The Political Economy of Football V2

Bury lost £51,000 a week in 2016/17 before interest expenses. They had less than £2,000 in their bank account at the year end and over £7 million of creditors. Their auditors say there is a material uncertainty over the club’s ability to carry on trading. They need continuing support from owner Stewart Day. He invested over £1m of cash in 2016/17 following £3m the previous year. The Shakers spent £170,000 on transfer fees in 2016/17. £150,000 of this was for manager Lee Clark when he was poached from Kilmarnock. Clark was sacked after eight months. The club owed Stewart Day’s company Mederco £4.3 million at end of 2016/17. The example of Walsall shows that it is possible to run a club in a sound way in the lower reaches of the EFL.

Five of the teams in the round of 16 (over thirty per cent) at the World Cup are Latin American (Argentina, Brazil, Colombia, Mexico, Uruguay), although Latin America accounts for only 8.5 per cent of the world's population. Five of the seven countries (after Russia) that snapped up most tickets in advance were Latin American: Brazil (30,000); Colombia (65,000); Mexico (60,000); Argentina (54,000) and the lively Peruvians who were unfortunately eliminated at the group stage (44,000). Many of the 89,000 fans from the United States are Latinos who may support their country of origin. South Americans have paid up to $10,000 to follow their national team, in many cases taking out loans. The World Cup has a unique appeal in Latin America. For European fans, club often comes before country. For Latin Americans, it is the reverse. Football is one of the few things at which Latin America is world class. Between them, three South American teams (Argentina, Brazil and Uruguay) have w...

Sheffield Wednesday are under pressure to balance the books: Owls Kieran Maguire of the Price of Football said, 'I calculated Wednesday’s losses over the last three seasons as being around about £26m. I think they can afford to make a decent sized loss this season. That’s assuming the chairman is willing to fund that loss and the evidence says he is not looking to cash his chips in. They do have some wiggle room but are going to have to cut back some how and in my view Wednesday need to have one big ticket sale. I think then they will be in a strong position to perhaps bring in two or three players in. They don’t have to get rid of half a team like Aston Villa.'

AC Milan are to appeal against their exclusion from the Europa League next season by Uefa over financial fair play regulations: Appeal They will take their case to the Court of Arbitration for Sport in Milan. The club claims that its finances are now in stable condition.

The authoritative Swiss Ramble has taken a look at FIFA’s accounts and how important the World Cup is to their finances. In 2017 Fifa made a $189m loss before interest and tax, though this was $202m lower than 2016 and $300m better than budget. Revenue of $734m beat budget by $120m, while $923m expenses were $180m below budget. FIFA said this was “a successful year for all key financial parameters”. It is important to note that FIFA operates in a four year cycle with the World Cup being the “crowning event” in the fourth year and the main source of income. Thus, the majority of revenue is shown in the fourth year, whereas football development is equally spread over all years of the cycle.So, FIFA has reported deficits in last 3 years (2015 $117m, 2016 $391m & 2017 $189m), while 2018 would be a $797m surplus to achieve the $100m profit budgeted for the four-year cycle. However, the recent congress estimated revenue would be $6.1 bn, leading to a surplus over $0.5 bn. To give an i...

Two bidders associated with US sports are interested in AC Milan: AC Milan The Ricketts family, owners of Major League Baseball (MLB) franchise the Chicago Cubs, are looking to take control of the Serie A side. Meanwhile, Italian newspaper Gazzetta dello Sport says that Rocco Commisso, the American billionaire owner of the New York Cosmos soccer side, is already in negotiations with current Milan chairman Yonghong Li. The financial stability of the club has been a concern for some time.

A lot of the focus on the supposed economic benefits of the World Cup has been on the alcoholic drinks industry, but betting firms are also doing well. It is thought that £2.5bn of bets will be placed on the tournament, an increase of 50 per cent on the last World Cup. There has been a big rise in the number of female gamblers. At the last World Cup only one in ten bets was made by a woman; this year it is one in three. Almost £500m has been bet in the past week with four out of five bets put on during matches. About a fifth of adverts shown during ITV's World Cup matches are devoted to gambling with many encouraging viewers to bet during matches on their smartphones. Live 'in play' betting has become so popular that more than £4,000 is being wagered per second on average. Almost £150m was bet on the England v. Tunisia game, the equivalent of £11 for every person who watched the match in full. The ideal scenario for bookmakers would be for England to make the final...

