http://uk.eurosport.yahoo.com/07102008/58/premier-league-debt-ridden-english-clubs-owe-3bn.htmlEnglish football has amassed debts of around £3 billion at all levels of the game and a top club could fold in the current financial climate, according to FA chairman Lord Triesman.
Triesman told a conference of football business leaders that the figure was based on information supplied by sources in the City of London and was the most reliable and up-to-date estimate available.
"The best estimate I could get in the City yesterday was that debts in English football as a whole have probably edged to the 3,000 million pounds mark," he said in the opening keynote speech at the two-day conference at Chelsea's Stamford Bridge ground.
"There is one thing certain about debt and that is that it has to be repaid, alternatively it has to be refinanced.
"The debt mountain as we now know is owned around the world and therefore part of the value of the club is owned around the world, either by financial institutions some of which are in terrible health, sometimes by very wealthy owners who are not bound to stay in the club and sometimes by not very wealthy owners who are also not bound to stay with their club.
"As we all know today and far too painfully, financial institutions become ever more risk averse."
Triesman said nearly a third of the overall debt - £950m - was owed by England's top four clubs - Manchester United, Liverpool, Chelsea and Arsenal - and that on average the wage bills were climbing by 12 percent a year.
The FA itself had accrued 400 million pounds of debt following the construction of the new Wembley Stadium which opened last year - a figure included in his overall estimate.
Asked whether he could guarantee that a top English club would not suc*****b to debt and fold during the global financial crisis, Triesman told a news conference: "I don't know - it could.
"If somebody had said to me a month ago did I have a genuine fear that Lehman Brothers would go bust I'd say no I didn't.
"What I know is we are in very much more volatile position in which debt is not only a problem in terms of its volume, it's a problem because those who own the debt are themselves now often in serious problems. Your fate isn't in your own hands."
In a later address to delegates, Richard Scudamore, the chief executive of the Premier League, said he did not think a leading club would fold.
"This is top of the clubs' agendas and in my view they are managing it responsibly. Is there a financial danger to any club? There is always a financial danger and there has been since clubs first came into existence over 100 years ago, but the 92 professional clubs in England today are very similar to the 92 clubs of yesteryear.
"They are brands that persevere and survive. I don't agree that debt is bad, it is inevitable and to a degree it is healthy as long as it is linked responsibly to your income."
Triesman would not be drawn on the reported troubles of West Ham United, whose owner is Icelandic banker Bjorgolfur Gudmundsson. His family are major shareholders in the bank Landsbanki which was put into receivership on Tuesday.
Triesman also said the ownership of clubs was no longer as transparent as it should be with owners moving the debt on through the financial markets.
"The owners break the debt up as a matter of policy into small packages. They mix it with other debts, some of it fine some of it toxic, and sell it on," Triesman told the conference.
"I believe this poses us with a tangible danger, not only is debt at high risk levels, but also in a period where transparency lies in an unmarked grave.
"There is no point in thinking that this affects everybody in the world except football.
"Indeed, further down the pyramid of football more and more clubs are in trouble and a number of owners leave abruptly and either seek repayment of debt owing to them as directors or they can consider selling the ground."
Triesman, a former foreign office minister, said the test for determining who could own an English soccer club, known as the "Fit and Proper Persons' Test", should be more rigorous.
"We can't have a test where someone like Robert Mugabe can own a club because he has not been convicted of anything and someone like Nelson Mandela couldn't," he said.
well who didn't see this coming
