The Political Economy of Football V2

Birmingham City have been placed under a transfer embargo for failing to comply with financial fair play rules: Transfer embargo The ban relates to regulations on profitability and sustainability. The Football League have demonstrated their determination to enforce FFP rules with £42m of charges levied on QPR. Like many Championship clubs who are treading the Financial Fair Play tightrope, Blues were initially placed under a 'soft' embargo at the end of last season. However, with the EFL not convinced Blues had heeded their warning, they were placed under full transfer embargo in early July and that prevents them from registering players. The news has only now been confirmed. Under the rules clubs can lose £15m over three seasons, although owners can top this up to £39m if they put in £8m a season in the form of shares. Blues had pre-tax losses of £21.4m in 2 years to 2016/17. Some costs are disallowed for FFP purposes. Kieran Maguire of the Price of Football has comme...

Forest Green Rovers has become the world's first certified carbon neutral football club. It also claims to be the first vegan football club in the world: Forest Green Rovers However, the 'ugly game' has tweeted a note of scepticism, commenting: 'This is all very commendable, but overlooks the fact that Forest Green are planning to build a brand new stadium, with a larger capacity, on a motorway with no rail access. The club's plans for growth involve encouraging more people to drive to the match.' The club says that it is 'looking to develop new bus routes [with Stagecoach], [new] cycle routes and [to] improve pedestrian access,' as well as working on ways of 'encouraging fans to use public transport and increase car occupancy' both at the current and new grounds. However, it is doubtful whether anything will be in place for the 'El Glosico' classic between Forest Green Rovers and rivals Cheltenham Town later in the season.

The London riots in 2011 unlocked support for the new Tottenham Hotspur stadium at White Hart Lane according to the club's chief executive: Riots and new stadium Donna-Maria Cullen said: 'All of a sudden there’s focus from local regional and national government. We’d banged our heads against that brick wall for so long. Nobody would have spent money in an area that had no commitment from government to support infrastructure and transport. As soon as we had the riots everyone came back around the table and it was something we could do. We always wanted to stay in Tottenham.'

Aston Villa are still facing short-term cashflow problems despite last week's takeover. The money generated by season ticket sales and a significant proportion of the Premier League's parachute money has been used this summer to clear debts. Villa missed a £4m payment due to HMRC in May and were also struggling to make payments due to other creditors before the takeover. Villa need an injection of £75m to get through the season and face bills of £9m for this month alone to meet their wage bills, tax commitments and money owed to other clubs for transfer fees.

The four year legal battle between the EFL and QPR over financial fair play has come to an end with an agreed settlement of £41.965m. They will also be under a transfer embargo in the January window. The club will pay a £17m fine to the EFL over a ten year period, contribute £3m to cover the EFL's legal costs and convert £21.965m of existing loans into equity. QPR were ordered to pay a world record £40m fine last year. QPR launched an appeal which they have now withdrawn as part of the settlement. Although the fine has been substantially reduced, the owners will still have to pay out a total of £42m. Kieran Maguire of the Price of Football offers his views on the deal here: FFP Fine

Last night's Europa League qualifier between Aberdeen and Burnley brought home the financial gap between English and Scottish football. Aberdeen received £2.3m for their fourth consecutive runners up finish in the SPL. Burnley were paid £120m for finishing seventh in the Premier League. Work on a new £50m stadium for Aberdeen is scheduled to start this summer for completion in autumn 2019 with a 20,000 capacity. Th new stadium is situated in Kingsford to the west of Aberdeen and has been held up by local protests: New stadium

The NFL has secured an option to move the first American football game scheduled for the new Tottenham Hotspur stadium to Wembley if there are delays completing its construction, while the sale of tickets for the match has been on hold until after test events at the ground have taken place. The Oakland Raiders are due to play the Seattle Seahawks at Tottenham on October 14th. The club are confident that their stadium will be ready in time to meet that commitment. The NFL has contributed £10m to the cost of installing a retractable, synthetic pitch at the new stadium as well as agreeing to pay a multi-million pound fee for every game played there. Moving the opening game could lead them to demanding compensation from Spurs.

