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Wigan failure could be tip of iceberg

There are special factors affecting the administration at Wigan which I will discuss in a later post.  Nevertheless, there are fears that it could represent the tip of an iceberg with perhaps as many as 10-15 clubs in danger: https://www.bbc.co.uk/sport/football/53256015

As usual there have been calls for the Premier League to pay up.  It already does so to the tune of £400m a year, although the greater part of that money goes on parachute payments which have a distorting effect on competition in the Championship.

Football is a very unusual sector of the economy in that the producers (clubs) very rarely disappear altogether.  A new buyer is found or a phoenix club appears.   Liquidations are very rare.  We remember examples like Third Lanark in Scotland because they are so unusual.

In strict economic terms, the market is over supplied.  As Szymanski notes, 'It has long been said that there are too many professional football clubs in England.'    But they are an important source of identity for fans.  Even 'thinning out' John Lewis stores creates a strong reaction.

At the end of the day, the Premier League will pay up and clubs which are not viable will limp on because they perform important functions for their communities.  Commercial logic does not apply and other values come into play.
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