Premier League - English clubs £3bn in red

Eurosport - Wed, 08 Oct 08:50:00 2008

English football has amassed debts of around £3 billion at all levels of the game and a top club could fold in the current financial climate, according to FA chairman Lord Triesman.

2008-2009 Liverpool Benitez is the business - 0

Triesman told a conference of football business leaders that the figure was based on information supplied by sources in the City of London and was the most reliable and up-to-date estimate available.

"The best estimate I could get in the City yesterday was that debts in English football as a whole have probably edged to the 3,000 million pounds mark," he said in the opening keynote speech at the two-day conference at Chelsea's Stamford Bridge ground.

"There is one thing certain about debt and that is that it has to be repaid, alternatively it has to be refinanced.

"The debt mountain as we now know is owned around the world and therefore part of the value of the club is owned around the world, either by financial institutions some of which are in terrible health, sometimes by very wealthy owners who are not bound to stay in the club and sometimes by not very wealthy owners who are also not bound to stay with their club.

"As we all know today and far too painfully, financial institutions become ever more risk averse."

Triesman said nearly a third of the overall debt - £950m - was owed by England's top four clubs - Manchester United, Liverpool, Chelsea and Arsenal - and that on average the wage bills were climbing by 12 percent a year.

The FA itself had accrued 400 million pounds of debt following the construction of the new Wembley Stadium which opened last year - a figure included in his overall estimate.

Asked whether he could guarantee that a top English club would not succumb to debt and fold during the global financial crisis, Triesman told a news conference: "I don't know - it could.

"If somebody had said to me a month ago did I have a genuine fear that Lehman Brothers would go bust I'd say no I didn't.

"What I know is we are in very much more volatile position in which debt is not only a problem in terms of its volume, it's a problem because those who own the debt are themselves now often in serious problems. Your fate isn't in your own hands."

In a later address to delegates, Richard Scudamore, the chief executive of the Premier League, said he did not think a leading club would fold.

"This is top of the clubs' agendas and in my view they are managing it responsibly. Is there a financial danger to any club? There is always a financial danger and there has been since clubs first came into existence over 100 years ago, but the 92 professional clubs in England today are very similar to the 92 clubs of yesteryear.

"They are brands that persevere and survive. I don't agree that debt is bad, it is inevitable and to a degree it is healthy as long as it is linked responsibly to your income."

Triesman would not be drawn on the reported troubles of West Ham United, whose owner is Icelandic banker Bjorgolfur Gudmundsson. His family are major shareholders in the bank Landsbanki which was put into receivership on Tuesday.

Triesman also said the ownership of clubs was no longer as transparent as it should be with owners moving the debt on through the financial markets.

"The owners break the debt up as a matter of policy into small packages. They mix it with other debts, some of it fine some of it toxic, and sell it on," Triesman told the conference.

"I believe this poses us with a tangible danger, not only is debt at high risk levels, but also in a period where transparency lies in an unmarked grave.

"There is no point in thinking that this affects everybody in the world except football.

"Indeed, further down the pyramid of football more and more clubs are in trouble and a number of owners leave abruptly and either seek repayment of debt owing to them as directors or they can consider selling the ground."

Triesman, a former foreign office minister, said the test for determining who could own an English soccer club, known as the "Fit and Proper Persons' Test", should be more rigorous.

"We can't have a test where someone like Robert Mugabe can own a club because he has not been convicted of anything and someone like Nelson Mandela couldn't," he said.

Reuters

Comment 43 - 62 of 82

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  1. money do not disappear like that , when talk about it loseing millions its all money only on paper or electronically if you like its what its perceived to be all real wealth is determined by gold reserves and mineral wealth ie oil and gas

    From liam, on Tue 7 Oct 11:30PM

  2. Bentley, Sidwell, Ashley Cole, Jermaine Pennant, all products of Arsenal youth. Frank Lampard was actually at Arsenal BEFORE signing for West Ham...don't keep giving it that Wenger does not invest in youth. And Jack WILSHERE, (please note post 36) has had numerous games for Arsenal this season, but at 16, still needs nurturing and guidance. He will be a big name in the future of the English game, as I am sure will Randall, Gibbs, and a host of other talent Arsenal have coming through the ranks.

    From kpb, on Tue 7 Oct 11:26PM

  3. first team to play no english players was liverpool back in the 80`s All Paddies jocks and taffs

    From Steve, on Tue 7 Oct 11:07PM

  4. barcelona couldnt secure fabregas' services at sixteen, as spanish clubs arent allowed to sign players on pro contract till they are 18. A quick one for jimmy lovin it, defoe was actually a product of charlton, and redknapp stole him at a young age

    From Chris H, on Tue 7 Oct 10:43PM

  5. Comment to Jimmys lovin it (no 53)

    What is it you are lovin? because it clearly is not football. otherwise you would know that Upson was a product of Lutons youth team, and was signed by Arsenal for £2mill. Next you will be telling us Walcott can be classed as a product of the Arsenal youth team, oh wait.......

    And Beckham wasn't 'stolen' off Spurs, he signed for us when he was about 14, he only had trials of sorts with Spurs. So he DOES count as a Man Utd youth team product.

