Old Board vs New Board

[Guest]

All PL clubs are in debt bar one - Stoke, last time I looked. It's the nature of the beast, the PL is highly competitive, expenseive but also with high rewards. Average debt at PL clubs runs between 30-50m with the top end perilously high. It is very difficult to remain competitive/not get relegated and with the other hand not spend money on players either, it is more or less impossible.

 

So far as to say, running PL clubs on profit is practically unheard of bar one or two clubs who have been run mind numnbinlgy well for half a dozen years or more. Still MA would have known all that IF HE HAD DONE DUE DILLIGANCE before he took over and had studied the football business model for even ONE DAY.

 

 

 

Everyone's getting into debt and running at a loss so it's all right?

 

What fantastic logic.

[peasepud 59]

United already owed the sports shop retailer more than £111m in interest-free loans, according to the most recent set of accounts, but The Journal understands that this figure has increased over the summer as Ashley (pictured below) paid for the club’s new signings out of his own money.

 

The most recent set of accounts being the season before we were relegated. We are now, I would estimate £180-£200m in debt to Ashley with a further £30m owed to Barclays (assuming that all of the £25m was paid off the overdraft).

 

Financial stability, its great man.

 

Aye, so he's basically paid for Freddie's ambition. I suppose you'd prefer he just left the debt to the original debtors, so that we paid a shit load of interest on it but owed Ashley fuck all?

 

Perhaps you'd like to suggest an alternative way of managing the debt that Freddie left. How would YOU have done it, peasepud? Pretend it didn't exist?

 

I borrowed £110 quid off me Dad today, because a direct debit went out that took me over my overdraft into my personal reserve. I don't normally need to, but the holiday to ibiza was a bit spur of the moment and I didn't budget for it. I don't get paid till the 24th. When I get paid I'll give my fatha £110 back. If I'd just ignored it and used my reserve, i'd pay back £110 plus £44 in fees.

 

He paid off £60m of debts that were paying something like 8% interest on them, then a year later took out £40m overdraft with an interest rate of about 15%.

 

So the paying off of the £60m has cost him/us 3 times that? Hes some fucking businessman if he can turn -60m into -180m and still have mugs applauding him for it.

[Guest]

Perhaps you'd like to suggest an alternative way of managing the debt that Freddie left. How would YOU have done it, peasepud? Pretend it didn't exist?

[sandman02uk 0]

United already owed the sports shop retailer more than £111m in interest-free loans, according to the most recent set of accounts, but The Journal understands that this figure has increased over the summer as Ashley (pictured below) paid for the club’s new signings out of his own money.

 

The most recent set of accounts being the season before we were relegated. We are now, I would estimate £180-£200m in debt to Ashley with a further £30m owed to Barclays (assuming that all of the £25m was paid off the overdraft).

 

Financial stability, its great man.

 

Aye, so he's basically paid for Freddie's ambition. I suppose you'd prefer he just left the debt to the original debtors, so that we paid a shit load of interest on it but owed Ashley fuck all?

 

Perhaps you'd like to suggest an alternative way of managing the debt that Freddie left. How would YOU have done it, peasepud? Pretend it didn't exist?

 

I borrowed £110 quid off me Dad today, because a direct debit went out that took me over my overdraft into my personal reserve. I don't normally need to, but the holiday to ibiza was a bit spur of the moment and I didn't budget for it. I don't get paid till the 24th. When I get paid I'll give my fatha £110 back. If I'd just ignored it and used my reserve, i'd pay back £110 plus £44 in fees.

 

He paid off £60m of debts that were paying something like 8% interest on them, then a year later took out £40m overdraft with an interest rate of about 15%.

 

So the paying off of the £60m has cost him/us 3 times that? Hes some fucking businessman if he can turn -60m into -180m and still have mugs applauding him for it.

 

those figures legit or have you pulled them out your arse?

