When welcoming a rich investor who promises to spend extravagantly on your cash-strapped club, the inherent risk often goes unconsidered.
It’s a lesson Malaga has learned well over the last half a year. And one that its UEFA Champions League group foe, Zenit St. Petersburg, hasn’t yet.
Zenit is owned by Gazprom, one of Russia’s energy giants with over $150 billion in yearly natural gas revenues. By the grace of club president Alexander Dyukov, who is also the chairman of Gazprom’s board, Zenit has invested hundreds of millions of dollars in new players. On Sept. 3, Zenit spent $100 million on transfer fees in a single transfer-deadline day on just two players; Porto’s Hulk and Benfica’s Axel Witsel.
But there is real danger in a club becoming reliant on a single person or company for its revenue stream. For one, there is the new peril that UEFA’s Financial Fair Play commission will boot you from continental competition for failing to break even or at least making an effort to do so. But a greater threat still is that your angel investor loses his appetite and leaves you with a payroll that you couldn’t possibly come close to covering under your own steam.
This is where Malaga enters the discussion.
At Spain’s southern tip, Malaga was floundering in the summer of 2010. So Fernando Sanz, the club’s majority shareholder and president sold it to Sheikh Abdullah Al Thani of the Qatari royal family for a modest $46 million. Malaga, so it seemed, had its own billionaire. Like Chelsea and Manchester City and so many others in recent years, it became competitive overnight. Or so it thought.
There was talk of becoming a global brand. A partnership with UNESCO was signed. The academy would be revamped and money would flow unimpeded into the transfer coffers. Malaga would soon join the world’s elite – a counter-weight to Barcelona and Real Madrid’s Spanish league duopoly.
In the summer of 2011, Al Thani began injecting serious sums into his squad; Spain playmaker Santi Cazorla and winger Joaquin came; midfielder Jeremy Toulalan enter the picture; while the scintillating young Isco arrived with the old war horse striker Ruud van Nistelrooy. A total of $75 million was laid out on transfer rights, more than Real or Barca, by a club who just a few years prior was in life-threatening financial difficulty.
Dividends yielded quickly, too. Malaga placed fourth in 2011-12, its highest ever finish, reaching the Champions League for the first time.
But last summer, the oh-so-promising project fell apart. Malaga was suddenly a selling club again. The club shed a slew of key players for $64 million and bought none. Cazorla – who had led the team in assists and was second in goals – and Salomon Rondon – who had led the team in goals and was second in assists – were sold to Arsenal and Rubin Kazan, respectively. Van Nistelrooy retired. Malaga dumped others at cut-rate prices, too. And in their place came a pair of free-agent signings and some loanees.
Players weren’t being paid on time and hadn’t been for months. Teams that had sold players to Malaga claimed transfer bills hadn’t been settled. Plus, the club was behind on taxes and rumors swirled. Had Al Thani lost interest? Was he looking for a buyer? Was he really as rich as they said he was? Was he broke?
Whatever the cause, the club president had cut off the cash stream without explanation. Not even a clue. Bled dry of talent and cash, Malaga surely wouldn’t be able to compete this season.
Wrong again.
Manuel Pellegrini, the highly experienced manager who once set a club-record for points in a league season with Real Madrid and was subsequently fired anyway, has forged a tight collective from the grab-bag of players he was handed at no cost and those that weren’t pawned off in the summer’s fire-sale.
In La Liga, Malaga won five of eight before slumping of late. More amazingly, they won their first three Champions League games, including a 3-0 thumping of Zenit and a 1-0 win over once-mighty AC Milan. Two weeks ago, they managed a 1-1 tie away at Milan. After four rounds of play, they had the second-best record in the competition and had already qualified for the next round.
It’s a strange case. Malaga is one of the season’s European sensations. But theirs is hardly a prototype to be reproduced. Though they’ve overcome the disappearance of its investor by performing better than ever, Malaga just as easily could have imploded altogether and gone bankrupt. At the same time, the club inarguably wouldn’t have had the chance to do so well without Al Thani’s injection of money in the first place.
In spite of their unlikely success, Malaga’s is a cautionary tale.
To affix your fate to outside investment leaves you in jeopardy of being abandoned, bloated and spoiled, too.
