Clubs in huge debt 'could face Euro ban'

Discussion in 'Football Forum' started by Kelvin, Oct 8, 2008.

  1. Oct 8, 2008
    #1

    Kelvin Banned

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    Clubs such as Manchester United and Liverpool could be barred from future European competitions because of their heavy debt, a top Uefa official has warned

    Uefa general secretary David Taylor said clubs face the 'ultimate sanction' if they failed to deal with serious debts.

    'There would be forms of communication, even warnings, even reprimands before one would ever get to a situation of exclusion but it's absolutely possible,' Taylor told the Leaders in Football Conference.

    Taylor expressed concern that clubs are putting their futures in jeopardy by exposing themselves to debt that would require a 'white knight' to bail them out.

    'We are looking at strengthening the minimal financial criteria and other forms of self regulation that may impose greater standard on clubs that want to compete in European competitions and beyond that club football,' Taylor said.

    Although he did not mention specific clubs by name, Taylor's warning is sure to send a shudder through England's leading sides.

    According to Deloitte figures for 2006-07, all 20 Premier League clubs are in debt.

    But it's the likes of Manchester United and Liverpool who are most heavily burdened – and the global credit crunch will only increase the strain following their takeovers.

    United are estimated to be a staggering £764m in debt after Malcolm Glazer took over the club. Liverpool are around £350m in debt after Tom Hicks and George Gillet saddled the club with huge debt following their takeover. Plans for a new stadium have also stalled.

    Chelsea meanwhile are £736m in debt, although owner Roman Abramovich could wipe that out at any point. Arsenal's estimated debt of £318m is tied in with their new stadium and the Gunners have always been careful to reign in their spending and look after their finances.

    Yesterday, FA chairman Lord Triesman warned that clubs operating on enormous debt are at great risk, especially in this bleak financial climate.
  2. Oct 8, 2008
    #2

    M13 Reserve Team Player

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    It's after reading stuff like this that a hatred for the Glazers becomes ever more prevalent.
  3. Oct 8, 2008
    #3

    Ballache Full Member

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    join MUST
  4. Oct 8, 2008
    #4

    maniak Full Member

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    Yawn.

    Nothing will happen.
  5. Oct 8, 2008
    #5

    Sarni nice guy, unassuming, objective United fan.

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    Why would we hate Glazers for that?

    It's UEFA's stupid idea.
  6. Oct 8, 2008
    #6

    Rood nostradamus like gloater

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    :boring:
  7. Oct 8, 2008
    #7

    ralphie88 Full Member

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    It's not an "idea". It's a reality. The UEFA Licensing Scheme for all clubs was brought in a number of seasons ago and has been phased it bit by bit. It's there to ensure that clubs are secure in terms of both finance and stadium safety.

    When it was brought in, it was originally thought it would only exclude Eastern European teams who did not meet the criteria. Then Lazio were mentioned as posibly being excluded as a result of it. Now it would seem that UEFA now have found the balls at least to suggest it could be applied to the likes of Chelsea, United and Liverpool.
  8. Oct 8, 2008
    #8

    M13 Reserve Team Player

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    Isn't it the Glazer's fault that we're so far in debt?
  9. Oct 8, 2008
    #9

    Marching Somehow still supports Leeds

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    More garbage from Uefa :rolleyes:

    Hello ralphie :lol:
  10. Oct 8, 2008
    #10

    ralphie88 Full Member

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    Chuckle :lol:

    I was a fan of the licensing scheme when it was brought in and I remain so.
    Interesting that no one was throwing their toys out of the pram at that time, eh?
  11. Oct 8, 2008
    #11

    Sylar Full Member

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    Wont happen cos lets be honest, how many teams would this effect? Not just in England but across Europe? These tournaments would lose a lot of money if the likes of United and Liverpool are banned.

