Lewandowski, Laporta, and levers: Barcelona bet the most money in the history of the club, risking bankruptcy

Super clubs in Europe resemble banks in certain ways. They may be even less fiscally prudent, but they unquestionably subscribe to the idea of being “Too Big to Fail.”

In the field of economics, it is believed that some banks shouldn’t be allowed to fail, regardless of how poorly they are operated. As we seen during the Great Recession, several governments made the decision to step in when banks found themselves on the point of going bankrupt and offered financial help to ensure that they could continue to operate.

To some extent, at least, it was possible to comprehend the governments’ perspectives. In essence, it was thought to be the better option. While the banks alone were to fault for their precarious positions as a result of egregious mismanagement, it may be argued that their collective collapse would make an already poor situation for the average citizen much worse while causing economic turmoil.

However, using the “TBTF” strategy has a number of drawbacks. First off, “Too-big-to-fail (TBTF) enterprises will seek to assume more risk than ideal, in the belief that they will receive assistance if their bets go bad,” as former Federal Reserve Chair Ben Bernanke noted.

Consequently, FC Barcelona, the epitome of Europe’s “super-clubs,” and their astounding sense of entitlement, comes into focus wonderfully.

Lewandowski, Laporta & levers: Barcelona risk bankruptcy with biggest bet  in club history

Lewandowski, Laporta & levers: Barcelona risk bankruptcy with biggest bet  in club history

 

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