Leaked documents on Gareth Bale's €91m Real Madrid switch produce more questions than answers
After Barcelona players' tax affairs are laid bare, attention has turned to Real Madrid's transfer chicanery
A few days after Gareth Bale signed for Real Madrid in September 2013 for £78,171,390 – or so we were told at the time – a Dutch MEP tabled a question in the European parliament asking how banks in Spain could get involved in the financing of the biggest consignment of transfer lucre in football’s history.
You could see the point that Derk Jan Eppink was making. Just a year earlier, Spanish financial institutions had been bailed out by the European Union for around €41bn, of which €18bn had been directed to the calamitous Bankia. He was told by Joaquin Almunia, then European Commissioner for Competition that Bankia’s finances were not scrutinised down to the last deal, be it for footballers or otherwise.
What the leaking of Bale’s contract last week suggested was that those Spanish banks were involved in that deal, although this time they were one stage removed. Those banks in the Bale deal have not been named definitively, although Bankia’s involvement has been hinted at in Spain, as have BBVA, Santander and Popular, as being part of a group of “friendly” banks who bought the promissory notes that guaranteed the deal.
As detailed in the leaked Bale contract, promissory notes were issued to Tottenham Hotspur to cover the three further instalments on the fee, the third of around £20m is due this July. The promissory notes were sold on by Spurs’ bankers to the friendly Spanish banks who ended up assuming the risk for Bale’s record-breaking transfer fee just as surely as they would have done had it been a loan, and for the same kind of premium.
It would seem that Eppink was right all along. The financial institutions of a country that had been bailed out by the EU just one year earlier was guaranteeing the stupendous fee required by an indebted club to sign one of the world’s best footballers. The Dutch MEP could not resist the opportunity of a little English language joke at Madrid’s expense: he called his question “Bale out”.
What else does the document on the Football Leaks website tell us? It is more the questions that are left tantalisingly unanswered that would catch the eye of any tax lawyer. There is much work for them in Spanish football now, with high-profile cases involving Lionel Messi, Javier Mascherano and Neymar, all three of whom have two things in common. They appear to have made misjudgements about what they can get away with tax-wise, and they play for Barcelona.
In this new anti-austerity Spain, where left-wing movements are sweeping away the old order, Real Madrid may also be asking what they can get away with as the political landscape changes around their once all-powerful president, Florentino Perez.
In the fourth paragraph of the leaked contract, there is a reference to Real Madrid giving up any claim over unspecified “outstanding amounts” owed by Spurs for the 2010 signing of Dutch playmaker Rafael Van der Vaart. How much we do not know, and this amount does not seem to be included in that infamous paragraph 15 where both clubs agree to mislead the world, and Cristiano Ronaldo, over the true value of the Bale transfer.
Curiously, paragraph four also mentions a “payment agreement” between the two clubs of Aug 23, 2012, two years after the sale of Van der Vaart to White Hart Lane. That date happens to be four days before Spurs officially announced the sale of Luka Modric to Madrid for £33m, although Modric is not referred to by name in the Bale document.
Was the Modric deal affected by the Van der Vaart deal? Did it affect the solidarity payments due to his original club, Dinamo Zagreb? Why was it agreed four days before the announcement of the official agreement to sell Modric, as conveyed to the shareholders of Tottenham and the members of Real Madrid? What’s more, what would the Spanish tax authorities make of this alarming lack of clarity?
We may not be talking about large sums of money. It may be relatively simple to clear up, although given the deception over the publicising of the transfer fee it is hard to offer the benefit of the doubt. Either way, at Barcelona they will be scanning the document with interest and pondering whether it is just their players’ creative accountancy that is of interest to the authorities. There is no suggestion of any wrongdoing by Bale himself.
It has been one hell of a week for the Nou Camp’s accountants. Sympathy is in short supply for Mascherano, who concealed around €1.5m but the Argentine who has been so important in this modern Barcelona side has effectively been given a suspended one-year jail sentence.
Equally, Messi and his father Jorge have had their court date set for the failure to declare around €4.1m on May 31 just three days after Barcelona would hope to be defending their Champions League title in the final in Milan.
Before all that, the Brazilian Neymar has been ordered to present himself in court on Feb 1 over a fraud case relating to his now infamous transfer deal to join Barcelona in 2013. No-one would argue that the financial affairs relating to any of the three aforementioned are beyond censure and it will be up to the courts to decide how serious they are, but again the question is raised: why just Barcelona?
In October, Barcelona issued a club statement referring to the “accumulation of totally inadmissible and external decisions that have been going on for some time, and that have nothing to with strictly sporting affairs”. There is a simple way that the Spanish authorities could address any question of favouritism: they could launch an investigation into the exact details contained in the freshly disclosed Bale agreement.