Isn't debt versus value of players under contract important

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).

Only if you're going to sell the players, right?

Or maybe sell the club. Otherwise, I think it is a question of debt service v. free cash flows. Typical EBITDA coverage ratio analysis.

I think we're looking at different aspects

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

Click here for link at https://en.wikipedia.org/wiki/Administration_(British_footba

My understating is some of the lower division

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.