Last week marked the end of the mid-season transfer window, a key period in the multi-billion dollar European soccer (football) business, when clubs can buy, sell or loan players. While spending for players among England 's top teams was up from 2012, the story in euro zone struggler Spain was drastically different.
Clubs in La Liga, Spain's top division, spent a little over 10 million euros ($13.57 million), or around 9 million pounds, according to numbers compiled from multiple Spanish newspapers.
That's less than what bottom-ranked English Premier League side Queens Park Rangers was widely reported to have spent on their first signing of the month.
In fact, Premier League clubs spent more money in the last month alone on acquiring players than La Liga clubs have spent all season, an estimated 120 million pounds ($190 million) compared to 113.3 million pounds ($181 million).
The contracting spending of La Liga clubs speaks to the massive debt many of the clubs are in. Eight clubs in the top division alone are either in administration, or on the verge of it, and a government report revealed clubs owed more than 750 million euros ($1 billion) in the first quarter of 2012.
Despite Spanish Finance Minister Luis de Guindos' claim last week that the country doesn't need a bailout, the country's Sport minister made a proposal last year to do just that for Spanish clubs by waiving their debt. The proposal was met with outrage from German officials and was quickly scrapped and despite subsequent calls for reform, no action was taken.
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Since then, plans to fine and relegate debt-stricken clubs to force them to clean up their finances have fallen through, and Spain continues to lag behind other European football leagues. In Italy, teams with tax debt are barred from competing in the league, and in Scotland, the club Rangers was relegated to the lowest division after entering liquidation last year.
One reason for the lack of reform might be the politics behind the Spanish football league. "In Spain it's an entirely different situation [than in England] because I think Spanish football is more highly politicized than English football," said Simon Chadwick, professor of sport business strategy and marketing at Coventry University. "What you tend to have is regional and national interests intervening very often."
Nevertheless, Spanish clubs have seen continued success in the Champions League, Europe's top competition, and the Spanish national team won the Euro 2012 competition in the summer. Much of that success is owed to La Liga's biggest clubs: Barcelona and Real Madrid, who provide a majority of the national team's players, and who Chadwick said have a "duopoly" of the league.
"I think Spanish football is very good to look at, obviously very successful, but I think it does flatter to deceive in many ways," said Chadwick. "Even Spain's two biggest clubs, its two biggest playing assets if you like, their debt levels are actually very, very high." Despite posting record revenue of 494 million euros ($670 million), Barcelona continues to operate with an estimated debt of 335 million euros ($536 million), according to Forbes.
Coventry University's Chadwick said a lot of the financial problems for Spanish clubs stem from the way they sell TV rights. According to him, because Spanish clubs sell rights to broadcasters individually (as opposed to England, where the league sells rights collectively, and teams split TV revenues), the two top clubs Barcelona and Real Madrid crowd out the other teams and leave them with with little money to spend on transfers.
Little wonder, clubs other than Barcelona and Real Madrird continue to offload big-name players to help pay off their debt. Atletico Madrid, for example, sold Sergio Aguero to Manchester City for 45 million pounds ($72 million) last season. Luckily, some of the most famous football academies in the world are based in Spain, such as Barcelona's La Masia and Valencia's Mestalla, and the country's ability to produce talent is reflected in the national team's success.
Still, there was bad news from the banking sector last week, with La Liga sponsor BBVA reporting that profits fell 44 percent in 2012 and the future of Spanish football looks to continue to be in the balance with the country's financial future. "In terms of the long-term viability of the league, the long-term viability of a lot of clubs within the league and the financial sustainability, I think something has to change fairly soon, within the next five years," Chadwick said.
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