By Tony Attwood
- Just how stupid is it for a PL club to change its manager?
- Which clubs’ transfers are being hauled in because of PSR rules this summer?
According to Statista.com five of the ten football clubs generating the most revenue in the world, are in England. They are in order of turnover, Manchester City, Manchester United, Arsenal, Liverpool, Tottenham, and Chelsea.
The non-English clubs that are above Arsenal in terms of revenue are Real Madrid, PSG, Bayern Munich, and Barcelona. The list shows Arsenal’s turnover at 716.5m euros. Manchester City has a turnover of 837.8m euros. Tottenham Hots are on 615m euros.
The only other PL teams in the top 20 of clubs by turnover are Newcastle United (15th), West Ham United (17th) and Aston Villa (18th). However, they are some way off the turnover of the big clubs – Arsenal for example hav ea turnover that is more than double of each of those three. Also interesting is the fact that Arsenal’s turnover is 15% higher than Tottenham, despite Tottenham’s ground being larger and having the benefit of being built more recently with all the latest gizmos. It appears that more than anything what fans like is being higher up the league.
Which is of course why Manchester United are in such dire straits. They have a very large stadium (the capacity of Old Trafford is over 74,000) but managed to end up 15th in the League last season, with a financial report showing that they were guilty of years and years of overspending.
Since winning the league in 2013 they have won five of the cups (excluding the community shield) and yet they are still in dire financial straits. Although of course we are so used to hearing about club debts that this hardly seems to get a mention in the media any more.
Now the key fact about debt is that it is only ok, if the debtor can pay the repayments and interest each month, and still continue doing what the debtor wants to do. But when those to whom the money is owed feel that things are getting a bit dodgy then they start activating clauses demanding some extra repayments, and that can lead to all sorts of difficulty.
Barcelona of course are the total basket cases in terms of debt with an estimated €1.35 billion – but what makes their situation so bad is that they have sold a lot of their future broadcasting income in order to pay past debts, which doesn’t sound that clever to me, but I am sure they know what they are doing. (Actually, I am not, but then I am not an accountant)
After Barce we have Juventus with a debt of around €900m, followed by, well, wouldn’t you know it, Tottenham Hots. Their debt was last reported at €826m. ManU looks tiny in comparison at €547m but there we have to be careful because some commentators estimate the debt at closer to €1 billion. Other bonkers cases are Inter Milan on €702 million and Atletico Madrid on €804 million.
And now part of the bonkersness of football at the moment is some clubs are loaning out star players to get them off the payroll, but are still paying part of the player’s salary!
The problem with carrying all this debt, of course, is that it has to be repaid sometime – but (as we have been repeatedly showing) buying players, just like getting a new manager, is absolutely no guarantee of taking a club up the league and thus bringing in more cash. In fact, most of the time it means the opposite. But so crazed are the managements of many of these clubs that they go on buying more and more players, while at the same time getting deeper and deeper in debt.
Then, as happens in the majority of cases (not all, but the majority) the club doesn’t charge up the league and so further debt is incurred by buying in more and more players.
The problem now however is twofold. Most clubs are in debt and are running out of ways to pay each other, while at the same time, they have also pretty much exhausted every new way of funding the clubs. Of course, they keep selling more and more rights to TV (interviewing players who have just been substituted is one of the latest wheezes, alongside showing ever more games) but those debts are not going to be repaid.
Now the people owed money don’t like to send in the bailiffs for two reasons. One is it only results in a small percentage of the debt being recovered, and the other is that it tends to lead to boycotts of their goods and services. So it all rumbles on, but we are getting very close to the moment where one of the big clubs is going to default. Sheffield Wednesday are just about there, but may yet creep out of trouble. But it won’t be long before another club folds, and that will start a knock-on effect.
