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The Beginning Of The End For Debt Ridden Clubs?


With the prediction by Lord Triesman, head of the Football Association, that the current global economic crisis could spell a ‘terrible danger’ to clubs with spiralling debt, meaning could we actually see a Premier League club go to the wall? According to Triesman the Premier League is currently in £3bn worth of debt so the possibility is looming ever larger.Triesman’s prediction comes on the same day when West Ham’s chairman and major shareholder, Bjorgolfur Gudmundsson, saw his Icelandic bank Lanksbanki nationalised and he was sacked from the board.

Despite reassurances that Gudmundsson’s assets are spread out and that this won’t effect West Ham you do have to start to wonder whether even the foreign investor can save the over spending Premier League club. Lord Triesman’s predicts that Manchester United, Liverpool and Chelsea account for nearly a third of the £3bn worth of debt so are even the big clubs safe from financial ruin?

Well you would have to say Chelsea and Manchester United will be fine what ever the global economy throws at football but Liverpool seem to be being hit hard. Liverpool Chief Executive Rick Parry has tried to play down claims that the credit crunch has meant the Reds won’t be able to build their new stadium on Stanley Park for perhaps a year.

The club are riddled with debt after the takeover by George Gillett and Tom Hicks but they are not the only ones. A while back there was a story that Michele Platini only wanted clubs who were debt free to compete in the Champions League and Uefa Cup. It turned out that only three clubs, under Platini’s rule, would have been eligible to compete. According to one report those clubs were Stoke City, Newcastle and West Ham, although I feel that may have changed now with the Toon’s ownership dilemma and the Hammers looking like they might have to fork out up to £50million in compensation to Sheffield United.

So could we be on the verge of seeing a Premier League club go to the wall? Well it’s rare to see a club go out of business in any level of football so you would have to think not but perhaps it might be the end of large transfers. That is apart from Manchester City, whose owners have more money than sense and if things carry on as they are in the economic world City could be a good bet to win the Premier League a few years down the line. However looking at the story of West Ham’s foreign owner in financial trouble you even have to wonder if outside investors have enough to save the Premier League.

There is a real possibility that we will have big clubs like Leeds United be financial ruined by over spending and end up being stuck in the lower tiers of English football. This is a very pessimistic outlook but things are very worrying for everyone and it looks as though football will not escape unscathed.

The Premier League can not continue in the same way it has been going on for the last few years and the effects of the credit crunch can already be seen in the stands where there are a growing numbers of empty seats. The Premier League’s bubble is going to burst, it just seems like most club are not ready for it and it will have disastrous consequences for owners and fans alike.

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  1. AtlantaPompey

    October 8, 2008 at 8:33 am

    I don't see any clubs folding or collapsing like Leeds Utd or Wimbledon, but I do see a major change in the way business is transacted. I would be willing to bet that this January's transfer window will see almost no major transactions due to the financial situation.

    The German Bundesliga requires every club to submit budgets, business models, and expense reports every season and the club must prove it can satisfactorily stick to the budget. You never hear about debts with those clubs. Sure, that league is probably not the best in the world from a competitive standpoint, but they have outstanding stadium, a great fanbase, and sufficient revenue to cover their expenses. Isn't that what businesses are supposed to do? I could see them being the next 'big' league in Europe once the financial situation forces other leagues such as the EPL to step back and reassess their business model.

  2. Patrick

    October 7, 2008 at 8:40 pm

    Lets face it. The people that own the clubs, who run the league are incompetent . Corrupt. Have very little understanding of who actually supports the league and the League leaders don't get international finance.

    That said. The entire league is in jeopardy. not just West Ham. or Man U or anyone. but even Man City… but then again… pretty much every thing is in jeopardy right now.

    I personally think the entire world will change in the next 6 months economically and who knows how the EPL will be effected. but they will still kick off every Saturday, and we'll still sing.

  3. Specter

    October 7, 2008 at 8:33 pm

    Yes, Chelsea is in debt – but we are really at no risk of going bust. Roman Abramovich owns Chelsea Football Club. A bank owns Manchester United and Liverpool. With so many banks in major debt, if these banks are nationalized they could very easily call up these debts at once. That could very well spell the end of these clubs unless another investor was to come in and take up these huge debts. I think Liverpool are at more risk than Manchester United, but it could happen to them as well.

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