Mohamed Salah is considering retiring from international football after becoming increasingly concerned that his image and reputation are being used for political purposes by the Egyptian authorities. His popularity in Egypt is shown by the fact that over a million voters wrote in his name in this year's presidential election, making him the runner up. Salah was pictured with Ramzan Kadyrov, the controversial Chechen leader, before the start of the World Cup finals and has since been made an honorary citizen of that republic. Kop Outs, a Liverpool LGBT group, has asked him to return his honorary citizenship as an acknowledgement of the persecution of LGBT people in Chechnya.

The prospective Australian owners of Charlton have been given a deadline of the end of the week to show that they have the necessary readies and the second week of July to complete the deal reveals Charlton fanzine editor Rick Everitt: Takeover deadlines Roland Duchatelet. the current owner of the club, has also being trying unsuccessfully to buy out the loans of former directors at a discount These loans have been outstanding since 2010. They are not repayable until and unless Charlton return to the Premier League and do not pay any interest while the club remains in the EFL. They are, however, secured by a first charge over the club’s assets, which means that the seven individual holders have the individual ability to prevent the issue of new leases over The Valley and the Sparrows Lane training ground. Given that the alternative British bid may have fallen at the fit and proper persons hurdle, all this suggests that a club ill prepared for the new season may still be in the hand...

The convergence hypothesis states that poor countries grow faster than rich ones. In practice it has been modified to become 'conditional convergence': countries only grow if the conditions are right such as good political leadership (think North Korea and Venezuela). Economists Melanie Krause and Stefan Syzmanski decided to see if the convergence hypothesis worked for international men's football. They did find that the performance of international football teams is converging. The minnows are getting stronger and the old cliché 'there are no easy games in international football' is truer today than it was n the 1950s. The very best ideas can be imitated. Elite football offers a global labour market. A strong player from a weak national team will spend most of his time at a top club side in the company of world-class dieticians, physios, trainers and fellow players. His home nation enjoys the benefits.

Now the results of all clubs have been published, Kieran Maguire of the Price of Football takes a look at the key financial figures from the Premier League for 2016/17, starting with total income, where Manchester United earned £100m more than any other club. Biggest ground capacity in the country and 32 home league matches meant that United had the highest match day income in the Premier League in 2016/17. United earned £21.46 of ticket sales for every £1 earned by AFC Bournemouth. Reliance on TV for Premier League clubs was significant as new £5.1bn BT/Sky deal kicked in. Half of the clubs had at least £4 in every £5 from TV, and for Bournemouth it was £9 out of every £10. Manchester City earned the most broadcast income in 2016/17 due to Champions League participation and popularity with BT and Sky too. Commercial income in the Premier League for 2016/17 shows the difference between the haves and have nots. Manchester United earned at least double that of every club apart from...

Tony Xia has given an assurance that Aston Villa will receive another £5m this month which should enable them to meet their wages and pay their tax bill: Survival The chief executive of the English Football League held talks with Villa this week about their precarious financial situation which includes financial fair play challenges.

The owners of Ethiopia's most successful sports club, St. George Sports Club, have announced that they will sell it to fans. The sale comes weeks after prime minister Ably Ahmed broke from decades of Marxist-rooted government policies and approved the privatisation of state owned monopolies. About 2,300 fans attended a meeting to discuss the sale. St. George, which has won the Ethiopian Premier League title 13 times since 2000, is owned by the St. George Football Association. It has been propped up by prominent businessman Abennet Gabre Meskel and the Saudi billionaire Nohammed Hussein Al Amoudi. The majority of a new company's shares will be offered to fans. Companies will also be able to buy some shares. Likely buyers include St. George Beer, owned by France's Castel Group, a long-term sponsor.

Fiorentina have made record profits, largely due to player sales: Record results Part of the reason for a record profit of over €35m was a profit on players of €88.7m, up from €31.8m in 2016.

