An article on the impact of the global recession on the world's most popular sport...Football.

1. Economic Crisis and its Effect on Football
First it was a credit crunch, and now it's a global crisis - but
football teams seem to have sleepwalked their way through it, with
Manchester United spending £30m to get Dimitar Berbatov,
Manchester City being taken over by Abu Dhabi United Group,
owned by Sheikh Mansour bin Zayed Al Nahyan and Liverpool
spending millions on every Spanish footballer that was ever born.
Finally, football clubs are beginning to see the magnitude of the
crisis at hand and they don't like what they see. Everton's Bill
Kenwright has already admitted that it's a game for the billionaires
and the club's finances have hit rock bottom with Kenwright forced
to mortgage the club's future against a stadium that may not even
get the go-ahead. Everton are in a bad state and badly need
someone like Anil Ambani to bail them out - but the three who
maintain the debts are the three in the frontline: Liverpool, Chelsea
and Manchester United. Together they owe £1bn worth of debt -
and Football Association Chairman Lord Triesman says that the
debt of these three clubs alone constitutes a third of the debt owed
by English football clubs.
Take a look at West Ham today, with Chairman Magnus Eggertson
having to issue a statement saying that the club will not be affected
by Landsbanki going into receivership. As of 12 September 2008
the club terminated its contract with its main sponsor, XL Leisure
Group which had been placed in administration. The club is
already set to hand out millions over the Tevez affair and have had
to scale back their spending plans as a result. What happens when
the Glazers of Manchester United or Gillette & Hicks of Liverpool
wind up in trouble? Liverpool has already put the new stadium on
hold...

2. Just as nobody predicted the collapse of Lehman Brothers, nobody
has predicted the collapse of a Premiership football club.
The Premier League, of course, have tried to deflect attention away
by claiming that the FA itself is heavily indebted and that clubs'
income is proportionate to their expenditure - but the debt
packages that have been tied into Liverpool and Manchester
United are just as murky as any of those that have been bringing
down American banks - and now banks around the world.
As long as there are billionnaires around to bail out clubs, those
with chairmen who view their clubs as playthings will survive -
until they get bored or see their fortune halved overnight and
decide they're going to stop playing around. Arsenal, too, will
remain solid – although still suffering from £43m in debt, invested
wisely in their stadium and a youth scheme that is paying
dividends. But there are clubs in the Premier League who have
been playing around with debt - and if one does start to struggle, it
could pull the others down with it.
The future? Unless every Premiership club gets itself a billionaire,
then the Premier League clubs ought to think along the lines of the
Championship, which sees clubs start on a relatively equal footing
and punishes those with poor financial records. However, even in
this volatile market, I don't see that happening unless a club
collapses. And as long as there's debt involved, there remains a
possibility that we might see Sir Alex carrying the items from his
desk out of Old Trafford in a cardboard box. A small one, but not
as crazy as Lehman Brothers or Manchester United's own sponsors
AIG going bust.