On a winter morning at Atlético Madrid's Vicente Calderón stadium, receptionists wear overcoats indoors as portable heaters struggle to provide a modicum of warmth. Madrid, which is on a plateau 600 metres above sea level and surrounded by a snow-capped mountain range, gets cold in the winter and Atlético's offices are not centrally heated.

The 55,000-seat ground is in a nondescript district south of Madrid, wedged between a six-lane ring road and a brewery. When Atlético is playing at home in the depths of winter, fans sitting in the uncovered stands are exposed to the chill wind and rain.

Atlético is the antithesis of its flashier rival Real Madrid: a working-class commoner to Real's nobility. Formed by three students, Atlético became known as “Los Colchoneros”, the mattress makers, in the 1940s because their red and white shirts looked like the mattress covers that were common at the time.

When the team moved to its present stadium after the Second World War, it struggled to raise enough money to complete the arena. The arena's last major refit was in 1972, in the final years of General Francisco Franco's 36-year dictatorship.

Real Madrid (which means Royal Madrid in Spanish) is based in a stadium on the city's tree-lined main boulevard, Paseo de la Castellana. It's the equivalent of Paris having a football club on the Champs Élysées. On the club's premises you can order sushi, jamón iberico or barbecued meat in one of three restaurants.

Team president Florentino Pérez, who is chairman of Spain's biggest building company Actividades de Construcción y Servicios, has plans to build an adjoining five-star hotel with funding from the United Arab Emirates. Real started to leave its cross-town rival in the dust in the 1950s, becoming the star of Spanish football. Then, led by the Argentine forward Alfredo di Stefano, it won five straight European Cup titles.

More recently, its model of hiring star players like David Beckham has drawn admiring write-ups in Harvard University studies that have described it as using the same model as Hollywood studios to create revenue.

On this January morning in 2013, a secretary ushering in visitors to the Calderón stadium blames the cold on the damp air blown from the nearby River Manzanares. Through a series of doors, deep inside the bowels of the old arena, Miguel Ángel Gil sits in a windowless office. Beneath black-and-white photographs of his father Jesús and mother María Ángeles, Atlético's chief executive officer is trying to keep the team operating amid Spain's worst economic crisis.

As Gil sits at his oak desk, Atlético has won only one league title since 1977. Its boardroom down the corridor is in a cramped wood-panelled space that looks like part of a 1970s suburban home and is filled with odd-looking cups and trophies from obscure competitions.

A few miles away, at Santiago Bernabéu stadium by the city's business district, Real Madrid's directors meet in a boardroom displaying replicas of a record nine identical, highly polished silver European Cups. The boardroom was redecorated as part of a €150 million refurbishment of the stadium. While Atlético doesn't have central heating, Real Madrid has fitted overhead heating outdoors to keep fans warm during games.

In Spain, the period following the two weeks of Christmas festivities is known as the “cuesta de enero”, or the January hill. It's a difficult time for personal finance, when families have to pay credit card bills after extra spending on food and gifts at the same time as coping with a rise in bills from fuel and transport.

In 2013, this incline was becoming never ending for many families. The country was in the sixth year of an economic crisis, with an unemployment rate of 26%. Families were losing their homes because they could not pay the mortgage. Businesses were going to the wall at an alarming rate.

Atlético Madrid was also suffering. It was stuck with €120 million of tax debt, more than any other team in the world. No wonder it could not afford to redecorate its offices that dated back to the Franco era or install central heating. Atlético would have folded in another industry, or if it was a football club in another country.

In Scotland, Glasgow Rangers had recently been placed in administration after a claim by the UK tax authorities for six times less than what Atlético owed the Spanish treasury. Rangers, the record 54-time champion, had racked up an average annual loss of £13 million over the previous 11 years, trying to keep pace with arch rival Celtic.

Like Atlético, Rangers had sought to offset losses and pay down debt with prize money from the UEFA Champions League or the second-tier Europa League. The model collapsed when the UK tax authorities objected to a scheme to pay players via an offshore trust and ordered it to pay £21 million in back taxes. Rangers eventually went out of business as a result of the claim and was revived as a new company in the third division. Its former owner, Gil's counterpart, was banned for life from Scottish football.

Yet Atlético, fondly known as Atléti, received much more favourable treatment in Spain. It was part of Spain's social fabric: the hopeless but loveable member of the family.

Many people had a soft spot for the stoicism of its supporters. It's easy to be a fan of Real Madrid but being an Atlético fan, well that requires dedication. The club even counted the odd member of the establishment as fans, including the soon-to-be-king Prince Felipe and Economy Minister Luis de Guindos.

