Will English soccer be slide-tackled by the economy?

Recession, what recession?

English soccer's latest foray into the realms of financial hyperbole takes some digesting in this era of belt-tightening, retrenchment, and job losses.

One player, AC Milan's Kaka, has attracted an eye-watering bid of as much as $150 million from the Arab-funded English club Manchester City. If the Brazilian accepts the offer, he may additionally bank a tidy salary of as much as $700,000 – a week.

But don't be fooled into thinking that this is an accurate indicator of the financial health of the game. For English soccer, the richest game in the world and a giddy carousel of the world's most richly talented and richly rewarded stars, is stuttering.

Half a dozen of the top clubs are for sale. No one wants to buy, though.

Multimillionaire stars are putting pressure on balance sheets at a time when the recession is undermining revenues from sponsorship, advertising, merchandising, and corporate entertainment. Season ticket sales are likely to fall, perhaps by as much as 10 percent.

One of the game's aristocrats, Liverpool, has shelved plans to build a new stadium. At London club West Ham, meanwhile, the team's shirt sponsor went bankrupt and its Icelandic owner has suffered along with his country's fortunes.

In an era where cash is king and debt is big trouble, a junior government minister, Lord Triesman, has warned that the entire stable of English clubs was carrying loans of $4.3 billion.

"There is every element of a bubble that could burst which is currently being sustained by this belief that football is immune," says Tom Cannon, an expert in the finances of the game.

The unthinkable scenario: if the billionaire owners of the elite clubs start to cash in their chips.

"The game is extremely vulnerable to the whims and interests of a small number of very rich people," Professor Cannon adds. "The fundamental business base is increasingly dependent on television revenues, [ticket sales] are declining, merchandising is declining, sponsorship is declining – you have clubs who can't get sponsors. All those fundamentals raise questions about the nature of the business."

Predictions of the spectacular implosion of English soccer are not new. As the game has become richer and richer over the past 15 years – easily surpassing rival leagues in Italy, Spain, and Germany – a minority of naysayers have constantly grumbled that the money sustaining the game would evaporate one day, resulting in a terrible reckoning.

Not everyone thinks of English soccer as a debt-inflated bubble. "Football is not built on nothing – it's built on huge popularity among supporters. There is no real sign of that waning," notes David Conn, a columnist for the Guardian newspaper and the author of "The Beautiful Game?"

The rise and rise of English soccer has been one of the defining cultural narratives of the past generation.

In the 1970s and 1980s, "football" was practically a dirty word, synonymous with crowd violence, shabby (and occasionally lethal) stadiums, and players who were cynical on the field, not to mention reckless off it. Slowly, subtly, a change occurred: stadiums installed seating throughout, which deterred thugs and pulled in a more affluent class of spectator; success for the England national team stirred passions; a new genre of soccer writers – Nick Hornby, Roddy Doyle – demonstrated that it was OK to love soccer again; most crucially of all, a landmark television deal negotiated by Rupert Murdoch's Sky Broadcasting Group brought money to the game and the game into people's homes.

By the mid-1990s a few foreign stars were beginning to trickle into the game. In 1996, the Premier League earned more than $650 million. A decade later that figure has quadrupled, and there are now scores of the biggest names in global soccer trotting out to play each week in England.

The top players earn tens of millions of pounds a year. Stadiums heave with upwards of 50,000 spectators each week. Newspapers devote entire supplements to the game. Last year, for the first time, the final of Europe's Champion's League was contested by two English clubs, Manchester United and Chelsea.

But the financial underpinnings of English soccer are less than robust. Almost two thirds of annual revenues are devoted to wages. Many clubs are groaning with debt – not least United and Chelsea, both carrying around more than $730 million in loans.

Few leading clubs are profitable. The old adage looks as true as it ever was: The best way to make a small fortune in soccer is to start with a big fortune and then buy a club.

To cap it all, the sudden weakness of sterling, which has fallen about 20 percent against the euro in recent months, may be prompting foreigners to think twice about accepting an English wage. "The pound has fallen and the transfer fees [have] become less attractive," says soccer writer Simon Kuper, adding that teams in Germany now stand to benefit in attracting top talent from across the Channel.

But Mr. Kuper doesn't think this is the end of the English soccer boom. He notes that in more than a century of the game, only two clubs have ever had to pull out of the league because of bankruptcy. "Football is a solid business, but it doesn't make profits," he says. "There is a lot of demand, but clubs always overspend and always run into debt, but nobody lets them go bust."

Much will depend on the new television deal due to be negotiated this year. The most recent three-year deal ends in 2010 and was worth about $4 billion. Television companies such as Sky may be feeling the pinch, but soccer is essential to their business and they could ill afford losing out to a higher bid from a rival like ESPN, experts say. Executives are in any case confident that they are fairly recession-proof.

"Consuming football is not all that expensive relative to how much fans like it," Kuper says. "A monthly subscription costs about the same as one restaurant meal in London. When people decide what to cut out of their lives, it's an affordable pleasure."

Mr. Conn, the Guardian columnist, says that the economic problems might result in a lower-value television deal. But not much lower because "it's a massive part of their business."

Former player Steve Claridge, who experienced the premiership in the early days of soccer's golden period, is sanguine that money will still pour into the game. But he believes that clubs will have to come to grips with the spiralling wages to prevent deepening trouble.

"If they go ridiculous and spend money they haven't got, there won't be enough money to go around," he says. "But that's the same in any business. The bubble will only burst if people are not prudent."