Premier League debt: Its pretty bad.

By: Rob | February 24th, 2010

   

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We knew that the Premier League was sailing Icarus-like into the sun with regards to money, but we just kind of chuckled at UEFA and FIFA when they tried to warn us about it, assuming that they were just picking on us for some reason.

Well, that probably should change today as a UEFA report reveals that Premier League clubs have more debt that all the rest of Europe combined. 56% of European Club Debt belongs to Premier League Clubs, and even though they get more income than others, (Premier League clubs account for 48% of Europe’s assets as well), its still an oddly worrying sign – in Spain the assets are three times the amount of debt.

So..is Michel Platini’s idea that clubs should only be able to spend what they earn a good thing?

I still say that idea is pretty flawed – the richer clubs are going to stay richer because they can always spend more money. But something has to be looked at with this crazy amount of debt.

Perhaps Portsmouth’s horrible example will provide a lesson to some clubs, but indeed its not a day i’m particularly proud of the Premier League – even if it is these debts that have put it in the position its in, in terms of being one of the three biggest leagues in the world.

The money thing is a bit confusing for me, as you know, i have no idea about such things. But it can’t possibly be a good thing.

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Comments  

• Martin |  February 24th, 2010 at 11:09 am

  
  
  

  I think it’s not quite as bad as the media is making it out to be. Arsenal has a substantial amount of debt, but it’s “good” debt, since the money was borrowed not to sink into players, but to build a new state of the art stadium which provides the club with a lot more income. And then you have clubs like Chelsea and Manchester City — they have a lot of “debt” in terms of money owed to the owners, but functionally, that’s just money coming out of the owners’ pocket — there’s virtually no chance the club will ever actually have to pay that money back.

  Portsmouth is definitely a cautionary tale, and clubs like Manchester United and Liverpool are struggling to find a way to deal with their debts as well, but it’s not like this is an exclusively English phenomenon (see, for example, Valencia). And a lot of clubs in Italy and Spain get a substantial amount of government financial assistance, which tilts the playing field even further.

  I’m not a financial expert, but from where I’m sitting, I don’t really think the English clubs are all that much worse about outspending their means than their foreign counterparts.

  

• D. Ebt |  June 8th, 2010 at 11:14 am

  
  
  

  You have many clubs in the City who have a lot of debt in terms of money payable to the owners, but functionally, that’s just money coming out of the owners’ pocket.