You’re probably sick of hearing the word by now, but until coronavirus abates, these truly are ‘unprecedented times’. Face masks, two-metre rules, tracking and tracing – you name it, it’s unprecedented.
A more precedented impact of the pandemic, though, has been Premier League clubs incurring debt. Many were in the red before COVID-19, but the loss of revenue as a result of this global health crisis has only exacerbated their money woes.
Which Premier League Club has Most Debt?
Per Deloitte’s Annual Review of Football Finance for 2020, published in June and taking into account figures for 2018-19, the cumulative net debt of Premier League clubs surpassed £3 billion for the first time in a decade.
From £2.9 billion the previous year, it rose to an astonishing £3.5 billion last year, due primarily to a 16 per cent increase in ‘soft loans’ – a type of loan made on favourable, interest-free terms to the borrower – from club owners. These totalled at £338 million in 2018-19.
The top ten clubs as far as debt is concerned was as follows:
|2||Tottenham Hotspur||£534 million|
|3||Newcastle United||£384 million|
|4||Brighton and Hove Albion||£279 million|
|5||Manchester United||£204 million|
|7||Wolverhampton Wanderers||£103 million|
|10||Leicester City||£80 million|
Despite four of the so-called ‘Big Six’ featuring in the top ten here, Chelsea were the only of them to record an overall operating loss, with a £2 million deficit.
Between them, the other five recorded a £566 million operating profit, which was roughly two-thirds of the total which the 20 top-flight clubs posted altogether.
It is also worth mentioning that, in their most recent accounts from October 2020, Manchester United’s debt has more than doubled to £474.1 million, registering a £23.2 million loss in 2019-20 and a 19 per cent fall in revenue to £509 million.
Other clubs are yet to post their latest figures at time of writing, but this really puts into perspective the impact already felt by COVID-19 – and not only through Arsenal making 55 employees and one Gunnersaurus (initially) redundant.
United have taken a £70 million hit on revenues, and £80 million of sponsorship payments deferred in the last year. This, unfortunately, is unlikely to be an anomaly – expect many more to follow suit, particularly the longer behind-closed-doors football continues.
And what about their neighbours? Are Man City in debt?
Well, some may be surprised to see they don’t feature in Deloitte’s most recent top ten – not least given Pep Guardiola spending more on his defence than that of entire countries of late – but in actual fact, City went the other way in 2018-19.
The only ‘Big Six’ club to not register debt (Arsenal – £42 million net debt), City recorded net funds of £57 million on the back of an historic treble-winning season. Though, this is in part due to much of their financing coming from share capital via their owners (who, of course, are an obscenely rich Middle Eastern royal family).
Why Are Premier League Clubs in Debt?
As much as COVID will inevitably become the next big reason, debt among Premier League clubs evidently long predated the 2020 pandemic.
We’ve touched on soft loans, but there are a plethora of other reasons why England’s elite have racked up debt so alarmingly.
Bank borrowings are another significant cause – these increased by £282 million in 2018-19, particularly at Tottenham Hotspur, who loaned £658 million as work on their new stadium concluded.
But aside from that, perhaps much else of the debt woes can be attributed to pivotal decisions being placed in the hands of the wrong people fixated with the short-term, with instant gratification.
As Dr Dan Parnell, senior lecturer in sports business at University of Liverpool’s management school and chief executive of the Association of Sporting Directors, told The Athletic earlier this year: “There are lots of good, well-intentioned people in the game who desperately want to make good decisions for their clubs but all too often those people are either not making the final decisions or those intentions go out of the window when the owners get involved.
“You can see it in the Sunderland ‘Til I Die documentary (on Netflix), where you have the manager and head of recruitment saying, ‘don’t pay any more than this for that player’ but then go ahead and do it anyway. It’s like they’re playing with a new toy.”
And amid talks of government bailouts, rescue packages and pay-per-view matches, the future looks decidedly bleak in this regard for a long while yet.