Articles and Essays on Legitmacy

English soccer is very big business. Arguably the finest league in European, and certainly the most competitive, the turnover in cash over a season runs into billions of pounds every year. For the last decade, Manchester United, arguably the biggest and most popular club side in the World has ruled the roost in England, both on the soccer field and in the boardroom. In season 2003/2004 they posted profits of £52million, and Liverpool another highly successful club, and also based in the North of England with a rich history and heritage, showed a £25million pound profit, largely due to them winning the highly prestigious and highly profitable European Champions League.

Arguably this has been the best season in English football, and possibly for all of Europe. The never waning interest in soccer among Europeans has raised the standards of soccer and levels of competitiveness previously unseen.

What may well have brought on this catalyst is the arrival on the English soccer scene of Roman Abramovich In June 2003, Abramovich , a Russian born oil and investment billionaire, and one of the wealthiest men in the World bought controlling interest in Chelsea Football Club. Chelsea were always one of English football’s perennial also rans, more glamorous than successful on the football field and barely showing a profit of it.

Abramovich was determined to change all that and he began a campaign of investment that shook the soccer world to its foundations, and made many question the legitimacy and financial reasoning behind his actions. Since taking over Chelsea and assuming its £80 million debts, Abramovich has poured a further £360 million into the club; the bulk in strengthening Chelsea’s playing squad, ostensibly the cream of crop of English and European players. With a wage bill to match

At roughly the same time as Roman Abramovich appeared, so did the Glaser family from Florida in the United States. They succeeded in buying controlling interest in Manchester United. However they financed the purchase by borrowing, and have invested very little liquid cash into the business, which is still extremely profitable, due to success on the field, prize money and incredible sponsorship income.

Chelsea on the other hand continues to post substantial losses. £140 million in season 2005/2006. But what does that sum mean to someone like Roman Abramovich whose personal fortune is estimated at over £10 billion. Making a profit appears to be of secondary importance to Abramovich, success on the football field seems to more important to him. And he has seen Chelsea achieve more success there in the three seasons that he has been in control, than in the previous fifty. But he has yet to see Chelsea win the glittering prize, the one that he obviously craves; the European Champions League.
The question that many argue is how long it will be before Roman Abramovich, who obviously is used to winning, becomes bored with his expensive hobby and moves onto something else. While there is a positive side, in that Mr. Abramovich’s millions have come into the sport from an outside source, and not as investment. The argument of the legitimacy of treating a business in any form as a hobby may be dangerous for Chelsea Football Club in particular and European soccer in general.

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The causes and consequences of the global debt crisis is one which should be a source of worry for most people. However most of us are either oblivious or unaware of it, although it has now reached massive proportions.

Debts to Third World Countries grew dramatically during the seventies. At that time it was felt that these countries were about to go through a period of rapid growth, and banks were very interested in getting in on the ground floor and lend money to these developing countries. A prominent banker of the era proudly pronounced that lending to governments is safe banking because sovereign nations do not default on their debts. He was later proved to be seriously wrong on his estimation

Twenty years later the world’s poor and developing countries owed more than $1.3 trillion to industrialized countries. By 1997 it had grown to $2.3 trillion, and estimates are that by end of 3007, it will have reached $3.3 trillion.

Of the total developing-country debt, roughly half is owed to private creditors, mainly commercial banks.

The rest consists of obligations to international lending organizations such as the International Monetary Fund (IMF) and the World Bank, and to governments and government agencies—export-import banks, for example. Of the private bank debt, the bulk has been incurred by middle-income countries, especially in Latin America. The world’s poorest countries, mostly in Africa and South Asia, were never able to borrow substantial sums from the private sector and most of their debts are to the IMF, World Bank, and other governments.

The debate that has been raging since it became obvious that most of these countries, and especially the poorer ones are experiencing major difficulties balancing their budgets, is on the legitimacy of writing of the debts of Third Word countries, and what would be the implications for the future.

World bankers have now reached the conclusions that the economic debts of the developing world cannot ever be made good. Situations in African and far eastern countries will continue to deteriorate, global warming is taking its toll. Scientists estimate that natural disasters such as the tsunami of late 2004 will occur on a semi-regular basis and the people’s plight will only gradually worsen.

These nations should be looked upon by the global financial community as being need of charity, instead of loans, Any debts that they have outstanding should be written off, and they should instead regular financial assistance in the form of grants to help them survive the difficult times ahead.

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