European top 5 leagues are filled with a vast amount of money and sponsorship deals. Clubs earn huge profits every year from match day income and TV rights deals. However, there are several clubs that are facing financial issues due to multiple reasons. The reason will be explored in the article.
- Top 10 fooball clubs in debt and Their debt value
- Football club’s debt breakdown analysis
- Collective debt and its breakdown
- Why football clubs are in debt?
Overall Collective Debt and its Breakdown
12 clubs that tried to form the infamous European Super League held the commutative debt of £7.4 billion as per the reports. The reason behind the league formation is to get rid of the debt and be independent once again. Commutative debts £7.4 billion of 12 clubs divided into different 6 sections. These are:
UEFA aimed debt: In General, 12 clubs have £5.6 billion of debt. As per UEFA’s definition of financial debt, clubs own £3.5 billion in debt. Cumulative transfer debt is £2.1billion. Moreover, almost all of the financial debt has come from banks (£3.3 bln), compared to only £0.2 bln from owners.
Remaining debts: Remaining £1.8 Billion combined debt is owed in Staff debt, tax authorities, suppliers, and other creditors. After adding all the combined debt stands at £7.4 Billion.
Football Clubs With The Highest Debt
We breakdown 10 clubs with highest debt. The numbers discussed below are official numbers from clubs tax books.
- Total debt: £1.2 billion
- Gross Financial Debt: £831 million
- Transfer Debt: £140 million
- Trade and Other Creditors Debt: £111 million
- Tax Debt: £96 million
Tottenham recently build a new stadium with tons of cash has been poured on that. When the time to recover arrived, Covid-19 waves appeared. Games being played behind closed doors has effectively led to a deficiency in matchday revenue.
As per various reports, Tottenham Hotspur has incurred a debt of £1.2 billion. Not winning any silverware since 2008, but the club a lot in financial crises. Due to major debt, they are close to striking a stadium name right deal. It will provide a financial boost for the club.
- Total debt: £1 billion
- Gross Financial Debt: £421 million
- Transfer Debt: £283 million
- Staff Debt: £180 million
- Tax Debt: £49 million
- Trade and Other Creditors Debt: £97 million
A club that suffers the most in pre and post-pandemic is no other than FC Barcelona. Despite being the richest club, their financial crises and debt lure them down. One of the reasons for the club’s huge debt is the club wage structure.
Barcelona was feeding football heavyweight players with millions of euro contracts. In order to win the UCL, they sign players on heavy deals taking loans. None of their record signings showcase their talent. Barca ends up selling these players on cheap deals just to cut the wage bills.
The situation Under Joan Laporta gets worse as the club has to offload Club’s biggest player Leo Messi just to register their summer signings. Players taking pay cuts, Staff debt close to £180 million, Its all worse for Barcelona at this moment.
3). Atletico Madrid
- Total debt: £804 million
- Gross Financial Debt: £192 million
- Transfer Debt: £277 million
- Staff Debt: £86 million
- Tax Debt: £5 million
- Trade and Other Creditors Debt: £244 million
Atletico was recovering from the loan and debt when the pandemic hit their healing road. Los Rojiblancos successfully liquidated around €202m worth of debt to the Spanish Treasury recently. But it still has a long way to go before they relax. Club’s overall debt reached £804 million. Whereas there Trade and Other Creditors Debt is the highest among ten clubs, £244 million.
4). Manchester United
- Total debt: £771 million
- Gross Financial Debt: £526 million
- Transfer Debt: £149 million
- Staff Debt: N/A
- Tax Debt: £68 million
- Trade and Other Creditors Debt: £29 million
The Red Devils may be one of the richest football clubs in the world, but they’ve struggled with debt, anyway. Manchester United’s huge debts came following the Glazer family’s takeover in 2005.
They immediately put the club into a debt of £525m after taking out several big loans. However, They establish themself but with United not winning silverware anymore they are losing their sponsors one after another. Huge compensation paid to managers after sacking them, Management at the club is a disaster.
After Tottenham, They have the highest Gross financial debt which is £526 million.
5). Inter Milan
- Total debt: £757 million
- Gross Financial Debt: £361 million
- Transfer Debt: £182 million
- Staff Debt: £37 million
- Tax Debt: £43 million
- Trade and Other Creditors Debt: £134 million
Like other clubs, Milan suffers from Covid as well. Despite winning the league last year, Inter Milan incurred losses of around €150 to €210 million by the end of 2021. They even had to sell their key players Lukaku and Hakimi to raise money for Club.
