The Political Economy of Football V2

A deal to save Hartlepool United has collapsed after a locally born businessman saw the state of the club's finances. Chris Musgrave said, 'I am not prepared to sign blank cheques with no end in sight': Deal to save club is off A crowdfunding scheme and a big attendance for a game against Wrexham last Saturday may have raised enough funds to deal with immediate needs. However, the need for funds is ongoing. The club was never that strong financially, and had a succession of owners, but relegation from the Football League was the killer blow.

The analysis in the latest Deloitte Money League report shows that elite clubs are less reliant on income from fans attending home games than smaller rivals. While broadcasting income is a crucial source of revenue for all top clubs, the richest clubs can also tap into global fan bases and commercial deals. Manchester United has gained large increases in commercial revenue in recent years, despite the club having not won the Premier League since 2013. Almost half its income is achieved through sponsorship deals, such as its £750m decade-long kit contract with German sportswear group Adidas. Last year, the club signed its biggest 'global partnership' with Melitta, a German coffee machine company. 'The top ten clubs are global powers and that is shown if you look at their social media numbers as much as their financial numbers,' said Dan Jones, partner in Deloitte' spots business group.' 'But it's dangerous to talk about them having deserted their ho...

Newcastle United and Sunderland have fallen out of the Deloitte Money League, reflecting the impact of relegation from the Premier League. Newcastle had been in the top twenty since 2013, although they slipped to 21st last year. Sunderland were 29th last year: Money League Newcastle's prospects are unlikely to improve without a change of ownership, but the chances of that happening are receding.

The 2019 Deloitte Money League report shows that aggregate revenue for the top 20 Money League clubs rose 6% to €7.9 billion (£6.8 billion) in 2016/17, a new record, with the top three clubs – Manchester United, FC Barcelona and Real Madrid – earning a combined revenue of €2 billion for the first time. Manchester United retained top spot for a second consecutive year, generating total revenue of €676m (£581m). This year’s battle for first place was the closest in Money League history, just €1.7m (£1.5m) separated Manchester United and second place Real Madrid: United’s win in the Europa League Final proving critical in the club topping the list for a tenth time. Their Europa League campaign generated £39m. In a statement, Deloitte Sports Business Group partner Dan Jones said: 'United's ability to retain first position is all the more impressive against the backdrop of the weakened pound against the euro. With both Real Madrid and Barcelona forecasting further revenue growt...

Former non-league clubs often find it hard to build up fanbases when they are promoted to the Football League. Of the 11 present League clubs who were outside the Football League when automatic promotion from the non-leagues began in 1986-7 (leaving aside Wimbledon, MK Dons and Newport County, all offshoots of former league clubs), nine have recorded the nine lowest average league attendances this season. Even Burton Albion at 4,710 represent the lowest figure in the second tier since the 1980s. Wycombe are the only club to do respectably, 72nd with 4,372. Despite being in League One, Fleetwood can manage just 3,211. Three clubs have average attendances of under 2.000: Barnet, Accrington and Morecambe (1,443). What strikes me about these clubs is they generally do not have highly populated hinterlands, or face competition from bigger clubs nearby, as in the case of Accrington. Barnet in the London suburbs face similar problems. What is striking is how well league clubs relegate...

The remaining English director of Charlton Athletic, Richard Murray, thinks that February is the most likely month for the sale of the club. Two consortia are involved in negotiations and one is more advanced than the other: Charlton sale In any event Belgian owner Roland Duchatelet would want things resolved by the summer as he would not want another season of accruing losses.

Norwich City are in better financial shape than most Championship clubs, but only really succeed financially when they are in the Premier League. This is the key lesson that emerges from the club's 2016/17 accounts. As the author of the Swiss Ramble blog has put it, 'At its simplest Norwich City are a profitable club - when they are in the Premier League. Outside the top flight, they lose money.' After making a £13m profit before tax in the Premiership, they returned a £3.1m loss in the Championship. However, in a division in which clubs are notorious for raking up big losses as they seek to get promoted, this was one of the smallest in the division. Revenue dropped by 23 per cent to £75.3m, mainly due to lower television money (down by £19.7m) but gate receipts (£2.3m) and commercial revenue (£0.5m) were also down. Canaries fans are known as a loyal lot, and the fall in gate receipts was largely due to lower average attendances resulting from fewer away fans. Reve...

