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Dig your debt to avoid digging your grave?  The dilemma of French football

In football, we lend to the rich. In addition to its financial income and its sports trophies, FC Barcelona has reached a new peak, that of billion euros in debt, announced the Catalan club on Monday January 25. The five-time European champion owes this sum to other clubs, for player transfers, but also to banking institutions.

Without reaching this end, the leaders of French clubs are also preparing for widespread indebtedness. To try to survive the crisis due to Covid-19. And absorb the consequences of the express disengagement of the broadcaster Mediapro, unable to honor its payments.

“In Angers, before the Covid-19, we had no debts”, assures Philippe Caillot, deputy chairman of the current 10e of Ligue 1. ” In the red ”, his club will have no choice but to ” get into debt “ to cope with losses that could range from 25 to 30 million euros at the end of the season. With urgency: “We have to find lending organizations. Today, the world of football is not really welcome among bankers. “

Read the analysis: After the Mediapro fiasco, French football clubs realize they are sitting on a pile of sand, not gold

To be “Treated like all companies”, the Angevin club requested this month a second loan guaranteed by the State (PGE). From the first confinement, in May 2020, the Professional Football League (LFP) had taken out a loan of 224.5 million euros to be distributed among the twenty teams of the French championship. According to our information, the Head of State has committed to the sports world that the repayment of the first installment of such special loans will be postponed for one year to 2022.

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Until the health crisis, French football had relatively limited its debts compared to those of English clubs (2.5 billion), or compared to their weight in Turkey (131% of revenue). Ligue 1 clubs had 530 million euros in net debt in 2018, much of which was due to stadium construction, according to figures from a report published in early 2020 by the Union of European Associations of football (UEFA).

Read also French football forced to reinvent itself

For the current season, it is impossible to estimate the total amount of debts contracted with banking establishments, no one who likes to expose their financial troubles to competition. The LFP expects a deficit of at least 1.3 billion euros as of June 30 for all twenty clubs, according to figures revealed by The team January 26, including The world had confirmation. Gold, “The deterioration of the budgetary situation risks leading to an increase in indebtedness, it is correlated”, notes economist Yann Carin, teacher at the University of Lille.

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