ANKARA, Jan. 13 (Xinhua) -- The Turkish government has handed crisis-stricken top football clubs an unprecedented financial lifeline as their multi-billion-dollar debt will be restructured as part of a major plan which would also introduce strict fiscal criteria.
The very popular football industry is the latest sector to benefit from a debt revamp after disappointing results in domestic and foreign international competitions. Unwise financial and transfer decisions cost millions of dollars for many of the clubs.
Turkey's economic difficulties have been exacerbated by a meltdown of the Turkish currency, the lira, last summer which also contributed to the woes of football clubs.
TURKEY'S DEBT-LADEN TEAMS
Turkey's Banking Association (TBB) and football federation are to announce the details of a restructuring plan for about 11 billion liras (2 billion US dollars) of debt held by the nation's soccer teams after reaching an agreement last week.
Initially it was reported that state-run Ziraat bankasi would take the risky path of restructuring debt, stirring debate on how one single bank could handle the difficult job at a time when Turkey is facing serious economic difficulties amid a slowdown.
Angry netizens and opposition politicians complained that the football clubs were receiving complaisant treatment at a time when many businesses are going bankrupt or seeking desperate debt restructuring at high interest rates.
"If the government want to support someone why isn't it seeking to scrap the (football) clubs debts? Let's scrap the debts of our farmers who have accumulated 14 billion liras (2.5 billion US dollars) of debt," said influential lawmaker of the main opposition Republican People's Party (CHP) in an interview with Halk TV.
But on Monday, the banking association tried to reassure after angry criticism and said in a statement that football clubs' debts won't be erased or restructured at a discount to market prices. The plan aims to strengthen the financial structure of clubs and introduce strict fiscal criteria.
Banks will draw up separate plans for each club and the football federation will supervise the teams' finances after the deal, Husnu Gureli, the Turkish Football Federation(TFF)'s acting chairman for finance, legal and licensing, was quoted as saying on the BloombergHT website.
The restructured debt will have a maturity of as much as 10 years, he said.
Spending on high-profile players and opaque ownership structures left Istanbul giants Galatasaray, Fenerbahce and Besiktas with high debts in Turkey's 18-team top league.
Galatasaray had debts of 2.97 billion liras (550 million US dollars) at the end of September, the company said. Fenerbahce reportedly owed four billion liras (735 million dollars), Besiktas 2.49 billion liras (458 million dollars) and Black Sea club Trabzonspor 800 million liras (150 million dollars). All the clubs are reported losses.
"Our clubs have no longer sustainable finances. Therefore, this plan has become compulsory for us to implement. Now we expect that their debts will not increase," Yildirim Demiroren, the chairman of TFF, said during a live broadcast.
Pressure had been growing on the government to support and monitor soccer clubs in a country that is fanatic about the game, the country's most preferred and watched by millions of fans.
Turkish President Recep Tayyip Erdogan, who was a semi-professional soccer player in his youth, is also a major fan and he is said to be behind the recent financial scheme with his son-in-law, Treasury and Finance Minister, Berat Albayrak.
However detractors of the Turkish leader argue that he is using it to boost the popularity of his ruling party ahead of local elections planned for late March.
Clubs in Turkey make the majority of their income via Turkish Lira but pay transfer fees and wages (the main expenditure) in euros. High transfer fees are also to blame for the debt-laden clubs hardships as they pay the price of ambition.
LAST CHANCE OPPORTUNITY
Specialists think that the government's lifeline should be seized as "a last chance opportunity" for Turkey's football clubs who should definitely put order in their finances or face inevitable consequences such as bankruptcy.
"In four major teams in Turkish leagues, 80 percent of total investments consists of money spending on football players while major teams in Europe only allocate 60-65 percent to transfer business," said economy professor Emre Alkin in an article on his website.
This academic from Istanbul's Altinbas University who is also a former administrator of the Turkish football federation, said that these numbers show that Turkish clubs obstinately prefer spending money on player transfers rather than invest on facility improvements, infrastructure and producing young footballers.
Alkin, who used to be an insider to the football industry, doesn't believe that the new scheme would yield big results because, he said, "football clubs' current attitude will not allow them to adopt ways that are compatible with modern criteria," citing bad management styles.