The Panathinaikos Licencing Dilemma

It is that time of the year again for Panathinaikos and its long-suffering fans. Last season it was nothing but torture as the club dangerously flirted with relegation largely due to an inability to obtain a licence to participate in this season’s Championship (the team started this season on -6 due to failing to obtain this licence).

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Fast forward to a year later and the Greens have the same battle on their hands, however, the circumstances appear to be much more positive but still far from perfect. The club’s submission is due on the 31st of March, 2019 and another season under the unpopular ownership of Giannis Alafouzos looms. In order to obtain a licence to participate in next season’s competition, the club has to satisfy three requirements.

The first already appears to be dealt with as the club has paid all its players and staff on time and in full, as opposed to last season’s disaster. This has been happening on a consistent basis since the season started.

The second factor at play involves being able to settle all outstanding debts to former players, coaches and other staff. In this case, the club will have to prove the settlements through signatures and responsible statements.

At the moment, the two biggest issues surrounding the club in terms of payments owed to former players and coaches relates to Argentine forward Lautaro Rinaldi and Italian coach Andrea Stramaccioni. The hearings of the two cases have been postponed until the 4th of March. Rinaldi is owed 90,000 Euro, whilst Stramaccioni is owed a more significant 600,000 Euro. Undoubtedly the case of Stramaccioni has the biggest bearing on the Trifylli’s ability to obtain a licence for next season. Overall, this operation requires consistency as a plan has been devised - this involves making a series of payments that vary from 5,000 Euro to 50,000 Euro over a period of time to settle the debt out of court. Meanwhile, the club has reached out to Rinaldi and is waiting for a response, even though the player’s lawyer is confident it will be resolved out of court.

As a result, the third requirement will be to find the sufficient funds in time. The figure is estimated to be anywhere between 4-6 million Euro. Consequently, the club took the matter to the meeting of the Board of Directors’ and it was announced that the Share Capital Increase will rise to 6 million Euro.

Interestingly, accounting firm ‘Grant Thornton’ prepared a briefing for Alafouzos and his associates in relation to Panathinaikos’ Balance Sheet. The results were very positive and show that the club is on the right track in terms of meeting its obligations. Last year, the same company recommended the club should not receive a licence to play in this season’s Championship due to the debt spiralling out of control.

Whilst the situation is improving, fans will need to be cautious in expecting an immediate upturn in fortunes. The operating costs of the club are very low (primarily the budget) and this has helped lower expenses. Consequently, the club will not change their ways and look to sign high profile players in a bid for instant success. The budget will remain low at 5.5 million Euro and gaps in the squad will be filled by young Greeks from the Academy or other clubs that sign on small-low risk deals expected to be in the region of 200,000 Euro. Federico Macheda was the only foreigner signed this season, but this may change moving forward as the club may look to lure 2-3 foreigners as the situation improves.

Efforts will be made to retain several current players (as evidenced by the re-signing of Dimitris Kolovetsios) but some may be let go in a bid to wipe the contracts off the budget such as Anthony Mounier, although it is still early days on that front. The days of signing players such as Marcus Berg are gone, players in the mould of Lucas Villafanez and Dimitris Kourbelis will be examined. The types that can be purchased on the cheap and if sold bring in a profit.

In spite of this, no attention will be given to retention and recruitment until the licencing issue is sorted. Furthermore, a ‘sustainability plan’ of sorts will be required to illustrate that the club can raise sufficient funds to avoid “bursting” in the 2019-20 season. It is encouraging that Panathinaikos has already sorted its two primary sources of income for next season - ERT (television broadcast deal) and OPAP (shirt sponsor). Additionally, Molto will also renew its sponsorship agreement and should the deal with Italian kit manufacturer Robe Di Kappa (Kappa for short) be achieved in time, the financial outlook instantly becomes better.

As it can be observed, the situation as a whole has improved relative to last year and Panathinaikos’ financial position has improved, but there is still some way to go in being a certainty to obtaining a licence - this stems from needing to settle debts to former employees. Meanwhile, patience will be required as there will not be instant success under the current regime. One thing is certain, the club cannot deal with a points deduction for a second successive season akin to the -6 it started on back in August.

by Nick Tsambouniaris

Image Source: to10.gr

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