UEFA’s proposed rules regarding clubs finances will not adversely affect Chelsea Football Club. UEFA have stated clubs can’t spend more on transfer fees and wages then they earn through Television rights, gate receipt and merchandising. Clubs can spend unlimited amounts on youth development and ‘infrastructure’, such as stadium and training facilities.
At the end of 2009 Chelsea Football Club plc released their financial figures for the year. Chelsea FC has virtually converted all its outstanding debt into equity and the company is practically debt free. Roman Abramovich was the man who turned £350 million of Chelsea’s debt into equity, making the club debt free. Chelsea Chairman Bruce Buck seemed to be expecting these rules back in 2009. He said: “The reduction will also enable the club to comply with any regulations on debt levels which are being discussed by the football community.”
Other clubs aren’t so lucky with their owners. The Glazer Family has racked up debts of over £700 million, which reside with Manchester United’s parent company Red Football Joint Venture. The Glazer’s involvement has impacted majorly on the fans at United. There has been a huge increase in ticket prices and the average price of a season ticket has gone from £487 pounds to £722. With things looking bleak the fans have stepped in.
The green and gold anti-Glazer scarves have begun to dominate the fans at Old Trafford and new ownership is on the cards. The Red Knights, a group of well off Manchester United fans, may make a bid for the club before next season and there has been talk of the fans buying a stake in the club.
Although Chelsea seems to be in the clear regarding UEFA’s proposed rulings, fellow Premier League managers aren’t so impressed by Chelsea’s finances, particularly Arsene Wenger. In an interview early this year Wenger said Chelsea were “half cheating” with their debt situation. He said that Christmas was “a time for magicians” with regard to Chelsea’s debt being written of by owner Abramovich.
With so many clubs in the Premier League with million pounds worth of money owing it’s not surprising that the debt of this English league creates 56% of the total debt across Europe. Fifa president Sepp Blatter has criticised the league’s debt: “They have two clubs in the Premier League who are not in debt. Why, because they have two sponsors and they have taken away the debt.
“Why are they in debt? Because they pay too high salaries and they spend money they don’t have.” The truth is he’s right, footballers’ wages and transfer fees have grown and grown over the last few years. A pay cap may be the answer, the Chairman of the Football League Brian Mawhinney thinks so. He said that it is inevitable that salary capping will occur because the current business model of England’s professional football league cannot be sustained without change.
No one can know the impact it could have on English football but with the debt growing something will have to be done.