No government wanted to be responsible for making the club disappear. That could have been a monumental vote loser at the next polls. In 1995, a previous government had already got a taste of that when it relegated two other teams, Sevilla and Celta de Vigo, because of financial irregularities. When thousands of fans took to the streets to protest, the government hastily reversed its decision.

Apparently to avoid such a situation, the Treasury had struck a deal with Gil to pay the €120 million of back taxes by 2020 along with interest payments fixed at the modest annual rate of 4.5%. It looked like a remarkably cosy arrangement.

Gil, who controls 64% of Atlético, is a boyish-looking 50-year-old with a crooked nose and white flecks in his black curly hair. Lounging on his chair behind a mountain of papers and books on his grand oak desk, he wears his top shirt button undone and his tie askew like a naughty schoolboy. He shrugs when asked about the team's enormous tax debt. “Other teams have bank debt,” he says. “We have tax debt.” Politicians from the main parties were unsurprisingly slow to attack Atlético's tax situation, even as the government froze pensions and scrapped subsidies for new mothers.

We asked Miguel Cardenal, Spain's Secretary of State for Sport, about the tax deal with Atlético. Cardenal, who was new to the job, was the government official in charge of monitoring football club finances. He told us that it was normal for businesses to restructure tax debt. “It's not special treatment,” he said.

It fell to an obscure regional party from Galicia, one of the country's least-populated regions, to take umbrage. “There is a dynamic in football that is totally irrational and it contaminates the public sector,” Francisco Jorquera, the Galician party's parliamentary spokesman, said. “Many Spanish football clubs are technically bankrupt.”

Atlético's woeful financial situation was a legacy of his late father, Jesús Gil. He was the most flamboyant club owner Spain has ever known. A construction magnate turned mayor of the upmarket seaside resort of Marbella, he rode into Madrid on a white horse and bathed in champagne when Atlético won the domestic league and cup double in 1996. It was a rare chance to cock a snook at Real Madrid and, well, he was not going to waste the opportunity. He never got another chance. Four years later Atlético was relegated to the second division for the first time in 65 years.

In a show of loyalty, the number of season-ticket holders almost doubled to 40,000. But fans paid less than they had a year earlier and the club had to grapple with a dramatic plunge in television income. Gil negotiated a tax moratorium with the government for two years.

More than a decade later, in 2013, Atlético still owed €46 million in back taxes from then, another €50 million following subsequent tax reviews, plus the odd €25 million it had accumulated since then.

For all that accumulated debt, Gil had just the league and cup success in 1996 to show off. That year was becoming a more distant memory each year for fans, even if they were reminded of it every time they went to a home match.

Tagged onto the side of the Vicente Calderón Stadium there is a bar called El Doblete (The Double). It is one of those archetypal Spanish bars littered with nutshells and paper napkins on the floor and serving tortilla, café con leche and beer made at the brewery a few hundred metres away.

During Madrid's stifling hot summers, Jesús would leave half of his shirt buttons undone to reveal a gold medallion as he puffed on a fat cigar. Once, at a formal dinner with other football club executives, he boasted that his first job was working in a brothel (as the bookkeeper). He went through as many as 25 coaches in 16 years as president. “For me, firing a coach is like having a beer,” he once said. “I could kick out 20 in one year, 100 if necessary.”

When Miguel Ángel Gil was a five-year-old schoolboy, his father served 18 months in prison after the roof of a restaurant in a tourism complex he built 50 miles outside Madrid collapsed in 1969, killing 58 guests. The cement hadn't been given enough time to dry. Gil and his brothers were told that their father was away in a hotel, before they were old enough to know better.

Gil avoided serving more than half of the sentence thanks to a pardon from Franco, the dictator. He resurfaced in politics, becoming mayor of Marbella on a promise to cut crime and clean up the city's sleazy image.

Jesús Gil's stint in charge of Atlético was peppered with controversy. In 1989 he called French referee Michel Vautron a “maricón” (poofter) when Atlético was eliminated from the UEFA Cup by Fiorentina. Seven years later, he thumped another club's executive outside the league headquarters.

“You are a crook,” Gil told his opposite number at Compostela. “And you're a son of a bitch,” came the reply. Gil's riposte was a right-hander. Separated by two of Gil's bodyguards, they exchanged insults for two minutes while they climbed the stairs to the first-floor boardroom. All the while, kickback scandals mounted in Marbella. He shrugged them off until he died of a heart attack in 2004, aged 71.

