Whelan Warns Of Looming Financial Disaster
Dave Whelan, the owner and chairman of Wigan Athletic has today been discussing his feelings that a Premiership club going bankrupt is only a matter of time due to the level of debts certain clubs are carrying. Whilst I think he may be overcooking the situation a little but if I’m honest, i’m surprised it’s not happened yet, or we’ve not seen at least one club go into administration so far.
It’s not so far away from the truth though when you look at the bigger picture of clubs that have played Premiership football since the league was created in 1992. Of the 42 clubs (Has it really been that many??) that have played at least one season in the Premiership, at least 17 of them have had major financial problems once they were relegated, with Leeds United being the most well known of the clubs to hit the skids. Add to that Barnsley, Bradford City, Swindon Town, Crystal Palace and Leicester City to name 5 that have gone into administration after leaving the Premiership, saddled by large wage bills and unsuccessful attempts to gain promotion within two seasons of dropping into the Championship.
One former Premiership club of course doesn’t even exist anymore in their original form, Wimbledon, but the phoenix has risen from the ashes and AFC Wimbledon are currently sitting on top of the Conference Division One South, 5 steps below the Premiership. They can’t return to the Football League quick enough for me, the other lot in Britains dullest city don’t count.
Yet, could a side really go bust whilst still in the top flight? Whelan’s discussions also pointed to his own Wigan Athletic, who he stated now had debts of £15 million and he hoped to have them debt free within 18 months. As he pointed out though, he does need higher crowds at the JJB Stadium to get to that target. Perhaps renaming the ground The DW Stadium from next season, as Wigan are doing, will attract more people in??
Of the Big 4, Only Arsenal probably have the lowest amount of debt in comparison but it’s still a staggering £300 million,but the big four have massive revenue streams that can allow them to swallow enormous debts based in the loans the owners have used to purchase the clubs or fund massive spending sprees. In Arsenal’s case, the debt they incurred was used to build the Emirates Stadium, which has seen their match day revenue jump from around £35 million a season to a whopping £179 million.
The solvent clubs are obviously led by Manchester City, Aston Villa and Tottenham. The only thing Mike Ashley seemed to do right at Newcastle United was clear their £110 million debt when he took over. Everton, Stoke City, Wigan, Bolton and West Bromich cut their cloth according to their means and carry small amounts of manageable debt. Everyone else would seem to be playing with fire, relegation a sure fire route to administration. Fulham apparently owe their owner Mohammed Al Fayed £165 million, Steve Gibson has underwritten nearly £70 million at Middlesbrough, West Ham will await the Icelandic courts decision on owner Bjorgolfur Gudmundsson’s ability to repay his debts in June.
In 17 seasons, we’ve only witnessed one club having a fire sale, as Leeds United desperately tried to keep the wolves from the door, but lets not forget before Abramovich arrived, Chelsea were in severe financial difficulty, finances so tight they could only afford to sign one player on a Bosman transfer in Ken Bates’ final season. Whatever happened to Enrique De Lucas? Chelsea were very close to asset stripping before the takeover in the summer of 2003.
So, as Whelan refers to, is it only a matter of time before someone actually hits the wall? Let’s hope not, but I fear he may be right sooner rather than later and we see the issues that blight clubs relegated to the Championship and cannot return within two seasons finally reach the Premiership.