When watching soccer, most fans are consumed with the results and fortunes of their teams. Fans may also spend time fretting about which player their team is going to sign, and hope it’s a star player that will bolster their chances of winning games. Supporters may care about the value of their favorite teams, but on the list of soccer topics discussed it is closer to the bottom than the top.
Every year, the most valuable soccer clubs are ranked with attention given to their value and their revenue streams. Rarely discussed is their level of debt. Most of these clubs were purchased through loans and have substantial debt because of that. Indeed, most of the world’s most valuable clubs are the most indebted ones as well. Yet, with their many revenue streams and many assets, these debts are not treated with much concern. In other cases, these debts directly impact the clubs on the field and lead to supporter angst. High levels of debts without increased revenue opportunities may lead to the sale of some talented players to alleviate the financial pressures.
Here are the top ten soccer clubs with the most debt. Most of these clubs are part of Europe’s elite and find themselves among the most supported and valuable clubs in the world. While some of these clubs are not among Europe’s elite and find themselves in the precarious situation where their limited revenue opportunities are coupled with large costs.
10. Borussia Dortmund -$ 82 Million of Debt
At the end of the 2012/2013 season, a season that saw Borussia Dortmund finish second in the Bundesliga and lose in the final of the UEFA Champions League, Dortmund’s debt was valued at $82 million. Dortmund was valued at $456 million and did make Forbes list of the top twenty most valuable soccer teams though. What is interesting about Dortmund’s debt is that it comprises 18% of the total value of the club.
Although Dortmund still has a large debt, the situation is a marked improvement from where the club was in the mid 2000s. Overspending in the transfer market and failure to consistently qualify for the Champions League led to the club having to repeatedly sell their prominent players such as Tomas Rosicky. The financial situation at Dortmund was so bad that the club was forced to take a loan from rivals Bayern Munich in 2003 to pay players’ salaries. The club also had to sell the name of their Westfalenstadion stadium in the summer of 2004 and have yet to buy it back.
9. Juventus – $83 Million of Debt
One of Italy’s largest clubs is ninth on the list of clubs with the most debt. Juventus’ debt of $83 million is 12% of the club’s total value. Though like Dortmund, Juventus is on the Forbes list of top twenty most valuable soccer clubs. This is partly due to the fact that they have just built a new stadium, Juventus Stadium, and are still feeling the lingering effects. The construction of the new stadium cost over $163 million. This investment in their new stadium will be a source of increased revenue in the long term as it is one of only two club-owned stadiums in Serie A. As a result Juventus are poised to claim all match day revenue from their new stadium, which is approximately $102 million, while their rivals in Serie A have to pay rent fees to local city councils for the use of their stadiums.
8. Liverpool – $110 Million of Debt
One of England’s most successful clubs, Liverpool makes the top ten with a debt of $ 110 million which comprises 17% of the club’s total value. Liverpool are owned by the Fenway Sports Group (FSG), the same group that owns and manages the Boston Red Sox. FSG bought Liverpool in October 2010, after a High Court ruling forced the previous owners of the club to sell. The previous owner’s of the club, Tom Hicks and George Gillett Jr., were forced to sell the club when accounts revealed that the holding company of the club was in debt to the tune of $573 million and creditors including the Royal Bank of Scotland took the owners to court.
7. Queens Park Rangers – $145 Million of Debt
Unlike most of the entries in this list, Queens Park Rangers (QPR) are not one of the world’s most valuable clubs. QPR are not even participants in the top flight of their domestic league. At the end of the of the 2012/2013 English Premier League campaign, QPR were relegated from the Premier League after they finished last. As a result of their relegation from England’s top flight, QPR’s revenue stream shrunk.
Their years in England’s top flight were marked with instability. In two seasons, QPR had three managers which is not a recipe for success. As a result of these managerial changes, QPR constantly brought in new players on huge wages, which they then had trouble selling in part due to their inflated wages.
6. Barcelona – $156 million of Debt
Barcelona is one of Spain’s most successful and supported clubs. Some of this generation’s greatest players ply their trade for the Catalan club, including Xavi, Iniesta and Lionel Messi. In recent years, the Spanish national team has enjoyed unprecedented success, winning a World cup and two European championships and a quick look at those teams will reveal that most of the players are from Barcelona. Barcelona is the third most valuable club according to Forbes at $ 2.6 billion and its debt is 6% of its total value. Unlike most clubs Barcelona is owned and operated by its supporters.
