Sunday 12 October ~

Few people outside Greece will remember George Koskotas. He was ahead of his time as a wealthy investor in football – and one aspect of his downfall offers a salutory lesson. Twenty years ago, Koskotas owned a financial institution, the Bank Of Crete, plus a couple of newspapers and Olympiakos FC, the most popular football team in Greece. A few years before the creation of the Champions League, Koskotas attempted to propel his club to the forefront of international football by spending prodigiously. In 1988 Olympiakos paid a then world record fee of £6 million for Hungarian midfielder Lajos Detari from Eintracht Frankfurt.

Shortly after the transfer, investigators established that Koskotas had been siphoning money from the Bank of Crete into the football club, and some of his other businesses. He fled to America from where he was extradicted to Greece in 1991; he ended up serving 12 years for embezzlement. Koskotas was also alleged to have bribed members of the Socialist PASOK government, including prime minister Andreas Papendreou, who lost a general election shortly after the banker's arrest; Papandreou was later exonerated and went on to regain power in 1993.

Olympiakos were faced with huge debts, to the tax authorities and to various financial institutions, when their erstwhile owner fled the country. The club was required to repay the money but, critics pointed out, at favourable rates of interest and over a much longer period of time than would have been permitted to a regular business. The reason for this was simple – in a country where power was regularly changing hands between the two main parties of right and left, no government dared risk alienating the supporters of the biggest football team. Olympiakos's popularity provided them with insulation.

So it is today. The most popular football clubs in the UK are riddled with debt – although none of it, of course, acquired by illegal means. The government is now required to bail out an economy run into the ground by financial speculation. They could pay much closer attention to how the top football clubs have been funded by setting up an official enquiry into the financial structure of the professional game, with a view to regulating it more effectively. Some have even suggested that clubs should not allowed to be in debt at all – UEFA have made noises about banning indebted clubs from international competition, but it remains to be seen whether they would carry out that threat given the commercial power of the teams they have in mind.

But the government dare not take on football. Indeed it remains pathetically eager to associate itself with the country's most popular pastime – whether it's David Milliband declaring that Arsene Wenger is the leader he most admires or Gordon Brown suggesting that a trip to a match at Old Trafford would be the ideal way to bring together the Israeli and Palestinian prime ministers. Prudently run businesses of various sizes will disappear in the recession that is now underway while football clubs sail serenely on, free of official censure – it's only a game after all.

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