The Political Economy of Football V2

Bolton Wanderers staff and players have not been played on time as the club continues to face financial challenges, although the revenue from the game against Wigan should enable payment to be made: Wages delay Problems with payments to players have occurred at Bolton a number of times over the past twelve months, although this is the first time that staff have been affected. Attempts to sell the club have stalled because potential investors have failed to show proof of funding. Kieran Maguire of the PriceofFootball has observed that 'Owner Ken Anderson, paid himself £525,000 and his son £125,000 as "consultancy fees"'.

Motherwell FC have reported record profits and turnover for the year ending May 2018: Financial results Turnover for the year increased significantly to £6.84m, a jump of £2.65m from the previous year. Despite an increase in costs, the club were able to produce a profit for the year of £1.72m, a record number, and a £1.9m jump from last year’s loss of £181,000. This would give them the third highest profit in the SPFL. There were notable increases in gate receipts, sponsorship and advertising, commercial and other associated income generated by the club, predominantly on the back of player trading.

Manchester United's players earn half a million pounds more on average than those at Manchester City - and almost twice as much as Tottenham Hotspur players. The Global Sports Salaries Survey reports that United pay an average of £6.5m to first team players with City's annual bill £6 million. Next in line are Chelsea at £5m, followed by Liverpool (£4.9m), Arsenal (£4.8m) and Tottenham Hotspur (£3.5m). At the other end of the spectrum, the annual average pay per player at Burnley is £1.6m; at Huddersfield £1.2m; and at Cardiff £950k. United are in the top ten teams in world sport, with Barcelona the first to have annual average pay of more than £10m, up one third from the previous season: Barcelona. Real Madrid are in second place with just over £8m.

The authoritative Swiss Ramble has reviewed the recently published 2017/18 accounts for Stoke City, the year that saw them relegated after ten consecutive years in the Premier League. He notes that the club 'has experienced a lot of changes in the last 18 months (players, managers, league status). The financial support of the Coates family will be more important than ever if they want to make a rapid return to the Premier League.' Since 2009 Stoke have had available cash of £245m: (a) £148m from owners’ loans; (b) £96m from operating activities (negative for the first time in ages in 2018). Almost all of this has been used to improve the squad with £217m (89%) spent on player investment. That said, it is noticeable how Stoke City are once again hugely reliant on the Coates family, as they put in a further £47m in 2018. The funding had been cut to just £2m for the two years 2015 and 2016, but it’s now back with a bang. The owners have put in £148m since 2009. Following the re...

Since the Premier League was set up in 1992/3 ten clubs have generated revenues of more than £1 billion each. What has happened to that money asks Kieran Maguire of the PriceofFootball? The clubs are: the two Manchester clubs, Chelsea, Liverpool, Tottenham Hotspur, Arsenal, West Ham United, Newcastle United, Everton and Aston Villa. The biggest drain on a club is wages, and since the start of the Premier League the biggest overall payer has been Manchester United, closely followed by Chelsea. Transfer fees are a club's second highest area of expense, and the biggest spenders in Premier League history is Manchester City, despite a few years not in the EPL, with Manchester United, Liverpool and Chelsea the only two other clubs to spend more than £1 billion. Despite perception of riches in the Premier League, the ten clubs with income of more than £1 billion each, which between them generated revenue of £28,546,000,000 only made a collective loss of £918 million since 1992/3.

Sporting Lisbon have won a breathing space from their financial problems by staging a bond sale which will stop them defaulting on creditors: Back from the financial brink Both Sporting Lisbon and FC Porto have been judged to be technically bankrupt in the sense that their debts exceed their assets. Sporting and other Portuguese teams have struggled to fix their finances after years of mismanagement and a legacy of debt going back to when Portugal built new stadiums to host the 2004 European Championships. The clubs then could not fill or maintain them.

