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The high price of football

The price of football is high, reveals Kieran Maguire, with only 11 clubs in the top two divisions having accumulated profits since they started trading (some of these clubs have been trading for only a few years because of new holding companies etc.). Accumulated overall losses are £3.376 billion. Good news [possibly?] for Arsenal fans though is that they are historically the most profitable club.'

Football clubs have four main types of finance, notes Maguire: owner loans, bank/third party loans and shares to investors. Owners of clubs in the top two divisions have lent clubs £3.26 billion, with many loans interest free. Roman Abramovich is responsible for over one-third of owner loans.

Third parties are often reluctant to lend to clubs due to the risks of relegation and loss of TV money. This finance includes regular bank loans, leases and hire purchase. Total funding from this area was £1.6 billion with 75% taken up by three clubs: Manchester United, Tottenham Hotspur and Arsenal.

Shares are the least risky type of investment as shareholders are not entitled to repayment and only Manchester United paying a dividend from the EPL and Championship. Total equity funding for these clubs is £4.1 billion.

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