A joint statement issued by the prospective Australian purchasers of Charlton and the existing Belgian owner of the club in effect says very little, although the BBC seems to be confident that a deal will eventually be done: Charlton Athletic Much is made of the regulatory complexities surrounding the deal, but it is unusual for the takeover of a football club to take more than a year.

Crystal Palace's accounts for 2016/17 are finally out.The delay in the accounts being published may be linked to proposed third party investment that didn’t eventually materialise. The club received a large deposit that was then repaid. Like the overwhelming majority of Premier League clubs, they have returned a profit. A loss of £6.8m in 2016 converted into profit of £12.8m in 2017. Income was up 40% on back of new TV deal. Gate receipts down 9% despite higher attendances reflecting lower prices. 82% of income was from broadcasting, a not untypical figure for 'smaller' Premier League clubs. Wages were up 39% to £111.8m. They had the ninth highest wage bill in the Premiership. The average weekly player wage was nearly £54,000. The highest paid director earned £2,150,000, presumably with initials SP. The club spent £117,000 on services from VMM, a Steve Parish company, and paid rent of £234,000 to Smoke & Mirrors Group, another Steve Parish Co during 2016/17. Pa...

England's World Cup squad is the least experienced it has fielded in recent times in terms of the number of top level games played. Over the past two years players in the squad have averaged 25 full games a season in the 'big five' leagues and the Champions League. This compares with England's squad for the 2002 tournament where players averaged 30 games a season. Part of the reason may be the increasingly cosmopolitan nature of the Premier League where players are attracted from around the world by big wages and high profile games. In 1992 English footballers took part in 69 per cent of all minutes played in the Premier League, compared with 34 per cent today. In contrast Spanish players take part in 58 per cent of the minutes played in La Liga, and German players get 45 per cent of all match time in the Bundesliga. The reluctance of English players to move overseas also limits the match time that they got last season. Last season, English players appeared in 3,...

Every World Cup is accompanied by media articles which resort to hyperbole about the resultant boost in consumer spending. What they always overlook is that if people spend more money in one month, they will have less to spend subsequently. However, this Evening Standard article which talks about a £2.7bn boost at least has more information than most, including the surprising revelation that the biggest boost in spending is usually in Fulham and Hammersmith: Bonanza

Tottenham Hotspur will play their first game of the Premier League season at Wembley on August 18 against Fulham. Their first match at their new stadium will be on September 15 against Liverpool after the international break. This is the first time a club has been allowed to play home games at two venues in the same season. Their new £850m stadium will seat 62,000 spectators, and the club will schedule several events preceding the Liverpool game to "check and rehearse various operational aspects".

The initial reaction to Uefa's verdict on Paris Saint-Germain's possible breach of financial fair play rules was that they had been cleared of any breach, but in fact they are not in the clear yet. What Uefa said was: 'The CFCB Investigatory Chamber decided to close the investigation into Paris Saint-Germain. Such decision follows a detailed review of transfer contracts and an analysis of the related management accounts which confirmed that such transactions were in line with the UEFA Club Licensing & Financial Fair Play Regulations. Furthermore, the chamber concluded that after significant fair value adjustments of several club sponsorship contracts - on the basis of evaluations performed by independent third party assessors - the break-even result of the club remains within acceptable deviation for the financial years ending in 2015, 2016 and 2017. The financial impact of transfer activities as from the 2017 summer – up to and including the upcoming transfer window -...

The long running saga of the Charlton Athletic takeover looks like encountering further delays. Controversial Belgian owner Roland Duchatelet has been in London this week starting to make decisions about next season, including the sale of Ezri Konsa to Brentford and the managerial vacancy: Duchatelet takes the helm Richard Cawley from the South London Press tweeted, 'RD definitely wants to sell but I don't believe that Australian-backed consortium expected Konsa to go. Does get to a point where RD has got to start making some decisions on manager etc if this doesn't get resolved.' 'Got to say that the information I'm getting is that Andrew Muir's [Australian] consortium still in for the club, deal not collapsed etc etc, but you have got to question how close it now is if RD is selling a prize asset.' 'In terms of why this takeover has taken so long, I think you'd find that both parties will blame the other. It is hard to pull apart some of t...