Chesterfield have been fined £12,500 by the FA after two players were paid by a private company instead of the club. Kieran Maguire of the Price of Football tweeted, 'This is a textbook example of how clubs can attempt to circumvent financial fair play.' The FA punishment comes two years after the game's authorities were made aware of the allegations. Meanwhile, uncertainty persists about the relegated club's ownership status: Ownership

Torquay United are proposing to relocate away from Plainmoor, but the local MP has expressed doubts about the proposal, saying that the finances don't stack up. A former deputy leader of Coventry City Council, he says that the scheme reminds him of Coventry City's disastrous move to the Ricoh Arena: MP sceptical over finances The proposed £40m project on the edge of Torquay involves a state-of-the-art expandable 10,000 seater stadium and a 30,000 capacity event arena, and a hotel, as well as an enabling housing development, all of which would be at Nightingale Park, creating 350 full time jobs. Having lost their Football League status, Torquay are currently playing in the National League South.

Arsenal fans fear that they will be further sidelined if Alisher Usmanov sells his 30 per cent stake to majority shareholder Stan Kroenke. Usmanov has explored selling his stake after accepting that his rival will not let him take full control. Kroenke owns a 67 per cent stake in Arsenal and there are fears of a reduction in transparency if he acquires the club outright. Were Kroenke to reach a 90 per cent stake, the remaining shareholders would be obliged to sell to him and he could then delist the club from the stock exchange. It is possible that the club's legal status could be transferred to the United States. In a statement referring to Stan Kroenke's refusal to engage with supporters, the Arsenal Supporters' Trust said: 'Arsenal is too important to be owned by any one person and there should be a plurality of ownership, including supporters.' Mr Usmanov has said he is willing to sell to any party - other than Mr Kroenke - who 'shares my and undoubted...

The billionaire businessmen Nassef Sawiris and Wes Edens have bought majority control of Aston Villa from Tony Xia. The beleaguered former owner will stay at Villa Park as co-chairman. The club would not confirm the size of the new investors’ stake, revealing only that their Egypt-based group NSWE would provide 'significant investment'. But it is understood that they have acquired 55 per cent of Villa, injecting £30m-£35m, with a view to completing a full takeover. Kieran Maguire of the Price of Football commented, 'It’s two cheers rather than three, administration threat lifted and less need for a. fire sale of players, but Steve Bruce will have to bring in more than he can spend in terms of player trading.' Aston Villa Supporters' Trust want to meet the new owners: Eager to meet

AC Milan's ban from European football has been overturned by the Court of Arbitration for Sport. They can now take part in the Europa League in the coming season: AC Milan The CAS noted that 'there were some important elements that could not properly be assessed by the Adjudicatory Chamber - most significantly the improvement of the Club's financial situation as a result of the recent change of ownership.' The case has been referred back to Uefa for 'proportionate disciplinary measures'.

Liverpool want to push towards £500m in annual turnover, the benchmark that would allow it to compete with the two Manchester clubs and Real Madrid. Owners Fenway Sports Group do not have the deep pockets of the Arab investors in Manchester City and Paris St Germain. One idea is to stage rock concerts, but the big trucks need to set up stages cannot pass through pitchside tunnels built in 1892. The last big concert at Anfield featured Sir Paul McCartney in 2008 and cranes were need to lift the stage over the top of the stands. Anfield's capacity increased from 44.000 to 54,000 when its main stand was enlarged in 2016. That has added £12m annually in match day revenue and increased lucrative hospitality places to 7,500. Around £200m has been spent on the stand, a £50m new first team training centre, and improvements to the pitch and access to Anfield. The club has planning permission to expand the Anfield Road stand by 6,000 seats before September 2019 but is still assessing ...