    In principle its a good idea though.
  12. Oct 8, 2008
    #12
    I'm sure the major sponsors of the Champions League would just love teams like United and Liverpool to be expelled:rolleyes:

    Ralphie I agree it's a good idea, but why no noises from UEFA when Real Madrid were so much in debt they needed a government bail out?
  13. Oct 8, 2008
    #13

    ralphie88 Full Member

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    Well the scheme came in at the start of the 2004/5 season. My understanding was that Madrid were out of debt by then (thanks to the Spanish Government!). All clubs supported the introduction of the scheme at the time.
  14. Oct 8, 2008
    #14

    SAred Full Member

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    What I good idea this is lets ban those clubs with heavy debts from the most lucrative money competition. That should help them repay there debts quicker. :houllier::wenger:
  15. Oct 8, 2008
    #15

    Handjob Bob And e(r) must 8(on) this tagline

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    What constitutes failing to deal with serious debt? Not paying your direct debits?
  16. Oct 8, 2008
    #16

    GAngel Full Member

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    They're in quite a bit of debt right now as well but not a whisper.
  17. Oct 8, 2008
    #17

    ralphie88 Full Member

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    Eh? UEFA have just stated at the Leaders in Football jolly - sorry conference - that all clubs with serious debt could find themselves facing sanctions. No names were mentioned. Only our anglo-centric media immediately assumed it was only English clubs he meant.
  18. Oct 8, 2008
    #18

    marcus agrippa Full Member

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    'if they fail to deal with debt' says the article.

    last i checked, we were servicing ours.

    UEFA: big bark, no bite.

    what about Real Madrid and constantly getting bailed out by the Spanish Governement?

    feck off!!
  19. Oct 8, 2008
    #19

    Cali Red Full Member

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    Really quite hilarious. How will they keep sponsors paying top fees when you remove what, something like 5-7 of the biggest clubs in the europe? Why do these agencies always come out and say stupid things they know they won't follow through on. :mad:
  20. Oct 8, 2008
    #20

    ralphie88 Full Member

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    The last time I looked, our debt was still going up. :(
  21. Oct 8, 2008
    #21

    marcus agrippa Full Member

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    true.

    but what i find laughable about the whole thing is the sort of asymmetry that exists. Madrid were essentially able to wipe out their debt using money from their government. no one said anything. it is also rumoured that they actually borrow money to finance signings. nobody says anything.

    now suddenly UEFA come out mouthing off. i may be accused of being paranoid, but it's not the first time i've noted an anti-English-club bias here.
  22. Oct 8, 2008
    #22

    All 3 United His tinfoil hat protects him from the Glazers.

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    Shouldn't matter about the balance sheet what is key is if the club makes a profit year on year and can therefore service the debt.

    By insisting clubs make a profit (with an element of flexibility) this would ensure the fan base and way the club is generally marketed/ran is in line with their overheads and thus prevent sugar daddy's coming in playing fantasy league football with real clubs. aka Chelsea and now City.
  23. Oct 8, 2008
    #23

    ralphie88 Full Member

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    But last year we made a loss. :confused:
  24. Oct 8, 2008
    #24

    All 3 United His tinfoil hat protects him from the Glazers.

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    Hence (with an element of flexibility) i.e. clubs can't make a loss year after year.
  25. Oct 8, 2008
    #25

    ralphie88 Full Member

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    Your plan could be very bad news for the Glazers.
  26. Oct 8, 2008
    #26

    All 3 United His tinfoil hat protects him from the Glazers.

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    Could be for them but better for the game and possibly utd. They could always re-float, although currently probably not the best idea for them.
  27. Oct 8, 2008
    #27

    Canuckred64 Full Member

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    I am no financial expert and don't for one moment claim to understand United's financial position. But is this as big a problem for United as people are making it out to be?

    Uefa general secretary David Taylor said

    "Debt in itself is not necessarily a bad thing. Just because I have a mortgage it doesn't mean I'm bankrupt. But the debt does have a requirement to be properly serviced.

