Greek basketball league crumbling amid country's financial crisis

ATHENS -- It's fitting that the tragedy of a basketball team called Maroussi played its final road game of the season in a town called Drama. Nearly broke,

ATHENS -- It's fitting that the tragedy of a basketball team called Maroussi played its final road game of the season in a town called Drama. Nearly broke, Maroussi chartered a bus for the eight-hour ride because it couldn't afford airline tickets. Maroussi lost by 38 points, slipping to 1-22 on the season. Its starting power forward didn't make the trip. Injured? No. Hung over from clubbing? Uh-uh.

Homework.

He's still in high school and had some big tests to study for. Amateurs from the junior squad were forced into action after many of the professionals quit. The club had stopped paying them. What little revenue it had was being diverted to players owed money from past seasons.

Maroussi is among several teams on the verge of bankruptcy. Greece is the epicenter of the European economic crisis, and with the country's economy in shambles, the Greek professional basketball league, once considered the best in Europe, is deteriorating. The all-star game was canceled to save money. With more government cuts looming, there's concern that revenue from state television will significantly diminish.

Teams are compiling huge debts even as player salaries shrink. Desperate for relief, the league has asked players who are owed money to accept a 50 percent "haircut," just like Greece's bondholders did. Ten of 13 clubs are several months late on payments, said the players' union, describing the problems as "urgent."

Players are fleeing either because they're not getting paid or they can simply earn more money elsewhere.

"Basketball is dead in Greece," said Yannis Gagaloudis, Maroussi's former point guard who is owed nearly $20,000 from the team. He left in February. "It's like being in a coma. In two or three years, Panathinaikos and Olympiacos will be in the same situation."

Three historically strong teams -- Maroussi, Panionios and Aris -- are banned from signing new players. The Basketball Arbitral Tribunal of FIBA imposed the sanctions after those clubs failed to pay overdue salaries.

Compared to other countries, the disputes in Greece "have led to the biggest number of sanctions being imposed for a failure to [pay players]," Benjamin Cohen, FIBA's legal affairs manager, said in an e-mail. Two lower-division Greek clubs are also banned from signing new players.

Like elsewhere in Europe, Greek sports teams generally aren't designed to earn money. Wealthy owners lose money every year in search of glory, political leverage and legitimacy. They've been providing personal bailouts long before Greece needed one.

But in the financial crisis, spending play money is a luxury most can't afford. Some owners make their living in industries like shipping, pharmaceuticals and construction -- all hit hard by the crisis. Dropping close to $20 million over three years -- the Josh Childress contract from Olympiacos in 2008 -- seems inconceivable today.

Even the owner of one of the few financially viable clubs, Rethymno on Crete island, is pessimistic. The team was a success on and off the court. It cultivated a fan base and sponsorships. And it signed high-performing players at workable salaries.

Harvard-educated owner Costi Zombanakis fears it may be too late. "The Greek league is just a reflection of what's going on in Greece. It's falling apart," he said. "Today, we're in an extremely precarious situation because the owners don't have money."

Arch rivals Panathinaikos and Olympiacos still have their deep-pocketed owners, but perhaps not for much longer. In the past year, the Panathinaikos and Olympiacos owners have said they want to sell, although there are no obvious buyers. They lose millions of euros every season and they've begun trimming. Still, their budgets are in the $20 million to $25 million range.

*****

The real story of Greek basketball is in the Athens suburb of Maroussi, which is sinking in lawsuits, FIBA sanctions, general bitterness and distrust. Until recently, money wasn't a problem. The club was controlled by Aris Vovos, chief executive of the construction company started by his father. Babis Vovos International Construction is one of Greece's top commercial property developers.

The fair market value for the company's portfolio in 2008 was $1.7 billion, according to the company's annual report that year. That was before the financial crisis struck. The Athens Stock Exchange temporarily suspended trading of the company's shares on April 2, when the share price closed at about 40 cents (00.30 euro).

When construction was booming, life was good. Vovos, a former race car driver, was spending between $1 million and $2.5 million per year on player salaries. That's far less than what Panathinaikos and Olympiacos spent, but it's huge money for a club playing in a gym that some U.S. high schools would consider inadequate.

"He had a lot of money," team manager Kostas Katsanos said. "He just wanted to have a team. He was proud. The family was proud."