Still short on the required amount. Now the club is negotiating with two financial firms, Bain and Oaktree Group, for a loan. They are looking for a loan of over €250 million to cover their losses.
- Total debt: £752 million
- Gross Financial Debt: £347 million
- Transfer Debt: £264 million
- Staff Debt: £26 million
- Tax Debt: £43 million
- Trade and Other Creditors Debt: £69 million
Juventus is the prime example of panic purchasing. The old Lady has spent recklessly in recent times. Their big-money acquisition of Cristiano Ronaldo prior to the Covid-19 pandemic has to pin them against the wall. Juventus reportedly have a financial debt of €347 million.
Their poor performance in the 2020-21 season under Andrea Pirlo did not help their cause. This, coupled with a decline in broadcast revenue and a severe drop in matchday income from the stadiums, has severely hit Bianconeri.
7). Real Madrid
- Total debt: £651 million
- Gross Financial Debt: £295 million
- Transfer Debt: £172 million
- Staff Debt: £122 million
- Tax Debt: £21 million
- Trade and Other Creditors Debt: £31 million
Despite being in debt and trying to form European Superleague, Real Madrid is still the richest club in world football. Their earnings from the last two seasons let the club jump past their rivals.
Real Madrid saves money from two summer windows in order to make a bid For PSG frontman Kylian Mbappé. Los Blacons offered euro 160 million in order to buy him. However, PSG declined. Real Madrid’s only regret is to sign Eden hazard for more than 100 million euros.
- Total debt: £405 million
- Gross Financial Debt: £218 million
- Transfer Debt: £154 million
- Staff Debt: N/A
- Tax Debt: £17 million
- Trade and Other Creditors Debt: £17 million
Buying players from the loan or permanent transfer worth £222m in summer and winter, put a dent in Arsenal’s pocket. The club is in debt of £405 million. Arsenal’s absence from the UEFA Champions League is costing the club financially and reputationally.
Arsenal’s net debt has increased substantially, rising from £142 million in 2020 to £405 million. This is largely due to a reduction in cash at the bank and in hand.
- Total debt: £386 million
- Gross Financial Debt: £129 million
- Transfer Debt: £167 million
- Staff Debt: N/A
- Tax Debt: £64 million
- Trade and Other Creditors Debt: £27 million
Liverpool withdraws a total of £197m from the credit facility in order to pay the bills and wages. Later the season starter, Liverpool returned bug chunk of money back but still, it’s not enough.
The interest rate over the loan is causing problems for the Club. Moreover, despite winning the Premier League and Champions League in recent years, Their revenue is still in the loss. However, Their new shirt deal lay off the huge amount of debt.
10). AC Milan
- Total debt: £247 million
- Gross Financial Debt: £101 million
- Transfer Debt: £67 million
- Staff Debt: £12 million
- Tax Debt: £2 million
- Trade and Other Creditors Debt: £65 million
AC Milan has been a complete mess over the last few years. Thus, it’s no surprise they’re one of the football clubs with the most debt in 2022. AC Milan fell into heavy debt under Chinese businessman Li Yonghong and things haven’t improved.
US hedge fund Elliott took from Li Yong in July 2018 and have tried to resolve the situation. No European football has caused Milan’s profits from merchandising and sponsors to suffer.
These are the ten clubs that owe the most based on their most recent published accounts.
In the list, half of them are from the most commercially-driven league in world football, England’s Premier League. Meanwhile, nine of them were clubs involved in the Super League:
|3||Atletico Madrid||£804 million|
|4||Manchester United||£771 million|
|5||Inter Milan||£757 million|
|7||Real Madrid||£651 million|
|10||AC Milan||£353 million|
Why European Football Clubs are in Debt?
- The obvious first answer was the COVID-19 pandemic and Game being played Behind the closed doors. Last years these teams combine loss £1 billion in revenue. This included an 18.5% drop in revenue at Manchester United, 12.3 per cent at Tottenham, and 7.9 per cent at Liverpool
- Another reason is simply by borrowing loan from banks and heavy intreset rates.
- High Wage structure of clubs in terms of salaries, Staff salaries.
- Big buys in transfer windows with low capital income genration.
- Sponsors pulling back from deals due to club failure.