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Most of Europe’s professional soccer clubs were on slippery financial footing even before the sovereign debt crisis hit. Only a few, such as England’s Arsenal or Germany’s Bayern-Munich, have the national fan base, broadcast rights, and star players to make them profitable. Tightened bank lending and cash-strapped fans have made a bad situation worse. Case in point: Sporting Lisbon, a 106-year-old club that has had its moments of greatness. Its farm club developed Real Madrid star Cristiano Ronaldo. And in March the club eliminated Manchester City from the Europa League playoffs.
The win against Manchester City (which is still vying for the English soccer title against Manchester United) was especially gratifying because the English club is owned by Abu Dhabi investors who spent heavily on players. Weeks before that match, an auditor’s report found that Sporting Lisbon was “technically bankrupt” after losing money for 12 of the past 13 years and accumulating debt of €375 million ($495 million), borrowed in part to acquire more than a dozen new players for some €30 million. Club President Luiz Godinho Lopes says he’s looking for an investor to ensure the team makes it through this season and next. He has traveled twice to Angola to see if he could find a backer.
Clubs without rich benefactors borrowed over the last decade to upgrade stadiums, buy players, and pay competitive salaries. Now they’re saddled with loans they can’t refinance at the same time government cuts hit the fans: Portugal’s government is raising taxes and curbing spending to comply with the terms of its €78 billion bailout. “I’m sad,” says taxi driver Abilio Sancio, a Sporting fan for three decades. “I fear the club won’t be able to dig its way out of this hole.” He’s in a hole, too: “I don’t go to the stadium anymore. Business is down and I can’t afford to buy tickets.”
Sporting’s ticket sales have fallen each of the last three years, dropping 18.4 percent in 2009, 15.9 percent in 2010, and 22.5 percent in 2011. Even Sporting’s gift shop is feeling the bite. “Some people can’t afford to buy the latest Sporting T-shirts,” says a clerk. “So we sell them last season’s at a cheaper price.”
The bottom line: Saddled by $495 million in debt, the Sporting Lisbon soccer club has looked as far as Angola for a backer rich enough to bail it out.