The second of four children, Miguel Ángel Gil is altogether different from his roguish father. A former veterinary student, he is shy and avoids public appearances. He escapes from the pressures of managing the club's parlous finances by rearing horses, bulls, deer, birds and boars on a 2,000-acre estate near Ávila, 70 miles outside Madrid. He has one vice in common with his father: spending on player transfers. Gil was betting that his investment in signing talent would pay off, pushing Atlético higher up the standings. In turn that would trigger more prize money, and better ticket sales and sponsorships. It was a high-stakes roulette game that he could not afford to lose.

This business model continued to be accepted by Spanish authorities, but worried European ruling body UEFA that was indirectly financing Atlético through prize money from the Champions League and Europa League.

Gil's bartering to sign new players would come to a head as the end-of-summer deadline approached. On 30 August 2010, a day before the trading window shut, Gil had an €11 million bid faxed to Galatasaray for midfielder Arda Turan on a single piece of A4 paper. The Turkish club rejected the offer, proudly showing off the fax to fans as proof. However, it relented for €12 million a year later and Turan was on his way to Atlético.

The signing was typical of how Gil spent money he didn't have. Atlético's cash reserves amounted to barely 5% of its €543 million debt. For the year to July 2010, just before bidding for Turan the first time around, Atlético posted a whopping €76 million loss. It was so stretched that it was late paying more than one-third of its bills, and Gil was forced to use his country house as collateral to obtain a bank loan.

Even if it was under the cosh and languishing mid-table in La Liga, Atlético was beginning to enjoy a rare patch of success in European competition under coach Enrique “Quique” Sanchez Flores, the son of an actress and nephew of a famed flamenco artist.

The high-society coach with impeccable dress sense led Atlético to the second-tier Europa League in 2010 by beating Fulham 2-1 in the final. Hugh Grant, the English actor who supported the London team, was among the crowd watching the final in Hamburg. Grant put his head in his hands as Diego Forlan scored the winning goal with four minutes of extra time remaining. In the centre of Madrid, Atlético fans converged on the Plaza Neptuno to serenade players including striker Sergio Agüero and Forlan. It was Atlético's first continental trophy since 1962.

Agüero was soon traded to Manchester City to help service the club's debt, with half of the €36 million transfer fee going to the Spanish tax agency.

Two years later, Atlético defeated Athletic Bilbao 3-0 in the Europa League final to win the title again, this time with another up-and-coming South American striker, Radamel Falcão, leading the forward line. A pattern was beginning to emerge. Gil would take on an ace young forward from South America, let him show off his talents in Europe and then trade him to a profit on the transfer market. Falcão would move on to Monaco for a €43 million fee.

The two Europa Cup wins brought Atlético €32 million in prize money from UEFA, boosting the club's income by more than 30%. But was it fair that the club continued to spend so much money on the transfer market when teams in some of Europe's other biggest leagues in the UK and Germany, such as Liverpool and Hannover, which they had defeated on the field, had to scrupulously pay their debts on time?

The European authorities were closing in on the Spanish government's laissez-faire attitude to Atlético's tax debt. The European Commission announced that it was opening an investigation into whether Atlético was receiving state aid by deferring its already-late tax payments.

On another front, the former France playmaker Michel Platini was tightening up oversight of team finances to try and create a more level playing field in UEFA competitions. Platini had parlayed a successful playing career into becoming a football administrator and was now UEFA president. It was the two-time European footballer of the year who had handed over the Europa League trophy to Atlético Madrid's victorious players in 2010 and 2012.

Platini, who had once painted over the three Adidas stripes on his football boots, saw himself as a traditionalist. He was suspicious of the money being pumped into European leagues by billionaires like Roman Abramovich, who bought Chelsea in 2003, and Malcolm Glazer, who took control of Manchester United in 2005. When he became UEFA president Platini wrote to the leaders of the European Union's 27 member nations asking them to protect football from “the malign and ever-present” influence of money.

“Money has always been in sport, and football has had a professional component for 150 years,” Platini wrote. “But money has never been the ultimate objective of football: the main purpose has always been to win trophies. For the first time, we may be entering an era in which financial profit alone will be the measure of sporting success.”

Platini wanted permission from the European Union to impose specific financial restrictions on football in the region. He planned to launch what UEFA called Financial Fair Play rules that aimed to stop clubs spending more than they earned.

It took him some years to achieve that support, which he eventually found from Joaquín Almunia, the Competition Commissioner who was a fan of Athletic Bilbao, the only team in Europe that shunned the player trading market; it only fielded players born or raised in the region that surrounded the club. The Basque politician met and posed for photographs several times with Platini to show his support for UEFA's move to rein in the relentless debt-fuelled spending by clubs.