[shackbleep 0]

Yeah, he comes out of that article looking great ©

 

 

If you say so... Though that was never anybody's point of view being debated

Well, you're the one seemingly intent on comparing him favourably with the previous regime, regardless of the facts. As shown by the bits you've put in bold. Feel free to put me right though.

 

How much did shepherd spend out of his personal fortune on players like?

 

Not comparable. Shepherd didn't own the club.

[peasepud 59]

Well I would have purchased high quality players with the £60m and stormed into Europe thereby increasing the turnover of the club by way more than the interest payments. Then with some of the extra income from Sky and European qualification I would have repaid the debt in the manageable timescales that it was already down to be paid in.

 

I would have ploughed the additional profit from shirt sales generated from a top 6 Premiership campaign into the academy, ensuring that the cream of European (and more importantly local) young talent were seduced into joining us.

 

The increased sponsorship income that would come with the successful football team would have been spent on improving the facilities within the ground, better in-house catering, plusher private boxes etc that would have ensured many happy customers leave with empty wallets at the end of the day. A small amount (a million or so) would have been invested in pushing the NUFC brand into the far east and USA. Getting the club known and admired in the way that Man United are, admiration abroad means merchandising sales go through the roof.

 

Season on season Id then make funds available to the manager, trusting him and not some dwarf cunt with no respect for the club to purchase players that he felt would improve the team. These improvements would increase the clubs league position and get us into the Champions League where finally, Id look to use some of the tens of millions made from that to pay some of the loans off.

 

The last half a million or so Id blow on getting the word Peasepud written in big letters across the top of the Gallowgate before paying some consultancy a small fortune to rename the ground Peasepudisfuckinglush@SJP.arse

[peasepud 59]

those figures legit or have you pulled them out your arse?

 

Those figures are me wracking my brain to remember the actual ones, Ive posted them somewhere on the board before though, at the time of the YWC campaign. Im fairly sure that the 8% and 15% are conservative estimates.

 

EDIT: MY bad, overdraft payments are 12% so we were paying (under Ashley) £4.8m on our £40m overdraft, that was used to replace some of the £60m we had at a much lower interest rate under Shepherd.

[Guest]

Well I would have purchased high quality players with the £60m and stormed into Europe thereby increasing the turnover of the club by way more than the interest payments. Then with some of the extra income from Sky and European qualification I would have repaid the debt in the manageable timescales that it was already down to be paid in.

 

I would have ploughed the additional profit from shirt sales generated from a top 6 Premiership campaign into the academy, ensuring that the cream of European (and more importantly local) young talent were seduced into joining us.

 

The increased sponsorship income that would come with the successful football team would have been spent on improving the facilities within the ground, better in-house catering, plusher private boxes etc that would have ensured many happy customers leave with empty wallets at the end of the day. A small amount (a million or so) would have been invested in pushing the NUFC brand into the far east and USA. Getting the club known and admired in the way that Man United are, admiration abroad means merchandising sales go through the roof.

 

Season on season Id then make funds available to the manager, trusting him and not some dwarf cunt with no respect for the club to purchase players that he felt would improve the team. These improvements would increase the clubs league position and get us into the Champions League where finally, Id look to use some of the tens of millions made from that to pay some of the loans off.

 

The last half a million or so Id blow on getting the word Peasepud written in big letters across the top of the Gallowgate before paying some consultancy a small fortune to rename the ground Peasepudisfuckinglush@SJP.arse

 

Ok and what if the 60m didn't get us into Europe?

 

A million for global branding like man utd, I wonder why everyone isn't doing it

[peasepud 59]

Ok and what if the 60m didn't get us into Europe?

 

A million for global branding like man utd, I wonder why everyone isn't doing it

 

At least we'd have acted like a football club and not a market stall.

 

Its a million more than we're paying out now and it couldnt be that expensive seeing as how Shepherd was doing it.

 

Under your logic we might as well get rid of all the players we have and replace them with Bedlington Terriors. We'd save a fortune on wages and transfer fees, make a healthy profit in the window and be laughing all the way to the bank.