In an interview with The Times Amanda Staveley insists that she is not a time waster and her £250m bid to buy Newcastle United is still on the table. She responded to 'hurtful and absurd' suggestions that her move for the club had been a bid for self-publicity. While Staveley's most recent bid of £250m was significantly below Ashley's £350m asking price, she was committed to investing a further £200m on new players and updating Newcastle's trading ground and academy. 'This is an investment, but it has to be a long-term investment,' Staveley said. 'Newcastle would be run as a business, but we want it to be a successful, thriving business that is an integral part of the city.' A staging post could be the next Premier League tv rights deal. Then whether Newcastle stays up is pivotal. A relegated club would have a much lower value.

Ufea's figures show that the number of European clubs with revenues in excess of €100m has edged up from 46 to 48, although there is some churn with five clubs dropping below the €100m threshold and six clubs rising above it. The more noticeable trend is the number of clubs with revenues above €50m, which has increased significantly from 86 to 94 clubs. At the turn of the century there were only an estimated 25 clubs with this earning, and consequently, spending power. Unsurprisingly, Manchester United tops the list of clubs by revenue and also has the highest growth rate (32 per cent). Barcelona comes in second and Manchester City in sixth place followed by Arsenal, Chelsea and Liverpool. Spurs are 12th and West Han United make the top twenty with a revenue less than a third of that of United. Leicester City, Newcastle United, Southampton and Everton are in the twenty to thirty range and Aston Villa come thirtieth. Thus, twelve English clubs occupy positions in the top thir...

According to Uefa, of the 256 clubs in the major European leagues, 111 or 43 per cent are foreign owned. However, they are particularly predominant in the Premier League (65 per cent of all clubs) and the Championship (58 per cent). More than 70 per cent of all foreign takeovers since 2016 have involved Chinese owners. Over the years the most steady flow of new foreign owners has come from the United States. The number of high profile Russian and Middle Eastern owners fell from 2008 to 2012,

The latest Uefa benchmarking report shows that, 'For the first time in European football, 11 clubs have reported aggregate league attendances of over a million. New in this category from last season are West Ham United FC, Celtic FC and Liverpool FC.' Rangers featured in the top twenty. Other English clubs in the top twenty are Arsenal and Manchester City. Barcelona had the highest aggregate attendances in 2016/17, followed by Manchester United and Borussia Dortmund (who have the highest average attendances). Once again, the German Bundesliga reported the highest average attendance of all European leagues. The Premier League ranks higher for aggregate attendance due to its higher number of teams and therefore matches. The English Championship joined the Bundesliga, La Liga and the Premier League in reporting aggregate attendances of over ten million in 2016/17.

The latest Uefa benchmarking report suggests that 'The underlying health of European club football is highlighted, with the 700 top-division clubs together generating the highest operating profits before transfers in history and year-on-year revenue growth of almost 10 per cent. Clubs are generating revenue but they are also investing in assets and infrastructure, thanks in part to UEFA’s financial fair play regulations. For the first time, club investments in stadiums and other long-term fixed assets exceeded €1bn in 2016.' The report states, 'Few, if any activities, can come close to matching the continuous 10 per cent year-on-year growth in revenues that English club football has generated since the turn of the century.' Everything depends on accessing the end 'customer', 'the huge pool of football supporters.' The report warns, 'Once more, we cannot help but note that the polarisation of commercial and sponsorship revenues between the top tie...

The latest Uefa benchmarking report contains some fascinating information on the financial situation of clubs: Benchmarking For example, Arsenal has the highest yield per league match attendee (€97.8). They are followed by Chelsea (€90.7) and some way behind Real Madrid (€73.8). Liverpool are 4th and Manchester United 6th. Watching a game in England is generally expensive. The average gate receipts per attendee in 2015/16 was just over €50 per person in England. This is 41 per cent higher than the average of €35 per attendee at Spanish clubs and 62% higher than the Swiss average of €31 per attendee. German and Turkish clubs, where the lowest-priced adult tickets are relatively cheap but where there tends to be a greater range in ticket pricing, are the other two leagues with average yields of more than €25 per attendee. The report suggests, 'The average yield underlines the positive impact stadium development can have on increasing the revenues of a club and on diversifying ...

