The worrying debt situation

Manchester City posted a huge loss recently. So much so, that the salaries that they are giving out to their players is exceeding their total revenue. Chelsea posted a record loss when Roman Abramovich took over in 2004. However, the point to be noted here is, both Man City and Chelsea have owners who are shelling out from their own pockets. They are not taking money out of the club for saving their other businesses. The Glazers are doing that to Man Utd though.



I was reading Alan Sugar's opinions about the whole situation:

"Reckless lending caused the demise of the banking industry throughout the world, and banks were irresponsible in lending to these guys to enable them to buy such big football clubs,'' he said. "They have used the club as an asset against the loans and that has resulted in big interest repayments on the debt."

"Here's the bad news: One day the Glazers, the Gilletts and Hicks's will find its payback time and, when that day comes, if they haven't got the money, they default, and it's a nightmare scenario for the clubs.

"A bank somewhere is going to own the football club and hope desperately that some investor will take over the debt."