The organisation of the World Cup in Russia has attracted widespread praise. In particular, the newly built and refurbished stadiums were hailed as high quality venues worthy of the tournament. But the 'legacy' issue is always a difficult one. Stadiums can easily become white elephants or even if uses are found they may provoke controversy because of sweetheart deals that have to be offered to secure occupancy as in the case of West Ham United and the London Stadium. Greece had one of the worst experiences with its Olympic venues: Abandoned stadiums. The predicament is particularly acute in Russia, where vast distances between host cities, a lack of a strong football tradition outside Moscow and St. Petersburg, and tight regional finances mean that local governments are using creative ways to keep their stadiums in use. Only five top flight teams are privately owned, while the local governments and state-run companies that own the rest struggle to fund their teams. Four...

With four weeks to go until the transfer window closes, this Newcastle United blog asks: 'Where's the money Mike?': Where's the money? 'Smaller' clubs are outspending Newcastle. The author (Elijah Newsome) comments, Newcastle are due to receive 'roughly £123m in TV/commercial money that should have arrived already or will be arriving within the next month or so. This sounds like a lot of money, but it is important to note that a lot of this money is going to go to expenses such as loans, or the current wage bill. That being said, in theory Rafa should still have a decent sized transfer kitty considering that this is only one of many revenue streams for the club.' [Although by far the most important one]. With the aid of Football Financial News the author provides an in depth analysis, despite saying he is not a football finance expert. Not surprisingly, he concludes that owner Mike Ashley is part of the problem, some might say pretty much the whole...

US hedge fund Elliott Management took control of AC Milan this week from Li Yonghong after he failed to keep up with debt repayments. Elliott said that it will inject €50m, of equity capital into the club. It is thought unlikely to sell the club in the short term, but will probably exit in 18 months. It has pledged to get the club back on a stable financial position and into Uefa's good books, possibly even overturning the ban on European football. Elliott is in talks to bring in Riccardo Silva, owner of Miami FC, in to the club to help improve operations. Elliott's loan to Mr Li's Luxembourg holding company carried annual interest of more than 11 per cent. The debt was a so-called 'payment in kind' loan, a high risk structure that allowed Mr Li to pay interest with further debt rather than cash, meaning the debt would keep on rising the longer it remained unpaid. He tried to refinance the debt in London to no avail. Hedge funds were willing to take on the d...

Africa's richest man, Aliko Dangote, is working on a major oil refinery project in his native Nigeria. Once he's built it, he intends to buy Arsenal, his favourite football club. Interviewed on his luxury yacht in Lagos by the Financial Times he said: 'I love Arsenal and will definitely go for it.' He reckons the club is worth about $2bn. He has long been frustrated with the team's decline under Arsene Wenger. As owner he would involve himself in rebuilding the team, 'chipping in my own advice' as he puts it. Neither of the leading shareholders has given any hint they want to sell their holdings.

Wigan Athletic, who have been relegated three times in the past six years, have gone to court to challenge their business rates. They are arguing they should pay less because of the catastrophic loss of value that clubs suffer when they drop down a division. The club argues that after relegation to League One in 2015, they were paying more than six times the average business rates of other clubs in the division. The average League One club paid £88,000 a year in 2015/16, but Wigan's bill was nearly £600,000. They argue that revaluations should be done more regularly. I am no business rates expert, but I would have thought that the standard of the stadium (high in Wigan's case) would be a factor. However, a ruling in Wigan's favour could potentially benefit other clubs.

Kieran Maguire of the Price of Football has noted that if the Conte severance figure as reported in the media are correct then it brings total management change costs at Chelsea to £80.6 million since Abramovich bought the club. Of course, the Chelsea way is to have a rapid turnover of managers. Whether less frequent changes would have brought better outcomes is a matter for speculation. Chelsea had hoped to avoid paying out £9.5m on the 12 months left on his contract. For his part, Conte is far from happy and is considering legal action: Angry coach

An Aston Villa blog looks at how Spurs became the club Villa should have been, with a great deal of credit given to Spurs chairman Daniel Levy: Villa and Spurs The article has less to say about the failure of Villa, although there is a bigger issue here about West Midlands football generally punching below its weight. This in turn has some relationship to what has happened to the regional economy and the lack (at least until recently) of good quality political leadership.

