Which Elite football clubs could go bust?

[GazTheLegend]

Not speaking about lower League clubs who are of course in HUGE danger without revenue, but the likes of Barcelona and Juventus and indeed ourselves (I'd argue to a lesser extent) pay HUGE wages and service those wages only through TV revenue and prize winnings for the most part.

Without those, I can't remember the article but for instance Juventus operate at 80 or so percent of revenue and Barcelona have the highest wage bills in Europe

Will the players accept reduced wages temporarily or will the elite clubs actually end up closed due to ironclad contracts?

 

[cyberman]

Villa could be fecked. Barca are operating close to the line as well and they have taken on shirt production themselves so if that stops..

 

[Ibi Dreams]

My gut feeling is that the biggest clubs are just too big to go down, they'll all find a way

 

[horsechoker]

Liverpool FC but mentally not financially.

 

[Dante]

We've shown good forward planning by intentionally not qualifying for the Champions League. It means that a suspension of play won't affect United as much as it does Real or Barca, as we're not as dependent on another big revenue stream.

David Moyes has basically saved the club.

 

[TRUERED89]

It would be very surprising if any of the elite went bust.

 

[GazTheLegend]

My gut feeling is that the biggest clubs are just too big to go down, they'll all find a way

UEFA already asking us for €200m to not stage the euros.

That's a precursor to them not paying out prize funds to clubs imo. Start by claiming you owe THEM money so you're happy when you don't have to pay.

 

[GazTheLegend]

It would be very surprising if any of the elite went bust.

I think that's a serious danger already. 6 months of no football = 6 months of no gate receipts, TV or prize or advertising money and 6 months of paying wages. Clubs already barely operate within FFP regs.

 

[11101]

I think that's a serious danger already. 6 months of no football = 6 months of no gate receipts, TV or prize or advertising money and 6 months of paying wages. Clubs already barely operate within FFP regs.

Is this paid per game or at the beginning/end of the season? If the latter it doesn't matter what happens to the league.

 

[TRUERED89]

I think that's a serious danger already. 6 months of no football = 6 months of no gate receipts, TV or prize or advertising money and 6 months of paying wages. Clubs already barely operate within FFP regs.

Fair points, however I just don't see it happening. They can probably get some sort of loans in the absolute worst case scenario. Most elite clubs probably have huge cash reserves hiding in the background somewhere anyway, for a rainy day.

 

[Arios]

Not speaking about lower League clubs who are of course in HUGE danger without revenue, but the likes of Barcelona and Juventus and indeed ourselves (I'd argue to a lesser extent) pay HUGE wages and service those wages only through TV revenue and prize winnings for the most part.

Without those, I can't remember the article but for instance Juventus operate at 80 or so percent of revenue and Barcelona have the highest wage bills in Europe

Will the players accept reduced wages temporarily or will the elite clubs actually end up closed due to ironclad contracts?

it will be bloody for everyone
For Juventus I'm not worried cause Exor which own juventus just pumped 300m for liquidity and it wouldn't be a problem for a company with 170b euro revenue to cover some losses
Still Banca Imi calculated that if the season doesn't go through and there isn't any help from the govt (like stopping taxes and salaries) Juventus will end up with a 110 minus

https://www.calcioefinanza.it/wp-content/uploads/2020/03/stime-banca-imi-juventus-coronavirus.jpg

 

[GazTheLegend]

Is this paid per game or at the beginning/end of the season? If the latter it doesn't matter what happens to the league.

It's a little of both

You get a guaranteed sum paid as a solidarity payment if your club is on TV less than 10 times in a season, but also a facility fee per game played so clubs that are shown more often on television do get more money.

 

[GazTheLegend]

Fair points, however I just don't see it happening. They can probably get some sort of loans in the absolute worst case scenario. Most elite clubs probably have huge cash reserves hiding in the background somewhere anyway, for a rainy day.

Our cash reserves are actually pretty desperately low

Depends on our debtors and whether or not we can renege on some of those due to unusual and strange circumstances - there may actually be a benefit to being riddled with debt there as essentially we are already operating on a loan.

 

[Mb194dc]

If football is stopped for a year, most clubs will have extreme financial difficulties. Similar goes for a lot of industries. They still have most costs but zero revenue.

Don't remotely see how governments can bale everyone out.

Of course, all the assets will still be there, stadiums, brands players etc. So clubs can be bought out of bankruptcy and keep going under new owners.

 

[Tom Cato]

Not speaking about lower League clubs who are of course in HUGE danger without revenue, but the likes of Barcelona and Juventus and indeed ourselves (I'd argue to a lesser extent) pay HUGE wages and service those wages only through TV revenue and prize winnings for the most part.

