On the day questions are asked over Manchester United’s ‘overextended’ IPO valuation and the recent bankruptcy of some of Britain’s big clubs, it’s worth asking if the mania for buying football clubs resembles the 17th century Tulip Bubble [graph above]. But it’s not just UK clubs which are facing problems. Some of Europe’s biggest clubs are mortgaged to the hilt and are owned, in all but name, by Spanish and Italian banks. Ironically, these clubs are worth more on the balance books of the banks [which include the nominal value of overpriced players] than they could ever realise as assets and so the farce must continue for now or those banks would be further weakened.
Glasgow Rangers will not be alone, the peak of the ‘Football Bubble’ has already been reached and some very big European football clubs are bound to follow them into bankruptcy.