Rangers have been stopped selling their new kit after an injunction was obtained by Mike Ashley's Sports Direct. Sports Direct are claiming breach of contract and the court has granted an interim injunction: Battle continues

The owners of Sheffield United, Kevin McCabe and Prince Abdullah, have fallen out so badly that they have ended up in the High Court: Dispute One area of disagreement is the funding of players for next season. Mr Justice Fancourt has been asked to make decisions for the first half of the season, as the case will take some time to come to trial. The court was told that the club was 'consistently loss-making', as almost all outside the Premier League are. The club needs £10m to operate between now and January.

AC Milan is on the verge of being taken over by Elliott Management, after its Chinese owner Li Yonghong failed to meet a deadline to repay debt owed to the hedge fund. €32m of a high interest loan was due for repayment on Friday. The change in control should take less than a week to be made official under Luxembourg law under which the loan deal was struck. Two American investors are interested in buying the club. Rocco Commisso is an Italian-American cable television entrepreneur and owns the New York Cosmos. The Ricketts family owns the Chicago Cubs baseball team. Mr Li has been stalling on selling the club as he was holding talks with some Asian and Russian investors.

Kieran Maguire of the Price of Football takes an in depth look at the finances of AFC Bournemouth after they paid a negotiated fine to the EFL for breaching financial fair play rules: Every breath you take The issue in relation to the EFL fine arose when the club was in the Championship in 2014/15, with a £30.4 million wage bill. This meant that Bournemouth spent £237 in wages for every £100 in income. He notes, 'The club presently have good control over wages, paying out just £52.42 in wages for every £100 of income, which is lower than the Premier League average.' Maguire argues, 'FFP discriminates against smaller clubs (such as Bournemouth) who have less ground capacity than others and also against all clubs that are not in receipt of parachute payments.' Maguire comments, 'AFCB’s owner, Maxim Demin, remains a mystery. He’s certainly put his hand in his pocket and loaned the club about £35 million. Demin’s ownership is via a company called A.F.C.B Enterprise...

The Premier League has agreed its first broadcast deal with Facebook, which has won exclusive rights to show matches in parts of Asia from next year. The social media giant is understood to have beaten the television networks Bein Sports and Fox Sports Asia in the auction to gain live broadcast rights in Thailand, Vietnam, Cambodia and Laos from next year until 2022 in a deal worth about £200m. Facebook's successful bid in Asia follows Amazon's breakthrough deal in Britain last month in which it gained the rights to broadcast 20 live matches a season from 2019-20. It is the latest indication of the Premier League's determination to appeal to streaming services as well as traditional broadcasters. The Premier League is also understood to have held talks with YouTube and Netflix over rights deals in several territories and believes that targeting technology companies is the best way to secure future revenue growth for the clubs. Amazon has ambitions to increase its offer...

The EFL and AFC Bournemouth have agreed a deal over the club's breach of financial fair play rules. They will pay £4.75 million and the EFL has agreed that the rule breach was not deliberate and there was no intention to deceive: EFL statement Bournemouth may feel that nearly £5m is an acceptable price to pay for a place in the Premier League. The fines are paid to charity. Kieran Maguire of the Price of Football tweeted, 'Eagle eyed followers of EFL FFP rulings may notice some similarities between the press release earlier this year when Leicester City agreed a fine and the one today in respect of AFC Bournemouth. Is the EFL using a lot of Tippex?' He also commented, 'Big difference between £7.6m FFP fine that AFC Bournemouth showed in their 2014/15 accounts and £4.75m sum announced by EFL today in carefully worded press release.'

