A Ponzi scheme is a type of illegal investment plan which relies on new people joining the scheme, so that their money can be used to pay earlier joiners. Once the scheme runs out of new investors it collapses. The idea is as old as the hills. The scheme ends when potential investors wise up to the unsustainable nature of the model, and fear they may be the last to invest. The Premiership model looks like a Ponzi scheme and Leicester City look like the bringers of bad news.
Since its formation in 1992 the Premier League’s value has spiralled. Its allure relies on guaranteed investment returns. The markets want certainty, and ever increasing returns. When Louis Van Gaal replaced David Moyes we got a strong suggestion that the markets had influenced the decision. Arsenal are agonising over the certain returns provided by Wenger, against the potentially greater returns of a manager taking them to the pinnacle. Leicester City might win the Premiership; this is a financial blip that could cause the whole scheme to collapse.
If Leicester win the title they are predicted to receive £90.9 million pounds. The figure is made up of an equally shared piece of Premiership income (£54.1 million), a piece based on TV appearances (£12.1 million) and a ‘prize’ for winning (£24.7 million). The problem is they aren’t supposed to get that much! It’s bad news for other club’s investors. Leicester should be down with the West Broms and the Swanseas receiving about £70 million. It’s not just a one season disaster, it’s at least two seasons, because their share of televised games will go up next year, due to their success. What if they spend the profits wisely? They might disrupt the status quo for years to come.
Market investors do not want uncertainty, they cannot accurately forecast returns. If lower- rated clubs perform disproportionately well the forecasting gets dodgy, so why invest? The Premiership has been disturbingly uniform in its returns based on league position. 47 different clubs have contested the Premier League since its inception, only five have won it. Leicester’s success may look like an aberration, but it’s an event that will scare the big clubs witless. The model may not be able to cope with many of these unforeseen shocks, and new investment may dry up.
The future of Wrexham FC is sadly tied to this Ponzi scheme. We can only dream of reaching the Premiership. We need a sustainable league system, because we need the revenues it brings, and we need the standard of competition it provides. A fan’s owned Club provides some insulation from the chill wind of ruthless market forces, but we aren’t isolated from it. I would love Leicester to win the title, plenty of people in suits will not.
DragonHeart 
Excellent observations. From Wrexham’s perspective I worry that Leicester’s success, and the resulting destabilisation of the investment model, might tempt the big clubs to pull the ladder up and create a sealed-off league with no promotion to guarantee their income. That’s the model in American sport, and the thinking behind the European League idea which Barcelona and Bayern are hawking around. Essentially it was also the underlying philosophy when both the Premier League and the Champions League were created.
Essentially no promotion = no point for lower division clubs.