Finetwork insolvent: another hole for women's football, which supports Real Madrid

The news broke last weekend. Finetwork has requested from Court No. 1 of Alicante "the notification of the opening of negotiations" with creditors after acknowledging its insolvency status . This legal process, regulated as one of the pre-bankruptcy situations in the Bankruptcy Law, enables the Alicante company to open a period of negotiations and avoid judicial intervention .

It's worth remembering that two years ago, Finetwork defaulted on €4 million in payments to the Spanish Women's League during the first year of professionalization of Spanish women's football . After a few months of sponsoring the competition and appearing in logos, advertisements, broadcasts, and even trading cards, the frustrated sponsor claimed that their agreement was a "one-size-fits-all" agreement and that it "was never formalized into a contract."

You only have to look at the Liga F website and search its Transparency portal to see that, as reflected in the Annual Accounts and Management Report for the financial year from July 1, 2023 to June 30, 2024 , "on September 29, 2022, the LPFF and Wewi Mobile SL signed a contract whereby the Finetwork trademark acquired the status of title sponsor of the competition and, in addition, became its official sponsor for the 2022-23, 2023-24 and 2024-25 seasons."

And he adds: "However, once the 2022-23 season had ended, Wewi Mobile SL unjustifiably refused to pay the agreed financial compensation . Following various requests from Liga F, and given the absolute and essential breach of its obligations by Wewi Mobile SL, on 14 September 2023, a claim for ordinary trial was filed before the Courts of First Instance of Madrid."

A loss of 4 million euros

According to an expert in this field, given the pre-bankruptcy situation, "the 4 million from Finetwork will have to be transferred from the asset account for receivables from customers to the asset account for doubtful customer receivables, and a provision will be made in the liability account for the same amount . That is, the income statement will reflect a loss of 4 million, the balance sheet will show a negative working capital of that amount and negative equity of at least the same amount."

And he concludes: "In this way, the F League is neither able nor will be able to meet its payment obligations to the clubs , which are its main creditors." In short, this is another significant gap for Spanish women's football.

The "opinion" of the F League's legal advisors

But there's more. Note 13 of the aforementioned Annual Accounts and Management Report states that "in the opinion of the Entity's advisors, the probability of obtaining a favorable outcome for the interests of LaLiga F is high . In any case, the agency contract with LaLiga guarantees a minimum annual amount higher than the sponsorship amount that would have been received from Finetwork, so there are no doubts about the income , regardless of the resolution of the dispute."

Well, as the same expert consulted by this newspaper points out, "we cannot lose sight of the fact that, according to article 444 of the Bankruptcy Law, if this were the case, the first thing that the legal advisors of the Liga F would have to do is to start working to claim from LaLiga the fulfillment of this guarantee in order to avoid the bankruptcy situation of the Liga F itself and justify the auditor's forecast. All of this without forgetting that, according to article 444 of the Bankruptcy Law, the bankruptcy is presumed culpable , among other assumptions, when the debtor or, where appropriate, their legal representatives, administrators or liquidators, have failed to comply with the duty to request the declaration of bankruptcy. In the case of the Liga F, the Delegate Commission".

According to one expert, "the first thing the F1 League's legal advisors should do is demand that LaLiga comply with the guarantees."

And he adds: "Therefore, in light of the auditor's note, the first thing the F League's legal advisors should do is get moving to claim that LaLiga fulfill this guarantee . Firstly, to avoid the F League's own bankruptcy situation and, in doing so, the potential legal costs arising from this procedure, which, according to them, would amount to 250,000 euros."

As these same legal advisors to Liga F pointed out, with Santiago Nebot at the helm , on August 3, 2022 , a contract was signed for LaLiga to be its exclusive commercial agent . This authorized it to promote, on behalf of and on behalf of Liga F, the marketing of all rights and products inherent to or resulting from its status as organizer of the competition worldwide from the 2022-2023 to the 2026-2027 sports season.

LaLiga's guaranteed remuneration commitment "as consideration for the appointment of an exclusive agent" has been 8 million in the 2023-24 and 2024-25 seasons, plus 6 in 2022-23, while in 2025-26 and 2026-2027 it will be 10. In total, 42 million, which would be mitigated by the income generated which, discounting the 4 from Finework, would not reach 9 million , without the F League having been able to generate commercial income on its own.

To date, the agency contract with the F League is costing men's professional football clubs more than 16 million euros.

Not surprisingly, of the five official sponsors of women's football—Puma, EA Sports, Mahou, Solan de Cabras, and GSK—only the latter is its own sponsor and not a LaLiga partner . This means that, to date, the agency contract with La Liga for men's professional football clubs has cost more than €16 million.

For all these reasons, it's understandable that this commercial agreement is jarring for the 29 clubs without a team in the F1 League—31 next season , following the relegation of Betis and Valencia. Where's the business if the majority of the F1 League's revenue comes from LaLiga and, until the 2024-25 season, from the Higher Sports Council ? At the General Assembly held in November of last year, Real Madrid already expressed its opposition to this agreement that the employers' association chaired by Javier Tebas signed with women's football.

A Liga F led by its Director of Planning, Strategy and Development, Pedro Malabia , who is already being pointed at by a large part of the clubs, even though the Mini Me of Tebas is trying to promote a motion of censure against the vice-president, Rubén Alcaine , a long-time critic of his management. As we reported in this newspaper , in the luxurious headquarters of Fortuny they need a scapegoat, but, barring surprises, perhaps at the General Assembly this Thursday, the clubs will decide to demand explanations as Real Madrid has been doing, which, by the way, the Finetwork case gives it completely right, and the censured one is another.