Italy has approved a blanket ban on gambling advertising from next January. The Italian Government will lobby for a similar ban across the European Union: Gambling ads banned The ban will apply to all gambling-related products and services across all media platforms – including television, websites and radio – and sports clubs will also be prohibited from carrying sponsors from the industry. Italian club soccer’s top flight, Serie A expressed 'extreme worry' on Tuesday with regard to the new ban. The league said in a statement that the new rules would create disparity with other European countries and would bring ‘competitive disadvantages to Italian [soccer] clubs, diverting abroad advertising budgets aimed at [Italian] teams’. More than half of the clubs in Serie A have sponsorship deals in place with firms from the sector.

Kieran Maguire of the Price of Football has noted some oddities in Gillingham's accounts for 2016/17 which were submitted late. He comments, 'Accounting note says transfer fees excluded from turnover but turnover note includes it. Doesn’t give confidence in the auditors who are paid to check this. Non depreciation of stadium bizarre too.' In addition, 'the accounts say the club is controlled by GFC Holdings Ltd, a company that was dissolved a month ago.' Excluding player sales and the Centreplate legal case Gillingham lost £18,000 a week from trading in 2016/17. The club made £674,000 from player sales. The wage bill was up 1.1% in 2016/17. Total wage cost £68,000 a week for 80 employees, about the same that Alexis Sanchez earns in a day. Paul Scally was paid £198k (plus loan interest). The club paid £67,000 in interest in 2016/17, of which £63,000 was on loans from directors. They have total loans of £2.3 million, all from directors.

Bristol City majority shareholder Steve Lansdown has recently sold £130m of shares in financial company Hargreaves Lansdown. He has already pumped £118m into the club, but would he now want to put in more, and how far would he be constrained in doing so by financial fair play rules? Kieran Maguire of the Price of Football addresses these issues: How much could be put in? Maguire says that FFP rules would allow them to lose £39m over the next two seasons, so they could spend reasonably big sums by Championship standards.

Group stage World Cup matches were viewed more than 40 million times on the BBC's digital platforms. Forecasts suggest that the internet will overtake broadcast television as the world's most popular medium in 2019. The 'gather round the television' appeal of big matches remains strong with England's opener against Tunisia attracting a peak of 18.3 million viewers. Nearly 24 million watched the penalty shootout against Colombia on ITV. However, record numbers are also opting to watch full games on iPlayer, either on request or repeat. The BBC received a total of 40.9 million streaming requests to watch group stage games to which it had the rights. 3.22 million streamed the Tunisia match, the highest ever viewing figure for any BBC programme online.

Derby County’s 2016/17 financial results covered the second season since Mel Morris purchased the club. The authoritative Swiss Ramble has been giving his thoughts on them. He notes that, 'A review of Derby County finances is complicated by the structure, where a holding company, Sevco 5112 Ltd, owns The Derby County Football Club Ltd plus 3 new companies: Club DCFC Ltd (catering & hospitality), Stadia DCFC Ltd (commercial & sponsorship) and Derby County FC Academy Ltd.' The club's loss reduced by almost £7m from £14.7m to £7.9m, mainly due to £16m increase in profit on player sales to £16.2m, though revenue also rose £6.5m (29%) to £29.0m. The last time the Rams made money was 2008 (in the Premier League). Since then, they have had nine years of losses, amounting to £80m. The main reason for the Rams' revenue growth was the Premier League solidarity payment, up from £2.3m to £4.3m, which meant broadcasting income rose £2.3m (41%) from £5.6m to £7.9m. Commer...

The Chinese owner of AC Milan, Li Yonghong, has valued the club at €700m (£620m) and has ruled out a quick sale for a much lower valuation to US television tycoon Rocco Commisso: Financial battle going down to wire Comisso's bid values the club at around €500m including debt. AC Milan and Li have a total accumulated debt of 308 million euros towards US investment fund Elliott, which lent 180 million euros to Li and 128 million euros to AC Milan to fund the acquisition of players and repay the club's debt with banks. €32m is due for repayment by July 6th or Li could lose control of the club.

Recalling happier days, Sunderland have five current and former players in the World Cup and will receive funds from Fifa for players who have played for them in the last two years. The exact amount depends on how far the players progress, but it will be at least £600,000 and could be quite a lot more: Financial reward