 

Even if the £60m didnt get us into Europe it would have got us further up the league than we were and the extra revenue would have covered the interest payments. Rocket science it is not.

[Guest]

Jesus wept

[Guest]

Ok and what if the 60m didn't get us into Europe?

 

A million for global branding like man utd, I wonder why everyone isn't doing it

 

At least we'd have acted like a football club and not a market stall.

 

Its a million more than we're paying out now and it couldnt be that expensive seeing as how Shepherd was doing it.

 

Under your logic we might as well get rid of all the players we have and replace them with Bedlington Terriors. We'd save a fortune on wages and transfer fees, make a healthy profit in the window and be laughing all the way to the bank.

 

Even if the £60m didnt get us into Europe it would have got us further up the league than we were and the extra revenue would have covered the interest payments. Rocket science it is not.

 

 

Because every time Freddie bought players our League position improved?

 

 

So I've asked the question on how you'd have managed the debt, and you've basically told me you'd go shit-or-bust with it.

[peasepud 59]

Jesus wept

 

Which part is difficult for you sunshine?

 

We were paying less than £5m per year in repayments on a debt of £60m when we were at least attempting (unsuccessfully I admit) to compete.

 

We now have debts of £180m+ and, if we hit our target will lose about £15m this season. Our idea of success is finishing 17th. Our perceived direct competion is Blackpool and Wolves. Clubs such as Stoke laugh at us.

 

Any part of that strike you as progress?

 

To take your analogy, you borrow a ton off your old man to save £44 but instead of paying him back you keep borrowing and borrowing, another ton here, 50quid there, £200 for that sparkly dress. Are you better off than you would have been if you'd just paid the £44quid?

[Guest]

I really want to dig further into your wonderful plan. Which manager would you have given the £60m to? Allardyce? Or would you have spent some of it paying him off then more of it replacing him? And then, who would you have gotten to replace him that you'd trust to be able to get us into europe with that relatively small remaining budget, knowing that it could all go pear shaped if it went wrong? For the sake of a couple of unambitious years, I'd much rather wait and try and get into europe with the money we're earning than go all out attack and risk the consequences.

Edited September 14, 2010 by AshleysSkidMark

[Christmas Tree 4679]

All sounds so familiar.....

 

Shepherd / Labour throwing good after bad to try and maintain the good times.

 

Ashley / Tories reigning in the spending and paying off the debt.

 

Bizarre fucking world init.

[Guest]

All sounds so familiar.....

 

Shepherd / Labour throwing good after bad to try and maintain the good times.

 

Ashley / Tories reigning in the spending and paying off the debt.

 

Bizarre fucking world init.

 

 

I mentioned this in the general election thread actually, where Leazes made the ironic move of criticising them for trying to spend their way out of trouble

[Phil 6]

Well I would have purchased high quality players with the £60m and stormed into Europe thereby increasing the turnover of the club by way more than the interest payments. Then with some of the extra income from Sky and European qualification I would have repaid the debt in the manageable timescales that it was already down to be paid in.

 

I would have ploughed the additional profit from shirt sales generated from a top 6 Premiership campaign into the academy, ensuring that the cream of European (and more importantly local) young talent were seduced into joining us.

 

The increased sponsorship income that would come with the successful football team would have been spent on improving the facilities within the ground, better in-house catering, plusher private boxes etc that would have ensured many happy customers leave with empty wallets at the end of the day. A small amount (a million or so) would have been invested in pushing the NUFC brand into the far east and USA. Getting the club known and admired in the way that Man United are, admiration abroad means merchandising sales go through the roof.

 

Season on season Id then make funds available to the manager, trusting him and not some dwarf cunt with no respect for the club to purchase players that he felt would improve the team. These improvements would increase the clubs league position and get us into the Champions League where finally, Id look to use some of the tens of millions made from that to pay some of the loans off.

