Do Arsenal need a Sugar Daddy?

May 21, 2008 | 53 Comments

Yesterday, a little bit more detail about Chelsea and Man U’s debts has been revealed in the Guardian; it turns out that this year’s Champions League finalists collectively owe £1.5bn. The funny part of the story is Chelsea’s insistence (through Peter Kenyon’s rabid drivelings) that they don’t have any debt. Oops, I mean “outside debt.”

In a rather Orwellian manner, Chelsea are claiming that they have no debt because, as it turns out, all that money that Abramovich is pouring into the club is actually just “interest free loans.” Which isn’t really a debt right? So, while the Guardian maintains that Chelsea currently owe £736m, Chelsea says “we owe no external banks.”

Right, you just have bonds issued to the tune of £578m in the name of Roman Abramovich and payable within 18 months of his demand. David Dein once famously described Abramovich’s spending as “Roman’s sitting in his tank firing £50 notes at us.” As usual DD was wrong, because if you look closely at those notes, they are IOUs.

Debt? What debt?

The other interesting fact in this article is that both United and Chelsea are actually running annual deficit spending as well. So, not only do that have enormous, unsustainable, club killing debts, but they run nearly £80m in the red every year. And every year their debt gets bigger and bigger and the prospect of their wealthy owners ever earning a dime on their billions in “investments” gets smaller and smaller.

I can’t see any future for these two clubs that doesn’t lead to a financial collapse. If you look, the signs of crisis are already in the offing; United can’t even pay off their transfer fees from last year’s foray into the market. How long before teams stop selling them players on IOU? What happens to United if their banks demand payment on their debt (they currently can’t even pay their interest)? What happens to Chelsea when Roman gets sick of losing £100m a year and stops funding their unsustainable salary structure? Or worse, demands a portion of his £600m debt be returned?

There was a time, when I, like many Arsenal supporters, saw the free spending ways of Man U, Chelsea, and Liverpool and wished that we had some rich guy to help us compete in the market. I no longer have any lingering doubt about the course the Arsenal board is on.

So, whichever club wins, I hope they enjoy the Champions League final today; I’m sure the trophy will be for sale soon on Ebay.

Posted by timmy_the_tooth | Filed Under Mailbag