Wealth, Debt, Glory and Humiliation: This is the Premier League

It is the nature of anything competitive to cause one to win and another to lose; one to acquire wealth and the other to be burdened by humiliation. The Premier League boasts Manchester United; a team worth in excess of £1billion yet simultaneously harbouring debts upward of £700million. Portsmouth remains a top flight team for two more matches and their spectacular nosedive into unmanageable debt flagrantly displays a difficult conundrum for the league to contemplate: clubs at the top and bottom of the table continue to acquire handsome debt.

It is probably Liverpool who best encapsulates the paradox of the current debt climate. The team has a history in English and European football of the highest calibre (eighteen Championships and five European Cups) yet are precariously balanced on the precipice of disintegration: trying unashamedly to sell in order to balance the £270million of incurred debt, almost definitely without the prospect of Champions League football next year, and a manager’s future that is somewhat uncertain. What’s worse is that if Rafa Benitez departs and the funds not available to strengthen the squad then the likes of Fernando Torres, Javier Mascherano, and even Steven Gerrard may just consider their immediate futures. Could the Liverpool talisman be fulfilled by playing a season in Europe’s secondary club competition at the age of thirty? We’re seeing how off field problems relating to club running is affecting players’ desire to perform on the pitch.

There are however some exceptions to the hopeless closed circuit of debt management in football. One, perhaps relying more on luck than on strategy (and unrealistic for pragmatists), is a bottomless purse to finance a club – Manchester City is the most glaring example of this. And the other is Arsenal. For all the recent pages dedicated to their nearly-nature, castigating Wenger for his transfer policy, his youth policy, his policy for policy…his achievements with the club are staggering. The foresight he exhibited when undertaking the financing of the Emirates is as daring as it is revolutionary. Just look at the fate of recent clubs who have built new stadiums: Leicester City, Derby County, Southampton and Coventry City all went down. Is Arsenal in debt? Yes, of course. But it would be foolish to compare their debt situation with almost every other club in the league. Michel Platini does not differentiate debt that has been taken on to finance transfers between debts that have been taken on to build stadiums yet this is a shockingly obtuse stance. When the stadium has been paid for the club will posses greater active capital. In February it was revealed that pre-tax profits for the previous six months was £33million and that Arsenal Holdings plc’s net debt had fallen from £333million to £204million. Such a drastic reduction is evidence that the club is managing a fruitful, sustainable business model in stark contrast with other top clubs who happily plough into heavier debts.

These statistics mean little to so many, including Arsenal fans, because it has translated into no winners’ medals. But the truth is such an achievement is absolutely unheard of in European football. Elsewhere (in France for example) the cost of a building site is nationally or municipally funded, slashing the debt that would be incurred by a club. If you look to Spain the TV rights are negotiated separately (which is why Barcelona and Real Madrid make the most out of it) and Real Madrid have been bailed out by the local government from debts in excess of £700million. This skews the spectrum of European debt management and leaves gentlemen like Platini spewing vitriol solely at the English league (click here), with little to offer by way of regulating the borderline scandalous nature of Madrid’s bailout for example.

I completely subscribe to the need for addressing the endemic issue of debt in our top flight but unless short term measures are overlooked in favour of a model more akin to Arsenal’s then debt will not only be an ever-present, it will be an exponentially increasing ever-present. The harder route to follow is to forgo immediate riches (which paradoxically create more debt) yet more and more we’re seeing that patience is a virtue unilaterally ignored in the Premier League; even Wenger’s time is running out when he, of all people, should be extolled and lauded for his commitment to the longevity of Arsenal.

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