Premier League Debt Revealed

[Chazza]

Report lifts lid on PL debt
Uefa releases figures from investigation into football's finances

The total debt of Premier League clubs is greater than the rest of Europe's top sides put together, report Uefa.

The English top-flight does, however, account for almost half of club assets across the continent.

Uefa has released these figures in a new report carried out into the state of football's finances.

It shows that the total debt of Premier League clubs stands at €3.8billion (£3.4billion), which equates to 56 per cent of the total across Europe.

Premier League assets stand at €4.3billion (£3.8billion), accounting for a 48 per cent share of the assets among all European clubs.

What is worrying for English clubs is that the total value of the debt is so close to the value of the assets.
Takeovers

In Spain, which has the next highest debt of £858million, the assets are worth £2.5billion, three times the value of the debts.

In Italy, the debt is £442million and the assets worth £1.3billion.

Uefa's report, the European Club Footballing Landscape, has looked at the 2007-08 accounts from all 732 clubs licensed by football's European governing body.

The 80-page document's analysis of the Premier League reports that many clubs have used their stadiums and grounds as collateral to borrow money.

The report accepts much of the debt is linked to the leveraged takeovers by the Glazer family at Manchester United and the Hicks/Gillett buy-out of Liverpool.

"Some of the long-term debt is linked to new stadia such as Arsenal's, and in other cases already-built assets provide security for commercial lenders," says the report, adding that the leveraged buy-outs have been "so far acting principally as a burden rather than to support investment or spending".

The report did not include the debts of Portsmouth and West Ham because they had not been granted Uefa licences that year due to their financial problems.

The report comes after it was revealed that Manchester United's £716million debt is greater than the entire cumulative sum owed by all 36 clubs in the top two divisions in Germany.

The German Football League (DFL) clubs' debts total £544million.

Uefa president Michel Platini is pushing for a system where clubs in the UEFA Champions League and Europa League will only be allowed to spend what they earn.

Platini said recently: "The Financial Fair Play concept is very important for the well-being of clubs.

"We believe that for clubs to survive they can't spend more than they earn and the executive committee has agreed to introduce regulations to reach this aim."

http://www.skysports.com/story/0,195...977210,00.html

So with the amounts owed by Pompey and West Ham thats gotta be another 100mil ontop!

[Chrono]

"We believe that for clubs to survive they can't spend more than they earn and the executive committee has agreed to introduce regulations to reach this aim."

That would actually be really interesting and would put a real impetus on Academies and local players whilst stopping the likes of Chelsea and Man City from dominating with their vast wealth. I actually really like this idea.

[dom9]

That would actually be really interesting and would put a real impetus on Academies and local players whilst stopping the likes of Chelsea and Man City from dominating with their vast wealth. I actually really like this idea.

All businesses have to borrow money at some stage. If you only spend what you earn, you can not progress. If you can borrow and are able to comfortably repay the debt, that should also be fine.

Imagine if mortgages were mde illegal? That would be isnane.

Sure a lot of clubs have spent way beyond their means, but policing this in the real world is practically impossible.

[Darkon]

All businesses have to borrow money at some stage. If you only spend what you earn, you can not progress. If you can borrow and are able to comfortably repay the debt, that should also be fine.

Imagine if mortgages were mde illegal? That would be isnane.

Sure a lot of clubs have spent way beyond their means, but policing this in the real world is practically impossible.

I don't think he is advocating that loans should be illegal in football just that you can't spend more than you earn including repayment of loans.

Basically to keep clubs from loaning more than they can repay or the likes of chelsea and man city to spend far more than they earn because they have a sugar daddy these years.

[Darkon]

Premier League clubs borrowing from money lender

By Harry Harris, Football Correspondent

March 1, 2010

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A private individual has loaned three Premier League clubs "tens of millions" as some of the elite have already sold TV revenues and season tickets for forthcoming seasons.

David Sullivan

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David Sullivan believes the debt situation is not so bad at the top of the table

Top-flight clubs are turning to a money lender to buy players, pay off debts or simply survive and stave off the kind of predicament that has hit Portsmouth.

Peter Storrie revealed to Soccernet that one of the biggest problems was that the banks called in their £40 million loans, and in the recession clubs have turned to this unnamed money lender of some considerable wealth.

West Ham co-owner David Sullivan told Soccernet: "A private individual has loaned three Premier League clubs tens of millions. I am not going to name him or say exactly how much he has loaned the clubs, but it is a considerable amount.

"A very rich private individual is making these loans based on the clubs' agreed payments from TV income. When we came to West Ham, we found that the club had sold its season tickets for two years in advance.

"We are also aware that financial institutions are buying up football debt at big discounts. One such financial institution bought some of the Portsmouth debt, but they are going to have to wait for their money now, if they ever get it all back."

Sullivan, though, does not necessary feel that the Premier League is in the kind of perilous state that has been suggested following Portsmouth's move into administration.

Much is made of the enormous debt at the top end of the Premier League, but Sullivan said: "Arsenal have just posted fantastic figures. Manchester United are the club most quoted as having the biggest debt, but big business does run on debt - look at Marks & Spencer.

"Chelsea and Manchester City can be taken out of the equation because their owners are running those clubs as hobbies.

"The real pressure is down the bottom, where the lesser clubs fear the financial effects of relegation, when whole income flows are no longer guaranteed if they go down. It creates sheer panic.

"That is why I would like to see a full parachute payment for the first season and half for the following two seasons. I have not advocated it, but it makes more sense to me. The fear factor at the bottom has to be addressed, because it is down there that clubs are pushing the financial panic button, and that leaves them wide open to doing things they might not wish to do."

From ESPN

The revelations and stories going around through the last year and portsmouth situation really shows how fragile the PL economy is right now. I know it's seen with some angry "the french, sour grapes etc. etc." but I think that UEFA are on to something in limiting the possible spending of clubs compared to their income. But interesting to hear that the main worry is at the bottom of the table right now, and almost sounds like Portsmouth is hardly the odd one out right now.

The financial situation in the PL is def. worrying and could it be the next Italy to implode on itself?