QPR chief executive Lee Hoos admits the club have been baffled by Hamilton and Fulham Council's angry response to the club's plan to develop the Linford Christie stadium. They want to leave Loftus Road and turn the athletics stadium into a 30,000 all seater facility. They see it as their only option to stay in W12 and claim the stadium would bring £60m into the area if built. The Council responded by accusing the club of playing property developer in White City. The Council have said they would help QPR in finding other sites in the area or assist them in redeveloping Loftus Road. For their part the club argue that they have been explaining for three years that redeveloping Loftus Road would not work and they are not aware of any other sites in the vicinity.

Mauricio Pochetinno has admitted that Tottenham Hotspur may not play their first game in their new stadium until February. They had hoped to open the 62,062 capacity stadium with a game against Manchester United on January 13th. After the manager toured the facilities earlier this week, he felt that the opening date may be too soon. He commented, 'There are a few things that need to be sorted and we hope that the people who need to sign the permission will be nice and [sign] as soon as possible.' The Tottenham Hotspur Supporters' Trust recently commented: 'The bottom line remains that we do not have a date confirmed for when the new stadium will be open, and that Season Ticket holders are paying match day pricing for seats in a completely different stadium from the one they bought seats in. They are paying more than last year to sit in a stadium they shouldn’t be in.' 'Many fans who have contacted us remain pragmatic about the delays on a project of this co...

The authoritative Swiss Ramble takes a look at Ajax's 2017/18 accounts which cover a season when they finished second in the Eredivisie (for the fourth year in a row), but failed to qualify for the Champions League or Europa League group stages (the first time since 1990/91). Profit before tax decreased from €67m to €2m (profit after tax down from €50m to €1m), largely due to profit on player sales halving from €79m to €39m and revenue dropping €26m (22%) from €118m to €92m following the lack of income from European competition. Ajax are essentially a profitable club, reporting profits in seven of the last eight years (and the only loss in 2015/16 was less than €1m). Over that period, they have accumulated €159m profits, averaging €20m a season. All three Ajax revenue streams decreased: broadcasting fell €18m (58%) from €30m to €12m; match day was down €6m (17%) from €38m to €32m; while commercial was €2m (4%) lower at €48m. Revenue decline was partly mitigated by lower costs: w...

English friends living for a time in Glasgow used to go to Patrick Thistle on the grounds that they were neither Rangers nor Celtic. However, being the third club in a city with two giant ones with impassioned sets of supporters is not easy. Partick Thistle have become the latest Scottish Premiership club to publish 2018 results. Income is up 11% on back of average attendances increasing from 3,900 to 4,700. Wage control improved as the club paid £61 in wages for every £100 of income. Partick, like most in the SPFL (with one exception, Rangers) are the epitome of a club that lives within its means, notes Kieran Maguire of the PriceofFootball. Operating profits tripled to £362,000 although one can expect a sharp fall in 2018/19. If the accounts are to be believed Partick's player recruitment consisted of free transfers for the 6th year in a row. They are not alone however in the SPFL where many of the smaller clubs take a similar approach to buying players.

Top flight clubs have made clear their opposition to an increase in the quota of homegrown players after Brexit. They argued that there was no evidence that an improved quota would have an impact on the performance of England teams. The FA wants to impose a limit of 13 overseas players in the 25 man Premier League squads after Brexit. Only 35 per cent of European players in the league at present would be eligible for a work permit if existing criteria were applied. The clubs would like to maintain the status quo of 17 players, but a compromise of 15 seems likely.

The big spending days in Chinese football are coming to an end as a series of measures are announced to restrain spending: Salary cap Limits on investment by owners will be lowered from 2019 to 2021 and clubs will be expected to break even. A salary cap will be introduced. The 100 per cent tax for expensive foreign players will be maintained. The Chinese authorities do not want foreign exchange being spent on ageing players. They want to develop domestic football and the national team which means offering pathways for local talent.

