AEK’s Soccer Downfall Another Greek Humiliation

ATHENS – The bad economy is hurting soccer clubs around Europe. But for Greece’s storied but troubled AEK, the fall has been especially steep.
Ignominiously ousted from the country’s Super League in April, the beloved club slid into bankruptcy – -the result of years of what fans roundly criticized as bad management and excessive spending, compounded by the country’s deep recession.
Now as the government in Athens hangs on with an international bailout, AEK has found what it hopes to be a local savior: oil and shipping magnate Dimitris Melissanidis.
“We are starting from scratch and we are fated to succeed,” the billionaire said at a July news conference where he introduced his new managers and the start of ticket sales for next season. He also predicted the club would be back in the Super League after two years.
Yet as training camp started in late July, Mr. Melissanidis was still negotiating with other potential investors and he has yet to say how much he will put up himself.
Meanwhile, authorities have been questioning five former club presidents over what police listed as €170.8 million ($224 million) in tax arrears and penalties.
Unlike Greece, which still struggles to pay off its debts and stay in the Eurozone, the team is trying to fill its depleted roster and make a clean start outside the Super League.
Established in 1924 in Athens, AEK is one of Greece’s three big teams and arguably the one with the deepest emotional pull. Its name is the Greek acronym for Athletic Union of Constantinople because the club was formed by Greek refugees who fled from Istanbul during wartime.
AEK claims 28 national titles and has over the years regularly placed well in European competitions.
Its recent troubles, while extreme, weren’t exactly a shock; Greek soccer has long been beset by match-fixing scandals and dirty money. In 2003, as the government sought to polish the sport’s image ahead of the Summer Olympics in Athens, AEK’s then-owner Makis Psomiadis was forced out amid charges of missing millions from the team’s accounts and a player revolt.
He was convicted of fraud in 2009 and sentenced to four years in prison, and is currently being tried on money laundering, embezzlement, tax evasion and match-fixing charges involving other clubs.
Mr. Psomiadis has denied any wrongdoing. His lawyer, Christos Stathis, told local media in May that his client was “devastated” by AEK’s relegation but “doesn’t feel he shares responsibility for the financial collapse of the team.”
After his departure, the club set ambitious plans for a rebound—underpinned, like the Greek economy, by mounting debt. By 2007, it had brought in Brazilian striker Rivaldo Vitor Borba Ferreira, better known as Rivaldo, for €1.3 million a season. His fancy “bicycle kick”—a midair backward flip – energized fans and helped to send season-ticket sales to a record.
But unexpectedly, AEK failed to qualify that year for the lucrative Champions League. Revenue shrank, leading to the departure of star players.
AEK posted a €15.8 million loss in the 2008-2009 season, compared with a €12 million profit from the previous season. The club bounced from owner to owner, each with fresh promises of revival.
The credit-fueled Greek economy began teetering, too. In October 2009, a new government stunned its Eurozone partners by revealing much higher-than-known deficits, sparking Europe’s sovereign-debt crisis.
AEK’s losses widened as television revenue fell and money from the state gambling monopoly OPAP dissipated.
By the end of the 2011-12 season, AEK had accumulated losses of €60 million, according to a survey published by Direction Business Reports. That was almost a quarter of the €264.7 million in losses racked up by the 14 first-league teams put together.
By mid-2012, with Greece gripped by protests against painful austerity, AEK couldn’t pay its players and released them from their contracts; most left. The team drew a new squad from young, cheaper amateurs – who were soon delivering another disappointing season.
Ewald Lienen, a former player from Germany, took over as coach in October 2012. He started providing a rare bonus for his players – free breakfast – after medical exams showed many weren’t eating well.
“We found a lot of the players had deficiencies with iron, other things, because of their nutrition,” said Mr. Lienen, who also handed out food cards for dinner. “In other countries, the players don’t imagine the problems we are dealing with here,” he said in a recent interview.
A short time later, Mr. Lienen was gone as well – dismissed following another loss in early April. He was succeeded by Traianos Dellas, a former AEK player from the team’s golden period.
On April 14, when AEK faced rival Panthrakikos, its viability was on the line. Even a tie would secure another year of television revenue, plus rights to a stadium to play in and an opportunity to renegotiate some of its debts. Losing meant certain bankruptcy and relegation from the Super League.
The score was 0-0 with three minutes to go when AEK defender Mavroudis Bougaidis extended his right toe. It was a gambit to bounce a corner shot away from his team’s goal. Instead, the ball rocketed into AEK’s net – an “own goal.” Angry fans stormed the field; players fled into the locker room for safety.
AEK was relegated to the second division because of the loss. It was also declared formally bankrupt, which knocked it down one more notch to the third, amateur division – but also allowed it to cancel its debts.
Nevertheless, in March police issued arrest warrants for five former team presidents: Andreas Dimitrelos, Demis Nikolaidis, Nikos Thanopoulos, Giorgos Kintis and Stavros Adamidis. All five voluntarily submitted to questioning regarding the back taxes, police said; All five have denied any wrongdoing.
Mr. Thanopoulos, who was president during the 2009/10 season, was convicted after a short trial on June 28 of failure to pay accumulated debt of €78.8 million owed to the state and sentenced to five years in prison.
The sentence was suspended pending payment amounting to €36,500 in this case – something common in Greece for financial crimes. Mr. Thanopoulos plans to appeal, according to local media.
“My conscience is clear,” Mr. Thanopoulos told reporters ahead of the verdict. “I think I did the best I could, with many personal sacrifices.”
A police official said it was up to prosecutors to decide when the others would be tried.
The team has defended Andreas Dimitrelos, who was club president at the time of the warrants, arguing that all the debt resulted from actions before his brief tenure, which ended in April. The statement didn’t assign blame to anyone else.
Mr. Dimitrelos said in an interview that he had tried to keep the team operating “so that there would be an expression of interest from some buyer. “This didn’t happen because the team dropped from competition,” he added, noting that he wasn’t responsible for the roster or its poor performance.
Meanwhile, the new owner, Mr. Melissanidis, is already talking about rebuilding the team’s rundown stadium.
About €20 million in European Union development funds, or a third of the estimated cost, has been earmarked for the project, according to the regional governor, Yannis Sgouros, who describes it as an economic boon.
Half the revenue from next season’s ticket sales also will go toward construction of the stadium, which will be called Hagia Sophia, after the former Orthodox church, now a museum, in Istanbul.
“This is a symbolic gesture,” team spokeswoman Aggeliki Arkadi said. “It will give the fans of AEK the satisfaction that they helped in that procedure, the same way that the refugees from (Istanbul) built AEK’s first stadium.”