New bankruptcy law will not allow La Liga clubs to avoid relegation

The Spanish House of Representatives met on Thursday to approve an amendment to the Bankruptcy Law, which states that sports companies entering bankruptcy will not avoid being penalised by relegation in case of non-payment to players. The new regulation will not affect teams this season, as the league has already started, but will come into effect in July, 2012.

Since Las Palmas started the trend in 2004 there have been a total of 22 Spanish clubs forced to apply for bankruptcy, including most recently Racing Santander, Rayo Vallecano, Real Zaragoza and Real Betis. Unsurprisingly, the Spanish Footballers Association (AFE) has welcomed the changes and issued a statement in which it said the ruling “vindicated one of our main claims over the past 18 months and has been achieved through the efforts of all players.”

It added: The coming months will be marked by continuous changes and rule modifications, which this Association has called for in order to defend the rights and give greater protection to those exercising the profession of football.”

UEFA’s Financial Fair Play rules, which demand clubs do not spend beyond their means, are due to be implemented for the financial period ending 2012. It is hoped clubs will then have the incentive for fixing any problems themselves, while up until now the league has so far failed to impose sanctions such as relegation or points deductions on those poorly managed.

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