Argentine football’s financial future looking a little blue
In many countries throughout Latin America their cultures always talk about the desire to go back home. The affection to the homeland is always present and when anyone has the opportunity, they do exactly that. The possibility of a person to return home and either retire or enjoy the rest of their lives is something that they all want to enjoy.
Of course in the football world that is more the rule than the exception. Many players in Argentina as well as in other places throughout the world. Players are still enamored and romanticized by the prospect of finishing the final years of their careers near home or with the colors that made them established within their craft. The reality tends to trump their desires, but players will usually be flexible in an effort to help the colors out. In the end though this prospect might become a bit more complicated in the coming months- more so than it is already.
Although they will look to ride on the publicity that the IFFHS offered them by placing them as the second best league in the world behind leagues such as the English Premiership, the Bundesliga and many other top leagues in the world.
The reality is a harsher one that no amount of sugar would be able to coat. If many look at Spanish football with a look of hopelessness, how would you look at the present reality or the eventual circumstances that Argentine football will have to endure in the near future.
The Dollar Blues
To understand what is going on in Argentina at a macroeconomic level, let’s put into effect what is happening at the everyday level to José or María. Just a few years ago, anyone could go and buy or consume dollars within the country.
In the past year and change, Cristina Fernández de Kirchner’s government has squeezed out the buying and selling of the US currency putting in place “Chavezian” measures that were enforced in Venezuela a few years ago. Those measures, which wreak more of despotic desperation than sound financial responsibility, restrict the buying of dollars in order to stop inflation as well as in putting a stop in the growth of money laundering- or that is what they are saying.
So if you have to buy dollars, the jumping of fire-lit hoops comes into the fray. In addition to having to make the effort to buy the dollars, you also have to answer the magical questions established by the AFIP (the Argentine equivalent to the IRS). You have to let them know how much you are buying without surpassing the limits that are established by the government based on one’s monthly salary. Also look at where one is going as well as why one is going on vacation to any particular place.
The Economist talked about the deceleration of the Argentine economy as one of the major side effects of this measure. Several multinationals have decided to look elsewhere in order to expand, mostly because the Argentine government implementation of import restrictions.
More importantly, these measures are the catalyst for a new black market for the buying and selling of dollars where the exchange rate is nearly over a dollar difference compared to the official rate. Between that and the “dolar blue”- blue chips sovereign bonds that are sold and transferred from pesos to dollars and then sold, the trading of this is getting close to surpassing the average daily stock trades in that country’s stock market; according
Football players have also done the same because of this measure. The summer transfer market in the South American nation has been virtually motionless as there are more players looking at the Asian market or even Brazil before Argentina. The biggest sale of the book so far has been that of Juan Manuel Martínez of Vélez Sarsfield when they sold him to Corinthians.
Boca Juniors ambitious project of building a new stadium in La Boca could see the wheels falling off from a financial perspective should Fernández de Kirchner’s newest measures to restrict real estate purchases
This measure is one more of desperation as the Argentine government is quickly running out of greenbacks despite their rhetoric of fighting money laundering.
The first victim of this measure was none other than the national team coach Alejandro Sabella, who had his contract changed from dollars to pesos last year.
This also leaves the clubs in a very dire situation as their Futbol Para Todos golden parachute seems to have lots of holes in it. Let’s be honest, if the government is truly running out of dollars, as many mediums say that is the case and is being confirmed with reckless measure after reckless measure being implemented by Casa Rosada at this, then the cash cow is thinned out to an almost alarming level.
For many clubs, the imminent possibility of seeing their greatest revenue stream drying up while seeing the clubs’ debts escalate instead of decrease during this time leads to even an even more preoccupying situation for the outlook of the game in Argentina.
Argentina is a country that is crazy about the game and few nations exude that passion the way they do. After years of mismanagement, pandering and corruption it has caught up to them and overrun the game.
The sad part is that there is still a small minority of people that might think that the game or their club are the only thing that matter and their team winning a title at all costs is more important than being able to put food on the table.