Credit crunch hits Premier League


When Manchester United play Newcastle on 4 March next year, the US government will also be playing the UK government. United’s main sponsor is AIG, now owned by the USA, whilst Newcastle’s sponsor, Northern Rock, is also nationalised. West Ham, of course, were sponsored by an Icelandic bank, now bust.

The President of the UK’s Football Association warned recently that the $5bn debts of the main Premier League clubs were ‘high risk’. The clubs, just like many banks in recent months, immediately denied this. But the fact remains that the blog’s team, Manchester United, have debts of $1.2bn; Chelsea owe $1bn: Arsenal owe $700m and Liverpool owe $600m. And only Arsenal made a profit last season ($60m), whilst MUFC lost $100m, Chelsea $125m, and Liverpool $35m.

These losses were in spite of the clubs’ receipts from the current $4.6bn Sky TV deal. And the blog does wonder whether the clubs will be able to renew this on similar terms next season? Equally, will UK football fans continue to pay $100/match for the cheapest seats as the UK recession bites? Is this the real reason for Cristiano Ronaldo’s unusually thoughtful face, as he turns out at Old Trafford each match?

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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