Debt in football

In April 2009 Forbes magazine published a list of the World 25 Richest clubs. The list unsurprisingly is headed by Manchester United and Real Madrid, with Arsenal surprisingly in third place. What how do they actually define profit? Well as only a few of... More

In April 2009 Forbes magazine published a list of the World 25 Richest clubs. The list unsurprisingly is headed by Manchester United and Real Madrid, with Arsenal surprisingly in third place. What how do they actually define profit? Well as only a few of the clubs in the Top 25 are publically listed they can actually be very ambiguous in how they class certain expenses and so the true position is slightly different. Profit is also a short term measure. You can run a business at a loss for years on end and pile up massive debt but in one year when you actually make profit you could appear on this list simply by selling one player, or the naming rights to a stadium. So Manchester United’s £80m sale of Christiano Ronaldo to Real Madrid will almost certainly keep them at the top of the list next season as that is money they apply straight away to their P & L. Now here’s the thing. Accounting regulations allow them to book that money straight away as revenue, despite the fact Real Ma Less