Without those, I can't remember the article but for instance Juventus operate at 80 or so percent of revenue and Barcelona have the highest wage bills in Europe

Will the players accept reduced wages temporarily or will the elite clubs actually end up closed due to ironclad contracts?

None. At least not within 1 fiscal year. This is a truth with a lot of variables that affect the accuracy of my own statement, but in general, none right now.

Most clubs have highly valuable assets. The players themselves that can be part of collateral if the club needs emergency bank loans. The other factor being the clubs are owned by incredibly wealthy inverstors who can offer safety in form of cash loans or other forms of cash reserve, or bank loan guarantees.

Today, while I write this, the clubs have so many options to stay afloat: investors, bank loans, sellable assets, binding commercial deals, etc. There is simply too much money involved for there to be any danger of foreclosure.

That could all change if we're seeing 2021 and the virus has somehow not released its grip, mutated and become more aggressive and deadly. Hopefully that does not happen and we go the way Wuhan did, cleared.

 

[Rampant Red Rodriguez]

Soo Juve players are on a 4 month wage break haha, they're doing so poor financially that they're talking about swapping/selling De Ligt to us.. They must be desperate.

I think they're a similar basket case to Leeds around 2002 when they brought the best in business players and didn't have the money to continue with the project. I think Juve will go a similar way to them if this lockdown continues..

They must have been desperate for something with the amount of debt they've taken on in recent years

 

[horsechoker]

Soo Juve players are on a 4 month wage break haha, they're doing so poor financially that they're talking about swapping/selling De Ligt to us.. They must be desperate.

I think they're a similar basket case to Leeds around 2002 when they brought the best in business players and didn't have the money to continue with the project. I think Juve will go a similar way to them if this lockdown continues..

They must have been desperate for something with the amount of debt they've taken on in recent years

Juve seem too big to fail, they're basically the Manchester United of Italy.

 

[Pablo76]

Where are you all getting this supposed 6 months and even from 1 person a year from?? There’s literally nothing to suggest football won’t be back for a year, utterly ridiculous statement.

 

[sun_tzu]

None of the very top.clubs will

They might all walk away from the champions League and set up a mid week European super League though

 

[Tom Cato]

Soo Juve players are on a 4 month wage break haha, they're doing so poor financially that they're talking about swapping/selling De Ligt to us.. They must be desperate.

I think they're a similar basket case to Leeds around 2002 when they brought the best in business players and didn't have the money to continue with the project. I think Juve will go a similar way to them if this lockdown continues..

They must have been desperate for something with the amount of debt they've taken on in recent years

If only Juve had any assets that could be sold to offset any financial turmoil.

 

[Teja]

I think more concerning for us / football in general is what happens to commercial / sponsorship revenues in a down turn. We make a small % of our revenue from match day (~20%) and 80% from commercial + broadcast rights. I assume all three portions here will take a hit.

The kit deal goes on till 2025 or whatever and that's probably the largest commercial deal we have, so we might be good there but unsure when the TV rights will be negotiated next.

I think transfer spending / wages will go down a bit for a few years now.

 

[90 + 5min]

I mentioned a week or two ago about that if this virus keeps going for 6 months to 1year maybe we will see football going back towards working people again.

Whenever we can start playing again I believe that there will be lot less money in football. From wages and transfer fees to ticket prices. And the way football has been going last 10 years I wouldn't mind. Sadly it would also mean that some clubs would be in economic trouble.

 

[Bubz27]

Spurs.

 

[SilentWitness]

People laughed at the sponsorship and commercial activities of Woodward but they could be vital to you at the moment. You'll be fine as you're commercially one of the biggest, if not the biggest, in the world so you have enough revenue to support yourself. Same goes for people like Liverpool and they're relevant too. City are bankrolled so they'll be fine.

Spurs are a potential worry. They've just built their mega stadium and were banking on a lot of commercial activity surrounding that in the near and long term future. Similarly clubs that are in a city where there are other big clubs that are currently bigger i.e Us as Liverpool are the bigger club currently or teams like West Ham/Palace in London when there are teams like Arsenal and Spurs.

 

[ivaldo]

I mentioned a week or two ago about that if this virus keeps going for 6 months to 1year maybe we will see football going back towards working people again.

Whenever we can start playing again I believe that there will be lot less money in football. From wages and transfer fees to ticket prices. And the way football has been going last 10 years I wouldn't mind. Sadly it would also mean that some clubs would be in economic trouble.

There is zero chance of that happening.

 

[Logit]

Any club relying on the transfer market as a source of income is in danger. There is no value in a footballer that isn't allowed to play. The damage to balance sheets of clubs around Europe and risk of further disruption next season will depress transfer spending. Yet it will probably be through selling players at reasonable fees that keeps many clubs alive.