The proposed sale of Newcastle United is in jeopardy after Mike Ashley sanctioned an inflammatory statement that accused Amanda Staveley, the businesswoman who has been attempting to buy the club, of wasting his time. A senior source at St. James' Park, has indicated that comments attributed to a 'source close to Ashley' and quoted by Sky Sports News, which appeared to question the seriousness of Staveley and PCP Capital, her company, were reflective of the owner's views. 'It is only right to let the fans know that there is no deal on the table or even under discussion with Amanda Staveley and PCP,' the source said. 'Attempts to reach a deal have proved to be exhausting, frustrating and a complete waste of time.' That version of events was disputed by sources close to Staveley who said that a written offer for Newcastle was sent in November and had not been withdrawn. According to Staveley's camp, that £250m bid, a straight cash deal, was the s...

West Bromwich Albion has been released from a mortgage on the stadium an other assets, a filing at Companies House shows. The club appears to be debt free, so is in a strong position in the transfer window, much needed given their relegation threatened position. I would like to express my sadness at the passing of that great footballer, Cyrille Regis.

It is easy to be sceptical when a football club announces its intention to become self-sustaining, but that is what Chelsea has achieved. From being one of the world' biggest spending clubs in the early days of Roman Abramovich's ownership, when they racked up hundreds of millions of pounds in losses, they are achieving steady profits and are in the black on player trading. Wages fell last season, despite the club having to pay title-winning bonuses, and a record profit was made from player trading. Since 2010, they have made an overall profit of £285m in buying and selling players. Chelsea's wage bill for 2016-17 was £219.7m, compared with £224.4 million the previous season. Manchester United are the biggest payers in the Premier League with total wages of £263.5m last season, while Manchester City's bill came to £244m. Last year Chelsea made a record profit of £69.2m on player trading, thanks in large part to the sale of Oscar to Shanghai SIPG for £60m. City, ...

Carlisle United have said that they are prepared to go into 'unprecedented detail' when they release the club's 2016/17 accounts: Fans to be told more In particular they will give an indication of the financial support received from Edinburgh Woollen Mill. The firm is run by Cumbria's richest man, Phillip Day. Between 2015-17 the club was pursued by a mystery billionaire who eventually made a formal offer. It appears that this was Syrian Yahya Kridi.

Plans for the redevelopment of Stamford Bridge have hit a new snag. The plans have been halted by a family who claim that the 60,000-seater stadium would block light from their home. Nicholas Crosthwaite and his family took out a High Court injunction in May against the stadium. The family, who have lived in the three bedroomed house for 50 years, are understood to have rejected a six-figure sum in compensation from the football club. Planners at Hammersmith and Fulham Council have said that the work cannot go ahead while there is a risk the injunction would stop the development. The house is in the neighbouring borough of Kensington and Chelsea whose council opposed the plans. The family argue that amendments could be made to the design. Planners at Hammersmith and Fulham Council are to meet on Monday to decide the next step.

Hartlepool United have to find £200,000 in the next 14 days to cover player wages and a HMRC bill, otherwise they could be forced into administration: Deadline edges closer They were relegated from the Football League to the Conference last season and, like many clubs, have not found the adjustment easy on or off the pitch. From six expressions of interest, two potential investors remain in the frame, both of them from overseas. Hartlepool fans have won many friends by dressing up for the last away game of the season. Here they descend the escalators at London Bridge for a match at Charlton Athletic. One issue is the debt pile of £1.8m. Meanwhile, fans from around the world are rallying to save the club: Campaign gathers pace Former manager Chris Turner has called for openness from the club on the extent of its financial problems: Financial crisis

Birmingham City's accounts for 2016/17 have been subject to an in depth forensic analysis by the author of the Swiss Ramble blog and he concludes that they 'do not paint a pretty picture'. They are the first to be produced with Trillion Trophy Asia as custodians of the club. Losses went up before tax by £5m to £16.4m. After tax, they were £18.1m. This was in spite of revenue growing by 19 per cent to £17.6m. All revenue streams increased, but there was a particular boost in broadcasting revenues because of enhanced Premier League solidarity payments. Attendances increased from an average of 17,571 to 18,650. Commercial income at £6.1m is not great, but not out of line with the norm for the Championship. Leeds do best, earning £17m a year. Almost all Championship clubs lose money (Wolves are one of the few exceptions) but the loss was one of the highest in the division and the highest at the club since 2008/09. The Blues have only made a profit once in the last fiv...

