Is the bubble about to burst? (all doomsday scenario posts here please)

Lentwood said:
Bit of a pointless thread really since most people don't seem to know what a bubble is or what causes one.

Don't mean to go all 'holier than thou' on people but I have a degree in Economics and this isn't a bubble - it's basic supply and demand

Bubbles occur when people lose sight of the real value of something and can only ever imagine a world where prices go up. What eventually happens is people/organisations are so certain of this that they borrow money or put their assets up to purchase as many of these "sure things" as they can - tulips, tech. stocks, mortgage bonds.....when the value of the "good" stops rising or goes down, the bubble bursts and the debts are unsustainable.

I can understand why people have got confused because it sounds similar - but the crucial point is City aren't borrowing money to buy players, neither are Utd, neither are Real, neither are PSG etc....if the value of the entire market for players plummets for whatever reason clubs won't be left to pick up the pieces. Prices are going up because top players are in short supply, the clubs competing for them are richer than ever and so are the selling clubs. Its like art. A painting might not have any "real" value but if every rich bloke in the world wants to own a Picasso the price becomes insane
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This pretty much sums it up really. It always amazes me when people say 50 millions or a 100 millions or whatever for a player is crazy and that the market has gone mad. It's like 1 million for a player is "normal". The assumption that there is such a thing as a normal reasonable price for a bloke kicking a ball is insane. Come to think of it, the assumption that there is a normal price for anything is absurd. Prices are dictated by supply and demand. A player costing a billion pounds makes about as much sense as one pound. If the buyers want it and have the resources for it, it all goes and the fact is these clubs are not borrowing money. I suppose this is a general phenomena though with people always assuming what they grew up with to be the norm and any changes down the line representing madness and things going out of control.
 
If anything the growth in international TV rights packages has a long way to go, and will ameliorate any contraction of domestic TV revenues. Believe we will see an upward curve of broadcast revenues, overall, for a long time yet.
 
balaks said:
Bubbles always burst eventually - there are signs that things could be changing already with the decreasing viewing figures for Sky, etc. which is leading them to change strategy with the new channels etc. Over saturation + lowering viewers = eventually a decline.
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What I dislike about that is that this decline would be bad for football altogether. But Sky would just pack up and leave without remorse.
 
So I am tired of repeat the point other already make about there is no bubble, I decided to tackle from different angle. Let's say there is a bubble. It bursts. Then what? Players would still want to go to big club as they're still the ones who would be healthy to offer chance to win & better wage. Even the wage equals the first point play a huge part. The big clubs already steps ahead & have enough money cast aside to pay the now big wage. It's not like they're borrowing money to pay to invest. Top players would still be the ones helping to generate the most money.


The one who would be in real shite would be those who only now look to expand 7 have to take loan to put in the classic bubble, the "real estate' bubble. Those loan would need to be paid eventually, bubble or not. So be careful what you're wishing for.
 
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GlastonSpur said:
Aren't they mostly paid in instalments over several years? So if a club makes several expensive signings each summer, the cumulative annual instalments bill builds up rapidly for years into the future.
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I dont know tbh ...
I think that was part of the problem for portsmouth when they got into trouble.
I think most clubs try to avoid having multiple large debts hanging around for a long period now,
I think paying over several years is mostly gone now and they tend to be more 1 / 2 year things but i dont know.


I was under the impression we paid most of the Martial fee upfront for instance, we could still owe performance related stuff but i think thats not a huge figure.
 
arnie_ni said:
While the whole premise of yout post here is correct, your assuming transfer fees are paid up front.

Aren't they paid in instalments over many years? If they whole thing went tits up and you owe 3 or 4 instalments on 3 or 4 £80 or £90 mil players it could turn into a situation where a club couldn't afford that player.

Especially someone like city or psg if their owner decided to jump ship because tv revenue bust or he simply got board.
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This is correct, and if the amount owed in instalments were a significant percentage of revenue it would be a cause for concern. Clubs like City and PSG are at risk in theory if their owners cleared off but they would still have their 'assets' to shift.

I am not saying that clubs can't suffer financially from an extraordinary set of circumstances. But we all borrow money all the time and make the assumption that we can pay it back because we have a regular income. That doesn't mean we its bad economics or a bubble
 
KingMinger22 said:
There is no bubble.

It's basic economics.

Supply and demand in a very financially healthy industry THAT WILL GROW.

You only have to look at the NFL to see how the PL can keep growing exponentially. And the NFL doesn't have anywhere near the global appeal.