 

The last half a million or so Id blow on getting the word Peasepud written in big letters across the top of the Gallowgate before paying some consultancy a small fortune to rename the ground Peasepudisfuckinglush@SJP.arse

 

 

90's have been on the phone, they want their business plan back!

[peasepud 59]

I really want to dig further into your wonderful plan. Which manager would you have given the £60m to? Allardyce? Or would you have spent some of it paying him off then more of it replacing him? And then, who would you have gotten to replace him that you'd trust to be able to get us into europe with that relatively small remaining budget, knowing that it could all go pear shaped if it went wrong? For the sake of a couple of unambitious years, I'd much rather wait and try and get into europe with the money we're earning than go all out attack and risk the consequences.

 

What fucking money are we earning? we're losing money hand over fist, we're in 3 times as much as debt as we were in those days of "unsustainable debt" as you like to put it.

 

 

90's have been on the phone, they want their business plan back!

 

Thank you, no greater an endorsement could have been given. The 90s, the decade when we were one of the worlds richest clubs.

[Guest]

I really want to dig further into your wonderful plan. Which manager would you have given the £60m to? Allardyce? Or would you have spent some of it paying him off then more of it replacing him? And then, who would you have gotten to replace him that you'd trust to be able to get us into europe with that relatively small remaining budget, knowing that it could all go pear shaped if it went wrong? For the sake of a couple of unambitious years, I'd much rather wait and try and get into europe with the money we're earning than go all out attack and risk the consequences.

 

What fucking money are we earning? we're losing money hand over fist, we're in 3 times as much as debt as we were in those days of "unsustainable debt" as you like to put it.

 

 

90's have been on the phone, they want their business plan back!

 

Thank you, no greater an endorsement could have been given. The 90s, the decade when we were one of the worlds richest clubs.

 

Utter bollocks.

[Guest]

I love how £60m would see us 'storm' into europe too, considering that we were easily more than £60m shitter than Arsenal, Chelsea and Man Utd, and Manchester City can afford to spend £60m on one player. Your plan to spend the £60m on players is pretty shit really, isn't it?

[JawD 99]

I love how £60m would see us 'storm' into europe too, considering that we were easily more than £60m shitter than Arsenal, Chelsea and Man Utd, and Manchester City can afford to spend £60m on one player. Your plan to spend the £60m on players is pretty shit really, isn't it?

 

Its a no win arguement. with £60M you could easily build a top 6 side. Good manager and very good selective purchases. Every good player doesnt need to be £15M+

 

However, with £60M spend you could just as easy get relegated with a struggling manager and poor purchases.

[Park Life 71]

All PL clubs are in debt bar one - Stoke, last time I looked. It's the nature of the beast, the PL is highly competitive, expenseive but also with high rewards. Average debt at PL clubs runs between 30-50m with the top end perilously high. It is very difficult to remain competitive/not get relegated and with the other hand not spend money on players either, it is more or less impossible.

 

So far as to say, running PL clubs on profit is practically unheard of bar one or two clubs who have been run mind numnbinlgy well for half a dozen years or more. Still MA would have known all that IF HE HAD DONE DUE DILLIGANCE before he took over and had studied the football business model for even ONE DAY.

 

 

 

Everyone's getting into debt and running at a loss so it's all right?

 

What fantastic logic.

 

What are you laughing at you stupid cunt?

 

Most PL clubs carry massive debt due to the nature of the business model they've all been using and escalating player wages and skyrocketing transfer costs. This upward spiral has occurred cause there is a huge demand and short supply for quality players exacerbated by cut throat competition and PL survival and dispropotionate rewards for the top 4 in the league.

 

Nothing to do with logic, they are just the FACTS.

 

MA wouldn't have bought the club if he had taken a proper look at the outgoing commitments of the venture (debt/intererst/old player transfer costs ongoing).

 

He's been trying to get rid of it the day he reaslised it's burning through money.