Norwich City may be doing well on the pitch, but like all clubs outside the Premier League they face financial challenges off the pitch: Challenges for Championship leaders City’s income dropped to £63.7m in the latest set of published accounts, to June 2018, and with top flight parachute payments now at an end the forecast is for a negative cash position by the end of the current year. The state of the club’s finances was laid bare at the annual general meeting, with a forecast £21.3m loss in 2018/19 and, with the end of parachute payments, a drop of £34.8m in income, down to £28.9m. The £16.1m cash surplus position at the end of 2017/18 is also forecast to drop to £5m in the red, but shareholders were told that was 'well within the working capital facility of the club’s bank': Delia Smith's pledge

Championship clubs enraged by the new Sky TV deal are holding back on legal action against the EFL until they have consulted all 24 clubs in the Championship. Some of the smaller clubs are more accepting of the deal and were opposed to a plan for a breakaway league. The clubs argue that the EFL lacks the authority to sign a contract against the wishes of its leading members and are calling for the resignation of Shaun Harvey, the EFL Chief Executive. 21 clubs are opposed to the new contract with Leeds United, Aston Villa and Derby County being among the most outspoken. However, the threat of a breakaway league has receded for now. While the new deal represents a 35 per cent increase on the current contract, Sky has secured added content so that it will now be able to show Championship matches simultaneously on midweek evenings and add commentary and graphics to its red button broadcasts. In addition the final two years of the contract give Sky the right to increase the number of ...

West Ham should be able to make the London Stadium the biggest in the country after Old Trafford following an out of court settlement after a bitter dispute with their landlords, the London Legacy Development Corporation. The club will pay an additional fixed amount in rent, thought to be less than £200,000, while the LLDC will pay the additional operating costs arising from expansion, thought to be about £1,200 for stewarding. For their part, West Ham's revenues will go up by £1.2m a year. Capacity will increase by 3,000 to 60,000 and to 62,500 in 18 months' time, eventually reaching 66,000. The settlement may revive hopes of a lucrative naming rights deal, although that market is relatively quiet at the moment.

Stoke City Football Club have announced losses of £30.1 million for 2017/18, mainly due to player write downs. Previous year was a profit of £4.9m. Stoke income down 6.5% in 2017/18 mainly due to less TV income as payments are linked to final league position. Income is likely to fall from £127 million to about £65-70m in 2018/9. Stoke wages up over £9 million in 2017/18 despite relegation to £94 million. Average weekly wage estimated at £45,300. Wages represented £74 out of every £100 of income, significantly above the £50 level recommended by Deloitte. Stoke City spent £52.2 million since relegation on new players and sold players for £22.8 million.

Social media club Hashtag United are currently top of the Eastern Counties Division One South, Step 6 of the non-league system - and they have 423,528 subscribers on YouTube, more than Tottenham Hotspur, Atletico Madrid and Inter Milan: YouTube channel Playing at Haringey Borough's ground, the club was founded by 29-year old YouTuber Spencer Owen in 2016. Owen told the Non League Paper 'Part of the appeal is that in an age where the top professional footballers are increasingly seen out of touch, fans find our content more engaging because it is about people like ourselves.' Operations manager Neil Spencer said, 'The punters don't watch us for the skill of the players. They watch us for the personalities and the relationships between them. We're offering viewers a relatable experience.' The club post regular behind-the-scenes clips on social media throughout the week, while each match is documented through a stylish video, featuring highlights, foota...

The authoritative Swiss Ramble has taken an in depth look at the recently published accounts of Hearts. Here are some of the highlights from his comments. The last loss Hearts reported was £0.9m in 2014/15, when they won the Scottish Championship. Since promotion, they have been profitable three seasons in a row. Hearts £12m revenue is the fourth highest in Scotland, within striking distance of Aberdeen £15m, but only around a third of Rangers £33m, while Celtic’s £102m is miles ahead. Indeed the revenue gap between Hearts and the big two Glasgow clubs is now at its highest for a while: £89m to Celtic and £20m to Rangers. On the other hand, they are £2.7m higher than Edinburgh rivals Hibernian. Given Hearts stadium investment, they did well to deliver the second largest profit in the SPFL Premiership with their £1.8m only beaten by Celtic £15.4m. That said, eight of the 12 clubs in the Scottish top flight make money with only Rangers reporting a sizeable £14.3m loss. One reason Ce...

