Comments | alldoubtaboutit: ~PRETENDING TO BE XPERT~

alldoubtaboutit

~PRETENDING TO BE XPERT~

Jul 28, 2010 20:20

Hellooo. So I was very late in posting a comment to this article on ontd_football but when I read it I felt like poking my eyeballs out or something due to...sheer misunderstanding of finance. ACTUALLY THIS IS SYMPTOMATIC OF WORLD IN GENERAL, so er, actually, yeah, I'm lucky because I have been taught how to read these things (to a certain extent--absolute ( Read more... )

Comments 5

thewearykind July 28 2010, 12:08:54 UTC

Your explanation makes a lot of sense.

The whole situation just annoys me, I guess; I don't believe in spending money that you don't have. Sigh.

alldoubtaboutit July 28 2010, 12:57:59 UTC

Oh, the whole situation is extremely bleak. It's not just Barca, it's everyone spending money they didn't have. For some, it's money they 'thought' they had, for some it's money they quite clearly didn't have. It's extremely bleak because in the end, the ones who had no role in creating the mess are the ones to pay up. (See taxpayer bailouts in various countries.) Sigh x 872893.

aviz July 28 2010, 13:18:33 UTC

oh wow, this is terrible. But then, if it's really this bad, why do investors put more money into the club? Do they think they can get a profit, or even recoup the money? I mean, I don't think the club will suddenly just close down and declare bankruptcy and not pay back the money, but well, if an investor wants his money back he might have to wait sooo long that he might have lost the chance to put it into whatever else he wanted/ he might be dead...

alldoubtaboutit July 31 2010, 13:36:57 UTC

Hmm, well, most of the clubs running huge debts actually make an operating profit--that is, in their normal operations of running a football club, stadium and selling shirts, tv revenue etc, they make a profit, unfortunately, because they're laden with so much debt the operating profit goes towards interest payments. It's like credit card interest payments. But yeah I guess they're hoping that money is irrational in football but your debts will always catch up with you.

(The comment has been removed)

alldoubtaboutit July 31 2010, 13:37:42 UTC

Oh hey! Sorry for the lateish reply. I haven't read the book, so thanks much for the rec! I'll be sure to check it out. :))