 

The old board used THE SAME MODEL as all the clubs we were competing against and also made some huge mistakes, but they really didn't do anything much different to all the other clubs who are carrying debt.

[Park Life 71]

I love how £60m would see us 'storm' into europe too, considering that we were easily more than £60m shitter than Arsenal, Chelsea and Man Utd, and Manchester City can afford to spend £60m on one player. Your plan to spend the £60m on players is pretty shit really, isn't it?

 

Its a no win arguement. with £60M you could easily build a top 6 side. Good manager and very good selective purchases. Every good player doesnt need to be £15M+

 

However, with £60M spend you could just as easy get relegated with a struggling manager and poor purchases.

 

That's why the PL is so interesting the fine line between top 4/6 and struggling for survival is always moving. The voodoo of getting everything in the right place at the right time is a very delicate chemistry. Fulham had almost everything right, but they are still 200m in DEBT. Even Spurs who everyone crows on about as a well run club are carrying debt of 50m.

Edited September 15, 2010 by Park Life

[Park Life 71]

I really want to dig further into your wonderful plan. Which manager would you have given the £60m to? Allardyce? Or would you have spent some of it paying him off then more of it replacing him? And then, who would you have gotten to replace him that you'd trust to be able to get us into europe with that relatively small remaining budget, knowing that it could all go pear shaped if it went wrong? For the sake of a couple of unambitious years, I'd much rather wait and try and get into europe with the money we're earning than go all out attack and risk the consequences.

 

What fucking money are we earning? we're losing money hand over fist, we're in 3 times as much as debt as we were in those days of "unsustainable debt" as you like to put it.

 

 

90's have been on the phone, they want their business plan back!

 

Thank you, no greater an endorsement could have been given. The 90s, the decade when we were one of the worlds richest clubs.

 

7th.

[Park Life 71]

Manchester United

 

Turnover: £278.5m

 

Operating profit: £91.3m

 

Net debt: £716.6m

 

Interest payment: £68.5m

 

Manchester United's Byzantine finances are essentially a tale of massive profits and massive interest payments. The club's 08-09 accounts showed that the Red Devils paid £42m of interest on their £500m of bank loans. And the interest charge on the "payment-in-kind" loan, secured on the controlling shares in the club of the Glazer family, was £26m. But the PIK loan "rolls up" the interest, so the value of that debt rose to £202m in the year. Last month the Glazer family issued a £500m bond with an interest rate of 9 per cent and maturity date of 2017. The proceeds will be used to pay off the existing bank loans. The bond prospectus also makes provision for up to £70m to be taken out of the club "for general purposes, including repaying existing indebtedness". This is assumed to mean paying off some of the Glazers' PIK debt, on which the interest rate will rise to 16.5 per cent this August. The full PIK debt is repayable in 2017. The recent bond prospectus also revealed that the Glazers lost the club £35m attempting to hedge against a rise in interest rates.

 

Arsenal

 

Turnover: £312.3m

 

Operating profit: £58.8m

 

Net debt: £297.0m

 

Interest payment: £16.6m

 

A pocket of financial sanity. The club's 08-09 accounts show the outstanding value of the bonds issued to finance the building of the Emirates stadium at £244.9m. But this is repayable over a 20 to 22-year term at a fixed interest rate of 5.3 per cent. The club is also paying off some of the principal sum of the bond each year (£5.3m in 08-09), which means that Arsenal, managed by Arsène Wenger, will not be saddled with debt indefinitely. The bank loan taken out by the club with Barclays to finance the Highbury Square apartment complex, on the site of Arsenal's former ground, stood at £137m, with a repayment date of December 2010 and an interest rate of 2-2.5 per cent above the London inter-bank lending rate (Libor). Since then, however, the club has reduced the property bank loan to £47.1m, financed by selling apartments at Highbury Square for a discount. The main financial risk for the club would be a failure to fill the Emirates.

