Greek football mired in financial crisis as Iraklis FC flounder

Fans riot as Iraklis FC face relegation

It was only a few short months ago that the financial problems in Greece started capturing the headlines globally, as mounting national debt and the irresponsible policies of the Greek government threatened the stability of the entire European Union and put the pressure on the Euro. Greece’s near collapse was noticed worldwide, but the growing financial woes plaguing Greek football are not likely to cause such a commotion.

For the first time ever, a Greek team, Iraklis FC faces relegation from the Super League, due to being unable to come to terms with the strict licensing system imposed by UEFA. Since the founding  of the First National Division back in 1959 Iraklis have only ever been relegated once, and that was due to a rigging scandal that broke out in 1980.

To elaborate, newly imposed rules stated that every team in the Super League had to submit official documents to prove they were financially solvent (i.e. not owing money to past players and staff). The caretaker board of Iraklis FC failed to provide all the required documents, and subsequently the Greek Federation denied them permission to play in the SuperLeague next season.

In Greece, of course you can never be quite sure of anything. Iraklis still have the right to an appeal and the pressure on the officials is mounting, after a 10,000 strong demonstration took place in the streets of the northern Greek city Thessaloniki. Supporters want the authorities to repeal the decision.

Whilst Iraklis FC have never been considered a “powerhouse” in Greek football (having won only one cup in their history), their potential relegation will open the door for many more possible relegations, as most of the Greek clubs do not cover the licensing terms of UEFA.

However, Iraklis FC are not the only team facing serious financial problems. Panathinaikos, the double-winners of 2010, powered by the likes of Gilberto Silva and Djibril Cisse, are going to follow a strict transfer policy this summer, after an internal search by the auditing firm Deloitte and Touche brought to light the club’s difficult financial situation.

In the next three years, Panathinaikos have to make serious cut-backs in order to avoid reaching a staggering debt of 180 million Euros. The search brought mayhem in the already complicated ownership of the club, as the chairman Nikolaos Pateras, although revered by Panathinaikos fans, decided to resign. At present there is no peaceful solution in sight.

Meanwhile at Olympiakos, after a disastrous season that left them out of the Champions League for the first time in the last 13 years, the chairman since 1992, Sokratis Kokkalis, one of the most powerful businessmen in Greece, announced his intention to sell the team to the highest bidder.

Interest was not so high, as Mr. Kokkalis wanted a bid of more than 60 million Euros plus a commitment to covering the club’s debts of about 20-25 million Euros. The only offer he has received on the table so far was for 20 million Euros, which he rejected. Now, it is reported that Olympiakos will have to balance the budget and renew their aging squad by spending only what they are able to make.

Given that Panathinaikos and Olympiakos are the only teams able to “shake” things up financially in the Super League, next season can be expected to be rather lacklustre. But then again, as with every crisis, new opportunities arise, and in a league that has been won by only three teams in 25 years, change can only mean good things.

(Photo credit: tom.tziros on Flickr)

Football and Finance, Greece, Greek Super League, Iraklis FC, Olympiakos, Panathinaikos