Football is teetering on the edge of a financial disaster: here’s why and how


By Bulldog Drummond

We are used to clubs having debts.  For example in their 2020 annual meeting, Real Madrid revealed that they had aggregated a debt of €901 million.  Not to be outdone Barcelona’s vice-president, revealed that the club’s provisional adjusted debt now stands at over €1bn even after they sold their TV rights for years to come.

Uefa has reported that the total debts of European football clubs growing by €1.25 billion (that is 22%) in a year.  Europe’s Top Five leagues have liabilties of over €10 billion

As for England QPR owe €279m which is more than AC Milan.  CSKA Moscow owe €224m.  Good luck in trying to get any of that back.  

But the real problem isn’t the money owed, it is that so much of it is owed to other clubs, as well as owners and (less and less often) banks.  That means the next club suddenly runs out of money.  And it owes money to others clubs and can’t pay.  It’s a pack of cards.

That this hasn’t happened so far is largely because there have been rich people who like the prestige of owning clubs: it’s the rich man’s club.  But now on the scene we have Saudi Arabia which has a lot more money than any club and is building its own clubs.  That is pushing the price of players up ever higher.  And there is Manchester City who managed to accumulate enough money to buy themselves a team that could win everything.

Manchester City has the money to pay its debts – which are of course enormous, being part payments for players bought in recent years.   But supposing Manchester City is found guilty of breaches of regulations and stripped of its titles, what then.  Will the club happily accept a fine and points deduction, and continue to pay out the money it owes.  Or will it form its own rebel World Series?

The problem is there is a history of clever clever ideas for keeping finances running which eventually run out of steam.  In England, for example, in recent years there has been a frenzy of selling off businesses that the state own, to private companies.   This has helped keep the state afloat until now – but the problem is the state has run out of organisations to privatise and so there is no more free money.

Take the companies that run the nation’s water supply.  They were all taken over with no debt, and now some 30 years later, they are overwhelmed in debt and are struggling to carry out their duties as water suppliers.  There is no easy solution: the state has long since spent all the money it got from the sales, and at least two water companies are teetering on the brink.

A similar thing happens in football clubs.  In the good times the owners benefit from the good name of the club and borrow vast amounts of money.  Then when the money runs out…  Well, no problem if there are always more and more companies around wanting to buy at a price that pays off the debts.  But if no one wants to buy…

After the sale of Newcastle to Saudi Arabia, it became just the second club with no debts (Aston Villa was the other).  But the other 18 clubs all have debts.  Here are the most indebted clubs according to Fanbanter

1) Chelsea – £1.3bn – although in effect this is owed to Abramovich who can’t call it in because of the ban on dealing with Russians.  But if the war ended…

2) Tottenham – According to Fanbanter Tottenham owe £140million in transfer debt, £96million in tax debt,  and £111million in other creditors equalling a total of £1.177bn when the stadium is added in.  They reckon that is now down to a mere £706m but I’m not quite sure how that is right.

3) Manchester United – £530.2m is owing to others, which is pretty large for a club that makes a profit.

4) Manchester City – £473m which is curious given that they are funded by Sheikh Mansour and so have all the money they could want.  But then there is nothing to stop him from borrowing money and giving the debt to Manchester City, and indeed it is a good insurance policy.  Basically, if that is what is going on (and of course I can’t prove it) it goes: if you don’t stop the legal cases against us we will stop paying our debts and move the club to another country.

5) Everton – £409m.  OK they have a mega rich owner, but if he gets fed up and walks away he isn’t going to be liable for the debts.  Everton FC plc is.

6) Brighton – £306m.  That is all owed to the owner, who could try and sell the club to a very rich overseas person, although he’s a fan so probably won’t.

7) Liverpool.  £268m.   Said to have been used for site development.

8) Leicester City – £219m.   And if I was one of the people to whom the money is owed, I’d not be sleeping too well at night.  To survive it is utterly dependent on King Power and the banks.  And banks can be a bit fidgety if they think their loans are not secure and King Power took a huge hit in the covid era.

9) Arsenal – £218m.  The Kroenke’s were known as people who make money from their sport ventures, not build up debts.  My guess is that the record-breaking run in the Champions League and Wenger’s seven FA Cup wins were taken as the baseline.  Six years out of the Champions League have left their mark, and the owners are now doing everything possible to go back to the solidity of the Wenger era.  Champions League each year, and some trophies.

10 Wolverhampton Wanderers. – £152m.  They were making money but then commercial and broadcasting income both declined and debts rose and rose.  Guo Guangchang, Wang Qunbin and Liang Xinjun, own the majority of the club.  Who knows what their plans are.

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