• Text size      
  • Send this article to a friend
  • Print this article

Lehman Brothers collapse comparison

THE financial crisis at Rangers was last night described as football's equivalent of the Lehman Brothers scandal, which sparked the economic downturn in 2007.

Consultancy firm AT Kearney claims the club's financial demise could be the beginning of a European footballing crisis.

Emmanuel Hembert, a football business expert with the firm, said a "vicious circle" could be created where creditors to all clubs call in their money and teams refuse to defer transfer fees.

Mr Hembert said: "This dramatic development with Rangers highlights the fact that the beautiful game may be on the verge of a systemic crisis.

"The big question at the moment that needs to be considered is whether Rangers going into administration heralds the same advance warning Lehman Brothers proved to be for the global banking industry?"

He added: "If Rangers – such an established club – does not honour its debts, it may threaten the foundations of the system.

"We run the risk of creating a vicious circle, whereby clubs refuse to lend money to each other through deferred transfer payments while creditors call in their money – which is dangerously reminiscent of what we saw in the banking world. The question is now: Are Rangers the Lehman Brothers of football?"

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.