Sunderland were once known as the 'Bank of England' club, one of the leading football powers in the land. Now they are fighting relegation to League One. Where did it all go wrong? This well-written and informative blog post from a Sunderland fan attempts to provide some answers: Lessons handed down A pivotal event is seen as the club being found guilty of illegal payments in 1957 and fined £5,000. (£110,000 in today's prices). It wasn't so much the size of the fine as the fact that many key personnel left the club afterwards and its reputation was never the same. Incidentally, they got found out over a £3,000 receipt for straw after a whistle blower (Sunderland fans would no doubt call him something else) had alerted the football authorities. That would have provided enough straw to cover the pitch in winter for 25 years. What is not mentioned is the economic decline of the area in which the club is located with the disappearance of its traditional heavy indus...

The ever closer links between football and betting companies have given rise to concern. Britain's gambling companies provide more than £47m in shirt sponsorship deals for Premier League clubs. Nine clubs have betting companies as their main shirt sponsor. Watford and West Bromwich Albion have gambling companies as shirt-sleeve sponsors. The most lucrative deal is that of West Ham United with Betway, worth £10m. Everton receive £9.6m from SportPesa. At the other end of the spectrum Burnley are paid £2.5m by Dafabet and Huddersfield Town £1.5m by Ope Sports. The range of payments reflects the different profiles of the clubs. GambleAware has expressed concerns that clubs are 'normalising' gambling for young people. An investigation by the Sunday Times found that clubs such as West Ham and Stoke City have been using some of their youngest players, who are not legally permitted to gamble, to help promote betting sponsors. Some clubs also advertise betting sites to y...

Manchester City captain Vincent Kompany has advanced a mixture of moral and pragmatic arguments to suggest that Premier League ticket prices should be cut. His conclusions are based on research he did for his MBA at Manchester Alliance Business School. His remarks have reignited a long-running debate about how many traditional fans and young adults have been priced out of football, with season tickets at some clubs costing £1,000 or more, particularly in London. Manchester City season tickets cost between £299 and £635. He argues that clubs need to a draw 'a moral line' and help 'the right communities' to attend matches. They should make sure that working class fans who have supported them for generations can go to games. More pragmatically, he argues that a full stadium with a passionate crowd drawn from the local community can improve the home team's performance and inhibit visiting players. The clubs that ranked highest for atmosphere in his research were ...

Chelsea's stadium redevelopment plans have been hit by a further delay with the date for moving out of Stamford Bridge being put back to 2021. The club were hoping that their re-built stadium would open for the start of the 2021-22 season. However, it is a complex project and there have been delays with planning applications and infrastructure work. Chelsea officials told a fans' forum in November that they would stay at least two seasons beyond the present one at Stamford Bridge, but they are now planning to stay for another three years. It has been put back another year because of the complex nature of the pre-demolition work, which involves acquiring small pieces of land next to the ground and obtaining a succession of planning permissions. Chelsea estimate that the building work will take three years, but the scale of the project means that it could take four. The club have spent most of the last 15 years attempting to relocate to a new site or expand Stamford Bridge....

The Soccerex report on the financial firepower of football clubs continues to attract considerable interest and Aston Villa, have made the top hundred, albeit in 91st place and behind Sunderland and Brighton and Hove Albion: Aston Villa Villa are the only West Midlands club to make the top hundred, unless one counts Stoke City which I would regard as a Potteries club. The interesting question to me is why the West Midlands punches so much below its weight in football terms. The two Manchester clubs have given the city a global profile that Birmingham lacks. Villa have, of course, been set back by the two previous owners of the club with Randy Lerner thinking one could buy Premier League success more cheaply than in fact is the case, but I suspect there is more to it than that. Villa, meanwhile, remain a sleeping giant.

The new Soccerex ranking of the financial firepower of football clubs are attracting the attention of the local press with Bournemouth coming in at 65th: Number 65 This is a creditable achievement given the serious difficulties the club faced not so long ago. Indeed, they are ranked above long-established clubs such as Marseille, Feyenoord and Boca Juniors. In part this just reflects the financial clout of the Premier League. The only three clubs not be in the top hundred are Huddersfield Town, Watford and West Bromwich Albion. The first two are not so surprising, West Brom more so. The value of Bournemouth's players is estimated at £126m, they have £45m in cash in the bank, but net debts of £71m.

