Unprofessional Foul


June 2, 2009

A Billion Here, And Billion There And Pretty Soon You’re Talking Real Money

The 20 EPL clubs are running massive debt. Yeah, tell us something we don’t know.

Okay, the total debt is estimated at £3.1B.

The accounts for the clubs, mostly documenting the year to May, June or July 2008, show that the FA chairman, Lord Triesman, significantly underestimated football’s indebtedness when he cautioned last October that debts in the sport as a whole, including the Football League and the FA itself, were at £3bn.

Two things: A) So those numbers are at least a year old, meaning they pre-date the evaporation of the global pool of money. B) The total number doesn’t really offer an insight into any given club’s ability to service its debt.

The really impressive part of this is the total debt owned by the Big 4 of United (£699), Chelsea (£700), Arsenal (£416), and Liverpool (£280). That’s £2.096B or 67.6% of the cumulative league debt.

Holy f**k.

A couple of notes. First, Chelsea’s debt is quasi-fictitious. It’s mostly an unscheduled, interest-free loan that owner Roman Abramovich made to the club. He could just forgive it and Chelsea would be almost debt free. The debt stays on the books because if he ever sells the club, Abramovich wants that money back (there’s a provision that if the club is sold, that money is due to him in something like 30 or 90 days). In fact in the face of pressure from the league, Abramovich already converted some of the debt to additional shares in the club (which we once postulated it just meant he diluted the per-share value of his holding in the club).

Arsenal’s debt seems pretty alarming for a club that is thought to operate on the cheap. Most of that is a result of the financing for the construction of the Emirates. The good news is that the new stadium gives the club fantastic cash flows to service that debt. The bad news is that the Highbury development isn’t selling units as anticipated with the housing downturn.

The other thing that’s worth mentioning (and sorry that I can’t source this, but I do remember coming across this someplace) is that an official with the club had noted there is a firewall between the Highbury development and the club. So, there is likely a completely separate entity like the Highbury Flats Development Corp or something that isn’t linked to the club in any way. So if the development goes belly up, it doesn’t mean the club operations take a hit and they have to sell off players because condos are sitting empty.

As for United, man it’d be nice to get better visibility as to what their situation is vis a vis the Glazers. For a hint at what might be going on, its worth taking a peek at the Tampa Bay Buccaneers, the Glazers other pro sports holding. The Bucs let go of a high-priced coach and replaced him with a cheaper unknown (seriously, I have no idea who the current coach in Tampa is without having to go look it up), they cut several higher priced veterans, and they didn’t make any splashy free agent signings. Basically, they are cutting costs. In fact, if you look here you’ll see that the Bucs have the most amount of room against the NFL’s salary cap—$46M*—essentially meaning they are spending less on players than anyone else in the league.

Normally teams try to free up cap space to go sign free agents. But, as was noted, the Bucs really haven’t brought in anyone of note. They are simply not spending money. And they wouldn’t be doing that if they were awash in cash. Just saying.

[* Actually, that number depends where you look. One source had it at only $41M, but this page here which is on the NFL’s official website has the cap-space number at $61M, which would mean an additional free $15M for the Glazers to spend elsewhere.]

[And there’s also this little tidbit from the Pewter Report which indicates the Bucs have moved training camp back to Tampa from Orlando/Disney to save money. Also of note, the Bucs even canceled their Christmas party and have laid off “a large number of employees.”]

Cialis Generic is possible to speak by phone with our consultants very much and very long. They know much and to discuss with them various subjects very pleasantly but you have to read many books. They help to develop the head and a lexicon. Tadalafil generic in various institutions it is possible to solve riddles for which give a lot of food and drinks. The frozen words won’t take off from your image as you will be in other city. Having a rest and sleeping.

About the Author

Precious Roy