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Will English soccer be slide-tackled by the economy?

Eyebrows raised over $150 million bid for AC Milan's Kaka.

By Mark Rice-OxleyCorrespondent of The Christian Science Monitor / January 17, 2009

English club Manchester city has reportedly offered as much as $150 million for AC Milan player Kaka.

Antonio Calanni/AP

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LONDON

Recession, what recession?

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English soccer's latest foray into the realms of financial hyperbole takes some digesting in this era of belt-tightening, retrenchment, and job losses.

One player, AC Milan's Kaka, has attracted an eye-watering bid of as much as $150 million from the Arab-funded English club Manchester City. If the Brazilian accepts the offer, he may additionally bank a tidy salary of as much as $700,000 – a week.

But don't be fooled into thinking that this is an accurate indicator of the financial health of the game. For English soccer, the richest game in the world and a giddy carousel of the world's most richly talented and richly rewarded stars, is stuttering.

Half a dozen of the top clubs are for sale. No one wants to buy, though.

Multimillionaire stars are putting pressure on balance sheets at a time when the recession is undermining revenues from sponsorship, advertising, merchandising, and corporate entertainment. Season ticket sales are likely to fall, perhaps by as much as 10 percent.

One of the game's aristocrats, Liverpool, has shelved plans to build a new stadium. At London club West Ham, meanwhile, the team's shirt sponsor went bankrupt and its Icelandic owner has suffered along with his country's fortunes.

In an era where cash is king and debt is big trouble, a junior government minister, Lord Triesman, has warned that the entire stable of English clubs was carrying loans of $4.3 billion.

"There is every element of a bubble that could burst which is currently being sustained by this belief that football is immune," says Tom Cannon, an expert in the finances of the game.

The unthinkable scenario: if the billionaire owners of the elite clubs start to cash in their chips.

"The game is extremely vulnerable to the whims and interests of a small number of very rich people," Professor Cannon adds. "The fundamental business base is increasingly dependent on television revenues, [ticket sales] are declining, merchandising is declining, sponsorship is declining – you have clubs who can't get sponsors. All those fundamentals raise questions about the nature of the business."

Predictions of the spectacular implosion of English soccer are not new. As the game has become richer and richer over the past 15 years – easily surpassing rival leagues in Italy, Spain, and Germany – a minority of naysayers have constantly grumbled that the money sustaining the game would evaporate one day, resulting in a terrible reckoning.

Not everyone thinks of English soccer as a debt-inflated bubble. "Football is not built on nothing – it's built on huge popularity among supporters. There is no real sign of that waning," notes David Conn, a columnist for the Guardian newspaper and the author of "The Beautiful Game?"

The rise and rise of English soccer has been one of the defining cultural narratives of the past generation.

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