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Making Sense of Malaga's Financial Situation

The remarkable story of La Liga’s Malaga continues as their financial turmoil off the pitch could threaten to end their heroics on it. After spending big and spending fast in an attempt to make the UEFA Champions League, a goal which was met, the rug could be pulled out from under their feet.

Malaga are one of nine European clubs which could be facing some further punishment from UEFA. The governing body is looking to tighten its grip on clubs across Europe who have to yet to meet financial requirements. Sixteen of the twenty three clubs originally targeted by UEFA had the suspension of prize monies lifted because of having settled issues of being in arrears with tax, staff or other clubs.

But for Malaga, the situation is still problematic because of the Financial Fair Play regulations being installed by UEFA. The legislation was drawn up to ensure that member clubs would all be able to balance their books, and if regulations were not met, then punishment could be handed out. Along with an embargo on winning prize money, a bigger sanction could fall on clubs because expulsion from European club competitions could be enforced from 2014-15 if losses are not reined in. This is the position that Malaga, along with Arsenal Kiev of the Ukraine, Lech Poznan from Poland, Croatia’s Hajduk Split, Romania’s Rapid and Dinamo Bucharest, and Serbia’s Vojvodina and Partizan Belgrade are all in.

Although Malaga officials have stated that they are working hard to settle their debts owed in order get a green light from UEFA, there is a bigger sword hanging over their heads than the other clubs still in the firing line. The case of the Spaniards has gone to an adjudicatory chamber at UEFA and now Malaga could be staring down the barrel of being expelled from their current European competition, the Champions League. With Malaga topping their group, going unbeaten in their first ever foray into the competition, it would be a bitter blow to bow out in this manner.

But the case of Malaga fires stern warning shots across the bows of other clubs in the competition. Reckless spending is no longer an option. Current reigning European champions Chelsea, from the English Premier League, find themselves free of the financial stresses only because of their success in the tournament last season. They have been the model of rapid, heavy investments in trying to claim the trophy over the course of a decade.

While Chelsea were able to live with debts before the UEFA Financial Fair Play was announced, Malaga are the first big guns in the crosshairs. So where did it all go wrong for them? They took the quick, big spending approach to achieve their goal of making the Champions League, an approach which worked as they finished third in La Liga last season. However, just one summer after all of their heavy investments, the problems started mounting. Players and staff weren’t paid on time and the club had to sell a lot of their star players to try and survive financially. It all went wrong very quickly for the Spaniards.

Remarkably, their performances on the pitch, under the management of Manuel Pellegrini has seen them maintain their position as a top six club in Spain. Pellegrini has gelled together the resources that he was forced to be left with and has continued to get performances out of them. Their swashbuckling Champions League foray has been one of the highlights of their season, but cracks are starting to appear on the domestic front. After losing just one of their first nine league matches this season, they have lost three of their last five, winning just one of their last six in the Spanish top flight.

So maybe the season will take its toll on Malaga and their financial situation may end up crippling them, not being able to strengthen their depleted squad. Maybe that is why they have left everything on the pitch in Europe. It is a desperate effort to make every moment count in Europe’s top club competition, because once that slips away,it may be a very long way back for them.

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