Also, football in the US is absolutely booming. The PL is everything here. That alone will help drive growth for many years to come.
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God you are annoying.
 
cyberman said:
The bubble will never burst. If anything they'll find newer ways to monetise the most popular league in the world's most popular sport.
Wenger has been waitinv for the bubble to burst since 2000. I honestly think part of his problems was building his vision for Arsenal around that.

It's not like if the bubble burst that we'd all be sitting around with players we can't sell. The market would readjust and maybe reset but clubs would still be richer than others and things just stay the same.
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I don't know if the bubble will burst or not but football could be a lot more different in a few decades from now.

Sky viewership is down. People can't afford or would not fork out for season tickets. If people are not going to the stadia and subscribing to people paying for all the TV deals, how do clubs earn their money?

Hosting league games in the Far East, where people have not yet balked at ticket prices, while the game is cast online pay-per-view style back to London, Manchester, Madrid, Barca etc?
 
peridigm said:
How can you say Neymar is a future Ballon D'Or? Not likely to happen if he signs for PSG. Also unlikely going to happen as long as he's playing in Messi's shadow. There is also a reported €80m difference in what Mbappe will go for compared to what Neymar is going for. Would Mbappe's reported fee be okay if he was 24 and had put in several years of great football? In today's market I think so. What has Neymar done to warrant him going for €200m or there about? Signing Neymar does not guarantee PSG a CL title. They'd win the league title but they already do that pretty much every year. These clubs are paying these fees based on potential and marketing hype. We all know RM want the latest hyped up player every season. This season it's Mbappe. I think the Neymar speculation is all bullshit but only time will tell. He seems to be linked with a move away from Barca every season.
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I agree with your notion that the Neymar links to PSG do seem like bullshit. But if he does move there, he will undoubtedly be the main man there. Provided PSG do well in CL (That is winning it), he has every chance of winning the player of the year award. PSG doesn't even have to be his final stop. He could be the man to take over from Ronaldo at Madrid. Anything is possible.

Regarding Mbappe, I did read people on here say that clubs have been interested in signing him for quite a while. So for all we know, that price for potential might be warranted, but he's achieved nothing of significance so far at Monaco. I'm basing on that. Potential vs Current Ability. If I look at your view point where clubs pay the fees based on potential and marketing hype, I reckon that Neymar can get even better once he's out of Messi's Shadows. Regarding Marketing, aside from Pogba and the other elites, he's a marketing goldmine. Considering all that, the quoted price 220 m is more of a safer investment than the 180m on Mbappe. That's how I see it alteast. Both insane prices though mind.
 
People have been saying the bubble will burst for 15-20 years. The 2002 WC led to football becoming very popular in Asia and has led to more money being injected into the sport and football still has a lot more potential to grow in Asia Pacific and North America. The progression of transfer fee isn't very surprising although the prices being quoted are outrageous for us mainly because we grew up in a time when Ronaldinho's and Beckham's were sold for less than what Michael Keane and Jordan Pickford cost today. You compare these prices as a function of most expensive transfers, they aren't that outrageous.

It's just inflation in transfer market, which while not fair on smaller teams and non major leagues, was bound to happen as football became more global
 
Bubble will burst seems to be the trendy thing to say after 2008 but there is no bubble in football. The spending of PL clubs is based on revenue they currently have not on some highly optimistic future projection. I haven't looked at our books recently (since AndersRed stopped blogging) but I think that our revenue to wages ratio was somewhere around 50-60% so even if our revenue declined drastically, we'd still have enough to pay the salaries of existing players and make outstanding payments on past transfers.
 
AshfordLad said:
As said earlier, they do not need to care for the host as it can be in any country.

All they need to do is declare streaming illegal in for example UK. Now sure, some will use VPN and wont be caught but a good VPN would cost about £10 a month anyway so it would defeat the purpose of streaming illegally (think it costs about £20 to get PL games).

But most ppl who stream illegally dont pay for VPN, I am willing to speculate. The govt could just contract some agency to give them a substantial fine or a criminal record. Obviously this would require first getting offending IPs from the ISPs but with the amount of state control prevalent in western Europe, this would be not too difficult.
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Mate, have you time travelled here from 1990 or something? This is basically exactly the short sighted strategy that the music industry used to try and stop people downloading music for free, and then the movie industry copied because they were too stupid to notice it had utterly and completely failed with music. The issue with all media is not that people don't want to pay for it, it's that they hate being ripped off and they really hate having things made unnecessarily complicated to use.

For a UK based football fan, you have exactly zero legal ways to watch every match live on TV and to watch the ones that are available now requires you to have 2 seperate subscriptions which starts getting seriously pricey. Sky appear to have seen some common sense and are lowering prices for next season, but that doesn't help the two subscription annoyance.