World Cup prize money is $400 million with winners earning $38 million and teams eliminated in groups $8m. In addition each team gets $1.5m of preparation money. In this context it is interesting to look at the newly published accounts of the Scottish Football Association. Income was up £3 million in 2017 to about £38.5 mill. Compares to Celtic £5m, Rangers £29m and English FA £351m. The Scottish FA made operating loss of £23,000 in 2017 compared to English FA £28m. 90 per cent of SFA income was from commercial and broadcasting income. Matchday from Hampden made £3.6 million. The Scottish FA wage bill was £9m in 2017. This is about the same as Barnsley in England. Rangers wages £17.5m Celtic £52.2m Aberdeen £7.8m.

The FA are seeking a bigger offer for Wembley than the £600m bid made by Fulham owner Shahid Khan: Sale opened up Three other potential bidders are understood to be in the frame. The FA will insist on a 'golden share' arrangement that would prevent a resale to an unsuitable owner.

The authoritative Swiss Ramble comments, 'Looking through the Premier League finances for 2016/17, one thing I noticed was a dramatic increase in the reported profit on player sales.' He sets out to analyse this increase and also tries to explain the mysteries of player trading accounting. Total profit on player sales in the Premier League in 2016/17 was £512m, which was a massive £215m (73%) higher than £297m in the previous season (£295m in 2014/15). In 2016/17 Chelsea had the highest profit on player sales for the second season in a row with £69m, mainly due to Oscar’s transfer to Shanghai SIPG, followed by Everton £52m, Southampton £42m and Spurs £40m. Interestingly, Manchester United and Arsenal only had £11m and £7m respectively. It’s a similar story for the last 4 years combined with Chelsea again leading the way with a hefty £224m profit on player sales, followed by Tottenham £192m, Southampton £147m and Liverpool £136m. Again, Arsenal £45m and Manchester United £32m...

Outgoing Premier League chief executive Richard Scudamore has praised globalisation. He said that he was proud of globalisation. He told The Times. 'Only 50 per cent of the people in this country like football. We have other countries, Norway, Nigeria, where it is into the 80s. They like the Premier League more than England does.' 'In promoting and saying how proud you are of globalisation doesn't necessarily win friends. I don't think that's anything to do with football. I think that's to do with Britain. There is something odd about the British who don't seem to be able to entirely embrace globalisation.' Britain has always been an outward facing nation highly integrated in the world economy and in a sense the Premier League is the latest manifestation of this. However, many people are unhappy about the neo-liberal policies associated with globalisation and the growing gap between a super rich elite and the poor, something which is also ap...

Fifa are cracking down on transfers: Shake up Clubs would be limited to four transfers in the January window.

The authoritative Swiss Ramble has reviewed the 2016-17 accounts of Ipswich Town. He comments, 'they have adopted a sustainable strategy under Evans, though whether this will lead to a promotion challenge is debatable, especially when competing against clubs with large parachute payments or hefty owner investment, so the lengthy stay in the Championship may well continue.' Since Evans bought Ipswich Town he has provided £48m of funding (loans £36m & share capital £12m). Other financing has come from £13m net player sales. This has almost entirely been used to cover operating losses with very little invested in infrastructure (though £1m in last 2 years). Evans averaged £6.3m new loans a year between 2010 and 2014, but this has been cut to £1.1m in last three years.' The club's £89m debt was the fifth highest in the Championship, below three clubs that have since been promoted to the Premier League (Brighton £207m, Newcastle £152m & Cardiff City £127m) plus B...

David Conn discusses Richard Scudamore's decision to step down as chief executive of the Premier League: Quits while ahead Conn concludes, 'Some football people have felt comfortable with Scudamore despite the perception of him as an aggressive fighter for the Premier League, appreciating his roots as an English football fan. Some pictured a possible alternative, say an obsessively commercial US-style chief executive, who might think ending promotion and relegation makes sense, and came to the conclusion about Scudamore: better the devil you know.' Sports minister Tracy Crouch tweeted, 'He has transformed the league into one that is passionately followed and watched here and across the world and I've enjoyed working with him for the past 3 years.' Sports academic David Webber responded, 'English football has ALWAYS been passionately followed. As chair of the Premier League, Scudamore was merely the latest to commoditise it and oversee its transformation ...