 

Liverpool

 

Turnover: £164.2m

 

Operating profit: £24.9m

 

Net debt: £261.7m

 

Interest payment: £36.5m

 

The clearest possible example of the madness of a leveraged buyout in football. Liverpool's relatively healthy operating profits in 07-08 were wiped out by interest payments on their borrowings from the Royal Bank of Scotland and the US bank Wachovia. Since Liverpool refinanced in the summer, the new managing director of the club, Christian Purslow, has claimed that the club's debt has come down to £237m.

 

West Ham

 

Turnover: £71.6m

 

Operating profit: –£32.8m

 

Net debt: £114.9m

 

Interest payment: £3.0m

 

As the new co-owner David Gold puts it: "a car crash". West Ham's 07-08 accounts showed that they owed £114.9m, more than its annual turnover. The accounts also showed the club had breached covenants on a £35m bank loan. The new repayment date for that loan, from a syndicate of five banks, is August 2011. This is, no doubt, the reason why the Hammers' new owners are urgently seeking to raise £40m from new investors.

 

Fulham

 

Turnover: £53.7m

 

Operating profit: –£2.1m

 

Net debt: £164.0m

 

Interest payment: £1.0m

 

The colossal size of Fulham's net borrowing reflects the debt it owes to Mohamed al-Fayed. The 07-08 accounts show that the club owes the Harrods owner £159m. However, this is said to be unsecured, interest-free and with no fixed repayment timetable. The club also has a £4.5m bank loan from NatWest, secured on Fulham's future broadcasting income and repayable within a year, on which it paid interest of 7.11 per cent.

 

Aston Villa

 

Turnover: £75.6m

 

Operating profit: –£13.1m

 

Net debt: £72.3m

 

Interest payment: £5.7m

 

Aston Villa's 07-08 accounts show the club has a £13m bank loan secured on the club's assets. £2.5m of this is repayable in three instalments each year until 2012. It also has a £10m overdraft. But Villa's biggest debt is to their American owner, Randy Lerner, who has lent the club £49.5m. These loans are repayable in full in December 2016. Villa paid £4.1m in interest in the year on Lerner's loan, on top of £1.37m to service the bank loan.

 

Sunderland

 

Turnover: £63.5m

 

Operating profit: –£2.4m

 

Net debt: £48.8m

 

Interest payment: £0.7m

 

Another club that survives by the grace of wealthy benefactors. The club's 07-08 accounts show that the Black Cats owed £35.2m to their immediate parent company. This was unsecured, interest-free and with no repayment date. The club also had a £13.6m bank overdraft, guaranteed by the owners. Ellis Short, the American businessman who took full control of the club last May, has given conflicting signals over how much he is willing to spend in order to push Sunderland up the table. The latest word is that he wants to reduce the wage bill.

 

Bolton Wanderers

 

Turnover: £52.3m

 

Operating profit: –£5.3m

 

Net debt: £58.4m

 

Interest payment: £3.9m

 

Not a healthy picture. Bolton rely on the backing of their owner Edwin Davies. The latest accounts show that the club owes its parent company £55.9m. Moreover, this borrowing does not come for free: £23m is repayable on demand and has an interest rate of 10 per cent. A further £11.5m is secured on future TV money. The threat of relegation is real – as is the prospect of a financial crunch.

 

Hull City

 

Turnover: £11.2m

 

Operating profit: –£9.2m

 

Net debt: £17.1m

 

Interest payment: £0.4m

 

An accident waiting to happen. The note from the accountants in the club's 07-08 accounts says that if the Tigers are relegated they will need to generate a financial surplus of £23m to avoid meltdown this financial year. And even if Hull survive in the Premier League, they will need to generate a £16m surplus. The accounts also show a £22m bank loan, with £12m repayable within a year.

