Soccer Club Debts

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  • Cod
    MVP
    • May 2007
    • 2717

    #1

    Soccer Club Debts

    Can someone explain to me how so many of the world's top-flight clubs are riddle w/ ridiculous amounts of debt?

    Let's take ManU for example. The Glazer Family purchased the club and loaded nearly $950m (USD) on the club. Today, the club is still ~$600m (USD) in debt. However, according to Forbes, ManU is the world's most valuable sports team at $1.9b (USD). So I have to ask, WTF?!? How does an investment group purchase a club and load it w/ all the debt from purchasing? Who "owns" the debt and how is it paid off?

    On a similar note, are there any top-flight (any country) clubs that aren't in debt? Or is this status quo?

    Also, I realize this isn't just an EPL problem...PSG is up to its eyeballs in debt as well.
  • Brahvocado
    MVP
    • Oct 2012
    • 7480

    #2
    Re: Soccer Club Debts

    Businesses that are profitable usually operate with a certain amount of debt.

    United’s profits are so ridiculous they could pay off their debt pretty much whenever they felt like it. For example, their debt is 600m, and JUST their kit deal alone is worth close to 800.

    Debt in business is only bad if your business doesn’t make enough money.

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    • Cod
      MVP
      • May 2007
      • 2717

      #3
      Re: Soccer Club Debts

      Thanks for the reply. Didn't UEFA pass financial fair play rules to stop this sort of thing though? I remember a few years back (2014 maybe), Manchester City was forced to reduce their roster by 4 or 5 roster spots because of the regulations. Are the rules still around?

      Comment

      • ImTellinTim
        YNWA
        • Sep 2006
        • 33028

        #4
        Re: Soccer Club Debts

        Originally posted by Cod
        Thanks for the reply. Didn't UEFA pass financial fair play rules to stop this sort of thing though? I remember a few years back (2014 maybe), Manchester City was forced to reduce their roster by 4 or 5 roster spots because of the regulations. Are the rules still around?
        They are still around and are largely a joke because clubs will use whatever loopholes they can find, then they will be fined instead of actually severly punished. UEFA doesn't actually want to ban cash cows from the competitions. They just want to rap them on the nose with a newspaper and say "Bad" to keep up appearances. At least that's how it's been so far.

        Comment

        • Brahvocado
          MVP
          • Oct 2012
          • 7480

          #5
          Re: Soccer Club Debts

          Originally posted by Cod
          Thanks for the reply. Didn't UEFA pass financial fair play rules to stop this sort of thing though? I remember a few years back (2014 maybe), Manchester City was forced to reduce their roster by 4 or 5 roster spots because of the regulations. Are the rules still around?
          Think it was just 3 spots. Most FFP rules are designed to stop things like Portsmouth from happening, not prevent rich clubs from spending money.

          The main problem is that a lot of people think FFP exists to make things more fair, but it's largely just there to prevent clubs from getting themselves in trouble. The name itself is odd because it gives off an impression that it is designed to make things more fair, which isn't the case.

          A byproduct has also been that it prevents more clubs being taken over and brought up quickly the way Chelsea and City were. You can't just spend a bunch of money and make an 8-year plan to break even like we did.

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