Serbian Red Star Belgrade on brink of bankruptcy

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The former European Cup winners owe EU 7.8m to banks and suppliers, with expenditure almost three times the size of its revenues. The club said that the debts arise from a EU6.77m loan which was taken for the reconstruction of its stadium, in order to meet the UEFA Club Licensing instructions. The club's financial results in the first half of 2005 were disappointing, with revenues at just CSD95.7m (EU1.12m) and expenditures at CSD324.8m (EU3.81m).

"Due to UEFA rules regarding refurbishment of the stadium, we have loans of EU6.77m," President Dragan Stojkovic commented to media. Stojkovic, who took over as president two months ago, said he was optimistic about ongoing talks with several big firms on sponsorship deals, but would not disclose any details.

Club chief executive Sinisa Ciric said the second half of the year would be better because of international matches, transfers, sponsorships and contributions of new members of the board.

Last season, Red Star lost the league title to city rivals Partizan and the Cup to other city rivals Zeleznik. They made an undignified exit from Europe, losing 7-3 on aggregate to PSV Eindhoven in the qualifying rounds of the Champions League and then went down 6-1 to Zenit St Petersburg over two legs in the first round of the UEFA Cup.

In an effort to return the team to their glory days, Stojkovic wooed former Italy goalkeeper Walter Zenga into taking up the post of head coach and signed a sponsorship deal with Japanese carmaker Toyota.

The club must also play their next home match in UEFA club competitions in an empty stadium because of unruly crowd behavior last month. Club supporters set off flares and through objects to the pitch before and during the second leg of a UEFA Cup second qualifying round match against Croatia's Inter Zapresic on August 25. UEFA also ruled that the club could face a second match behind closed doors, and other punishments, if fans commit further offences in the next two years.