Outlook: Strictly a game for mugs

ENGLISH FOOTBALL has a lot in common with biotechnology and mining exploration, though its fans might hotly deny it. It is a rich industry, with growing turnover, spending and prospects. But it squanders most of it on a mad scramble for success, which means membership of the Premier League, ever- growing wages and transfer fees.

A dozen clubs have floated on the stock market over the past 18 months, but they have been in a bear market for all that period. Only a handful have bucked the trend - Manchester United, with its amazing success on the field and grip on costs, Charlton, which achieved a surprise promotion to the Premier League, and Sunderland, which seems set to follow. The rest have crashed ominously in price.

It is not surprising when you look at Deloitte Touche's Annual Review of Football Finance. It shows that in1996-97 English Football Inc enjoyed revenue of pounds 676m, up from pounds 517m. But players' earnings and transfer fees took most of it. The net result was losses of pounds 42.7m, down from pounds 98m previously.

Out of 92 clubs in four leagues only 29 made any profits and Manchester, with a sparkling pounds 27.5m earnings, is way out in front. The Big Five, Manchester, Newcastle, Blackburn, Liverpool and Tottenham, make more profit than all the rest put together. But they cannot stay on top for ever and Deloitte Touche believes10-20 clubs are in danger. It sees mergers and partnerships as ways for clubs to survive and prosper.

Football may be a game of two halves but in the end there can be only one winner. That makes it unlike any other sector of the market. Small investors should leave the field to those with deeper pockets.