KPMG takes a look at the development of the Asian 'football market': Tapping into the Asian market The analysis notes, after listing many positives from a business angle that 'there are also some limits and challenges to cope with. Indeed, the level of football in Asia is still relatively weak, as in the FIFA World Ranking, for instance, there are no Asian national teams among the top 30. Furthermore, wealth distribution is uneven, as not all local fans have the same purchasing power, while some governments operate through peculiar regulatory frameworks which do not always allow for an easy alignment with the clubs’ needs. Domestic fans may also be uneasy about decisions being driven too much by marketing opportunities in Asia.

Manchester United's results for the three months to 30 September show overall revenues falling to £135m period, compared to £143.7m a year earlier, a six per cent decline. The club said the drop was explained by a fall in sponsorship revenues due to a shorter than usual tour of the United States. The club also made less in matchday income because the club had played two fewer matches at Old Trafford at the start of the season compared with the same period last year. Ed Woodward, executive vice-chairman, said that a new sponsorship deal with denim brand True Religion and renewed endorsement contracts with Canon Medical Systems and Deezer will keep the club on track to achieve full year revenues between £615m and £630m. Kieran Maguire of the Price of Football notes, 'Danny Blind and Sam Johnstone may not have made a huge impression on fans of Manchester United but the club made a profit of £22 million on their sales, without which the club would have lost £8.5 million in the ...

As the mainland football correspondent of Radio Scilly, I was naturally interested when this week’s Non-League Paper took an in depth look at football in West Cornwall. On a clear day the Cornish coast can clearly be seen from the islands where the Woolpack Wanderers are currently dominating the two team football league. The article stated, ‘From Mousehole to Ludgvan in West Cornwall is just under eight miles, but in football terms these days it feels like a million. Last week, the team with the charming name (they say it should be pronounced Mowsle, I always say Meusel) outside the gorgeous seaside village, made the short journey and won 11-1 in Peninsula League Division One West, Step Seven.’ I remember seeing Mousehole losing 10-1 at Falmouth Town in a Cornwall Senior Cup match when Falmouth were dominating the Rothmans Western League. Anyway, the article continues, ‘Recently the former Torquay United player and manager Kevin Nicholson was lured to Trungle Park by wealthy chair...

Hearts have announced their financial results. Income was up 8% mainly to higher matchday receipts. This is still some way behind Celtic and Rangers but ahead of Hibs. Kieran Maguire of the PriceofFootball notes, 'Hearts income breakdown shows the relative poverty of TV income compared to England, where over half of EPL clubs generate more than 80% of their money from broadcasters.' Hearts wages were up 19% to over £7 million, subsidised by a mysterious benefactor who donated £1m towards wages. Hearts underlying business is loss making, reliant on donations and player sales to turn losses into break even. On top of the wages donation there have been mysterious benefactor payments of £4.5 million over last 2 years to help fund stadium expansion. Hearts have spent just over £1 million on players over last six years, and sold players for three times that to make ends meet.

Susanna Dinnage, a senior executive at US TV network Discovery, is to be the new chief executive of the Premier League. She heads the Animal Planet channel. She faces the challenge of more people switching to watch sport online. Chelsea chairman Bruce Buck who headed the appointment panel told the Financial Times, 'Susanna was the outstanding choice, given her track record in managing complex businesses through transformation and digital disruption.' However, perhaps her greatest strength is her network of connections in government. She was the only representative of the creative industries at the first two gatherings of UK business leaders at Chevening when then Brexit secretary David Davies discussed concerns about the negotiations. With its mind on other things, and a turnover of sports ministers, the May Government has largely left football to its own devices. However, a future Labour Government would make a number of interventions, including in relation to the gamb...

