This was the post I had in draft for most of last week, you snooze, you lose, eh?
Have you seen the debt some of (most of) the Premier League clubs are carrying? I know New York Addick believes it, and so do I. One of these big boys is going to go bankrupt sooner rather than later. The game is leveraged by television money, an arbitrary monthly outgoing that many families will be thinking twice about. Falling television receipts will only emphasise club's considerable levels of debt, and believe me when the banks have finished sorting themselves out that debt will not be looking pretty.
So called millionaires, billionaires even are no longer such. Before the entrance of camels on the horizon Charlton very prudently paid down short-term debt, ensuring that banks will ignore us when it comes to withdrawing credit, perhaps it might have forced us into administration? Other clubs lower down the food chain will not be so lucky. How many teams will end this season with a points deduction due to forced upon administration?As New York Addick points out
, many clubs and West Ham are sadly the greatest example are 'backed' by 'funny money' and not real cash. That funny money is not particularly funny anymore. Add in the potential fine due to the Tevez debacle and XL going tits up plus £142 of debt and the Hammers have big problems. However they have the potential, geography, fanbase and history to find a new suitor but do Fulham (£182m in debt) and Middlesbrough (£84.6m in the red) if their current sugar daddies decide to ditch their 'investments'?
Manchester United's debt is seven times that of Bermuda. Recent figures put United's debt at £764m and the Glazer's had to pay £81 million in interest alone last year. Even a dodgy referee is not going to let them get away with that. Chelsea can't even beat Man U in the debt league! They come a close 2nd with a whopping £736m, but then they have Abramovich, who after a bad few weeks at the office is down to his last few billion. Chelsea's debt nevertheless is underwritten by Abramovich at let me see, a slightly better interest rate than those elsewhere in the Premier League.
Liverpool and Manchester United, meanwhile, were taken over or partially bought by American businessmen using a private-equity type model, borrowing heavily to buy the clubs, and then loading them up with the debt. Liverpool's debt is said to be £350m, most of which was due to be refinanced in 2009. The old Kop might well be standing for a few years yet.
The chairman of the FA, Lord Triesman touched a sore nerve among England's top clubs last week
, and also I expect raised some unwelcome eyebrows in some of their banks. Some of the other Premier League club's debts are as follows:
Arsenal £318m, but nearly all tied up in the new stadium and those new flats. Oh.
Man City £103m, but soon to be wiped out by petrol dollars.
Newcastle United £69.7m, with the club on the market for £400m with Dennis Wise thrown in for nowt.
Aston Villa £63m but with a rich and seemingly well informed sugar daddy.
Bolton £43m with Eddie Davies looking to sell.
Portsmouth £41m with huge wage bills and an owner running short of money.
Sunderland £35m and big spenders.
A lot of doom and gloom but whatever happens to our beloved Addicks, at least Richard Murray and others have allowed us to walk down to the ground on a Saturday afternoon with our hopes and dreams. Others might not be so lucky.
For excellent up to date news on the football economy, check out The Political Economy of Football
. New York Addick of course can be read here