Barcelona’s high wage bill is a major cause of their debt. Unlike their great rivals Real Madrid, Barcelona do not usually pay large transfer fees to acquire great players. Most of their great players were developed through their youth academy with only a few exceptions. The cost of keeping such players and ensuring that other clubs do not tempt them away can be quite high. Players such as Messi, Xavi, Iniesta, Dani Alves, Cesc Fabregas and Victor Valdes are among some of the highest paid players in the world for that reason.
5. Real Madrid – $165 million of Debt
Real Madrid is the world’s most valuable soccer team. The club generates the most revenue and was valued at $3.3 billion at the end of the 2012/2013 season. They are one of the most successful clubs in the world and are famous for buying the world’s most expensive players. Like its great rival, Barcelona, Real Madrid is owned and operated by club members. The $165 million debt comprises 5 % of the club value.
There are significant questions regarding the accuracy of the Real Madrid’s accounts with some fan groups arguing that their debt is significantly higher. Real Madrid’s debt is due to their habit of signing some of the world’s most expensive players and repeatedly breaking the transfer record in order to do it. Four out of the top ten transfers fees in history were payed by Real Madrid and all were made since 2001. Some fan groups have argued that the sale this summer of popular play-maker Mezut Ozil to Arsenal, for nearly $70 million, was to balance the budget after giving star player Cristiano Ronaldo a raise on his new contract and breaking the transfer record in acquiring Gareth Bale.
4. Bolton Wanderers – $267 million of Debt
Bolton Wanderers, like QPR on this list, are not in their country’s top flight division. After an eleven year stay in the English Premier League, Bolton were relegated at the end of the 2011/2012 season. At the end of 2013, the club announced that its debt had grown to $267 million and that they had lost over $83 million in one year (50.7 million pounds). Only four other clubs in England have lost 50 million pounds in a year. Three of those clubs, Manchester City, Liverpool and Chelsea are among the top twenty most valuable clubs in the world. The fourth club, Aston Villa, is in England’s top flight and has more revenue streams than Bolton Wanderers.
A worrying fact for Bolton Wanderers is that the club are dependent on a single benefactor, the owner Eddie Davies. There are fears that the situation at Bolton could descend into the type of crisis that could see the club become bankrupt. The situation at Bolton highlights the risk that comes with overspending on player wages and the dangers of being relegated. Bolton were relegated the year before the English Premier League signed a new television deal worth $ 4.92 billion (3 billion pounds) over three seasons.
3. Valencia – $374 million of Debt
At the beginning of this century, Valencia won two Spanish league titles and were a fixture in the Champions League, reaching the final of Europe’s premier club competition in two successive seasons. Since the turn of the century, they are the only Spanish club to have won the league not named Barcelona or Real Madrid. However, Valencia’s massive debt has resulted in the club repeatedly selling some of their most important players. Players such as David Villa, David Silva and Juan Mata were sold to alleviate the debts facing the club.
Valencia play all their home matches at the Mestalla stadium. The club were supposed to move to a new larger stadium at the end of the 2008/2009 season. Due to the financial crisis, the club have still not moved into their new stadium as construction was suspended. They hope to move to their new stadium by the 2014/2015 season.
2. Arsenal – $384 million of Debt
Forbes values Arsenal at $1.326 billion and as the fourth most valuable club in the world. Arsenal’s debt is a whopping 29% of the total value of the club and according to Forbes is the highest percentage of debt of any club valued in the top twenty.
The debt figures published by Forbes include stadium debt. Arsenal moved into their current stadium, the Emirates Stadium, at the start of the 2006/2007 season. While this stadium is largely responsible for the large debt the club faces, it is also responsible for the high revenue generated by the club. Arsenal’s previous stadium, Highbury, had a capacity to hold only 38,419 fans while the Emirates holds over 60,000 fans. The stadium has allowed Arsenal to generate match day revenue in excess of $480 million.
1. Manchester United – $ 569 million
The soccer club with the most debt is one of the world’s most popular teams, Manchester United. Manchester United’s debt of $569 million comprises 18% of the club’s total value. Forbes values Manchester United at $3.165 billion and as the second most valuable club behind Real Madrid. Manchester United are owned by the Glazer family who took full ownership of the club in 2005. The Glazer family purchased the club with the use of various loans which were secured against the club’s assets. The takeover of Manchester United by the Glazer family resulted in the club accruing debts much to the chagrin of a portion of their supporters.
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