Weekend interlude: The curse of the Hammers

Longtime readers may recall that Macro Man is partial to the footballing stylings of West Ham United.  The story behind his support of West Ham is a convoluted one; suffice to say that when he first moved to Europe more than two decades ago, the allure of East End pie'n'mash and jellied eels proved stronger than the fancy-Dan surroundings of certain other London clubs more generally popular with his fellow expatriates.  And hey- if the Hammers are good enough for Frodo Baggins, they're good enough for him.

Anyhow, as your author was enjoying the 3-0 thrashing of Hull City this morning, he was struck by the ongoing blandishments of erstwhile club sponsor Alpari FX on the advertising hoardings around the pitch.  Alpari, as you may have heard, was one of the casualties of the SNB this week; like many FX bucket shops, it was unable to recoup the losses from short CHF customers trading on razor-thin margins, and has gone bust.

Curiously, this was not the first firm associated with West Ham that has run into a spot of bother.  Although the club is currently owned by a couple of East End boys done good (if becoming a porn magnate can be described as "done good"), its previous owner was an Icelandic sugar-daddy named Björgólfur Guðmundsson.   Mr. Guðmundsson, who alas no longer qualifies for sugar-daddy status, was also the majority owner of highly levered Icelandic bank Landsbanki, proprietor of such too-good-to-true financial schemes as Icesave.   As readers may recall, Iceland did not exactly enjoy smooth sailing during the financial crisis, and both Landsbanki and Mr. Guðmundsson declared insolvency in 2008-09.

Prior to that, West Ham was sponsored by a no-frills airline called XL Airways, which catered to the package holiday customer more interested in the size of the ticket price than the comfort of the travel or the convenience of the embarkation/debarkation locales and times.   The business model was a familiar one in the airline industry:

1) Borrow money
2) Lease aged planes and slap a new logo on them
3) Charge punters little enough to fill the planes but just enough to turn a profit

Such a business is inherently leveraged, and as you may recall leveraged businesses did not fare so well in 2008.  XL, however, was almost prescient in the timing of its failure; it ceased operations the Friday before Lehman Brothers went bust.

Let this little history lesson be a word of warning.  It seems unlikely that the demand for pornographic materials is going to wane in the near future, so the core business of West Ham's owners would appear secure.   If you happen to own stock in the club's next sponsor, however, you might be advised to sell...or at least take out a cheeky hedge in case the curse of the Hammers strikes once again.