Where does the football money trail lead?

Like previous contributors, I can't see how sport and integrity can be used in the same sentence, unlessyou put the words "has no" between them. I know nothing about finance, but I would love to know if any of these huge sums are ever actually handed over, i.e does the wealthy purchaser ever stump up several millions, put it in the bank accunt of the club and get a receipt? Or is it all done by promissory notes that are then passed around in ever-increasing inflationary circles? Does the purchaser have a lazy billion sitting in his account, or does he take out a loan (credit created by the bank from non-existent funds?). I only ask these questions because each step in the payment process allows for some sort of corruption, threats, bribes to take place. Even in the relatively low-finance area of rugby league, we seem to have clubs going broke after an entrepreneur has bought them -- how can this happen if the dosh was actually handed over?

; ) http://www.youtube.com/watch?v=W0o0uWJbS1s

Hahahahaha yes great point Fuss there on paper currencies....like your (inadvertent) style....the forex market really is a whole bunch of nothingness. Maybe thats why there is such resistance to sound money! Would take away the chance for traders to skim profits by moving money around a market of nothingness. I dont know if the alternate PM is with me there though! :D The ETS or 'floating price' approach i guess is also similar to paper currencies in that the supply of permits (like paper) is centrally rigged as well is it not. More opportunity for some Libor style scandal down the line or at the very least more skimming by sophisticated, high finance types.

So what if it's an invisible product? Every day, transactions worth trillions of dollars are completed involving invisible products. In fact, the Foreign Exchange market - the biggest market (based on transaction value & liquidity) on the planet - involves 'invisible products'. Heck, the world of global commerce would grind to a halt if we didn't trade "invisible products" ... I can't believe the alternative PM of AUS doesn't understand this basic concept of global business.

Financial fairplay is just window dressing that will fuel another shadow economy to keep the pay of footballers off the books. Will be good for keeping the mitts of the common statist away from their bank balances i guess. Hey maybe they could start paying them in bitcoin or gold and silver, eh? ;)

And which is the long outdated system thats blindly producing war, poverty, collusion, corruption etc? Im guessed you'd say its capitalism...id say its corporatism and statism...we are probably both identifying similar issues and calling them by different names. Partly due to folks like Fuss who co-opt terms like 'free market' and 'capitalism' i would guess...i know i fell for that trickery for a long time myself! :)

Well he is technically true i guess....and besides, they're all 'dog-whistling' on every issue, its the job of the populist aint it? ;)

Financial "Fair Play" is actually nothing of the sort. It's a mechanism put in place to protect the big clubs from failure,and make the rich richer. Read this fascinating interview with Michel Platini. Martin Samuel of the Daily Mail gets the truth out of him a few paragraphs into the interview. http://www.dailymail.co.uk/sport/football/article-2329745/Martin-Samuel-meets-Michel-Platini--read-FULL-transcript-interview-UEFA-president.html

Now, I don't know about you, but I don't think the primary purpose of your life, of my life and the entirety of the human race's is just to blindly consume to support a failing economy and a faulty system, forever and ever until we run out of every available resource and have to resort to blowing each other up to ensure our own survival. I don't think we're supposed to sit by idle while we continue to use a long outdated system that produces war, poverty, collusion, corruption, ruins our environment and threatens every aspect of our health and does nothing but divide and segregate us. I don't think how much military equipment we are selling to other countries, how many hydrocarbons we're burning, how much money is being printed and exchanged, is a good measure of how healthy our society is but I do think I can speak for everyone when I say, we're sick of this.......schhhh...

"Finally a Strayan politician who speaks my language!" So, did you come running when Tony dog-whistled his dismissive thoughts on "trading invisible products"? ;-)

Yes those finance schools have really done great by us of late....i think its more Projected ROIs that get sophisticated financial modellers and their cheerleaders into trouble. Everyone telling each other what they want to hear :) I nominate u for the next chairmanship of the US Federal Reserve, Fussball ist unser leben! And true "free market capitalist economies" should not require the magical hand of the Fed and their bond purchasing, nor bailouts/bailins...nor the helping hand of the state. Tony Abbott has at least a sceptical eye on statism... “The Rudd-Gillard government has been a highly statist government, the Brown government reverted to statism with a vengeance in Britain, and Obama is the most left-of-center government in at least half a century.” Finally a Strayan politician who speaks my language!

