The Political Economy of Football V2

The New York Times has taken an in depth and interesting look at why apparently solid mid-table clubs like Wolves eventually fall out of the Premier League. My view is that they tell half the story.   Statistical analysis shows that there is a strong correlation between spend on players and success.    You can fit a reasonable linear two variable regression lin to the data. Of course, there are outliers, clubs that punch below or above their weight: at the moment, Brentford on the positive side and Tottenham Hotspur on the downside. However, I think the Premier League is essentially an oligopoly, i.e., competition is controlled for the benefit of a few producers.    The big six or maybe seven ensure that they remain at the top financially and in other terms.    Insurgents are tolerated to an extent because they make the competition look more competitive than it actually is, but are eventually sent packing. In 2018, Stoke City and West Bromwich ...

Releagted from League One, Cambridge United have submitted their latest accounts reports football finance guru Kieran Maguire. Revenue was   £9.2m up 11%.    There was a parallel increase in wages of 11 per cent, total was £6.6m so they are 72 per cent of revenue.   Operating loss was £3.7m up 45%.      Borrowings £2.9m (mainly to group company);   Total losses over the years amount to £14.0m. Relegation led to a loss of £1n in commercial income. CEO Alex Tunbridge highlighted the ongoing modernisation programme but said that the fall in commercial income ‘further highlights the challenging financial landscape in the lower leagues at a time when the new Football Regulator is getting up and running. ‘’Although we were relegated the Club has continued to prioritise sustainable progress and development both on and off the pitch. We conducted a Football Review during last season to strengthen the football op...

The works team was once a common feature of football in the UK, particularly at the non-league level, including my non-league club Lockheed then AP Leamington and still referred to as the Brakes. My father as a non-league footballer thought that works clubs were particularly difficult to play against given that their players were given cushy jobs in the factory and plenty of time off to train. As implied by the club’s name, Philips Sport Vereniging (Philips Sports Union), the electronics giant Philips has close ties with PSV Eindhoven.   Indeed, the club started out in 1913 as a works team for employees of the conglomerate. It has extended its sponsorship of the club to 2031, covering stadium naming rights and participation in an innovative cooperation with four other Dutch companies under the Brainport Eindhoven name, which features on the front of the shirt. The Swiss Ramble has undertaken his usual forensic analysis of the club’s accounts; much more detail is available on ...

Barcelona have started the process of withdrawing from the European Super League (ESL), leaving Real Madrid as the only founding member in the project. Of the 12 founding ESL members, nine pulled out swiftly following its launch. Another, Juventus, said in 2023 that they had withdrawn from the proposal, leaving just Barca and Madrid attached to the project. In January 2023, the Catalan club’s president, Joan Laporta, said he remained convinced a new European League to initially compete with England’s Premier League would still be launched. The 20-team, closed-shop ESL was initially launched in April 2021, but fell apart following a substantial backlash from supporters. Six English Premier League clubs — Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham Hotspur — all immediately withdrew, along with Spanish side Atletico Madrid and both Milan and Inter of Serie A. The changes in the Champions League format along with that of the Club World C...

The financial troubles at fan owned Exeter City continue:  https://www.bbc.co.uk/sport/football/articles/c3ede8g785zo The club has a good record of developing players in its Academy and selling them on, but there are obvious risks in a financial model based on player sales.   Of course, many big clubs are also very reliant on player sales, but they also have other substantial revenue streams they can draw on. I have always been sceptical about the financial viability of fan ownership - AFC Wimbledon are in an affluent part of a global city and even they have been looking for outside investors. You either need a benefactor (e.g.., Brighton) or a private equity company willing to take risks to make a capital gain. Consider this announcement made today which confirms the interest of finance capital in sports teams.  Arctos Partners has been one of the most prolific purchasers of sports assets including a minority stake in Liverpool FC. Today the private equity firm KK...

 The authoritative Swiss Ramble reviews the finances of Benfica which posted a €37m pre-tax profit iin 2024/25, which reflected “a robust economic and financial situation”.  This represented “a complete reversal of the 2023/24 financial year”, when they lost €31m, so their bottom line improved by €68m.  Revenue shot up by €54m (31%) from €177m to a club record €231m, while profit on player sales improved €31m (52%) from €58m to €89m. Benfica’s revenue growth was largely driven by the performances in the Champions League and FIFA Club World Cup, which led to broadcasting rising by €47m (46%) from €101m to €148m. Importance of player sales As always, Benfica’s financials greatly benefited from player trading with a hefty €89m profit from player sales, made up of a €117m gain less €28m expenses.   The largest profit came from the sale of Joao Neves to Paris Saint-Germain, which generated a profit of €60m, while other important transfers included Marcos Leonardo to...