How Atletico Madrid were rebuilt from debt-ridden club to Spanish giant
May 24, 2016 8:47:10 AM PDT
By Vivek Chaudhary

Diego Simeone's combative, tough-tackling Atletico Madrid go in search of European football's top prize this Saturday at Milan's San Siro stadium against rivals Real Madrid. But off the pitch, an equally tenacious approach is helping to rebuild a club once considered a basket case of the Spanish game.

For much of their recent history, Los Colchoneros ("the mattress makers") lay on shaky foundations, plagued by mismanagement and crippling debt that forced them to sell some of their best assets, including the likes of Sergio Aguero, Fernando Torres, Diego Costa and David De Gea. Even when Atletico won La Liga in 2014 (the 10th league title in their 113-year history) and reached the Champions League final the same season (when, as now, they faced Real Madrid), they still had reported debts of €540 million, much of it money owed to Spanish tax authorities.

But within eight months of winning La Liga and losing the Champions League final 4-1 in extra-time against their city rivals, Atletico made two significant signings that both resurrected the club's finances and injected impetus to their ambitions of challenging the Real Madrid/Barcelona hegemony within Spanish football.

In October 2014, former Manchester United and Chelsea chief executive Peter Kenyon was appointed as financial advisor to the club. He was handpicked for the job by Miguel Angel Gil Marin, the Atletico chief executive, whose father Jesus Gil, the club's former owner, came to personify the erratic manner in which it was being run.

Jesus changed coaches 19 times, went to prison twice, saw the club relegated and once famously rode his horse through Madrid after his side won the league and cup double.

Kenyon, the former head of Umbro, went to Old Trafford in 1997, landing a number of lucrative commercial deals and significantly increasing the club's presence in Asia. He followed a similar strategy at Chelsea, which also included signing an agreement with the Asian Football Confederation to build the West London club's profile in the region.

Soon after arriving in the Spanish capital, Kenyon secured the first investment from a Chinese company in a top European football club when billionaire Wang Jianlin, owner of the Wanda Group, bought a 20 percent stake in the club for €45m.

The move not only earned Atletico some much-needed revenue, but also gave the club a foothold in the lucrative Asian market, one of Kenyon's key objectives to expand the club beyond Spain. As part of this approach, the Spanish outfit are also co-owners of Indian Super League Club Atletico de Kolkata and have a growing profile there.

"On the pitch, Atletico have been competing with Barcelona and Real Madrid and are emerging as the third force of Spanish football," said football finance expert Dan Plumley of Sheffield Hallam University.

"But off it, Kenyon and Jianlin have moved the club forward. Not only have they restructured the finances and ensured it is more efficiently run, but they've also diversified into new markets, which is exactly what they need to do because Spain is so dominated by the big two [Barcelona and Real Madrid]."

Last year, Spanish media reported that Atletico had cut their tax debt to €45m from €205m four years ago. The club estimated that their debt would be zero by the end of the 2016-17 campaign. Atletico also revealed that in 2014-15, they made a net profit of €13.1m compared to only €1.6m the season before, when they won La Liga, thanks to an increase in revenue and reduction in costs.

Jianlin has been anything but a silent partner, buying a house in Madrid so that he can play an active role in rebuilding Atletico while maximising its potential for growth in the Chinese market. Initiatives developed by his company include development programmes, in which young Chinese footballers are handpicked by Atletico's coaches and sent to its academy in Spain for further training to the opening of 200 club outlets across China in shopping malls owned by the Wanda Group. Last year, Atletico visited China and they were greeted by 8,000 fans at one event in a Wanda Mall, highlighting the growing popularity of the team in the country.

Margaret Chen, founder of China Club Spain, a Madrid-based organisation that develops top-level business ties between the two nations in sport and other areas, said: "The Wanda Group has a strategy to develop Atletico and football in their own country. Chinese investors think long-term and will not blindly throw money around, and this is why they have become attractive to many European football clubs."

Things are also looking up for Atletico on the home front, with a new 69,000-seat stadium currently under construction. Despite some continuing issues with the local authority, the club insists it will open for the 2017-18 season, representing a significant increase in matchday income compared to its current ground, the Vicente Calderon.

Atletico's bank balance will look even healthier when La Liga's first-ever collective domestic television deal (reportedly worth €2.65 billion) kicks in next season, which will lead to money being distributed more evenly among its 20 clubs. In Atletico's La Liga-winning season, the club earned €42m from television income, but according to some media estimates, this could increase to €116m under the new arrangements.

Simeone's team and its vociferous fans will be looking to get one over their arch adversaries come this Saturday, but whatever the outcome, Atletico will be optimistic that their future is bright.

t Facebook t Twitter

Back to Top
ESPN Mobile Web Home
En Espaņol
Change Timezone
Help & Feedback
Terms of Use