Obviously the big teams aren't going to dump all their players, but some of the debt is due to purchases of stars who still have value in the transfer market.
Also I wonder how the debt levels are with lower division clubs which don't have owners with deep pockets or highly valuable players. I think the UK has had some issues with clubs going into receivership (and losing points which makes promotion hader and being relegated more of a threat).
Or maybe sell the club. Otherwise, I think it is a question of debt service v. free cash flows. Typical EBITDA coverage ratio analysis.
Your point and the OP are correct that a large debt and the ability to service it are key financial considerations. A negative cash flow will cause teams to sell off assets or enter receivership. I've included a link of the number of UK soccer teams that went into this condition (shocking and includes some relatively big clubs).
The other side of the equation, as any homeowner can relate to, is that financial debt doesn't tell the whole story when there are non-liquid assets (here players value and perhaps stadium ownership). Some of these high-debt clubs could vastly reduce the size of their debt by selling off some/all players (i.e. the value of the franchise - its debt > 0)
It's like the two problems a homeowner faces: do I have the cash flow to make the monthly mortgage (your point) and is the value of the house more than the house still greater than the mortgage or not (mine). Both are valid
clubs in England are in poor shape. The extent isn’t clear to me, but the pyramid isn’t healthy.
The Big Six premier clubs also get a larger share of tv revenue. It isn’t dispersed evenly in the premier league.
than Liverpool and yet Liverpool is on this list but Man City isn't?
City purchased outright and sold two tranches of ownership for 25% to Chinese and American investment groups with the funds invested in the City group. They also don't take money out and the club had the good fortune of inheriting a free stadium in which they have made substantial additional investment.
As much as fans of the American owned clubs bray about dirty oil money and sports washing their own club's financial models tend to be leveraged and extractive from football and their team's cash flow. I'm pretty sure the Burnley owners only put in 20% equity with debt service severely limiting player and other investment.
1) I'm pretty sure the club was in deep shit when FSG bought. They have improved the situation drastically.
2) At least some of that debt is tied to stadium expansion. It's possible the majority of it is. I think they're in really good shape when it comes to player expenditures.
Abramovich just agreed to wipe a billion of debt off the books for Chelsea. So stuff like that helps.
City's relative debt free models is aided by the oil money as well well as the ownership investment group that spreads losses over multiple clubs and the ability to negotiate both sides of the Ethihad sponsorship of City.
Sheikh Mansour doesn’t take a draw from the club which helps a lot. He is content to reinvest revenues into the team.
I’m not sure if the club is paying a dividend to Silver Lake which owns 10 percent of the club.
As I understand it, FCB is relatively majority owned by club members.
Is the debt held by the operating entity, and if so, would a reduction in membership lead to a reduced ability to service the debt?
Obviously Barca has a rabid fanbase and probably a long list to get season tix, so the people will pay, but is the debt getting serviced out of that membership revenue? Obviously they pull CL money every year so that likely helps, but they're looking at 10 years to pay it off at a minimum.
(My gunners are subject to the whims of a greedy owner who won't invest, sadly.)
I want to say it's somewhere around 60-70M euros? Seems like a lot, but that's probably less than 1/4 of their broadcasting revenue. Forget all the other revenue sources (sponsorships, media deals, etc.).