Here is Robert Peston’s commentary on the refinancing of Liverpool FC, a situation on which I have had my beady eye for a while.

But Peston does not get to the nub of the problem. Liverpool and Manchester United have been borrowing to sustain performance. They will both find themselves having to pay back the money they have borrowed in aggregating their costly squads. And when they cut back on the spending their teams’ performances will most likely slip as well. But with less success, their revenue will decrease, limiting the clubs ability to repay debts further. With the danger of this de-leveraging spiral of decline looming, the future looks a bit bleak for the reds.

Arsenal is looking good, and will benefit if Man U and Liverpool go down the pan. They have virtually no debt, and are still in the top four simply because of Arsene Wenger’s sheer managing ability and resistance to media pressure to spend money on overpriced [English] players, seeking out undiscovered value from farther afield.

Chelsea are all right too. Abramovich is still flush, despite his massive losses due to the recession. He bought the club without masses of debt, unlike the Glazers and Gillett/Hicks who were more or less acting as agents for international banks and debt salesmen.

I hope that Liverpool is not an economic model for anything more widespread. Otherwise we really could all be in the brown stuff a few years down the line…