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Football Finance


Norwich May Sell Ground To Deal With Debt

League 1 has four clubs who have descended recently from Premiership glory (Oldham were there much longer ago). Each of them has faced financial problems. After a regime of overspending, Leeds was eventually rescued but paid a penalty on the pitch. Southampton were rescued from administration at the last minute. Charlton have put together enough money to get through the season, but face a real threat of insolvency if they don't get promoted or find a new investor.

That Was The Decade That Was

With the noughties ending in the most serious recession in the global economy since the Second World War, there has inevitably been discussion of the impact on football. In many respects, football has turned out to be recession proof, both in terms of gates and television audiences. This is not so surprising when low inflation and falling interest rates mean that the incomes of those in work have not decreased and in some cases have increased in real terms. Unemployment has increased, but not as much as was feared, although there has been an increase in short-term working.

Chelsea Go Debt Free

In a generous gesture of support, Roman Abramovich has made Chelsea virtually debt free. In the previous financial year, he reduced the debt from a peak £760m. In the year to 30 June he converted the £340m of interest free loans owed by the club to him into equity. The move has reduced the club's debt almost to nil and puts it in a strong position ahead of proposed rules seeking to prevent European football clubs from taking on unsustainable levels of debt.

Wembley Stadium Could Default On Bank Debts

Wembley National Stadium, a wholly owned subsidiary of the Football Association, made a pre-tax loss of £31m last year and could default on finance arrangements if wealthy patrons fail to renew their season tickets. The stadium hosts England football internationals, the FA Cup final and Football League play-off finals. The company made an operating profit of nearly £6m in the year to December 2008. However, there was a £26.6m interest bill and the £10.9m write off of bank fees associated with the stadium financing in 2002.

Buyers Wait For Fire Sale at Liverpool FC

Co-owners of Liverpool Tom Hicks and George Gillett, who were the subject of a fans' demonstration yesterday, have hit a brick wall in their attempts to sell the club. Several potential investors think that it makes better sense to wait for the club to be sold at a knockdown price rather than inject money now. There is a strong feeling that Liverpool are heading towards a financial crisis of their own making that will force the owners to sell.

Top Clubs Fend Off Recession

Premiership clubs have kept their fans and in some cases increased attendances since the start of the season, providing further evidence of football's ability to withstand recession, according to Deloitte. The first six weeks of the season have seen clubs using 91 per cent of their stadium capacity, in line with previous seasons. Blackburn Rovers and Manchester City have increased attendances by 10 per cent.

Hyde United On Edge of Abyss

Blue Square North outfit Hyde United face liquidation tomorrow. On Wednesday Hyde were wound up by the High Court with debts of £123,000. The gates of their Ewen Fields ground have been padlocked shut with the insurance on the stadium now invalid. They have got seven days to appeal the decision but they need to come up with all the money they owe HM Revenue and Customs to get the winding up order rescinded. Hyde United have collected £67,000 and the local council have pledged £23,000 in sponsorship, but when legal costs are added in, that leaves them £35,000 short.

The Credit Crunch and Football

How will the credit crunch hit football? The financial storm is not over yet, but at the moment, within the Premiership at least, the top clubs are sitting pretty, while smaller clubs in less prosperous areas are having to be more innovative in their response. Watching football at the top level either live or on television isn't cheap at a time when incomes are being squeezed. A Sky package costs around £400 a year and season tickets have gone up by almost 800 per cent since the Premiership was set up.

Liverpool FC renegotiates its debt with RBS

Liverpool which owes two banks £350m has renegotiated its debt with the Royal Bank of Scotland. Although Liverpool fans will be relieved that a deal has been done, after fears that the loans might be called in, the sequence of events does nothing to reassure them that the American co-owners, Tom Hicks and George Gillett, have the financial clout the football club needs, particularly to build the Stanley Park stadium.

How will Real Madrid pay for Ronaldo?

Real Madrid have said that they have a €300m transfer budget his summer, but €68m went on Kaká followed by €92m on Ronaldo. It is understood that €100m will come from cash in hand, €100m from additional revenues hopefully generated by new players and €100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year €300m facility.