Juan Ignacio Martinez at the helm – remarkable achievements given key players have needed to be sold to balance the books. Now, with the experienced Joaquin Caparros in charge, Levante are once again punching above their weight and have spent the international break sitting a healthy 10th in the table, three points off the European places.

Of course, the relevant cost-cutting measures have needed to be implemented out of financial necessity, but as well as grooming its own youngsters, the Valencia-based club has also shown a €7m surplus on transfers for each of the past three years. Felipe Caicedo, for example, was bought from Manchester City for €1m after a successful season-long loan and was immediately offloaded to Lokomotiv Moscow in 2011 for €7.5m, and it was a similar story with Arouna Kone. The Ivory Coast international signed on a free transfer from Sevilla after an impressive loan spell and was sold one year later to Wigan Athletic for €3.5m, whilst this summer home-grown Vicente Iborra, whose contract was due to expire next year, joined Sevilla for €6m.

Moreover, according to economist David Bartolome Martinez, who has conducted an extensive study of Levante’s finances, existing policy is that from every transfer made around €800,000 goes directly to the club, while the rest is used to pay off debt. This means the budget is under strict control and no unnecessary expenditure is undertaken without proper justification. It is a philosophy Quico Catalan outlined before the start of the 2013-14 season.

“One of the things achieved after four years of hard work is that we have laid foundations at this club. Since 2009 a lot has changed and we have been exemplary at both an organisational and management level,” the President recently told Superdeporte.

“We must be clear, however, that any growth must be consistent with our obligations and commitments. This club cannot forget it generates the income it generates and has a very important burden of debt that has to take care of every year. So far we have met our responsibilities.

“We are a club with a lot of potential that is growing moderately, consistently, but we must keep our feet on the floor. In football, as well as in life, if you try to fly and don’t have your wings ready then you must be prepared to crash.”

Needless to say, the Levante ‘model’ ensures continuity and stability for as long as the club remains in the top flight and, as Bartolome Martinez points out, the only parameter not under control is whether the ball hits the back of the net. Even so, in the pursuit of success it is refreshing to acknowledge a club that is aware of its limitations off the pitch and one, hopefully, that serves as an example for Spain’s more modest outfits in the current climate.



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