Too Big To Fail?

To borrow a phrase coined with regard to international banks during the financial crisis of 2008, it was never more relevant than it is right now with regard to several high profile football clubs of which Portsmouth and Glasgow Rangers are the most at risk.

Nearly every football club likes to refer to itself as a 'big/massive club' and any of those 'big/massive clubs' that are ever relegated instantly become 'sleeping giants'. Football loves a cliche and here it is no different. But these days what is the definition of a 'big club'? In this day and age, it is measured by revenues plain and simple.

There are many different ways in which a club can be bankrupted by those charged with their custody. There are some owners and chairmen such as Peter Risdale at Leeds and Sir David Murray at Rangers who should simply know better. Then there are others such as the assorted Eastern Europeans who have owned Hearts and Porstmouth who are either laundering money, servicing some sadistic tendencies or trying to turn a fast buck.

Then there are those such as Carston Yeung at Birmingham who simply don't have the money they say they do and there are the Gillettes and Hicks who simply loaded Liverpool - one of Europe's most famous clubs - with hugely leveraged debt, driving them to the brink briefly (with the full backing of the Premiership) in the hope of making a profit.

Whichever of the various follies have been the root cause for a particular club, the simple facts are that much in the same way as the US housing market cascaded into the subprime vacuum, you simply cannot keep on borrowing money indefinitely and living vastly beyond your means for an extended period of time.

Glasgow Rangers are by most measures a 'big club', a huge one even with a vast support and long history dating back to 1873 no less. But in revenue terms they ceased being a big club (in European terms) in the early nineties with the birth of the Premiership, the Champions League and the television revolution that came with those sweeping changes.

Despite no access to these revenues - due partly to repeated Champions League failures -  Rangers continued to spend like the top European clubs, the results speak for themselves. Failure on the pitch (in European terms) and a catastrophe off the pitch. Rangers are a big fish but in an incredibly small pond.

Paradoxically, Portsmouth are by almost no measure a 'big club'. They are a club from a seaside town with no great footballing history. Yet their access to the television riches of the Premiership allowed a succession of chairmen and managers to spend huge amounts on some fabulous players. One FA Cup was achieved via the backdoor and with all the culprits now having left the scene of the crime, the Pompey faithful are faced with the loss of their club with even the Premiership parachute payments going to the former owner.

Port Vale are now in administration and there are many many rumours circulating about Birmingham City. Fiorentina and Leeds United have imploded previously and even the mighty Barcelona needed a huge Euro loan previously to pay their players whilst Real Madrid engineered a 400M 'sale' of their training ground to tide them over several years back.

The UEFA Financial Fair Play rules are at the very least flawed but Platini at least is trying to address the problem of the long term viability of football. One only needs to look at German football for instance - interesting how football is mirroring the wider financial picture - where grounds are modern and full and most clubs run an operating profit.

The irony is that the larger the revenues, the larger the defecits clubs appear to run widening the gap between the top and the bottom. Smaller clubs such as Leeds, Fiorentina and on a smaller scale Dundee and Motherwell as an example duly bankrupted themselves trying to keep up with the top, it is a horrendous ever decreasing circle.

Bankers' bonuses are in sharp focus due to the taxpayers bailouts across the globe but what those same taxpayers are missing is that they are also funding the players' wages that are so bankrupting football as a whole. The only difference is they are paying via the turnstile or Sky subscriptions rather than through income tax.

Davie Moyes' cry for everyone to take a 20% haircut was a radical socialist cry worthy of his Glasgow heritage but the truth is it would be probably for the long term good of the game - No Nonsense.