Leading article: The football bubble

Thursday 04 September 2008 00:00 BST
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To say that fans of top-level English football are living through exciting times would be an understatement. The acquisition of Manchester City this week by a consortium from Abu Dhabi has turned an under-achieving club into one with ambitions to be the biggest in the world. It is the latest, and most spectacular, episode in the transformation of the Premier League into a playground for super-rich investors.

Traditionalists have found plenty to grumble about in all this. Some clubs have become vehicles for the international jet set to flaunt their wealth and amuse themselves. Others have become sports "franchises" run by foreign businessmen purely for profit. Neither type of investor has any long-term ties with the clubs, in the manner of the earlier owners who were often local business tycoons. The bonds between England's top clubs and the communities from which they originally grew has long since been broken.

There seems little point in railing against this trend. For good or ill, England's top football clubs are now businesses, to be bought and sold by the highest bidders. And the majority of fans are ecstatic about the injections of foreign investment and the promise of greater success on the field. So what could possibly go wrong? In a word: economics. On the surface, the financial fundamentals of the game look sound. Television revenues remain strong. The enthusiasm from fans for match tickets has not abated. But the market for playing talent is beginning to resemble a bubble. If it is pricked, there could be a very hard landing.

And there are a number of sharp objects on the horizon. Several top clubs are grossly indebted. If they find difficulty in raising finance in the credit markets, their owners might have no alternative but to sell up. The first assets to be offloaded would be players, which would have a disastrous effect on a club's ability to compete. Another danger is the possibility of a sudden withdrawal of money by those owners with apparently bottom-less pockets.

This is not to argue that any of this will definitely happen. The Premier League might continue to go from strength to strength, dominating European club football. But if the bubble does burst, there could well be many fans who live to regret the day they threw open their arms in such a wide welcome to the Premier League revolution.

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