The plan for a Premier League 2 is gaining momentum with 15 leading Championship clubs threatening to break away from the EFL. One could have a slimmed down Premier League 1 and 2 with twenty clubs in each league. Whether there would be promotion and relegation from what is now League One is a moot point. A complicating factor is the interest of top clubs in breaking away from the Premier League to join a new European Super League. However, that would not be possible before 2022 and it would not necessarily rule out a Premier League 1 and 2 format. In some ways, it might strengthen the case for it. A further difficulty is that there has been no discussion with the Premier League who are believed to be opposed to the project. It could be seen as a dilution of their brand. In many ways, parachute payments make the Championship a de facto Premier League 2, certainly in terms of a willingness to splash the cash. The breakaway threat is part of a dispute over a new Sky contract whi...

Proposals to restrict the number of foreign players after Brexit may go down well with those fans who like to identify with English players and feel that more opportunities for them would boost the national team. The proportion of English players starting top flight matches was just 28 per cent two weekends ago. However, the global appeal of the Premier League could be undermined. The FA is proposing that at least half of a team's first team squad should be made up of at least half 'homegrown' players. (Players who have a different country of origin but have come up through the Academy system would count as 'homegrown'). This would reduce the number of overseas players in any squad of 25 to 12. This compares with 17 under existing rules. There would be a transition period until the end of 2020 if there is a Brexit agreement with the EU. Five clubs including Manchester City and Tottenham Hotspur have the maximum number of foreign players, while four more, inclu...

Metropolitan Police are playing in the FA Cup today, but none of the team are police officers. It's three years since the last police officer stopped playing as he couldn't get enough time off. Time off to represent the Met in sport was being denied by Scotland Yard 15 years ago and the police force is now more stretched than ever, particularly in London. Four Four Two did run a profile of the club some time back, but I have been unable to track it down online. At that time the support seemed to consist of equivalents of Sid and Doris Bonkers, the legendary supporters of Neasden FC in Private Eye. Apparently the usual crowd these days is around 90. It is seen as a brand and players are expected to behave in a police-like manner. Talking back to the referee is not tolerated. The broader issue here is the virtual disappearance of the works team, once quite common in non-league football. My father, as a former non-league player, had a particular dislike for them. Emplo...

As the mainland football correspondent for Radio Scilly (where the local league has just two teams) I am always interested in news of island football. The Non-League Paper this week featured that unusual island football team, Guernsey. The Green Lions were formed in 2011. They began life in the Combined Counties League and won back to back promotions to the Isthmian League where they seem to have found their level at Step 4 of the non-league system. The catalyst for starting a new club came when the island team won the FA National League Systems Cup in 2010 and got the chance to represent England in the Uefa Regions Cup. Initially, a lot of local clubs were unhappy that their best players had left to play for the island team. (There are nine teams in the Priaulx League). The team has to travel by plane for away matches which usually involves an overnight stay. Four players work for a scaffolding company and only two can be taken on each away trip. There is one player who is no...

Her Majesty's Revenue and Customs have added their voice to the criticisms of Manchester City by threatening to take action if they discover any evidence of tax avoidance: Relentless in pursuing tax dodges City have been under fire since Der Spiegel published a story alleging that City had evaded financial fair play regulations by attracting inflated sponsorships from businesses linked to the club's owners. Here is a link to Chapter One, but the German news magazine has published subsequent 'chapters' which can easily be found online as they go to town on the English club: Bending the rules I have some sympathy with City and their fans. Financial fair play regulations are arguably anti-competitive and could be seen as an attempt by existing elite clubs in Europe to pull up the ladder behind them and shut out pesky newcomers like City and Paris Saint-Germain. There is also an element of what Australians call the 'tall poppy syndrome' with resentment of Ci...

Real Madrid's status as possibly the leading commercial force in world football has been confirmed by the conclusion of a record kit renewal deal with Adidas worth €1.1bn over ten years: Record deal This is only the guaranteed amount and it could rise to €150m a year depending on merchandising. It certainly outpaces rivals Barcelona.

