How the Romanian soccer clubs dodged paying off their debts to the state

• The six month reprieve from the government turned was extended by another six months • Without it, half of the teams would not have received their license for next year

The Romanian soccer clubs have once again dodged the bullet of financial collapse. All of them have until March 31st 2011 to solve their problems and to pay off their debts to the state.

The clubs which have unpaid debts were saved by the Decree no. 92 issued last year, by which companies that had no tax offence record and hadn"t entered bankruptcy or insolvency could postpone their debts by a maximum of six months. All the clubs of the 1st League managed to avoid disaster and get their playing permits for their next season. According to some of the data, half of the 18 clubs of The 1st League would have been disqualified from playing due to their arrears. There are two criteria which pose a problem for most clubs: infrastructure and financial problems.

Since most teams owe the state millions of Euros, the postponing of the payment of those debts by four to six months was truly a life buoy. In theory at least, the clubs won"t have any problems with their licenses and right to play until March next year, even if the maturity will come much sooner.

Since Romanian soccer club owners don"t plan for the long term, everybody"s happy that they got away with it for now, and it becomes obvious that next year there won"t be any leniency to be found.

Viorel Duru, the head of the License and Affiliations Department of the Romanian Football Federation, said for "Bursa" that everything is cleared for the next playing season, but a new study of the situation will be performed at the end of the year: "Concerning licenses, nothing will happen until next season."

On December 31st 2010 it"s time for the financial statements and it will then become obvious who acted in good faith and who didn"t. But even so, as far as we are concerned, the clubs still have until March 31st 2011 to solve their problems, at which time they will need to apply for their licenses for the 2011-2012 season".

• Arrears swept away

Since dog does not eat dog, the clubs once again successfully put off solving another problem. Apart from the consistent amounts that they owe the state, the clubs in the 1st league needed to solve their financial litigations with their own employees and the ones that they had with each other after the transfers of some players. Since there are no problems with the licensing applications, it is obvious that all the clubs have agreed to reschedule the payment of the amounts they owe each other. As soon as the new season starts, the sports arbitrage commissions will be flooded with requests to solve all these cases that have been swept under the rug so far.

• Money lost along the way

One month ago, the Administration of Public Finance of the 1st District of Bucharest opened the bankruptcy procedure for Dinamo Bucharest, which owes the state 44 million lei. The chairman of the club, Nicolae Badea, however, claims that the club has no debts on its books and in theory he"s right. Because in 2005, most of the clubs turned into joint stock companies, and transferred their debts to the old associations which used to manage them. For instance, in the case of Steaua, the team which has the largest debts, the judges ruled that there is no connection between the former management of the club and the current one. Basically, the clubs" debts were dumped on the Association which formerly managed the club of Ghencea, with interest accumulating from one year to the next. In this entanglement it is impossible to make sense of all the debts that these clubs have accrued.