    United have always said that their debt is serviceable. That is probably debatable, but if the debt is indeed serviceable, than this may not be as big a worry to United as people think.

    he also says;

    "Clubs must work within all available means and they must not expose themselves to such an extent that the whole future of the club is jeopardised unless some white knight comes over the horizon with millions and millions of pounds.

    United seem to work within their means, the salary bill as a percentage of turnover is lower than most of our main rivals, especially Chelsea. Chelsea is totally dependent on Abramovich and his money, if something happens to him or he grows tired of owning a football team, their future will be jeopardised.
  28. Oct 8, 2008
    #28

    Rood nostradamus like gloater

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    You actually understand it a lot better than those who think any kind of debt is a terrible thing - this is the type of myth that is perpetuated by the LUHG people
  29. Oct 8, 2008
    #29

    ralphie88 Full Member

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    The people who tend to be most upset about the debt tend to be those people who have seen their Season Tickets rise by 60% since the Glazers took over and have been forced to join the ACS. Those who have been priced out as a result are particularly disappointed about our financial situation.

    But, hey, what do they know? :rolleyes:
  30. Oct 8, 2008
    #30

    Rood nostradamus like gloater

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    ticket price rises are a different issue and we already have a thread about that as you well know:
    http://www.redcafe.net/f6/reasonable-ticket-prices-watch-united-220545/

    This thread is about debt and my only point was that having debt is not necessarily a bad thing - do you disagree with that?
  31. Oct 8, 2008
    #31

    Spoony The People's President

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    Why isn't it such a bad thing?
  32. Oct 8, 2008
    #32

    ralphie88 Full Member

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    Yes, primarily because in serving the interest payments, the owners are forced to increase income, which they do by increasing ticketing costs. The two issues cannot be separated I'm afraid.

    Under current debt levels (still increasing), around £60-70m is leaving the club each year to pay the banks when it could have been used to subsidise ticket prices, invest in the youth/1st team squad and invest in the stadium.
  33. Oct 8, 2008
    #33

    Canuckred64 Full Member

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    There is no doubt the £60-70m could be better used and since it is going to service the debt, instead of being put to better use, than obviously the debt is not a good thing.

    I also realise that the Glazers are servicing the debt on the backs of the clubs supporters and it is the season ticket holders who are taking the biggest hit.

    But my question was if the debt is serviceable no matter how they do it, and if United's salary bill as a percentage of turnover is within what uefa considers acceptable, than should we be worried about getting kicked out of the Champions League as much as people seem to be?
  34. Oct 8, 2008
    #34

    ralphie88 Full Member

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    To find the answer to this question you will need to read the Licensing Scheme - should be on the UEFA Website. As I said, this isn't new 'news' at all. Just demonstrates how ignorant and lazy most of the UK journalists are unfortunately.
  35. Oct 8, 2008
    #35

    esmufc07 Full Member

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    Those have been invested in.
  36. Oct 8, 2008
    #36

    ralphie88 Full Member

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    When did I say they hadn't? :confused:

    All I said was we're pissing £60-70m a year up the wall that could have been spent on the club/fans/players/stadium etc.
  37. Oct 8, 2008
    #37

    VP Full Member

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    Yes debt isn't a bad thing. But no debt is clearly better than any debt.
  38. Oct 8, 2008
    #38

    esmufc07 Full Member

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    Money is being spent on the players, if we had an extra £60/£70m in the bank, I doubt we would have added to the Berbatov and Petrucci signings this year or the Nani/Anderson/Tevez/Hargeaves deals the last.

    But you're right, ticket prices should be reduced. We're victims of our own success in that respect.
  39. Oct 8, 2008
    #39

    Spammy Being watched; will learn to post in the correct f

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    1) This is a non-story, it's like admitting that one day when you cross the street there is a danger you may get hit by a car.
    2) UEFA and FIFA have a vendetta against England, this is not a revelation.
  40. Oct 8, 2008
    #40

    ralphie88 Full Member

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    Erm.... so debt is a bad thing then? :confused: :D