Malaga knocked off Real Madrid one day after it was fined and hit with sanctions by European soccer's governing body. Reuters

The Spanish soccer club Malaga found out Friday that it won't be allowed to play in the Champions League next year, regardless of where it finishes in La Liga and even if it goes out and wins Europe's top competition this season. UEFA, the governing body of European soccer, announced that Malaga would be banned for its next continental tournament because it owes more than $11 million in unpaid wages to players and transfer liabilities to other clubs. This violates UEFA regulations on club licensing, a set of rules recently folded into the body's Financial Fair Play regulations. Basically, it comes down to this: If a club has unresolved liabilities with players, other clubs or the tax man, it will get fined (Malaga was hit with a sanction of nearly $400,000) and banned from the extremely lucrative UEFA competitions.

This wasn't exactly the best way for Malaga to prepare for its Saturday match with Real Madrid. The reigning Spanish champions have hit speed bumps here and there—Jose Mourinho's team is down to third in the league, its worst start in five years—but Real Madrid is still a star-studded side and one of the most expensive in history.

And yet Real Madrid strutted into Malaga's La Rosaleda Stadium and trudged out with a 3-2 loss. What a difference a day can make.

Real Madrid manager Jose Mourinho doesn't like the sound of losing to Malaga. Agence France-Presse/Getty Images

As the soccer world focused on Real Madrid, let's not overlook Malaga's achievement. This is a club that looked—and still looks—destined to burst in a classic speculative bubble. For much of its history, when times were good, Malaga was a yo-yo club, flitting between the top two divisions in Spain. When times were bad, it went bust, as it did in 1992: The current club, Malaga CF, rose from the ashes of its bankrupt predecessor CD Malaga.

In 2010, a wealthy Qatari named Abdullah Al Thani, a distant relative of the country's current ruler, acquired the club and raised expectations through the roof. Malaga fans dreamed of the kind of investment that Sheikh Mansour bestowed on Manchester City, and Al Thani looked the part. He talked of building a 65,000-seat stadium and a state-of-the-art youth academy aimed at generating an assembly line of young talent for the first team. Then he ratcheted up expectations even further, bringing in a high-profile coach (Manuel Pellegrini, previously of Real Madrid), a respected director of football (Fernando Hierro, previously of the Spanish FA) and a phalanx of pricey stars (Ruud Van Nistelrooy, Joris Mathijsen, Jeremy Toulalan, Santi Cazorla and Diego Buonanotte among them).

There was talk of Malaga challenging Barcelona and Real Madrid, the traditional powers in the Spanish game. Barcelona once paid Unicef to carry its name on its shirts; Al Thani signed a similar deal with Unesco, the United Nations' cultural organization. His club wasn't far behind on the pitch, either. Malaga finished fourth in La Liga last year, its best season ever, and qualified for the Champions League.

Except things weren't so rosy off the field. Four players filed a complaint in July with Spanish soccer authorities claiming they were still owed their wages. The complaint was later withdrawn, but all four ended up leaving the club, as did Hierro, the technical director. UEFA opened an investigation, and by the middle of the summer, Malaga had turned into a giant tag sale. Jose Rondon and Cazorla, its top two scorers, were sold for a combined $37 million. Mathijsen was released; Van Nistelrooy retired. What's more, Al Thani didn't seem willing to bankroll any future spending sprees. Malaga went so far as to release a statement that confirmed his commitment to the club and said its everything-must-go approach was a "reorganization" to meet Financial Fair Play requirements, which limit the losses a club can sustain over time.

But supporters were unimpressed. Their team had finally qualified for the Champions League, and now it was letting its best players bounce. Their replacements—a mixed bag of free agents and loan signings, including the American defender Oguchi Onyewu—hardly fired up the Malaga base.

According to Spanish media reports, Pellegrini approached his players in early September and offered an us-against-the-world speech. Whatever he did certainly yielded results. Malaga is once again fourth in La Liga and won its Champions League group to qualify for the Round of 16, where it will meet Porto in February. The gifted playmaker Isco is helping fans forget all about Cazorla, while Roque Santa Cruz and Javier Saviola, two free agents in the scrap heap, have combined for 10 goals in La Liga.

The only question is what happens next. Malaga will lodge an appeal against UEFA's decision with the Court of Arbitration for Sport. There is no date yet for the arbitration body's decision. In a statement released Friday, the club insisted it has reached agreements with its creditors and that Al Thani is investing more money in the club. "The club believes they are being made a 'scapegoat' and an 'example of' by UEFA by this unfair treatment," the statement read. "Given the total and absolute indignation and outrage at the decision, Malaga wishes to state they are working tirelessly to ensure justice is done, and will work with all organizations necessary until the situation is resolved."

As things stand, Malaga's players could find themselves playing for pride and little else: no Champions League next year and maybe not much money, either. So why play? For things like beating Real Madrid for the first time in 29 years.
