Premier League football is on the brink of a financial crash, a top expert has warned.
Jim Wood-Smith, head of research at wealth managers Williams de Broe, said only television revenue and a handful of very rich men were holding the system together.
But, speaking at an investment breakfast held at Hotel du Vin in Birmingham, he claimed anyone could now watch their favourite team for nothing.
“Every Premier League game is there on the internet for free if you search hard enough,” he maintained.
And, given it was primarily TV revenues which were propping up the game, allowing clubs to pay big wages to big players, “the boom is bound to go bust sooner rather than later”.
He went on: “While there are still a few people like at Chelseaand Manchester City prepared to put in enormous amounts of money, this can support football for a while. But there are an awful lot of clubs which are not owned by people with a bottomless pit of money.
“The rich clubs however raise the wage structure across the whole industry. It means some have wage bills in excess of their annual revenue, and that is unsustainable.
“My impression is that the number of clubs prepared to spend large amounts of money on players is diminishing season by season.”
His comments came as pundits pointed to new rules in the pipeline that state clubs must break even to play in European competitions, a move also thought likely to limit wages.
It has been speculated that Wayne Rooney’s decision not to sign a new contract at Manchester United may be all about the need to cash in now before the good times bomb.
And it is not just football which is gambling with its finances.
Mr Wood-Smith said: “The UK’s inflation target of two per cent has been abandoned in all but name. It has been dumped out of the window.”
Despite strong upward inflationary pressures – the imminent VAT rise plus increasing commodity prices – the Bank of England had indicated that another round of quantitative easing was likely.
The lead was coming from Americaand Ben Bernanke, head of the Federal Reserve, worried that USunemployment was stuck stubbornly at ten per cent, much higher than target.
Mr Wood-Smith said: “The tone is clear. The fight against inflation for the past three decades has been too successful, verging on the myopic. The key task now is to raise inflation expectations.”
Noting it had become part of the psyche that anything which generated inflation had to be countered, he went on: “What Bernanke is now saying is to get the economy moving there must be a belief that prices will rise.
“And what this means is that the market’s expectation that the Fed will put the brakes on at the first sign of rising inflation is simply wrong. Instead it will be prepared to see an extended period when inflation and hopefully growth are markedly higher.”