Just how much debt is football in; and what happens next for SuperLeague?

By Sir Hardly Anyone,

Curiously, for such huge questions as those posed in the headline, these are not questions that are being posed in the football media.  Maybe that’s because media editors think that football is too big an industry to fail, or that supporters aren’t really interested, or that the story has been around for so long and the threats of failure made so often, that it is all a bit of a fantasy.

But still football debts are spread across the whole industry, even if no one can agree just how big football’s cumulative debt is, and it is of interest because Super League, which was devised as a way of removing some of the debts, is also still lurking in the wings.  So maybe it is worth contemplating the debts a little further.

That there is a difficulty in knowing how much debt football has, is in part because there seems to be no standard regulation on how debt is accounted for with football clubs.  For example, does one include the money owed on stadium refurbishment and the cost of transfers in the same list of debts?  

Or in the case of Chelsea, is it reasonable for them to have separated out the money owed to Abramovich and reported it as a sort of non-debt on the grounds that he is not demanding (and indeed unable to demand) payment?  But supposing the West is so desperate for gas, a deal is done with Russia over Ukraine, and suddenly Abramovich’s debt is a live issue again, and he wants paying.  What then?

Quite simply for questions like that there are no answers. 

Here is the debt table taken from Football Transfers and from the invaluable twitter feed Swiss Ramble, and with some additional notes.  As you will see, no one is actually able to agree what the level of debt is, which is usually a very worrying sign.

Club Debt Note
Chelsea £1.7 billion Mostly owed to Abramovich.  Quoted as £174m if Abramovich simply walks away from his loan.
Tottenham Hots £1.1 billion Mostly owned on the new stadium and with planned repayment over years.  Quoted as £826m in some sources, £970m in others.
Barcelona £1 billion Being reduced by selling off future earnings.  Quoted as £1.3bn in some sources.   Quoted as low as £704m in other reports
Juventus £900 million Quoted as low as £611m in some places.
Real Madrid £789 million Stadium redevelopment costs.  Quoted as £662m in some reports
Manchester United £741 million Caused by bad transfers, poor results, and annual dividends paid to owners irrespective of profit or loss.  Quoted as £420m in some reports, £675m in others
Inter Milan £702 million Quoted as £543m in some reports
Milan £666m Swiss Ramble quoted this as low as £168m
Arsenal £625m Part of this comes from the purchase of Usmanov shares by Kroenke via the club.

In Arsenal’s case, Kroenke bought out Usmanov’s 30% share in 2018, and that valued the club at $2.3 billion.   Private ownership means that Mr. Kroenke’s financial decisions are now subject to very little scrutiny.

Of course the takeover meant that Arsenal avoided one particular issue given that Mr. Usmanov is a close associate of Vladimir Putin of Russia as is Roman A. Abramovich.

So what we have are billionaires owning some of the clubs which owe huge amounts of money.  Clubs can balance their books by taking into account the value of the stadium, although if there were a sudden crash in the value of football clubs, the value of the grounds (which have little possible use other than as football grounds) would be small.

To give a comparison in normal life, one might have bought an apartment 20 years ago for £100,000 and find that it is now listed as worth £500,000.  Which is fine, but one still needs somewhere to live.  And besides all the other apartments will have gone up in value as well.

Barcelona are probably in the worst mess of all, for they are reported to have £213 million debt owed to staff in delayed salaries.  That is where it really gets serious because if that is not paid, Barce can be refused the right to buy anyone else.   And this is where SuperLeague comes in, because SuperLeague, if it does go ahead, wiil write its own rules, not use those existing elsewhere.   SuperLeague is unlikely to have any rules that threaten Barcelona.

And as you may know by now, we are approaching the final legal round in the battle over Super League.  The three clubs that did not resign from Super League (Real Madrid, Barcelona, Juventus) have taken the matter to the highest court in Europe.  Whatever is decided in that case will be the end.

And the choices are stark.

If Uefa win, then SuperLeague is over.  Barcelona have nowhere to go, for they have not only sold assets that they hope to accrue in the future (such as their future broadcasting rights) but also spent all the money they got from that in one big splurge on new players for this season.  Their recovery plan is Super League.  Without it, they look sunk.  But there will be a huge knock-on effect as they start to default on the money they owe other clubs.

Meanwhile, Juventus had €216.7m of debt at December 2021, down from €369.1m a year prior. However, it does have €171.1m in cash offsetting this, leading to net debt of about €45.6m.  So saving SuperLeague is basically all about saving Barcelona.

But Juventus have a different problem, for after nine years in a row of winning the league, for the last two seasons they have come just fourth, which is not so clever.  They need Super League to bring them the money so that they can buy the players they need to get back to winning the Italian League year by year. (AC Milan and Inter have taken the top two places for the last two seasons).  Worse for the last three seasons Juventus have not made it beyond the round of 16 of the Champs League.

So if the court rules in favour of SuperLeague, Uefa is humiliated and probably sunk.   Even if the clubs like Arsenal that joined last time round don’t join this time, others will want to take advantage of the billions of pounds on offer, and those who stay out could find themselves disadvantaged.

If the court rules against Superleague then certainly Barcelona look to have a huge problem.   And that could send enormous financial ripples through European football.

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