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Money, football and the pandemic: Anecdotes, predictions, and possible solutions.

When Kieran Marguire, Financial football expert said “lower league clubs have been taken out at the knees by the coronavirus pandemic, having seen income streams dry up as the possibility of empty stands until 2021 looms large”, we all thought, boo-hoo! what did y’all think.

There is a reason why they are in the lower leagues, this financial crisis will hit them more…cry me a river Maguire. But as Ed Woodward had an interview recently, where he all but said Manchester United was looking into a very deep, hollow and echoing money barrel(nothing is in it anymore), we couldn’t help but be shocked.

As it would so appear, not only the teams in the lower leagues, but the entire world of football in fact is in for a violent financial shock, one which reckless “overdraft”, lack of foresight and outright negligence has put us all in.

What is happening?

50 + 1 rule in Germany has disaster capitalists lurking

In 1998 when the German FA inaugurated the 50 + 1 rule that inhibits investors from “hijacking the club ownership from its members and fans”, it seemed like a pro-fan culture move. And it felt like this for the last couple of decades. But now, a rude financial reality has slapped the germans in the face: Fans money can’t save a club in financial crisis

With 13 of the 36 teams that make up the Bundesliga one and two league facing existence threatening financial hardships(leading to the hasty restart of the league, to obtain that TV broadcast money), the statement by Bayern President Herbert Heiner, that “some have a greater need for capital than others” is shrouded in understatement. Everyone can use that money right about now.

At the end of the day, football clubs are still commercial enterprises and this pandemic has revealed financial weaknesses that have been covered over the years for the sake of fan inclusion and what not.

Crisis exposing the weakness of football finances, Manchester united and EPL can testify

It’s understandable, and perhaps expected that the likes of Macclesfield, Southend and Bradford are deep in financial mess due to the current situation, but for teams in the top tier of English football to be so flummoxed in only two months, so much so that some even began to apply for furlough staff pay and others practically begging club staff to take drastic pay cuts, it begs the questions as to what financial structure was even in place all these years.

As reported by Mark Odgen of ESPN, there was a warning to investors that as much as £20m ($25m) will have to be repaid to the Premier League’s broadcasting rights-holders this season given the disruption to matches that were suspended in March. This itself is no issue, until you realize that in their quarterly accounts for the period covering Jan. 1 to March 31 of this year, United revealed that the club’s debt had rocketed by $156 m to $525m in the space of just 12 months.
If this cold wind is affecting as big a team as United, what dare we think the rest of the football world is going through.

Real Madrid as bullish even in the face of a crisis…but other Spanish teams scampering

When former Real Madrid Boss, Fabio Capello, inferred that Barcelona and Atletico Madrid are among the teams that are likely to be left in tatters by this financial crisis, there were many ooohs and ahhhs. As though he was spewing lies.

But here we are, and the books are staring us in the face. Unsustainable financial behavior leaves even Barca in the red, however the numbers aren’t looking as bad for Los Blancos as we look forward to seeing how Florentino Perez will make good his promise that there will be no pay-cut in the Real Madrid fold.

Even that is all beginning to sound like hogwash, as rumors have it that the great Real Madrid might also have its players taking salary cuts due to the worsening financial situation.

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