Financial crisis could claim English soccer teams
Ryan Giggs (L) and Rio Ferdinand parade the Premier League trophy and European Cup at Old Trafford in August. Photo: PAUL ELLIS/AFP/Getty Images
The chairman of English soccer's governing body said the country's clubs have debt of 3 billion pounds (€3.9 billion), and conceded that a team may become a victim of the meltdown in the world's financial markets.
''We are in a very much more volatile position, in which debt is not only a problem in terms of volume, it's a problem because those who own the debt are themselves now often in serious problems,'' Lord David Triesman, chairman of the Football Association, told reporters today at the Leaders in Football conference in London.
The four teams that finished at the top of the Premier League last season, champion Manchester United, Chelsea, Arsenal and Liverpool, carry a third of the debt, Triesman said. The data are from financial firms in the City of London, he said, without giving details.
The Premier League is soccer's richest, generating revenue exceeding 1.5 billion pounds in 2006-07, and matches are watched in 199 countries. Its latest television agreement is worth 2.7 billion pounds over three seasons.
Much of that money has flooded into the pockets of players, and those pay levels need to be reassessed to protect the future of teams, Triesman said. Wages in English soccer are growing at a rate of 12 percent, and one Premier League club increased salaries by 41 percent last season, he said. Clubs were imperiling themselves by building a ''debt mountain.''
'Tangible danger'
''This poses us with a tangible danger,'' he told delegates in an earlier keynote speech at Chelsea's Stamford Bridge stadium. ''Not only is debt at high-risk levels, but we're also in a period where transparency lies in an unmarked grave.''
Soccer clubs, like the banks, don't explain their finances well, bringing uncertainty and a lack of trust, he said. He called on teams to be clearer about their accounts and ownership.
''Nobody in the wider world knows what the quality of the information is and nobody has real confidence in what they cannot see,'' he said.
In his speech, Triesman said he had no problems with the influx of foreign owners in English soccer, provided they were vetted properly. He said the current tests were not stringent enough.
The BBC reported today that FIFA President Sepp Blatter wants to curb foreign ownership of soccer clubs in the U.K. and Europe.
''Something has to be done about these billionaire owners,'' the BBC cited Blatter as telling reporters at the European Parliament yesterday. ''These days you can buy a club as easily as you buy a football jersey. There is something wrong and that's why I ask the European Union to act.''
'Fit and proper'
Triesman, a former Foreign Office Minister, said the league's current ''fit and proper person test,'' which forbids those formally convicted of crimes from owning teams, didn't offer enough scope to outlaw individuals suspected of offenses such as human rights abuses.
''We can't have a test where someone like Robert Mugabe can own a club because he's not been convicted of anything and someone like Nelson Mandela couldn't,'' Triesman said.
Former Thai Prime Minister Thaksin Shinawatra, who bought Manchester City in July 2007 for 82 million pounds including debt, sold his stake in the club to Gulf-based Abu Dhabi United Group for Development and Investment in August after his Thai assets were frozen. He denies corruption charges in his home country.
Among the Americans who have bought into the English league are the Glazer family at Manchester United, George Gillett and Tom Hicks at Liverpool, and Randy Lerner at Aston Villa. (Bloomberg)
- Tariq Panja