 

Wigan Athletic

 

Turnover: £46.3m

 

Operating profit: –£17.0m

 

Net debt: £54.0m

 

Interest payment: £1.5m

 

The club's latest accounts make it plain that all that stands between Wigan and oblivion is Dave Whelan. The owner has put £39m into the club in the form of an unsecured, interest-free loan with no fixed repayment date. The club also has an overdraft and bank loan from Barclays of £18.7m, repayable on demand, on which Wigan paid £1.5m in interest in 08-09. The club ran at an operating loss of £17m in that year and the accounts note "further losses are anticipated in 2010 and 2011".

 

Tottenham Hotspur

 

Turnover: £113.0m

 

Operating profit: £18.4m

 

Net debt: £45.9m

 

Interest payment: £8.0m

 

Spurs have gone into debt to build a new training ground in Enfield. The club is paying an annual interest rate of 7.29 per cent on £30m of its borrowings. But it does not have to pay this back until 2024. A planned new 56,000-seat stadium should increase match-day revenues, although it remains to be seen how much the project itself will cost, or the terms of the financing.

 

Stoke City

 

Turnover: £11.2m

 

Operating profit: –£7.8m

 

Net debt: £2.3m

 

Interest payment: £0.5m

 

The Potters' 07-08 accounts showed negligible debt, but do make it clear how dependent the club is on its benefactor, Peter Coates, the owner of the bet365 online betting company. Revenue will have increased thanks to the Premier League TV money. But so will their outgoings. Last summer, the club spent £10m in luring Robert Huth and Tuncay Sanli to the Britannia Stadium.

 

Everton

 

Turnover: £79.7m

 

Operating profit: £6.3m

 

Net debt: £37.9m

 

Interest payment: £4.1m

 

Uncertainty reigns. £27m of the Toffees' borrowings – secured on future ticket sales – are spread over a relatively long period. But the 7.79 per cent interest rate meant that £4.1m of cash left the club in 08-09. The plan to increase match-day revenues by building a new 50,000-seat stadium in Kirkby was thrown into disarray last year when the Government rejected the proposal.

 

Burnley

 

Turnover: £11.2m

 

Operating profit: –£8.9m

 

Net debt: £11.9m

 

Interest payment: £2.7m

 

According to the 08-09 accounts, the Clarets' chairman, Barry Kilby, and seven other directors had the right to claim full repayment of their £6.97m loans out of the club's new Premier League revenues following last summer's promotion. The chairman is aiming for a profit this financial year to improve the club's balance sheet.

 

Portsmouth

 

Turnover: £70.5m

 

Profit: –£17.0m

 

Net debt: £57.7m

 

Interest payment: £6.6m

 

Portsmouth owed £28m to their former owner Alexandre Gaydamak, £18m to their owner, Balram Chainrai, and £5m to agents and other creditors. The club was also being pursued for £7.4m of unpaid taxes by Her Majesty's Revenue and Customs. Administration means a nine-point deduction and just about certain relegation from the Premier League. Now the fight will begin by the club's creditors to get their money back. First in line will be those other clubs still owed money by Pompey.

 

Wolves

 

Turnover: £18.2m

 

Operating profit: –£1.6m

 

Net debt: £13.0m

 

Interest payment: £0m

 

Wolves spent heavily to win promotion in 2007 and the club's 07-08 accounts reflect that. The effort was financed by new owner, Steve Morgan, who is now owed £13m by the club, although this is interest-free. Morgan tried to buy Liverpool in 2004 and says he was prepared to put £70m of cash into the Merseyside club to do so. Looking at Wolves' zero interest bill for 07-08, many Liverpool fans will probably wish he had been successful.

 

Chelsea

 

Turnover: £190.0m

 

Operating profit: –£11.4m

 

Net debt: £511.6m

 

Interest payment: £0.7m

 

Chelsea's 07-08 accounts show the club falling short of its goal of financial sufficiency. The accounts also showed a debt of £488m to its owner, Roman Abramovich. But last December the club released a statement revealing that this had been converted to equity, leaving the club "virtually debt-free". Those same results also featured an exceptional payment of £12.6m to Luiz Felipe Scolari and three coaching staff following the Brazilian's sacking as manager last season.

 

Birmingham City

 

Turnover: £49.8m

 

Operating profit: £13.7m

 

Net debt: £12.0m

 

Interest payment: £0.26m

 

Hope, perhaps, for Hammers fans. Birmingham City's 07-08 accounts reflect the golden legacy of David Gold, David Sullivan and Karren Brady. The accounts are evidence that a middle-ranking club without a ridiculously wealthy sugar daddy can run its finances in a sensible manner. The club's main debt was a £14.7m loan from its parent company, but this appears to be interest-free. Birmingham's new owner, Hong Kong businessman Carson Yeung, has a solid base on which to build.

 

Blackburn Rovers

 

Turnover: £50.9m

 

Operating profit: –£6.8m

 

Net debt: £20.3m

 

Interest payment: £0.8m

 

Precarious. The latest accounts show bank debt, secured on the club's assets, projected to increase to £20m. This loan is repayable by May 2012. The estate of the club's late benefactor, Jack Walker, has lent some £6m interest-free. But there does not appear to be an open-ended commitment to fund the club's losses. As the chairman, John Williams, warns in the accounts: "Without external funding we are inevitably moving from a trading club to a net selling club".

 

Manchester City

 

Turnover: £87.0m

 

Operating profit: –£34.2m

 

Net debt: £194.4m

 

Interest payment: £14.4m

 

The normal rules of business do not apply to Manchester City. The latest accounts show a company with a turnover of £87m running at an operating loss of £34m and with an accumulated debt to Sheikh Mansour bin Zayed Al-Nahyan of Abu Dhabi of £194m. Since then, the club has spent £117m on players, including Emmanuel Adebayor and Carlos Tevez. But last month Sheikh Mansour converted Manchester City's entire £305m debt to him into equity.

[Park Life 71]

PL DEBT ACCOUNTS FOR 56% of ALL EUROPEAN FOOTBALL DEBT!!!

The figures are contained in a new Uefa report into the state of football's finances, and shows the total debt of the Premier League clubs as being €3.8 billion (£3.4b), 56 per cent of the total across Europe.

 

Premier League clubs' assets are €4.3b (£3.8b), accounting for a 48 per cent share of the assets among all European clubs.

 

 

What is worrying for English clubs however is that the total value of the debt is so close to the value of the assets.

 

In Spain, which has the next highest debt of £858m, the assets are worth £2.5b, three times the value of the debts.

 

In Italy, the debt is £442m and the assets worth £1.3b.

 

Uefa's report, the European Club Footballing Landscape, has looked at the 2007-08 accounts from all 732 clubs licensed by football's European governing body.

 

The 80-page document's analysis of the Premier League reports that many clubs have used their stadiums and grounds as collateral to borrow money.

 

The report accepts much of the debt is linked to the leveraged takeovers by the Glazer family at Manchester United and the Hicks/Gillett buy-out of Liverpool.

 

"Some of the long-term debt is linked to new stadia such as Arsenal's, and in other cases already-built assets provide security for commercial lenders," says the report, adding that the leveraged buy-outs have been "so far acting principally as a burden rather than to support investment or spending".

 

The report did not include the debts of Portsmouth and West Ham because they had not been granted Uefa licences that year due to their financial problems.

 

The report comes after it was revealed that Manchester United's £716m debt is greater than the entire cumulative sum owed by all 36 clubs in the top two divisions in Germany.

 

The German Football League (DFL) clubs' debts total £544m.

 

Uefa president Michel Platini is pushing for a system where clubs in the Champions League and Europa League will only be allowed to spend what they earn.

 

Platini said recently: "The Financial Fair Play concept is very important for the well-being of clubs.

 

"We believe that for clubs to survive they can't spend more than they earn and the executive committee has agreed to introduce regulations to reach this aim."