With United's strong financial position and ability to raise capital quickly, this could lead to a very strong transfer window where transfer targets can be bought at a discount.

 

[Relfy]

I seem to recall Barca having an obscene wage bill and it consuming +80% of their revenues, so they could be at risk, but one would imagine that they're too big to fall. If this continues for lets say another 6 months, they will surely be forced to sell a few players when the market eventually reopens just to balance the books. As mentioned by others Juve could be forced into a similar situation too.

 

[Mb194dc]

Most clubs will suffer financial difficulty the longer this goes on. Doubt big clubs will go bust though. Sold cheap is more likely.

All revenue streams will decline because of both the virus and general economic problems. Match day will certainly continue to be effected for a long time. There is the potential for losses in TV income if season can't be finished. Sponsorships will reduce in value or be cancelled as the general economic downturn bites.

Meanwhile the main outgoings clubs have is player wages, they're fixed till players contracts expire.

That is a pretty ugly combination which could also lead to a fire sale of players by clubs wanting to offload wages.

 

[GuybrushThreepwood]

Barcelona's financial stewardship has been a disgrace for a long-time. Even during middle of their Guardiola era, they had to take out a large bank loan in the summer of 2010 to pay their players' wages and settle their liquidity problems. When they won their second treble in 2015, behind the scenes they were panicking about the additional bonuses that they would have to pay out.

That's despite them benefiting from advantages not enjoyed by clubs like Man Utd and Bayern for long-time, i.e. an incredibly lopsided distribution of TV money in La Liga in their and Real Madrid's favour (which clearly helped them in Europe), far more municipal support, cosy relationships with banks, 'fairly' dodgy dealings and creative accounting etc.

 

[Arios]

Soo Juve players are on a 4 month wage break haha, they're doing so poor financially that they're talking about swapping/selling De Ligt to us.. They must be desperate.

I think they're a similar basket case to Leeds around 2002 when they brought the best in business players and didn't have the money to continue with the project. I think Juve will go a similar way to them if this lockdown continues..

They must have been desperate for something with the amount of debt they've taken on in recent years

so English newspapers claim shit and it's automatically real? as if man

 

[RedStarUnited]

UEFA already asking us for €200m to not stage the euros.

That's a precursor to them not paying out prize funds to clubs imo. Start by claiming you owe THEM money so you're happy when you don't have to pay.

They wouldnt dare do that. The top clubs can just as easily move away from UEFA and go and form another competition. FIFA would be begining for that to happen as they want a new club competition.

 

[GazTheLegend]

so English newspapers claim shit and it's automatically real? as if man

Yeah English newspapers are full of shit but your club is undeniably insanely broke af

I said at the start of the thread there's no way Juventus can afford those wages with no revenue and so it proves

 

[donkeyfish]

Highly leveraged clubs are the ones in danger, but for massive clubs brand name and customer loyalty is high enough to find a buyer if they go bust.

Football clubs have a proud history of bankruptcy and they usually survive just fine in the longer run.

 

[Hulksmash]

Barcelona with their 600m wage bill.

 

[Devil81]

Barcelona with their 600m wage bill.

Wonder if the Spanish government would bail out Barca and Real given the current situation...

Not a chance.

 

[Uniquim]

Has anyone mentioned Bournemouth yet? They are in horrible shape economically. If that whole thing about paying back broadcasters happens, or worst case scenario for them, relegation, then I think they'd struggle. They have a 84.6% wage-to-turnover ratio, and 88 percent of their total revenue comes from broadcast rights money. They also owe other clubs £81m in transfer instalments, with only £5m coming in.

 

[Wednesday at Stoke]

Didn't Spurs take on a big load of expenditure with the new stadium that is not hosting anything right now? They must be feeling the cash crunch and I don't think all the Kane rumors are coming from one side. Juventus seem to be in some trouble, as do Dortmund as they were the first big clubs to start docking wages. Barcelona have to be at the top of the list though, reckless spending, astronomical wages and an aging squad with no bumper TV deal like the PL clubs enjoy.

 

[arthurka]

Now borrowing money is dirt cheap that might help.

 

[Tincanalley]

Price of oil has, erm, tanked. Russia, it is said could survive 40 dollars per barrel for a decade. The Gulf states and the Saudis in particular need it to stay above 80 per barrel. It could go down further with demand gone through the floor. Now where does that leave City? With UEFA ban, Pep probably on his bike and nation state sponsors in trouble? Course the Glazers might be suffering now too; the USA situation broadly looks super precarious. All is change, who knows what the 2025 season will look like?