Bristol City are yet another Championship club hit by the skewed playing field caused by parachute payments concludes the authoritative Swiss Ramble in a review of their recently published accounts. The Swiss Ramble notes, 'Despite the growth in revenue, Bristol City's £26m revenue is still only mid-table in the Championship. For some context, in 2016/17 Newcastle led the way with £86m, a full £60m more. So far in 2017/18, Norwich City and Hull City have posted £62m and £56m (with Sunderland and Boro to come). It’s difficult to compete with clubs receiving Premier League parachute payments with no fewer than eight clubs benefiting from these in 2017/18.' 'If parachute payments were to be excluded, it would be a very different story. In this case, Bristol City would have the seventh highest revenue in the Championship, which would give them a very decent chance of making the play-offs.' 'Almost all clubs lose money in the Championship, but their £25m loss wou...

This weekend's Financial Times magazine takes an in depth look at how Watford have survived in the Premier League and, this season so far, are punching above their weight. A key element is buying low and selling high. Since their promotion to the Premier League they have, on average, acquired and sold more players than any other side in the top flight. But how does one ensure that one buys potential rather than dross? Assessing a player's potential is not that easy. A typical scout is a former footballer getting little more than petrol money with perhaps a small bonus for a successful signing. Watford have invested in their scouting network, with 12 senior scouts travelling the world, backed up by junior scouts and consultants. That's still far fewer than the fifty full timers employed by Manchester United, but it's still a lot for a club of their size. Moreover, their reports go straight to the ruling trio rather than through other layers of management. They ...

Plans for a European super league have attracted considerable criticism this morning, particularly from fans who see it as representing all that is wrong with modern football. Here is the Der Spiegel article which broke the story and goes into it in some depth: Secret elite league plans As the article notes, plans for a super league have been discussed for thirty years. This blog referred to the commercial logic underpinning it earlier this week. If it did happen, the remaining teams in the Premier League would have greatly reduced earnings. Reports refer to the 'top five' clubs in the Premier League being involved, i.e., the two Manchester clubs, Liverpool, Chelsea and Arsenal, but not Tottenham Hotspur. With their new stadium they would certainly want to be involved.

Nuneaton Borough, whose debts threatened to put them out of business, have a new owner, 33-year old Nick Hawkins: New owner He is a former semi-professional footballer with Chasetown and is being backed by the Supporters' Cooperative at Nuneaton. He runs a refurbishment company (possibly of furniture). He said, 'As a company, we do refurbishments. And they were asking me if I could come and help out and have a look at the refurbishment.' Nuneaton start under his ownership tomorrow with 'El Warwicko' against Leamington. One of his first tasks will be to get the club reconnected to the electricity grid. Hawkins is not happy with the condition of the ground which belongs to Port Vale's Norman Smurthwaite: Many challenges

'Football without fans is nothing,' said the Celtic legend Jock Stein. But is it any more in commercial terms? The key audiences are thousands of miles away in Asia. For a club like Bournemouth, match day revenues are less than five per cent of total income. This blog post looks at the issue in some depth, in particular focusing on the cost of attending matches for fans: Are fans needed? The article notes, 'the fans are among the most marketable assets of the clubs: the atmosphere created by supporters is one of the key aspects that marks football out in a crowded sports market.' However, the growing number of football tourists at big clubs and the changing demographic of supporters is affecting the atmosphere in grounds. The article does consider possible solutions, although it should be noted that some lower league clubs still have fanatical supporters home and away. Portsmouth comes to mind.

Rangers have announced their financial results and income is up 12 per cent overall in the second season in the Scottish Premiership but is very dependent upon matchday, although Ibrox seems full every game, reports Kieran Maguire of the Price of Football. Rangers matchday income was up to £23m but still £20m behind Celtic last season. Maguire expects to see that gap significantly fall this year as Celtic didn't qualify for the Champions League and Rangers in group stage of Europa League which generates about £1m per match. Rangers made pre tax losses of £275,000 a week last season, and even if one strips out interest and one off costs still losing £190,000 a week. Rangers had to borrow to fund the losses made last season, and this has seen net debt rise to £21 million., Since the year end the club has raised further £12.6m, although nearly all of this was lenders converting their debt to shares and only £1.5m cash was raised. Being a top club in Scotland fails to generate the ...