Does anyone miss the days when football wasn’t about financial restructuring, debt management, and bankruptcy proceedings? The veteran football fans out there must remember a time – a time not even that long ago – when football was about competition and sport instead of bizarre financial messes.
Unfortunately, today’s football world is packed with problematic financial behavior. From poorly planned club purchases to mega-loans and long-term debt issues, it’s almost impossible to find a football team today that isn’t involved in some kind of strange financial operation.
We’ve found five UK football teams that are in serious need of financial repair. If you’re a fan and an investor, you might find inspiration. If you’re just a fan – these examples of football’s dodgy finances may serve as a disappointment.
1. Portsmouth F.C.
Portsmouth have been facing some serious financial problems since the early days of 2008. After struggling with debt and ongoing expenses, the club passed from owner to owner, eventually attracting interest from troubled Abu Dhabi businessman Sulaiman Al-Fahim.
However, just forty days after purchasing the club, Al-Fahim decided it wasn’t for him and sold over 90% of the holdings to another UAE-based businessman. The club went through a range of financial problems – late payments to players, staff, and other contractors became common – and eventually wound up just days away from administration in February 2010.
After seeking desperately for a buyer, Portsmouth ended up admitting defeat and searching for bankruptcy options. While the club still actively seeks some form of financial support and ownership, it’s unlikely this Premier League club will ever be the financial powerhouse that it once was.
Current Status: Seeking bankruptcy protection after failing to repay debts acquired by the fourth owner in one season. The club has faced bankruptcy once before – in late 1998 it entered administration after a series of failed investments and loan screw-ups.
2. Leeds United A.F.C.
Leeds United was once a powerful football club, winning major games and hitting their first European semi-final in the late 1990s. After breaking player transfer world records and showing their financial power on and off the field, the club appeared to be a major player in English football and an image of corporate strength.
Of course, things didn’t stay rosy for too long. The club took out massive loans against its chances at winning major tournaments and championships, hoping to repay them with the income that would be generated with a favorable result. After failing to perform in some important games, the club ended up with a terrifying dilemma: they could struggle with long-term debt, or sell for well below their worth.
They chose to sell. After selling Rio Ferdinand for $30 million to rival club Manchester United, the club went through a series of poorly-planned and embarrassing financial disasters. Now a third tier team, Leeds United A.F.C. are often considered the UK’s best example of financial football mismanagement.
Current Status: Still around, although currently a third-tier team – a long way from their late 1990s glory. However, many expect the team to improve in coming years, as other leading football teams face financial cutbacks and debt-related issues.
3. Crystal Palace F.C.
Crystal Palace Football Club has been a state of near-permanent financial ruin since the late 1990s. After securing a place as one of England’s leading teams through Premier League success in the 1990s, the club fell to disastrous financial places after severe mismanagement and debt-related issues in 2000. Then-owner Mark Goldberg simply couldn’t handle the level of debt the club had amassed, and sold it to mobile phone tycoon Simon Jordan,
Unfortunately, Simon Jordan couldn’t handle the club’s heavy financial obligations, despite his own fortune. After failing to bring the club to a steady level of financial health, Crystal Palace F.C. went into administration in February 2010. Despite interest from a number of UK-based and international investors, the club’s future isn’t exactly clear.
Current Status: Crystal Palace F.C. is currently in administration, although a number of investors and businesspeople are expressing interest in purchasing it. American rapper, entrepreneur, and producer Sean “Diddy” Combs is reportedly considering buying the club out of bankruptcy.
4. Manchester United F.C.
Although the financial side of Manchester United is most well-known for Malcolm Glazer’s privatization and controlling interest, there are some serious debt issues troubling one of the UK’s most famous and successful football clubs. After being made private through Glazer’s 75% buyout in the early 2000s, Manchester United no longer release financial reports, though many speculate that the club isn’t in such hot financial shape anymore.
After entering a £660 million financial package in 2006, the club has struggled with debt. Public estimates put Glazer’s current debt at over £1 billion, although many analysts say the club could actually be in good financial shape. A range of parties have expressed interest in buying the club from its current owners, including the ‘Red Knights’ – a wealthy group of Manchester United fans with an interest in controlling the club.
Whether or not the deals go ahead, the thought of a fan-owned football club is certainly interesting. Manchester United may be in better financial shape than many of their other modern counterparts, but whether a fan-run team can bring the club out of its current worries remains unknown.
Current Status: Struggling with over £1 billion in debt. American owner Malcolm Glazer isn’t particularly popular with many Manchester United fans, who believe his ownership has caused severe financial worries for the club.
5. Chester City F.C.
Like many other UK-based football clubs, Chester City F.C. are no stranger to severe financial difficulties and near-miss bankruptcy situations. The club first entered administration in 1998, after a series of poor player investments and financial mistakes left them unable to service their debt or meet minimum repayment amounts.
Despite a purchase by American investor Terry Smith in 1999 and a large personal investment, the club has still struggled to escape bankruptcy throughout the last decade. After losing their Football League status in the early 2000s, Chester City has been on a steady downhill slope. The club entered administration again in late 2009, and has since been barred from playing in any English leagues after failing to pay players and staff.
Current Status: Unable to play in any English football leagues. The club entered administration in 2009 with over £7 billion in debt.