MAY 28, 2009
English Soccer’s Morning After – Years of Unrestrained Growth Brought Heaps of Glory — and Debt; ‘We Are in Serious Trouble’
As the Premier League vaulted to prominence with a frothy mix of TV money, rising ticket prices and a devoted — and increasingly international — fan base, it became a status symbol for billionaires across the world. They paid huge sums to acquire teams and waged a salary arms race for top players. Corporate sponsors lined up to splash their brands on teams or, in the case of banking giant Barclays PLC, the whole league. Its teams generate an estimated $2.4 billion a year in broadcast fees, tickets, sponsorships and merchandising.
Today, thanks to Britain’s deep recession, the league must spend its off-season grappling with falling ticket prices, ailing corporate sponsors and financially distressed owners. Unlike teams in the NFL, Premier League clubs are almost entirely unregulated: There is no salary cap, players are freely traded, and league administrators have no control over who buys and sells clubs. Given such wide latitude, some owners racked up big debts during the credit boom, both on buying the clubs themselves and recruiting expensive, on-field talent. Analysts fear the owners who spent big will now be whipsawed by the downturn and forced to make deep cuts.
How will your team handle the new realities?