Debt

Most football fans this week have only been concerned with World Cup qualifiers. No one seems to have noticed or been bothered by the Leaders in Football Conference that was held at Stamford Bridge in London. This is where one thousand of football’s decision makers – senior executives from international clubs, leagues and federations – met for two days, networked, and made business.

Jeff Tipping, the NSCAA’s Director of Coaching, introduced the controversial and allegedly corrupt, FIFA Vice President, Jack Warner to the conference. Warner made a speech, where he called for football clubs with huge debts to be punished.

He called for sanctions against clubs that were in excessive debt. That part of the sanctions should be, that clubs heavilly in debt, should be banned from taking part in European competitions. This would force club owners to make more prudent financial decisions. It would also level the playing field for smaller clubs whose capital doesn’t allow them to get the kinds of massive loans that other clubs, like Real Madrid, get.

Last year, the English Football Association, stated that Premier League clubs owed a total of $5 billion between them.

MLS clubs owe zero.

Yet the league that is heavily in debt is more popular than the one that isn’t.

The problem is not debt. The problem is unsustainable debt. It is the increasing gap between revenue and expenditure, which gets to a point where it can’t be closed in normal business practices, so you have to depend on outside people, like Roman Abramovich.

Debt ridden clubs dominate European football. Jack Warner believes that clubs in debt should have a two year period to put their finances in order, otherwise they will be suspended from European and national competition.

There are, however, two types of debt: there is the debt to private owners like Roman Abramovich and then there is the debt to the banks that Arsenal have. Arsenal’s debt will be paid off, but not in two years. Arsenal borrowed money to build a new stadium. Real Madrid are also in debt to banks. They borrowed money to buy new players. Is there a distinction between the two? Should Arsenal be suspended from playing, for being in debt even though its sustainable debt?

I think Jack Warner needs to come up with more answers to back up his statements on debt.

Keep it Arsenal

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