Soccer Clubs: Europe’s Other Looming Debt Crisis

Euro zone governments aren’t the only entities seriously needing to get their debt levels down these days. Information revealed this past week showed Europe’s leading soccer clubs are similarly spending their way into a dangerously deep hole, and must somehow find a way to reverse increasing losses.

BOINK!

The UEFA report stated 56% of Europe’s top pro soccer clubs lost money in the 2010 financial year for a staggering total of over $2 billion.

Little wonder, then, that UEFA officials revealed that painful sanctions will be applied under “financial fair play” rules beginning in the 2014-2015 season for recklessly spending clubs.

Little wonder, then, that UEFA officials revealed those dismal figures with the reminder that painful sanctions will be applied under “financial fair play” rules beginning in the 2014-2015 season for recklessly spending clubs.

Virtually all top-flight clubs have lived beyond their means for over a decade now. Real Madrid, for example, has long relied on the Spanish crown to step in and assume the losses and debts created by assembling “Galactica” sides while the Abu Dhabi owner of Manchester City demonstrated even greater largesse in 2011 when he wrote the club’s $164.5 million operating loss off.

All that would be over, however, under UEFA’s looming rules calling for all clubs to balance their books. At the end of the year, the clubs’ bottom line will be examined. Meaning the days of the sugar daddy in European soccer may be coming to a close as a climate of austerity kicks in.

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