This week, John Henry and the New England Sports Ventures consortium made great strides in their attempts to purchase Liverpool football club. For once, an American takeover of a great English institution is being welcomed—but only because it means running the previous American owners out of town. Better the wealthy Americans you don't know than the ones you do.

That's because owners of American sports teams have a history of running English football clubs into the ground. Liverpool, the most successful football team in English history, has $450 million in debt due on Friday and this season is off to its worst start in 57 years—thanks, in large part, to its current American owners, former Texas Rangers chief Tom Hicks and George Gillett. It is as though a group of used-car salesmen from South London had bought the New York Yankees and turned them into the Pittsburgh Pirates. Meanwhile, the most famous football club in the world, Manchester United, has accrued $830 million in debt under its American owners, the Glazer family, owners of the Tampa Bay Buccaneers.

These days even your average billionaire might struggle to keep up with the competition in the Premier League arms race.

It turns out that business-as-usual in the MLB or NFL doesn’t apply to the English Premier League. English soccer fans may be discovering an allergy to debt but they're also hostile to profiteering: Any money made by any football club must be invested in the club, not paid out in dividends to shareholders. (With no salary cap, many Premier League clubs spend more than 75 percent of their income on player wages.) The only way to make a return is to sell the club for more than you bought it.

Hicks outraged Liverpool by fans by attempting to sell naming rights to their legendary grounds, Anfield—a move that would have hardly registered in the United States, where stadium names change with the seasons. Increasingly, it became obvious there was a culture clash between owners and supporters and as performances on the field declined, the Americans discovered they'd lost the confidence of the fans. A protest movement demanded they sell the club to someone, anyone else. Even another group of Americans, if necessary.

Hicks and Gillett also found themselves without some of the traditional financial safeguards of the U.S. sports leagues—salary caps, revenue sharing, and taxpayer-funded stadiums. In retrospect, it looks like Hicks, Gillett, and the Glazers purchased more than they bargained for. These days, even your average billionaire might struggle to keep up with the competition in the Premier League arms race. Roman Abramovich, the Russian owner of Chelsea, has spent $1 billion on the club since he bought it in 2003. Meanwhile Sheikh Mansour bin Zayed Al Nahyan, half-brother of the emir of Abu Dhabi, has poured $800 million into Manchester City since purchasing the club two years ago. With a fortune estimated at $30 billion however, the sheikh can afford it.

Hicks and Gillett discovered they could not compete with that kind of extravagant largesse. When they bought Liverpool in a deal valued at $750 million in 2007, the club was "only" $70 million in debt. But, like the Glazers at Manchester United, they bought the club with borrowed money. Interest payments took their toll: Unless Liverpool pays the Royal Bank of Scotland $450 million next week, the bank will take control of the club. One of the proudest names in English soccer will, essentially, be bankrupt.

Meanwhile, Manchester United lost $131 million last year and the Glazers are paying an eye-watering 16 percent interest on $350 million of its debt. No wonder leverage has become as dirty word in English football as it is on Wall Street these days.

Should Henry’s purchase of Liverpool go through, he knows that, if nothing else, he’ll be more popular than his predecessors: It is a matter of much celebration on Merseyside that Hicks and Gillett may actually lose $250 million on the sale, and the venerable Times of London wearily editorialized this week that "Mr. Hicks and Mr. Gillett have failed Liverpool in every sense." And the success Henry has enjoyed with the Boston Red Sox is enough to have Liverpool fans welcoming the New Englanders with open arms.

But even if Henry balances the books at Liverpool, he faces the problem of competing with richer clubs. Liverpool, 18 times champions of England, risk being eclipsed by the plutocrats at Chelsea and in Manchester. As Alan Sugar, former owner of Tottenham Hotspur and host of Britain's version of The Apprentice told The Times, "Buying a Premier League football club doesn't make any sense whatsoever."

• Full Coverage of SportsSometimes no amount of creative refinancing can paper over the truth. Everyone "knows" that English football is still an inflated asset bubble, just as everyone "knew" that the property boom of the last 20 years would end eventually. Despite that—and despite some falling prices—owners and fans alike continue to delude themselves that the good times can roll on and on for good. Sooner or later, the bubble will burst and some of the grandest, most famous names in English sport and all soccer will be ruined and embarrassed.

Alex Massie is a former Washington correspondent for The Scotsman and The Daily Telegraph. He currently writes for The Spectator and blogs at www.spectator.co.uk/alexmassie.