The money power may shift to Asia over the next 30 or so years... as it's Asia where the money is...

The equally simplistic speculating on possible ROI ignores the fact that most of these clubs are not *making* more than they are spending, a reality proven by the fact that up to 8 clubs in the La Liga are either in, or facing, administration. We all know what it means when you can't pay you're debts as they're due - you're insolvent. If it wasn't for the Spanish Government ignoring or papering over the debts, many Spanish clubs would be. The Esp.Govt has even acted as guarantor to some of these clubs. It's the house of cards way to run a football competition.

That is good for City then! It's good to see that the owners are putting money into developing their own talent rather then buying it. This must be a good thing for football?

It's naive to simply mention "debt" without any context. In any reasonably competent business school, school of economics or applied finance you will be taught that the most important thing to consider is "ROI" = Return on investment. So, just to spew the idea that "debt is bad" is unsophisticated business analysis ... something that I only expect from the leader of the Liberal Party of Australia & his bunch of incompetents. :-) The truth is, in free-market capitalist economies, every organisation should strive to maximise return on investments. Investments can be sourced from debt, or equity; or a mix of both. Provided the ROI on an investment is greater than the cost of the investment (i.e. interest payments for debt, dividends & cost of dilution of ownership for equity), then a rational business owner/investor will accept the investment. I'm not saying that the levels of debt in every football club is acceptable. But, without analysing the return that the club is getting on each investment & the overall financial health of the entity (balance sheet, cashflow, P&L) it's impossible to reach any sophisticated conclusion about the level of debt at a football club, or any entity.

Interesting article. It's a theme which has been widely written about in the past few years - including the amount of debt that European clubs have amassed...with total debt levels for football clubs trebling in the past 5 years alone. Frightening. Obviously, clubs like Man City & Chelsea are big perpetrators of this endless debt, but the Spanish clubs in particular, would be in major trouble if the Spanish Government actually called in their debts. It's the highest display of arrogance from these clubs, particularly when it can be done successfully and sustainably...see Bayern. This article touches on it: http://blogs.blouinnews.com/blouinbeatbusiness/2013/04/09/a-red-card-for-spains-debt-ridden-soccer-clubs/

It's hard to disagree with your piece bshine. Problem is we have had utopists wanting to change the world for ever and look where we are now. If your employer offers you tomorrow twice as much as what you are earning now you won't probably ask him why he does that, where does this money come from, is he being fair all across the board with all employees etc. You'll say thank you very much and book a trip to Brasil next year. Same in football really. It doesn't mean we should sit down and watch. We all have different ways to address this, in football or life in general. As a PSG supporter from the start, of course I miss the Borelli and even canal + years of the 80 and 90s where the club was owned by passionate Parisians. thing is those guys are simply too small in today's world. We need the Russian or in our case, Qatari, if we want to attract the best players and coaches. Sure I don't see my club the same way I did 30 years ago but it's still my club. And it's the same for many other supporters all around the world. But I welcome Platini's financial FairPlay. It might not resolve everything but it's a step. If we don't have clubs spending money they don't have in the next decade or so I will be happy with that. IMO Leeds or Portsmouth fans are the real victims, not Chelsea, PSG or Man city. Not yet at least!

Chelsea. Owned by a bloke who was at uni in the 1980s and a communist state where possesions are against the law. Then a decade later he miraculously owns a corporation worth billions. He doesn't even know the first thing about drilling for oil or tapping gas. Odd, no one bothers asking how you would do it. Maybe I should just turn up with a Smith and Wesson at BHP Biliton hq and tell the management to leave, I am the new boss. It is quite acceptable the Grand Theft Auto way of climbing the ladder.