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Villarreal seeks to avoid an ERTE

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Negotiations with players have commenced.

Villarreal CF v FC Barcelona - La Liga Photo by Quality Sport Images/Getty Images

An ERTE, for those who aren’t aware, is a financial move corporations can take in extreme circumstances to avoid insolvency. It allows them to cease payment to their employees. As Spanish soccer clubs seek to navigate this financial implications of the COVID-19 pandemic, they have tried to avoid this measure. In Barcelona, for instance, where the player wage bill has irresponsibly grown for years, the players have agreed to take a 70% pay cut and to help pay the salaries of the rest of the staff at the club. Essentially, they are shouldering the responsibility their mismanaged club cannot. Other clubs, like Real Betis (proposing a 15% cut) and Atletico Madrid (proposing an 18% cut) have thought of similar measures. Villarreal has now joined this list, with it being reported by El Periodico Mediterraneo that negotiations with the players have begun.

Villarreal is more financially healthy than most highly competitive top flight football clubs, but part of the trouble is that there is so much uncertainty about how and when the season will resume that the club cannot currently feel assured of continued revenues. Speculation that La Liga will lose all tv revenue because of unplayed games or that sponsors will just abandon clubs during this time seem to be unfounded. In all likelihood there will be negotiations between all these parties as well for percentages that keep everyone involved afloat.

It speaks well of the club that we were not in the same rush or panic to react financially that other clubs with much higher revenues were. Hopefully, this unprecedented situation will allow clubs to take a step back and consider their financial policies, suppress transfer fees and wages, and overall not be quite so desperate for every euro that they can get their hands on.