Maroussi punched above its weight and was widely considered the third-best Greek team. In 2001 it won the Saporta Cup, which later became the Eurocup. Maroussi made it to the league finals in 2004, losing to Panathinaikos.

Just two years ago, Maroussi competed in the Euroleague, considered the best league outside the NBA. The club also has developed young talent, including Vassilis Spanoulis. He now plays for Olympiacos and at nearly $3 million per year is the league's highest-paid player.

Besides the financial crisis, the company was stung by a court order that halted construction of a shopping mall that would be adjacent to a new Panathinaikos soccer stadium. In the summer of 2010, Vovos stepped down but he left the team with debts. Former Iowa State star Jared Homan's 2009-10 contract included a FIBA clause whereby disputes are settled by an arbitrator -- instead of by local courts.

Homan's contract was for $170,000, but Maroussi paid only $95,250, according to the tribunal's findings. Maroussi also failed to pay two bonuses, including $15,000 for reaching the Euroleague top 16.

Last May, FIBA's arbitral tribunal ordered Maroussi to pay Homan more than $100,000. Maroussi didn't pay, so the tribunal in August imposed the ban on signing international transfers.

Maroussi coach Nikos Linardos said Vovos should have resolved the Homan issue a long time ago. "I can't believe the biggest construction company doesn't have money," Linardos said. Vovos did not respond to requests for comment.

Twice this season Maroussi thought it had a deal worked out with Homan and his attorneys. The first time, FIBA actually lifted the ban for a day, but re-imposed it when Homan's side ultimately rejected the terms, Katsanos said. (Homan now plays for Bayern Munich and through a team spokesman declined to comment.)

In that one day, Maroussi signed Frank Elegar, who played his college ball at Drexel.

"I knew it was a messed up situation," Elegar said. "I talked to my agent, he was saying things would be all right. They said they were going to have money set aside for me. I said, 'OK maybe I can work with them.' It spiraled downhill."

Almost immediately paydays were late, in part because teams didn't get TV revenue until December. The TV money and sponsorship by state-run betting company OPAP comprise $520,000 -- lifeblood for every team besides big-budgeted Panathinaikos and Olympiacos.

In January, Maroussi was 0-10. Three of its losses were by two points. The backbreaker, though, was a 75-74 home defeat on Jan. 7 to the team from Drama. Yannis Gagaloudis, a wiry, super-quick, fully bearded, pack-a-day-smoking playmaker, scored 29 points that day and added eight assists and five rebounds.

He pumped his fists after each big shot, and Maroussi led by 10 points. Getting in the win column would be a big psychological boost.

The team had been promising to finally fix the "Homan problem" -- someone drew an "X" on Homan's face on the '09-'10 team photo in the Maroussi gym -- so help would be coming in the form of new imported players, they hoped. Teams are allowed six foreigners. Elegar, 25, was Maroussi's lone import, besides a Serb who left early in the season.

Drama fought back and took the lead with four seconds remaining. Maroussi had two chances to win it. Gagaloudis missed a runner and the rebound was swatted out of bounds. Maroussi got the ball back with .9 seconds.

From under the basket, Gagaloudis inbounded to top scorer Nestoras Kommatos along the baseline. His defender slipped, so he had a good look. The ball clanged out. Kommatos fell to the floor in disbelief. Gagaloudis never moved. He slumped to the floor and lay down as Drama players celebrated.

Soon afterward, team president Vasilis Konstantinou said there was no more money to pay players. This, after they received only half their salaries. Any revenue, the former Panathinaikos soccer goalkeeper told the disheartened team, would go to players owed money from past seasons.

Oh, and you're free to leave, he said.

Elegar left for Turkey. Dimitris Haritopoulos went to France. Gagaloudis signed with a team in Cyprus. And Kommatos went to Italy. The losing streak stretched to 18 games. Unable to sign foreign transfers, Maroussi relied heavily on its junior team.

Jon Diebler, a second-round pick of the Portland Trail Blazers in the 2011 NBA Draft, is playing for Panionios this season. During a Feb. 15 talk at the American Community School, he told kids that hard work is the key to success. He didn't know one of the students would try to apply that advice hours later. Against him.