    So, lets re-@#$% your numbers:-
    Arsenal - 1
    United - 2

    i dont blame you though, it is very smoggy up there!

    From syco291, on Tue 7 Oct 10:32PM

  6. Fabregas was at Barcelona, and if they thought he was that good at the time they would have secured his services at 16. Trying to say that Wenger only takes talent once the hard work is done is nonsense. He has taken unknown players and helped them become superstars.....As for only having two english youngsters in the Arsenal squad, sorry but you are wrong. Wenger may have been guilty in the past of not having english in the

    From kpb, on Tue 7 Oct 10:25PM

  7. Might I add, Aston Villa is one of the few clubs in the black, one thing we have to be grateful to Doug Ellis for.

    From Mike S, on Tue 7 Oct 10:09PM

  8. Re: From Jimmys Lovin It
    Jimmy that must explain why England struggle, and perhaps are potential no hoperss in the near future tornaments to come.

    From Skittles, on Tue 7 Oct 9:18PM

  9. looks like my beloved hammers are f**ked then...............

    From joe public with a mind !, on Tue 7 Oct 9:02PM

  10. Lots of debate over arsenal's youth policy. I'll have a stab at which youth policy the last england squad came from. Sorry if I get some wrong

    David James - Watford?
    Rio Ferdinand - West Ham
    Wes Brown - Man Utd
    Ashley Cole - Arsenal
    John Terry - Chelsea
    Frank Lampard - West Ham
    Gareth Barry - Villa
    Emile Heskey - Leicester??
    Wayne Rooney - Everton
    Theo Walcott - Southampton/Arsenal
    Joe Cole - West Ham
    Substitutes
    Paul Robinson - Leeds
    Matthew Upson - Arsenal
    Glen Johnson - West Ham
    David Beckham - Spurs? (Theived by Man Utd I seem to recall)
    Jermaine Jenas - Forrest
    Stewart Downing - Boro
    Jermain Defoe - West Ham
    David Bentley - Arsenal

    West Ham - 5
    Arsenal - 4 (counting Walcott)
    Man Utd - 2 (counting Beckham)
    Chelsea - 1

    To be fair Gerrard would've been 1 for Liverpool, Owen a second.

    In Summary - Man Utd fans shush

    Boro4ever

    From Jimmys Lovin It, on Tue 7 Oct 8:59PM

  11. Two points comment 42: (1) you avoided the point i tried to emphasise (i.e. the english product in Arsenal), (2) good work to realise he was free, but maybe question your own statement of Barca 'releasing' him. Why would they want to after all, he was named player of the tournament and top goalscorer of the tournament in the U17 world cup. Good work to Wenger though, 'spotting the potential' in a midfielder and signing him before Barca and 11 days after he gets these awards. Maybe Platini has some good points to make after all?

    From Andrew, on Tue 7 Oct 8:38PM

  12. Its all going to implode,English football sold its soul long ago

    From the truth, on Tue 7 Oct 8:36PM

  13. people live too much on rice to be confused about the economical situation in china

    From rosshoulihan83, on Tue 7 Oct 8:25PM

  14. Its time that all transfers were made cash on the nail.
    NO £5 down and the rest sometime in the future

    CASH up front only

    and agents (leechs all of them ) to be paid by the player that employs them neither of the clubs to pay anything

    From d.nelson2@..., on Tue 7 Oct 8:17PM

  15. Comment number ten. one word..

    @#$%!

    From devilwillrot, on Tue 7 Oct 8:15PM

  16. Sorry poison pill, but you're a bit light on facts......Abramovich didn't buy Chelsea purely for the football club, but for the hotel site and numerous other business opportunities that surround it that he's invested heavily in, so i don't suppose he's ready to switch off his "xbox" just yet, or in the forseeable future....FYI, he looked at plenty of other clubs before buying Chelsea, but none of them had the surrounding opportunity for investment and subsequent profit, he knew that the football club would operate at a loss when he bought it, the man's anything but stupid.....More to the point, Chelsea's "internal debt" (i.e, money owed to Abramovich) currently stands at £230mill, which when put up against his (constantly growing) net worth of almost £13BILLION, would be about the same as you losing a fiver in the street..... Therefore i don't think he's overly bothered about Chelsea's "football debt", do you?

    From melaniepoynton@..., on Tue 7 Oct 8:07PM

  17. ///////////

    From r.j.hall@..., on Tue 7 Oct 7:55PM

  18. it does not matter what a ower thinks his club is worth in this tight cash climate try getting it sold,newcastles price went from 400m to 280m and its still on the market,

    From allan, on Tue 7 Oct 7:44PM

  19. I meant comment 36! They swapped them round!

    From goonerstuff, on Tue 7 Oct 7:40PM

  20. Selling clubs to any old bilionaire is surely not the way forward. The English Premier League.... with foreign owners, foreign players and foreign managers. I'm not saying it should be British through and through, of course not, but there has to be a limit.

    From marco.silvestri@..., on Tue 7 Oct 7:39PM
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