Football's relationship with new technology has always been an uneasy one. There has always been a fear that embracing new technology will change the character of the game. But the conservative resistance of the game's authorities (reflecting that of the wider football community) is starting to break down. In the past one of the most transformative technologies has been floodlighting. Experiments were carried out in the 19th century before the arrival of electricity, but not surprisingly what amounted to giant flares or using batteries and dynamos were not very successful. When floodlighting eventually arrived, it was treated as something of a novelty with special 'floodlight' competitions. During the 1930s Herbert Chapman at Arsenal decided to install permanent lights at Highbury. The Football League, in its infinite wisdom, refused to sanction their use, though, so only friendly and unofficial games were played using the newly installed lights. It took until the...

A new study examining the finances of the UK’s football clubs has revealed that Leicester City are the 20th biggest football financial powerhouse in the world. The Soccerex Football Finance 100 show the financial power of football clubs across different continents. Its authors say that the study underlines that 'the global football landscape has changed dramatically' over the past two decades, largely due to increased investor interest. Leicester City are the East Midlands’ only representative in the Soccerex Football Finance 100. The Foxes’ entry reads: 'Leicester City were a little-known club in world football until the 2015-16 season, when they won the Premier League title, outperforming the more fancied names in England and their considerably higher budgets. Reaching the quarterfinals of the Champions League in 2016-17 was also a milestone in the club’s history. Leicester City is owned by a Thai tycoon, which creates a big differential in competing in the market.'...

Perhaps the biggest 'surprise' in the new Soccerex rankings came in the fourth place ranking of Guangzhou Evergrande, the Chinese Super League (CSL)’s most successful club who boast the financial backing of both the Evergrande Real Estate Group and e-commerce behemoth, the Alibaba Group. While some may not have expected a Chinese club to feature so highly, this really should not come as a surprise given they once achieved a market value of £2.5 billion on China’s National Equities Exchange and Quotations, putting them ahead of Real Madrid and Manchester United. Evergrande have dominated Chinese football since they first invested in the club, winning the CSL for seven consecutive seasons and the AFC Champions League in 2013 and 2015. While they are undoubtedly the standard bearer for the league, they are not alone in representing China within the Soccerex Football Finance 100, with a further eight clubs appearing in the rankings making it the fourth most featured nation ahead o...

Manchester City have more financial muscle than any other club in world football – according to the Soccerex Football Finance 100. The study underlines how the global football landscape has changed dramatically over the past two decades, largely due to increased investor interest from billionaires across Europe, Asia Pacific, the Middle East and the Americas and escalating broadcast revenue. Manchester City topping the Soccerex Football Finance 100 will come as little surprise, being one of the most prominent cases of significant foreign investment transforming a club’s status and potential. This new annual report by Soccerex uses a bespoke methodology to evaluate and rank the top 100 clubs across the planet based on their finances. Manchester City topped the global rankings with a Football Finance Index (FFI) score of 4.883, which factors in five variables – playing assets, fixed assets, money in the bank, potential owner investment and net debt. Potential owner investment presumabl...

Sky and BT are not expected to engage in aggressive bidding in the latest round of Premier League television rights. One factor is the recent signing of a content signing arrangement between BT and Sky which will start in 2019. This will allow Sky to offer the BT sports channel to its satellite subscriber base and make Now TV, its lower cost streaming service, available to BT customers. There is always the prospect of a big technology company such as Amazon or Facebook getting involved. Executives at Sky would probably not be able to match the financial muscle of Silicon Valley giants should they get involved. However, they would probably not want rights that are confined to the UK. Their interest is in global rights. A significant clause in the Premier League's tender document shows that it is thinking of new media in the future. The league said that its new rights package would be available on a 'technology neutral' basis, meaning that it is open to showing matche...

Chesterfield FC have taken out a loan from director Dave Allen who is a casino and dog track owner. The loan is secured on the stadium. The repayment terms and the interest rate being charged are unknown. The loan may be to cover operating costs or to secure players in the transfer window for the relegation threatened club. The documentation is available online, but it is a standard agreement and does not contain any information about the amount involved: CFC 2001 Ltd.

