Sunday, October 12, 2008

It's the economy

The head of the English FA, David Triesman, has warned that at least one major EPL club may fail (The Australian 9/10/8 page 14). Football is a massive business and is tied into the global economy. Football's growth and deviation from its long term norm as a capital negative business has reflected two decades of carbon priming and China's realisation that capitalism and totalitarianism can co-exist. Where we are now, even in the A-League, reflects these happy and slightly unusual times.

The key sponsor of world's biggest club, Manchester United, AIG is under bailout. The US tax payer won't see football as the highest priority.

West Ham's major shareholder has seen his investment in a bank disappear.

Other teams will be being impacted in ways we don't know of yet. Investors and sponsors will not be comfortable.

Unlike 1987, or the Asian crisis of 1997, or the tech wreck, this downturn looks like it will be deeper and take longer to recover. The oil price and other resource prices have fallen. And the Australian dollar has declined from a remarkable high of 98 cents to the US dollar to around 69 cents. A dead cat bounce - where the market falls and all the optimistic bargain hunters pour in and then see their money wiped out as the market falls again - has occurred.

get out there and support your club. They need you.

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