Europe Gets What It Wanted from S&P

 | Dec 06, 2011 | 9:00 AM EST
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You own a team in an international sports league that suddenly faces a crisis. Players are getting crazy, complex contracts that nobody understands. Disputes about bonuses increase, players are sitting out or not reporting at all and lots of parties are heading to court.

Eventually the crisis comes to a head and a major franchise can't field a team for a game and shuts the doors of its stadium.

Agents are crafting these contracts (making sure that they get hefty bonuses from each one) and there are rumors of a pernicious influence, maybe gambling, also involved.

People start asking questions at the League Office. Why did you sign off on these contracts? Why weren't some of these clauses flagged? Where were you?

Everyone comes down hard on the entire league management, from the Commissioner on down. The league office responds and vows to be more diligent in the future. Everyone looks forward to agents being held to account.

Things improve somewhat and attendance picks up. But then there's more trouble. And this time it's not the agents or the players. Many of the owners of smaller teams are overextended on stadium leases and team expenses and they're spending 150% of projected TV and gate revenue.

The owners band together, call for calm and try and come up with a plan to bail out the smaller teams while not putting too much financial pressure on the bigger ones (and upsetting the big teams' fan bases too much).

It looks like it could work. But suddenly, the newly-invigorated League Office lives up to its promise and starts criticizing the owners' plan and tightening the tap on team funding from the league.

People start worrying about the league disbanding, leaving just a couple of viable teams.

European leaders really wanted more action from ratings agencies. They just didn't think the next crisis would be their own bonds.

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