Getting promoted from the Championship to the Premier League is invariably expensive, but clubs can also spend money to get out of League One. This is evident from the accounts of Millwall FC to June 2017. Losses from operations were down from £5.5m the previous year to £4m, although still means that the club is losing £100,000 per week. Revenue year for the year at £10m represented an increase of 20 per cent. Matchday income was up by 19 per cent assisted by a successful FA Cup run. This run also generated an increase of £0.8m in TV income and other central allocations from the Football League. The promotion bonus paid to players and increased administrative staff pushed up overall salary costs from £8m to £9.4m. This meant that £94 was spent on wages for every £100 of income. Over the last five years Millwall has spent 111 per cent of income on wages, more than twice the level recommended by Deloitte. Attendances averaged 9,475. Since promotion to the Championship they have...

Northampton Council lent Northampton Town and over £10m to redevelop their stadium and surrounding land and (under previous ownership) the money seemingly vanished. The matter is the subject of an ongoing police investigation. Allegations have been made of theft, bribery, misconduct in public office and electoral offences. Such matters are necessarily complex and take some time to resolve, so it is useful to be reminded of what progress has been made and to have a timeline of events: Northampton Town

On Christmas Eve we produced a relatively upbeat report on Everton's finances, although qualified by a later report on cost overruns on the key new stadium project: Record financial results The estimable 'Swiss Ramble' has produced a more forensic analysis of Everton's analysis. Unfortunately, he now only tweets his analysis instead of putting them on a blog, so I am going to summarise the main points here. Everton are the club that have the best chance of breaking into the top six, but the Swiss Ramble's analysis suggests that the gap is widening. Indeed, last night's defeat at home by Manchester United might be seen as confirmation of that on the pitch. The good news is that Everton do have the 7th highest revenue of any Premier League club (it's just possible that West Ham United might overtake them when they publish their 2016/17 results). However, their income is still less than a third of that of Manchester United, £171m against £581m. When you...

Chelsea FC plc have announced their annual financial results for the year ended 30 June 2017 with the club recording our highest ever turnover figure, resulting in a profit for the year of £15.3m. The group turnover figure grew to £361.3m from £329.1m in the previous year, an increase of 9.8 per cent. Broadcasting revenues increased as a result of winning the Premier League title last season, as well as the commencement of the Premier League’s latest contracts with TV broadcasters. Revenue from Chelsea’s commercial activity also grew following the signing of several partnership deals, most notably with new official training wear partner, Carabao. Stamford Bridge continued to sell out on matchdays and ticket prices remained frozen at 2011/12 levels. However, matchday revenues for 2016/17 fell slightly as a result of the club’s non-participation in UEFA competitions. Although the club recorded an operating loss in the year, the club reported an overall profit after making a profit on ...

Charlton's unpopular Belgian owner Roland Duchatelet is prepared to lower the asking price for the club after he realised that he was not going to get the £50m he wanted. He paid around £20m for the club in 2014: Takeover talks continue It is suggested that Duchatelet was 'stunned' by the departure of fellow Belgian chief executive Katrien Meire for the job of CEO at the Sheffield Wednesday. Many Charlton fans are wondering if the Owls know what they have left themselves in for. Meire was an unpopular figure at The Valley, in particular for her reference to fans as 'customers' which she says was taken out of context. Some fans alleged that some of her public statements were at least inaccurate. The question now is whether Duchatelet will prepared to lower the price enough to interest prospective purchasers. These include Australian bidders and a British-led consortium said to have funding from the Middle East.

Carlos Carvalhal is the top flight's 400th permanent post-war manager. The turnover of managers has steadily increased since the 1950s. In the 1950s and 1960s the average tenure of a top flight manager was a little over five years. It then dropped to a little over three years in the 1970s and 1980s. With the arrival of the Premier League it fell back to two years, five months in the 1990s. In the noughties it was two years, one month. Now it is one year, three months. With the broadcasting riches, relegation has to be avoided at all costs. However, a new manager coming in has to make use of players he would not necessarily have chosen. By the time he has something approaching a preferred side he may be sacked and the whole cycle starts all over again. It is also questionable how much difference a new manager can make, beyond an initial bounce (although that may be enough to secure survival). The way in which matches are spaced to suit the needs of television has drawn com...