If you want people to comply with the law, then just offer them convenience at a decent price and they'll pay it. Try and criminalize or financially punish them, and they'll just get cleverer at subverting your attempts to stop them, and they'll hate you for it for good measure. Then at some point another company will come along with a better customer model and take away your business.
 
The only doomsday scenario I can see for football and the recent superbig money involved is the latest daddies (arabs, chinese, russians) leaving for political reasons, which may still happen because of some sort of crisis with Western Europe and its American stepdad. Some clubs would crash very badly and the transfer window would be played again at daily life rates, following accounting books sanity with the occasional megatransfer.
 
mitchmouse said:
people said that about he TV money last time -- then it rose massively
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But they've been expanding it out. My general point is that there must be diminishing returns at some point for the TV money. There's only so many countries you can sell it to and then so many times you can increase prices etc.
 
Ijazz17 said:
I agree with your notion that the Neymar links to PSG do seem like bullshit. But if he does move there, he will undoubtedly be the main man there. Provided PSG do well in CL (That is winning it), he has every chance of winning the player of the year award. PSG doesn't even have to be his final stop. He could be the man to take over from Ronaldo at Madrid. Anything is possible.

Regarding Mbappe, I did read people on here say that clubs have been interested in signing him for quite a while. So for all we know, that price for potential might be warranted, but he's achieved nothing of significance so far at Monaco. I'm basing on that. Potential vs Current Ability. If I look at your view point where clubs pay the fees based on potential and marketing hype, I reckon that Neymar can get even better once he's out of Messi's Shadows. Regarding Marketing, aside from Pogba and the other elites, he's a marketing goldmine. Considering all that, the quoted price 220 m is more of a safer investment than the 180m on Mbappe. That's how I see it alteast. Both insane prices though mind.
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Whoa. I've not seen those figures for Mbappe. If that is the amount he's going for then I agree, Neymar would be a safer investment than Mbappe. However, I would imagine the fees for Mbappe are including wages over a period whereas the Neymar fee is most likely just the exit clause. Who knows though, there is so much shit spouted by the media you can't believe anything anyone writes anymore.

I still hold my viewpoint that when a club spends money on a player it should not concern the fan. It's not the fan's money. Sure you can protest and disagree with the purchase but it does feck all in the end. It's a billion dollar industry of corruption and greasy palms. Prices will continue to rise because muppets eat this shit up every window.
 
Minimalist said:
But they've been expanding it out. My general point is that there must be diminishing returns at some point for the TV money. There's only so many countries you can sell it to and then so many times you can increase prices etc.
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but here are also new prosepective suppliers: Netflix, Amazon and other American outlets who will compete and drive up the bidding price...
 
Kentonio said:
Mate, have you time travelled here from 1990 or something? This is basically exactly the short sighted strategy that the music industry used to try and stop people downloading music for free, and then the movie industry copied because they were too stupid to notice it had utterly and completely failed with music. The issue with all media is not that people don't want to pay for it, it's that they hate being ripped off and they really hate having things made unnecessarily complicated to use.

For a UK based football fan, you have exactly zero legal ways to watch every match live on TV and to watch the ones that are available now requires you to have 2 seperate subscriptions which starts getting seriously pricey. Sky appear to have seen some common sense and are lowering prices for next season, but that doesn't help the two subscription annoyance.

If you want people to comply with the law, then just offer them convenience at a decent price and they'll pay it. Try and criminalize or financially punish them, and they'll just get cleverer at subverting your attempts to stop them, and they'll hate you for it for good measure. Then at some point another company will come along with a better customer model and take away your business.
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You totally missed the point of my post. I was replying to the fact that it is possible to do it. Not on whether it was a smart thing to do or not.
 
peridigm said:
Whoa. I've not seen those figures for Mbappe. If that is the amount he's going for then I agree, Neymar would be a safer investment than Mbappe. However, I would imagine the fees for Mbappe are including wages over a period whereas the Neymar fee is most likely just the exit clause. Who knows though, there is so much shit spouted by the media you can't believe anything anyone writes anymore.

I still hold my viewpoint that when a club spends money on a player it should not concern the fan. It's not the fan's money. Sure you can protest and disagree with the purchase but it does feck all in the end. It's a billion dollar industry of corruption and greasy palms. Prices will continue to rise because muppets eat this shit up every window.
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I've always believed the highlighted part. As a fan, it matters little to me how the club spends their money. My only pre-requisite being that club like ours focus on quality additions regardless of price, which is not difficult to achieve. But at the back of my mind, a small part of me always thinks, that's bat shit crazy prices.
 
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