Exotic Investments : Football ClubsA few years ago, there was a rush of football clubs floating on the UK stock market. It was a way for the clubs to raise extra money (under the burden of rocketing wages for top players and ground expansion they had to do something) but added extra scrutiny and problems to an already troubled industry. As you may know, Manchester United is one of the few clubs on earth to be profitable. They have a huge global brand, success on the pitch and until recently, Beckham too. The passion that football brings and the potential of dominating the huge sums paid in TV rights has made United a constant takeover target. What of the rest? In the Premiership, is Leeds United. They are in a troubled situation. Very troubled. Recent manager changes. Players in trouble with the police. They made another huge loss this year and owe in the region of £90 million. It is widely anticipated that if they are relegated, (which looks very possible right now) the club will go under. I have no doubts that if they were in almost any other business, they would already be in administration. The chairman said as much recently. It seems that they are already investigating the options to protect the club because they have been unable to renegotiate their loans. Short of a Chelsea like fairy godmother, the game could soon be up. It reminded me of Warren Buffett and some of his pearls of wisdom on the subject of share investment. His thoughts run along the lines that the investor should be trying to find industries to invest in that are so wildly profitable that ANYONE could manage the business at a profit. Other than for billionairre oilmen I would suggest that mere mortals like you and I buy no more than replica shirts (for fear of losing our real shirts otherwise). * This was first published in December 2003 *
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