Spillovers from finance into sports
From the Independent (U.K.):
Sport feeling the pinch
By Rich Jones, PA
Wednesday, 8 October 2008
Sport has become the latest victim of the credit crunch as a wave of financial turmoil threatens to throw some of the world’s biggest names into crisis.
Football and Formula One look most in danger as global economic problems deepen, with leading figures in both sports yesterday voicing concern that the lavish spending of recent years may no longer be sustainable.
On a day when Football Association chairman Lord Triesman claimed debts totalling £3billion could leave some English clubs in “terrible danger”, West Ham were forced to play down concerns over their financial future.
The nationalisation of Icelandic bank Landsbanki left Hammers chairman Bjorgolfur Gudmundsson with a major shareholding which at a stroke became almost worthless.
Already talk has turned to the effect Gudmundsson’s problems may have on manager Gianfranco Zola’s plans as the club looks to reduce costs, although chief executive Scott Duxbury was last night confident that the disruption would be minimal.
He said: “The position of Landsbanki has absolutely no effect on West Ham United and Mr Gudmundsson’s ownership of the club.
“Mr Gudmundsson is an investor with a large portfolio, of which Landsbanki was just part. He remains as committed as ever to West Ham United and is not looking to sell the club.”
The Hammers also lost their shirt sponsor when travel company XL folded, owing the Londoners £2m.
West Ham are far from the only Barclays Premier League club suffering as a result of the economic downturn.
Liverpool chief executive Rick Parry admitted at the weekend that the Merseysiders’ new stadium would be delayed until credit markets improve.
Finance for Liverpool’s new stadium has been iffy since last fall, and was one of the early signs to your bloggerspondent that the credit crunch was not-trivial and having an impact on the “real” economy.
There’s more to the story. By the sound of it,Formula One Racing may be in serious trouble.