Problems At Parma Highlight Differences Between U.S. Leagues, Europe...

American sports teams usually survive and often thrive after bankruptcy, but the same isn’t always true for European soccer clubs.

Parma, which plays in Italy’s Serie A, is the latest soccer club to find itself teetering toward possible doom, having canceled its most recent game because it couldn’t afford to pay stewards and security staff. Players have reportedly not been paid this season, and the team is said not to be able to afford water for its practices. The club has a March 19 date set at which the company could agree to go into “controlled administration.”

The Italian Football Federation has offered to loan the club 5 million euros as part of a restructuring plan, but if the plan falls apart, the team could dissolve. This would automatically relegate the squad to Serie B, a lower tier of Italian football. Some reports say this has already happened. This comes in the same month that new Parma president Giampietro Manenti, part of the club’s third ownership group of the season, said he thought the team would be able to pay its debts by the end of February. Typically, a team that dissolves is bought and reformed as a different company and often with the same name.

Such an outcome would seem preposterous for a major U.S. sports team, mostly because of the safety net provided by the leagues themselves and the debtor-friendly nature of the bankruptcy code. But European leagues don’t have as much revenue sharing as U.S. ones, and foreign insolvency rules are much different and more varied. The bankruptcies of the Los Angeles Dodgers and Texas Rangers baseball teams have come and gone with the teams coming out financially stronger and with more than enough money to buy the most expensive players.

But for European soccer teams that aren’t flush with cash and resources like Manchester United, Barcelona or Bayern Munich, coming back after bankruptcy is less predictable. For every Crystal Palace, which has been put into administration twice in England but is now a relatively thriving Premier League club, there’s a Parma, which was once owned by current A.C. Milan owner Silvio Berlusconi and is now possibly facing its third insolvency or liquidation since 1968.

Parma, which is in last place in Serie A and facing relegation for its play on the field anyway, would be forced to forfeit its remaining games as 3-0 losses if it can’t afford to start playing again.

Founded in 1913 as Parma Foot Ball Club, Parma had its greatest success from 1992 to 2002, winning several tournament trophies and once finishing second in the top flight of Italian soccer. Soon after, the club got caught in the wave of scandal and bankruptcy of its then-parent company, Parmalat SpA. The financial instability has followed ever since.

Despite the spell of success, the team might be now best known for having been essentially sold for one euro, twice, and for its looming third bankruptcy.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler