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  1. #1
    I don't know barbaro's Avatar
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    Premier League Teams, Deep in Debt

    Interesting. For those of you who know a lot more than I do, what could be the ramifications? A sale? But the debt is still there.....

    Richest English Premier League clubs deep in debt

    Tue Apr 28, 2009 3:58 AM EDT
    sports, soccer, debt, qa, english-soccer
    Stuart Condie, AP Sports Writer

    Images (showing 1 of 3 photos)
    #imageGallery .galleryimage {background-color: #000; width: 382px; text-align: center; padding-bottom: 20px}
    Manchester United's manager Sir Alex Ferguson is seen before his team's English Premier League soccer match against Tottenham at Old Trafford Stadium, Manchester, England, Saturday April 25, 2009. (AP Photo/Jon Super)



    Liverpool's Dirk Kuyt celebrates scoring during the English Premier League soccer match against Hull City at The KC Stadium, Hull, England, Saturday April 25, 2009. Liverpool won the match 3-1. (AP Photo/PA, Gareth Copley)



    Chelsea's manager Guus Hiddink attends a press conference at the Camp Nou Stadium in Barcelona, Spain, Monday, April 27, 2009. FC Barcelona will face Chelsea in a Champions League semifinal 1st leg soccer match in Spain on Tuesday April 27. (AP Photo/Manu Fernandez)




    <a href="http://iv.doubleclick.net/click%3Bh=v8/381d/3/0/%2a/h%3B213912848%3B0-0%3B8%3B23698753%3B4307-300/250%3B31037275/31055151/1%3B%3B%7Eokv%3D%3Bsite%3Dnbcsports%3Bsect%3Dnull% 3Bsub%3Dnull%3Bsub2%3Dnull%3Bsub3%3Dnull%3Bcont%3D Story%3Bgenre%3Dsports%3Bcategory%3Dnbcsports%3Buc id%3Da2741084%3Bloc%3Dundefined%3Baff%3Dundefined% 3Bsz%3D300x250%3Bdcopt%3Dist%3Btile%3D1%3Bpos%3D1% 3B%7Eaopt%3D2/1/f8/1%3B%7Esscs%3D%3fhttp://clk.atdmt.com/M0N/go/131764685/direct;wi.300;hi.250/01/7654070" target="_blank"><img src="http://view.atdmt.com/M0N/view/131764685/direct;wi.300;hi.250/01/7654070"/></a><noscript><a href="http://iv.doubleclick.net/click%3Bh=v8/381d/3/0/%2a/h%3B213912848%3B0-0%3B8%3B23698753%3B4307-300/250%3B31037275/31055151/1%3B%3B%7Eokv%3D%3Bsite%3Dnbcsports%3Bsect%3Dnull% 3Bsub%3Dnull%3Bsub2%3Dnull%3Bsub3%3Dnull%3Bcont%3D Story%3Bgenre%3Dsports%3Bcategory%3Dnbcsports%3Buc id%3Da2741084%3Bloc%3Dundefined%3Baff%3Dundefined% 3Bsz%3D300x250%3Bdcopt%3Dist%3Btile%3D1%3Bpos%3D1% 3B%7Eaopt%3D2/1/f8/1%3B%7Esscs%3D%3fhttp://clk.atdmt.com/M0N/go/131764685/direct;wi.300;hi.250/01/7654070" target="_blank"><img border="0" src="http://view.atdmt.com/M0N/view/131764685/direct;wi.300;hi.250/01/7654070" /></a></noscript>
    LONDON The most successful clubs in soccer's richest league have some of the biggest debts in the sport.
    A report by British lawmakers last week accused Manchester United, Liverpool and Chelsea the top three teams in the Premier League of "financial doping," or reckless borrowing to maintain their domination.
    Five of England's 72 lower league clubs have had a minimum of 10 points deducted this season for irregularities stemming from financial problems. Many fans are now worried that the global economic crisis makes it just a matter of time before a Premier League club buckles under.
    How did this all come about?
    What follows are some questions and answers about the financial problems facing England's top clubs:
    Q: Why is there so much money in the top tier of English soccer?
    A: The creation of the Premier League in 1992 led to huge increases in television income as satellite broadcaster BSkyB bought exclusive rights to the sport to drive its expansion. The next British broadcast agreement, with Sky and Setanta, is worth 1.782 billion pounds ($2.58 billion) for three years from the start of the 2010-11 season, almost six times more than Sky's initial contract.
    Q: So why are clubs borrowing so much?
    A: You might say the lure of massive revenue has created massive borrowing. The Premier League generates more income than any other national league through match-day revenue, sponsorship and broadcast agreements, so most clubs are either scared of dropping out of it or desperate to get into it. Three clubs each season are relegated to the far-less lucrative second tier, leading many teams to spend lavishly on player acquisitions and wages to prevent this.


    Q: But Manchester United isn't scared of relegation. Why is it so heavily in debt despite its success?


    A: England's dominant club of the last 20 years had no debts before being bought by Malcolm Glazer in 2005. The Tampa Bay Buccaneers owner funded his takeover by borrowing money secured against the club's future earnings. With the loans set at relatively high interest rates, the club's "healthy operating profits ... are more than eaten up by the servicing of its debt," according to a report by British legislators.


    Q: Why did Glazer borrow so much?

    A: Glazer simply believed that United was not exploiting its commercial potential and that the club could make enough money in the long term to justify his risk. Glazer has increased United's turnover through commercial activities, sponsorships and higher ticket prices. Regular preseason tours to overseas markets such as Asia and the United States have also helped raise profile and income, but probably not to a level that has reduced debt as much as the Glazers hoped. After winning the Champions League and Premier League last season, United posted pretax losses of $65.2 million. Interest and repayments on debt of $945 million took $66.2 million annually out of United's profits.


    Q: What about Liverpool and Chelsea?


    A: Tom Hicks, owner of MLB's Texas Rangers and the NHL's Dallas Stars, and George Gillett Jr., owner of the NHL's Montreal Canadiens, bought Liverpool for $430.8 million in 2007, apparently for the same reasons that Glazer bought United. Liverpool's debt has swelled to $509.5 million because of the financing of the takeover. Chelsea is in a slightly different position. Roman Abramovich owns the west London club and furnished it with huge interest-free loans from his personal fortune. That means Chelsea is not at risk from creditors, but would be hugely vulnerable if Abramovich ended his involvement. The club was reportedly hours from going out of business before the Russian oligarch bought it in 2003.
    Q: Could the same thing happen to more clubs?


    A: Yes. Under British financial regulation, investors who build up a stake of 30 percent of the voting rights in a publicly traded club are required to make a takeover bid.
    Link & Entire: Newsvine - Richest English Premier League clubs deep in debt

  2. #2
    watterinja
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    Live in debt, die in poverty...

  3. #3
    I don't know barbaro's Avatar
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    Quote Originally Posted by watterinja View Post
    Live in debt, die in poverty...
    I agree.

    And with these teams it seems that a couple of them may be over their heads, financially. I'd like to hear more from people who know the league better than I do.

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