The Political Economy of Football V2

As Exeter City emerges from a financial crisis which has led to budget cuts, it is evident that there have been offers of external investment.  This interview with the interim chairman illustrates some of the limitations of the fan ownership model:  https://www.devonlive.com/sport/football/football-news/exeter-city-open-investment-offers-10872138

My eldest lives down the road from the Coventry City training ground at Ryton.  During the years of exile at Northampton and Birmingham it was a forlorn sight, blighted by years of under investment.  Now high fences keep out inquisitive eyes.  A cluster of Sky Blues fans can usually be seen by the gate hoping to see players or even Frank Lampard himself. The Swiss Ramble has cast an inquisitive eye over the 2024/25 accounts for the Sky Blues.  As usual, the full picture is available on his Substack platform, but here are some highlights. Despite the improvement in the league, Coventry found life more difficult off the pitch, as they swung from an £8.7m pre-tax profit to a £21.6m loss, a decline of £30.3m in the bottom line. The positive was a large increase in revenue, which rose £4.8m (17%) from £29.3m to a club record £34.1m, but this was not enough to compensate for a significant reduction in profit from player sales, which dropped £20.6m from £23.7m to just £3.1m...

Liverpool’s U.S. owners Fenway Sports Group (FSG) has shelved plans to purchase a second football club.   FSG announced its intention to create a multi-club ownership (MCO) group in 2024 when it rehired Michael Edwards as its CEO of football. Extensive analysis was conducted on around 25 clubs with a strong focus on Spain, Portugal and France. FSG investigated possible deals for Bordeaux , plus Spanish outfits Malaga  and Getafe,  but opted not to pursue them. The New York Times  also revealed FSG looked into buying a minority stake of less than 30 per cent in Monaco in early 2025 alongside another ownership group but, again, decided not to take it any further. The reasons behind FSG's decision is necessarily speculative but they tend to be cautious and risk averse. To some extent the MCO bubble has burst or at least peaked.   It was also never quite clear what strategic objective they were pursuing.

The penalties imposed on Chelsea have reignited interest in the charges made against Manchester City  There has been no formal movement in the Premier League’s case against Manchester City for over a year. Following a four-year long investigation, City were originally charged with 115 breaches of the league’s financial regulations in February 2023 — depending on classification, it could even be understood as 130 breaches. City deny all charges, but broadly, the Premier League allege that the club breached profit and sustainability rules (PSR) by disguising payments from ownership as sponsorship, and providing undeclared salary or bonuses to players and managers. The in-person hearing began on September 16 2024, finishing almost three months later on December 6. The three-person independent panel then retired to reach their decision. Fifteen months have now passed without an update. “I really can’t comment, and there are very good reasons for that,” Premier League CEO Richard Master...

Chelsea have been handed a suspended one-year ban from signing first-team players and given a £10million ($13.7m; €11.6m) fine from the Premier League relating to breaches of financial rules during Roman Abramovich’s time as owner. The ban is suspended over two years, meaning that Chelsea will still be able to register senior players if they do not commit any further breaches. No sporting sanction, such as a points deduction, has been imposed. The club have also been banned from registering academy players for a period of nine months. The restriction, which comes into immediate effect, only applies to youth players that have previously been registered with another Premier League or English Football League club’s academy, and not any current players, international players or players who are registering on professional terms. It also does not apply to players who are applying for their first registration at Under-9 or otherwise, the Premier League said. The club will also pay a £750,000 ...

The Swiss Ramble was invited to give a presentation at the FT Football Business Summit on the increasingly popular model of multi-club ownership.   For some reason this contribution was not publicised by the Pink 'Un. It is the most thorough data-based treatment I have seen of the motivations for multi-club ownership and the advantages and drawbacks of the model.   Of itself it is a reason for subscribing to the Zurich-based football finance guru's Substack page. My only additional comment would be don't forget the wood for the trees.  I would argue that globalisation is alive and well in football and one thing that a globalisation model encourages is holding assets in different countries, albeit that the junior subsidiaries lose out. The Swiss Ramble states: ' One of the best known examples of multi-club ownership is City Football Group, largely owned by Abu Dhabi United Group (ADUG). They first acquired Manchester City in 2008, but have significantly expanded ...