At the time of every World Cup there is a lot of hyperbole about what it will do for the British economy. It's one of the standard stories that is always wheeled out. However, consumers only have a finite amount to spend, so if they spend more during the World Cup they may have less to spend later. However, consumer demand has been depressed this year and the UK economy is (over) dependent on consumer spending, so there is a sense in which any boost is welcome. VoucherCodes and the Centre for Retail Research reckon it could be worth £1.3 billion extra to the economy if we get through the group stage and £2.7 billion in the unlikely event that we win the trophy. However, given a £2 trillion economy, a billion or so of extra spending is relatively trivial. Pubs and drinks sales from supermarkets would benefit, but that would mean less spending elsewhere.

The demand by top clubs for a bigger share of fast growing overseas TV rights has been resolved by a new formula. Premier League overseas rights are to be split based on league position. The sum paid will be capped at top team having 180% of that of the bottom team. Kieran Maguire of the Price of Football commented, 'This ignores that a club such as Liverpool already has 1100% of the commercial revenue of a decent PL team such as Burnley.' Clubs are outside the top six are concerned that the big clubs will come back with new demands.

The expected breakthrough of new media into Premier League games has happened at last. The line between television and the internet is becoming increasingly blurred. Amazon has won one of the remaining packages and will show 20 games from 2019-20: Amazon The online streaming service has won the rights to show one round of midweek games and one round from a bank holiday. The price has not been disclosed, but will not offset the reduced sum received from BT and Sky. However, it may have a knock on effect on international deals where there may be a concern about Amazon becoming involved. Kieran Maguire of the price of football commented, '[The package] includes all matches on Boxing Day (26 December). Expect to see staggered kickoff times of midday, 3pm 5:30pm and 8pm to maximise return on investment. Good luck catching a bus or train home.' Amazon Prime subscribers will be able to see the games free of charge, but others will have to pay. Amazon hope it will make them m...

Record revenues for Europe's biggest football leagues have created a new era of profitability at the continent's top clubs where income is outpacing spending on players for the first time. The combined revenues for clubs in the top divisions in England, Spain, Germany, Italy and France were €14.7bn in the 2016-17 season, an increase of 9 per cent compared with the previous year, propelled by the escalating value of television rights deals. According to Deloitte Sports Business, the Premier League's retains its leading financial position, with its 20 clubs generating €5.3bn in income. Revenues at Premier League clubs are up 25 per cent year on year, with wage growth up 9 per cent. No Premier League team made an operating loss in the 2016/17 season despite the huge sums spent on transfer fees. Dan Jones, partner at Deloitte Sports Business Group, said the figures marked 'a financial revolution'. A decade ago 60 per cent of Premier League clubs were making a loss,...

Singapore company VSport are understood to have made a bid for Blackpool: Blackpool bid They would take complete control of the club and stadium. This has been a concern for fans who do not want the Oystons to have any involvement in the club. The owner wanted £45m for the club, but the bid is believed to be £25m.

Kieran Maguire of the Price of Football has now turned his attention to the Championship in his review of the leagues. Championship clubs tend to spend beyond their means in the hope of securing access to the riches of the Premier League. The figures on wages confirm this. Overall there was £716.3m in income and £715.8m in wages for clubs, leaving little room to pay other bills. The £716m total compares to £2,346 million in Premier League from four fewer clubs. The overall average £12,113 per week wage compares to £52,867 in the Premier League £2,785 in League One and £1510 in League Two. Leeds United had the highest 2016/17 commercial income in the Championship. Newcastle United had a match day income twice as large as any other club due to their big gates at St. James's Park.