Now UEFA was warning Atlético that it was among the clubs who might have millions of euros of prize money withheld from UEFA's second-tier Europa League – the competition they had won twice in the previous three years – after apparently contravening the new regulations by falling behind with bills to other clubs or tax authorities. “They've known the rules for years now,” UEFA general secretary Gianni Infantino, Platini's Swiss-Italian lieutenant, said a few months after the Frenchman had handed the trophy to Atlético captain Gabriel “Gabi” Fernandez in 2012.

Atlético fans already had a gripe with Platini. After UEFA ordered the club to play two home games 300 km from Madrid following crowd disorder in 2008, they had taken to signing “Fuck Platini” at home matches. The ban was eventually revoked, but the grudge looked like it was about to get worse.

Just as Platini was getting the ear of politicians in Brussels, another issue emerged. He had heard that businessmen were seeking profit by taking stakes in the transfer rights of footballers from Atlético and other European clubs via offshore companies. The UEFA president was appalled that the careers of players had become the subject of financial speculation. It was immoral, in his view, that shares in the market value of these young athletes were being acquired by people with no connection to the game. Not only that but this was happening in the territory he oversaw. “A player's arm is owned by one person, his leg by a fund based I don't know where and his foot by a third person,” Platini would later say. “I find that outrageous.”

Atlético, meanwhile, was flirting with insolvency like the Spanish banks squeezed by business loan defaults and home-owners who could not honour their mortgage payments. Gil said that he could no longer extend the club's bank overdraft. Nor, in recessionary times, could he find a sponsor for the team's shirts. Ticket sales were falling as supporters lost their jobs or had their pay cut. Spain's decade-long housing bubble had burst in 2007, shedding construction jobs and ruining Atlético's project to wipe out its debt by selling its stadium to a developer and moving to a new one.

When Gil left his office at the wheel of a black Audi Q7 to join the ring road that wrapped around the Vicente Calderón Stadium, a security guard checked the coast was clear. There was always a chance of fan backlash.

A group of supporters had taken him to court, claiming a 2003 capital increase was unlawful – a claim upheld in a ruling by Spain's Supreme Court in 2014. The group maintained that Gil wasn't the rightful owner of the club. When the club was doing well, complaints subsided. When the team faltered, the vitriol returned. That's why Atlético's form was a more pressing issue for Gil than the tax debt and, when matches were being played, he was too nervous to watch. Instead, he drove around the M30 ring road. To keep the fans happy, Gil had to find new ways to get financing. Putting in as many as 12 hours a day in his windowless office, he worked with general manager Clemente Villaverde, a silver-haired former Atlético player with a law degree, to come up with a business plan.

They started by asking foreign banks including France's BNP Paribas and Société Générale for high-interest loans and obtaining short-term finance from an unusual bunch that included a former Soviet Union official and one of Britain's wealthiest tax exiles.

When we visited them in Gil's office, cocooned deep inside the stadium, Villaverde was uneasy with us asking questions about these relationships. They were off limits for journalists, he said. “You don't ask about those kind of things.” Gil appeared more relaxed but did not answer all our questions. “We are having to look elsewhere for finance because of the situation of Spanish banks” Gil said, before confirming some details of the transactions.

He said that he did not have any obligation to disclose the deals to Atlético fans. “My only duty is to the club's other shareholders,” he said. The other main shareholder was Enrique Cerezo, a film production company owner in his 60s who was more outgoing and liked to appear on TV. Gil's brothers Oscar and Severiano also held small stakes.

Gil said that Platini's notion that investors were a danger to the sport's integrity because they could interfere with the careers of players was plain wrong. He said that he retained complete control over the club and its transfer decisions.

Still, Platini and his executives, who wore smart blue blazers with the UEFA emblem on the breast pocket, felt powerless to regulate the growing secondary market of transfer rights in which money was flowing to the British Virgin Islands and other offshore havens. We are a football governing body, not a financial services watchdog, Alasdair Bell, UEFA's blunt speaking Scottish legal director, said. We can't go to all these tax jurisdictions to examine complex financial transactions.

Bell was already assembling a group of a dozen forensic accountants to make sure that teams were complying with the Financial Fair Play rules. He had also hired accountancy firms Deloitte and PricewaterhouseCoopers as consultants on the project, and expected some hectic months ahead. During the preseason, we may be dealing with a number of clubs that are breaking the rules, he said. And, speaking as someone who likes to have a summer holiday, July and August may be a busy time.

Bell planned to spend his summer holiday in the Scottish university town of St. Andrews, where he had a home, and in the Scottish mountains. The last thing he wanted was to monitor investors betting on the transfer market. It was a role that his counterparts at world football ruling body FIFA had been shunning since the 1980s, when the practice first took off in South America.