LaLiga corporate general director explains Valencia CF squad cost measures

José Guerra, corporate general director of LaLiga, spoke to VCF MEDIA about the league's squad cost limit regulations and plans. The LaLiga executive, who describes the club's management as "excellent" earlier this week, explains the reasons why this limit has been reduced, and assesses the capital increase proposed by the Board of Directors this past Thursday.

Why has the salary limit been reduced?

For Valencia CF, the end of the 2019/20 season was the perfect storm -especially 2020/21, in which the team were out of Europe and the stadiums closed. Tickets are a very important source of income, as a result of the large influx of fans that the club have. There was also an absence of a transfer market due to the economic weakness of all the clubs in general. Those three factors combined for Valencia CF and it was the perfect storm.

A situation in which several factors converge

In the 2020/21 season, Valencia CF have, as a consequence of this loss of income when not playing in Europe and not being able to use the transfer market - a measure used by all clubs -, an excess of squad costs that is very difficult to manage, precisely because of this lack of a market. In another market, with another situation, they could have put together a cheaper squad. Unfortunately, in 2020/21 they could not, because that market was not active, and that makes it even more difficult to respond to the situation caused by the lack of income. That causes an excess of squad costs, motivated by the pandemic -there is no reason attributable to the management of the club. As a consequence, Valencia CF have an excess that is not punishable, but that has to be recovered in the 2021/22 season.

A margin for extending the squad cost limit

This limit that we recently announced is a limit that is alive throughout the season. It can be improved in many ways with sponsorship contracts, player departures in the winter transfer market or -as Valencia CF have done- through capital contributions, which by following the LaLiga regulations can be used to increase the limit. There are mechanisms to improve it.

Valencia CF's capital increase proposal

It is undoubtedly one of the options for those clubs or corporations that have share capital. Having a shareholder who can make capital contributions is one of the tools commonly used to increase the squad cost limit.

Satisfaction from LaLiga regarding the capital increase

Without a doubt, it is a demonstration of support for the sporting side and for the stability of the entity in the medium and long term. This is great news for Valencia CF and for LaLiga because it ensures the stability of a very important club for us.

Valencia CF's responsible management

Valencia CF have always had responsible management, and when the pandemic arrived they continued to do so. Responsibility was demonstrated at the end of the 2019/20 season, at the beginning of 2020/21, in the winter market and now. Those in charge at Valencia CF have managed the club in a responsible way throughout this time.

Return of 100% capacity to stadiums

It was one of the needs of recent times, when we made the first draft of budgets with the clubs we thought we were going to have a 50% return this season. That improved with the pandemic situation, rising to 70%. By the end of September it reached 100%, which is good news for revising the budgets at clubs. Hopefully the situation improves during the season.