Liga MX weighs options during imposed downtime

Diego Valdez, Santos (Photo by Armando Marin/Jam Media/Getty Images)
Diego Valdez, Santos (Photo by Armando Marin/Jam Media/Getty Images) /

Liga MX clubs and owners take time to confront financial and structural issues while the Clausura is suspended.

Liga MX teams have been studying their financial bottom line during this global shutdown, though on March 25, league officials denied that they were going to withhold a percentage of player salaries to balance their books.

On Saturday, however, Milenio newspaper confirmed that a few teams have indeed taken some action. Querétaro coach Víctor Manuel Vucetich said the club had begun to reduce wages.

El Universal newspaper reported that Grupo Orlegi (owners of Atlas, Santos Laguna and Ascenso MX team Tampico Madero) had negotiated a salary reduction in order to prop up the clubs’ academy teams. Cruz Azul is also considering similar action.

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Several Liga MX players have expressed reluctance to accept reduced salaries, claiming rightfully that clubs can’t legally withhold payment without the consent of the players. However, there may be a technicality available to the owners.

Mexico’s Labor Law would allow clubs to reduce payments if the federal government declares a national health emergency. If that occurs, clubs can pay their players the minimum wage for a month – that would be 3,896 pesos ($148 dollars).

A study by GEA economists indicates that the Liga MX is losing roughly 2.5 billion pesos per week (about $100 million dollars).

Another financial concern for owners is the devaluation of the peso. Player contracts in Liga MX are written in dollar amounts. Over the past month, the peso has dropped from roughly 18 to the dollar to nearly 25 to the dollar.

Fortunately, player contracts feature legal wording that fixes the dollar payment so that it doesn’t fluctuate wildly in circumstances such as those that exist today. However, the weaker peso would impact Liga MX clubs going forward since player transfers and new contracts would still be fixed to the U.S. dollar.

As such, the upcoming summer transfer window will provide new challenges. Liga MX clubs might feel certain that rivals within the league will not be able to poach the higher-salaried players, but they surely would be tempted to sell players abroad.

This could be good news for youngsters such as J.J. Macías (Chivas) and Charlie Rodríguez (Monterrey). Macías – the 20-year-old goal-scoring phenom – signed a $10.5 million-dollar contract to return to Guadalajara in January. Rodríguez, 23, is playing for $8 million dollars per year.

Cruz Azul star Roberto Alvarado, 21, is also on an $8 million-dollar contract and his performance during the Clausura 2020 would suggest he is ready to try his luck in Europe.

On the other end of the spectrum, the peso devaluation could be bad news for fans. Clubs will be tempted to recover their losses with higher ticket prices as well as boosting prices for merchandise (jerseys, scarves, etc.).

Meanwhile, second division teams are hunkering down and hoping to survive the crisis. Mexico’s soccer federation (FMF) has been trying to figure out how to maintain the Ascenso MX.

Annual demotion and promotion were put on hold before the pandemic and the second division is down to only 12 teams, down from 17 a few seasons ago. Over the winter, the federation made certification rules stricter amid reports that the FMF might allow the Ascenso MX to disappear.

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That decision, and the eventual fiscal fall-out for Liga MX, will become clearer in the months to come.