Can we extend our overdrafts?

A Uefa report just about to be released will show the parlous state the finances of the Premier League clubs are in: they owe more money than all the clubs in Europe’s top divisions put together, totalling up at 56% of all European football’s debt.

The report, by The European Club Football Landscape, says that according to the latest accounts available (2007-08) of all 732 clubs licensed by Uefa, the combined debts of 18 Premier League clubs totals just under €4billion (around £3.5billion), four times as much as those from Spain’s La Liga. The figure would have been even higher if West Ham and Portsmouth, two of the worst afflicted by debt, had been given a Uefa license that year. However their financial problems put a stop to that.

‘English clubs contain on their balance sheets an estimated 56% of Europe-wide commercial debt,’ says the report. ‘... Just over half of (the Premier League’s) commercial debt has been placed into the clubs (or at a holding company level) recently as a result of leveraged buyouts, so far acting principally as a burden rather than to support investment or spending.’

Uefa will use the report as evidence for its Financial Fair Play rules, which requires that the clubs are run at least to break-even by 2012-13. Both Liverpool and Manchester United have been heavily indebted by leveraged buy-outs, with United supporters in particular voicing their concern before and after the Glazer family bought the club.

‘The Portsmouth example shows something must be done to help the clubs be more sustainable,’ said Gianni Infantino, Uefa’s general secretary. ‘The English Premier League clubs have higher revenues, but it is worrying to see such huge debt. If it is borrowed to fuel spending on players, the problem comes when you cannot borrow any more money and can no longer pay the debts.’

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