Football’s gold rushwill end in tears

A LEADING economist has likened Premier League football clubs to investment banks such as Goldman Sachs and Bear Stearns – financial giants which have recently gone bust.

Paul Ormerod, author of The Death of Economics, Butterfly Economics and Why Most Things Fail, has described the business model used by most football clubs as “unsustainable” and has warned that more and more clubs face financial ruin.

“The parallels with investment banks are what interested me,” said Ormerod. “They, banks and clubs, both have completely unsustainable business models because any surplus generated just goes to the workers. The investment bankers and Premiership footballers were taking stupendous money out of the game, so all it takes is one little shock for it to become unsustainable. If you have people on ludicrously expensive contracts and your revenue dips a bit, you’re in dire trouble.