Racing Against Time

Argentines have always been mad about football, but few things have made them madder than the recent failures--both on and off the field--of the venerable Racing Club. The 96-year-old institution has had a glorious past: supported by such luminaries as populist strongman Juan Domingo Peron, Racing was the first Argentine team to win a world club title (the Intercontinental Cup in 1967), the first to win the Buenos Aires championship three years in a row--and the side with the longest unbeaten streak, 39 matches. But now it is struggling for survival. Racing has not won a championship in 32 years. Worse, a string of incompetent--some believe corrupt--directors have left the club with a ruinous debt load of about $62 million. Last month, a bankruptcy court ordered Racing to shut its doors and sell off its assets--a move that sparked a crisis. Front-page headlines screamed foul, and Racing fans at a mass protest hurled stones at the club's president, Daniel Lalin, when he tried to address the crowd.

Say goodbye to the golden age of Argentine football. Racing is the most notorious club mired in red ink, but it is hardly the only one. Temperley and Atlanta, two smaller Buenos Aires clubs, have come close to financial collapse in recent years. Argentina's 18 first-division clubs have a combined debt of more than $200 million--twice their annual revenues. How could that happen in a country so passionate about football? It's not simply that Argentine football, for all of its tradition and pretensions, is a relatively modest moneymaker. Critics say Argentina's teams are mismanaged because they are run not as businesses, but as nonprofit social clubs with little incentive to rein in spending.

The irony is that when Lalin was elected president of Racing in 1997, the 50 -year-old businessman was hailed as a savior precisely because of his successful career in real estate and construction. But the result has been disastrous. To compete with wealthier teams, Racing stopped developing young talent in favor of recruiting high-priced stars--often using peculiar financing. Indeed, Lalin not only runs the club, he's also its biggest creditor. Lalin pumped $2.5 million of his own money into Racing to keep it afloat, sometimes in exchange for rights to players. Racing fans despise Lalin for the club's collapse, but he remains unfazed. "Eventually," Lalin told NEWSWEEK, "we shall see if I share any of the blame. I believe not."

Racing's demise has prompted deep soul-searching in Argentina. Fernando Galmarini, a member of the lower house of deputies and sponsor of a new sports law, says: "It's time to get out the scalpel and make some serious incisions." Even so, under pressure from a powerful group of politicians, the court has reconsidered its decision and allowed Racing to stay in business. That doesn't mean, however, that Racing and Lalin are in the clear. An Argentine court has judged Lalin to be personally bankrupt, though he insists he has "no problem" with his creditors. Racing's players, moreover, are now in revolt over the $2.7 million they are owed in back pay. If the issue is not resolved by June, they say, they will ask the Argentine Football Association to dissolve their contracts and declare them free agents. Last year, Lalin held a religious ceremony on the Racing pitch to lift the curse he believes hangs over the club. Some 15,000 fans showed up. He could use another prayer or two.