Stefanos Fazianos, 16, introduced himself to Diebler at the school. "He was very surprised," Fazianos recalled. "He said 'you're very young to play for the men's team.'"

Panionios beat Maroussi by 40 points that night. Fazianos only played the final minute -- he guarded Diebler -- but two 17-year-old teammates saw significant time.

Don't feel bad for the kids. The junior team is among the best in Greece. The two young starters -- Lampros Tsontzos and Dimitrios Agravanis -- are 6-10. Tsontzos, who just turned 18, has been accepted to MIT. His SAT Math score was 790. Agravanis, who doesn't travel to away games outside Athens because of school, scored 15 points against Panathinaikos.

*****

Besides being broke, Maroussi is prohibited from selling tickets to home games because it owes taxes. Before the long bus ride, the team flew to away games, but usually on game days to avoid hotel costs.

"It's not good for our performance," guard Lefteris Akepsimaidis said of the travel conditions. "We don't have enough time to focus on the game."

Akepsimaidis, 26, hopes to catch on with a new team next season. He has received just $6,500 of his $35,000 contract. He also plans to finish courses for an accounting degree. Maroussi has $3.25 million of debt, including salaries from several seasons, Katsanos said. He and his wife, team secretary Eleni Mistra, estimate they are owed $45,000. They haven't been paid since January.

Vendors have threatened him via phone and in person. Security personnel, videographers, and landlords -- teams typically provide housing to players -- are all looking for their money.

"You will become a professional liar, because you say 'next week, next week.' Like politicians," Katsanos said.

In the players' union office at Olympic Indoor Hall, built for the 2004 Summer Games, legal director Yiannis Zafeiropoulos said most clubs have no assets (arenas typically are city owned, as is the case in Maroussi), so in bankruptcy no one gets paid.

If players take the 50 percent haircut proposed by the league, he said, then the clubs would direct a percentage of future income (such as TV money) to ex-players. Even then, it would require three years to pay off. The union is still discussing the proposal with players.

Huge debts are threatening to sink not just teams, but the league as well. "We have four or five teams in the A1 league with debts that we cannot overlook. If you miss five out of the 14 teams then you don't have a league," Zafeiropoulos said.

Teams had financial problems in the past, but 10 and 15 years ago they were getting close to $1 million in TV revenues. Plus, teams today pay more in tax. Most salaries are taxed at 40 percent, nearly double the rate of two years ago.

Panathinaikos, Olympiacos and a third Athens-based club, Ikaros, are the only teams to have fully paid their players this season, the union said. Excluding the two big clubs, salaries have shrunk dramatically. The average salary for a Greek player this season was about $50,000 -- half of what it was just three years ago, while foreigners are earning 30 percent less, averaging under $130,000. And many Americans are now playing for less than $65,000, which was unthinkable 10 years ago.

Zack Wright, a 6-2 point guard, averaged 13.5 points per game and led the league in steals before leaving Rethymno in mid-March. Wright earned $7,000 per month. He signed with Cibona in Croatia, where he'll make at least $40,000 just for Cibona's playoff run.

Wright said his Greek agent has received offers worth $120,000 and up for next season. But the financial condition of clubs will be a top priority when vetting offers.

"That definitely weighs in," he said in a phone interview. "I'm not by myself. I've got a family. You've got to weigh all those factors."

Rethymno was one of the league's bright spots this season. The team hustled to land sponsors large and small. They sold 800 season tickets (capacity 1,300) to raise $130,000 in revenue. They have a mascot. In short, they run a professional operation. Most Greek teams don't.

Rethymno spent more than $500,000 building a roster around Wright, shooter Dionte Christmas (league-leading 18 ppg) and Brent "Air Georgia" Petway, who delivers crowd-pleasing dunks.

"In the States, it's about the players. You market the players. That's what we've done, and it's worked," owner Zombanakis said.

Rethymno will lose about $125,000 this season, which is "considered a miracle," Zombanakis said. The top concern now, he said, is future revenue from the state broadcaster because the government likely will make more cuts.

A Moneyball-style Rethymno model -- professionalism, good scouting -- could work for Greece, Zombanakis said, but "I don't see it happening."

"Even if it could happen ... now the country is falling apart," Zombanakis said. "There's no money. Advertising has dried up. There's a reality: This is the biggest default in history. It's really bad out there. Really, really bad."