Leading sports journalist David Conn reviews the finances of Premier League clubs: Premier League Finances A pithy comment is provided on each. For example, about Chelsea he says: 'Chelsea’s mega-funding by Roman Abramovich has always been an anomaly; now even more so, as Chelsea were the only top club to make a loss and rely on more funding from the owner. In this title-winning season for Antonio Conte, the Russian oligarch increased his loan by £33.8m, taking his funding to £1.17bn since he bought Chelsea in 2003.'

American businessman Peter B Freund is reported to be interested in buying Aston Villa and is prepared to pay Tony Xia £75m. Having spent £140m on the club, Xia was hoping for £100m. The club has allegedly missed paying a £4m tax bill which led to the threat of a winding up order from HMRC. It is believed that this episode is why chief executive Keith Wyness has been suspended. Tony Xia has put in about £4 million a month since buying club but capital flows from China are difficult after stricter foreign exchange controls were imposed by the government. Substantial sums due for player transfers bought on credit. In 2016/17 the club bought players for £88m but only paid cash of £58m. The balance is on credit to other clubs. Having overspent to secure promotion, the club faces financial fair play challenges. Freund is a minority shareholder in baseball's New York Yankees through his Trinity Sports Holdings. TSH has an agreement with the United States Soccer League to enter ne...

There are clearly big financial problems at Oldham Athletic with fears expressed that the club could be the next Leyton Orient: Financial troubles It is never easy for lower league clubs on the periphery of Greater Manchester given the dominance of the two Premier League clubs. However, Rochdale seem to have found a better path.

Nearly all clubs in League are1 losing money, reveals Kieran Maguire of the Price of Football. Average losses are £75,000 a week. Only Walsall have broken even. The average wage bill is £6.6 million for a League One club, which takes Alexis Sanchez 15 weeks to earn. The average wage is £135,000 a year of £2,600 a week. Total transfer spending in 2016/17 was £8.3m compared to £980,000 in League Two. League One debts total £70m, mainly owed to companies controlled by owners, as banks would not want to risk lending them money.

Soccer economics guru Stefan Szymanski has taken a look at how the 2008 financial crisis impacted the finances of European football clubs: Financial crisis It has been argued that improving club finances are down to financial fair play, but Szymanski gives a much bigger role to the recession.

With just two sets of accounts to come in, Kieran Maguire of the Price of Football has taken a look at overall League Two results. Clubs made a collective loss of £15 million, signed players for £980,000 and had loans of £63.8 million with Luton Town and Colchester United taking up £48 million of those loans. The average income of League Two clubs is £4.5m with Portsmouth by far the highest at £7.5m. Luton are second and Carlisle third. Average wages are £1,610 this week, but this figure is somewhat misleading as it includes Portsmouth. Maguire also takes a close look at the accounts of Morecambe FC: Bring me sunshine With the second lowest attendances in the division, the club only generated about £848,000 from gate receipts for the season, much lower than that of the large clubs in the division such as Portsmouth (£3.86 million) who have the benefit of larger crowds. It’s always tricky to determine player wages but using his standard formula Maguire estimates the average weekl...

A consortium of British businessman is considering making a bid for Aston Villa after they failed to win promotion to the Premier League: Takeover attempt Owner Dr Tony Xia is thought to be ready to cash in. He paid £60m for the club when he bought it from Randy Lerner. Villa faces financial fair play challenges that will constrain its spending next year. The consortium is fronted by fitness entrepreneur and former football agent Matt Southall. Former director of football at Blackburn Rovers Paul Senior is also involved.

There has been some relief at Chelsea that the stadium redevelopment plan has been abandoned. Many of the club are not unhappy that the grand designs for a 'cathedral of football' produced by the architects Herzog & De Meuron have fallen through. There wasn't really a business case to spend more than £1 billion to add just 18,000 seats to Stamford Bridge. Unlike Liverpool, which had to expand Anfield to create more capacity for the prawn sandwich crowd, Chelsea has always had a lucrative corporate hospitality business. The majority of the new seats would have gone to ordinary fans. There were also concerns about the limited relocation options available during the four years that would have to be spent away from Stamford Bridge. Egg chasers did not want them lowering the tone at Twickenham and the London Stadium, leaving aside its shortcomings, is well away from the main fan base in West London and Surrey. That left Wembley which is in the process of being acquire...