The Political Economy of Football V2

Sad news from France in the last few weeks, as the storied Girondins de Bordeaux had to file for bankruptcy in order to avoid “heavy additional sanctions” over the club’s ongoing financial difficulties. This dramatic step also entailed giving up the club’s professional status, terminating the contracts of all its players and closing one of France’s leading youth academies, which highlighted the colossal mismanagement over the last few years. The French financial watchdog, the Direction Nationale du Contrôle de Gestion (DNCG), had already provisionally relegated Bordeaux to the Championnat National (the third tier) after the club was unable to provide financial guarantees ahead of next season. It beggars belief that this could have happened to one of the most storied football clubs in France that has won the league on no fewer than six occasions with the most recent title coming in 2008/09. That qualified Bordeaux for the following season’s Champions League, where they got as ...

American money has been flowing into European football, but it doesn't always end well, as has happened at Bordeaux. The Ligue 1 club's majority shareholder, American investment firm King Street, recently withdrew funding, placing Bordeaux into administration. French fiduciary law firm Poulmaire Avocat & Fiduciaire has been asked by the city to analyse the takeover which also involved American investor Joseph DaGrosa. A plan for the continuation of the club's activity will have to be presented and validated by the French league's financial overseer before mid-July. If their debt is not restructured and a buyer is found before then, the club could be placed into judicial liquidation.

Ligue 1 has been in difficulties ever since it lost its lucrative television deal and got a less satisfactory replacement.  Now it appears that the American owners of Bordeaux want out:  https://www.getfootballnewsfrance.com/2021/king-street-seeking-to-sell-ligue-1-side-bordeaux/   The problem is they can't get the price they want for a depreciating asset, so bankruptcy may be the answer.