Sport: Market forces mean rosy outlook for football

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The financial future of English football is brighter than at any time since the late 1940s, according to a statistical analysis of clubs' financial performance in the latest issue of the International Review of Applied Economics. The authors, Stefan Szymanski and Ron Smith, argue the Taylor Report has forced clubs to invest in facilities they would have had no incentive to provide of their own accord.

Between 1974 and 1989 the game made big losses, showing a profit in only six years. But the introduction of market forces via the exposure of a stock market listing - there are now a dozen quoted clubs and another half dozen planning to float - will force them to turn a profit in future. Newcastle would probably not have paid a record pounds 15m for Alan Shearer if it had had to answer to external shareholders.

International Review of Applied Economics, January 1997, Carfax