The Political Economy of Football V2

Fans group Forever Bury have raised the prospect of legal action against the English Football League. They consider that the decision on their expulsion should have been put to a vote of all members: Letter to EFL Even if a legal action was successful, it is doubtful whether it could be resolved in time to make any practical difference this season.

Former Bolton Wanderers owner Ken Anderson walked away with £240,000 from the sale of the club to Football Ventures despite being criticised for his conduct by the administrators. The Eddie Davies Trust forgave £7.5m of debt to facilitate the sale: Takeover

There is nothing surprising about a lower league club encountering financial problems. The 20 clubs in the Premier League made operating profits of £900m before transfers in the 2017/18 season. The 72 clubs in the EFL made combined losses of £411m in the same period. Being a club in the Manchester conurbation with its two top Premier League sides is not easy. Bury have been in financial trouble before. In 2002 I remember being one of many football fans who donated £10 in return for having my name put on a seat. However, clearly there has been mismanagement in the case of Bury. The Financial Times has described it as 'a case of speculative property finance intruding on the world of lower division football where simply running a team rarely provides returns.' Previous owner Stewart Day was the sole director of a company called Mederco Ltd. It entered into leases on the car park that the club owned on the Gigg Lane stadium. The spaces were then subleased to retail inve

Bury have been expelled from the Football League after a takeover bid collapsed. They are the first club to be thrown out since Maidstone United in 1992. Whether they can be reformed at a lower level remains to be seen, but this is a sad day for Bury fans and football. An EFL statement said that the decision was taken after a 'long and detailed discussion': Statement

The prospective purchasers of Bury FC, C & N Sporting Risk, have withdrawn their interest in buying the club: No sale A statement from C & N Sporting Risk said: 'As part of our due diligence, we set ourselves a list of key criteria regarding the CVA, the ground and the overall financial state of the club that had to be met in order for us to be satisfied that we have enough knowledge to proceed with the takeover'. The EFL has said that it will continue discussions with Bury ahead of the 5 pm deadline for their expulsion, but the prospect is bleak.

David Conn points out that Bury's plight reflects the economic vulnerabilities of the surrounding town and notes that the club has been beset by financial instability for some time: Bury's dilemma

Bolton Wanderers face liquidation after the takeover deal for the club collapsed. The administrators say that it cannot go on trading: Bolton crisis worsens It would seem that the rogue owner's terms proved too onerous for the buyers. Everyone signed up on Saturday except his solicitor. In a statement the administrator said, 'On Sunday evening, there was some tentative dialogue but we are still some way from reaching a solution. Therefore, I am appealing to those parties whose position seems intractable to do everything to reach a compromise.' Kieran Maguire of the PriceofFootball has commented, 'Why did the EFL allow a man previously banned from being a company director acquire the club, then pay himself £525k and £125k to his son for ‘consultancy’ as well as borrow money at 24% a year?'

The American investors seeking to buy Sunderland are thought to have recognised the potential of the club from the Netflix documentary that followed their struggles in 2017-18. The eight part series received considerable media coverage in the United States. The takeover could be completed within a fortnight. Stewart Donald who bought the club last year with a 74 per cent stake will remain in the board with a reduced holding. Michael Dell, who founded Dell Technologies and is said to be worth £25 billion, will be a passive minority investor. The bid for Sunderland is even more impressive when one considers that buyers of English football clubs are scarce. Chinese interest has dried up. Newcastle, Crystal Palace and Chelsea are reportedly for sale while Leeds United have considered offers.

With Bury hopeful of a takeover deal by the new deadline on Tuesday evening that will save them from extinction, the focus now turns back to Bolton Wanderers. Unless they can sort out their takeover deal by Tuesday evening or show a credible plan for surviving the season in administration, this historic club also faces being thrown out of the Football League: Bolton under threat The attendance at their home game against Ipswich which they lost 0-5 was the lowest ever since they left Burnden Park. In the wake of events at Bury the Football Supporters' Association have renewed their call for more effective regulation of the game: Need for action

Bury owner Steve Dale has asked fans and local businesses to raise £2.7m by the end of today to save Bury from expulsion from the Football League. Given his track record, he's got a nerve: Fans pledge sought Dale agreed the Bury takeover rapidly in December with the former owner Stewart Day, a property developer who was facing several of his companies falling into multimillion-pound insolvencies leaving scores of investors unpaid. It is widely agreed that Day pumped money into the club beyond a scale that was sustainable. Many Bury supporters were immediately concerned that Dale's business record appeared to consist largely of buying failing companies, selling their assets and seeing them liquidated or dissolved. One Bury fan speaking on Radio 5 made the point that neither of the last two owners had any emotional connection with the club which had not been the case in the past. It has been suggested on social media that Bury should 'do a Rangers' and start again

A group of four American investors is close to taking a controlling interest at Sunderland, giving the club the opportunity to realise its potential: Deal close Billionaire and computer magnate Michael Dell is one of the group, although he would be a sleeping partner.

Manchester City is looking to build a 20,000 capacity entertainment venue next to its stadium, with the US arena operator Oak View Group. It has announced a feasibility study with OVG. They opened a UK office in March. City Football Group sees an arena as a key part of its redevelopment of its Etihad Campus. It owns the majority of the land around the stadium.

Proposals for a salary cap on player wages in the EFL were discussed at a special meeting of club chairmen last week. It is thought that it might help to avoid the kind of financial crisis faced by Bolton Wanderers and Bury, the latter club likely to be expelled from the league tomorrow. Of course, in both those cases mismanagement by owners was a key factor, so a salary cap of itself would not be enough. Nicola Palios, vice-chairman of Tranmere Rovers, told The Times, 'The gaps between the leagues are effectively encouraging clubs to gamble to get across that gap, to overstretch themselves, and that leads to the situation we are seeing with some clubs now.' Palios said she would like to see the rules changed so that clubs had to pay off football creditors before starting in the next division. She believes that the system of parachute payments from the Premier League makes the situation even worse because clubs have to spend more to compete. Seven clubs failed to pay wag

The continuing dynamic of globalisation in football is shown by a plea from Juventus for early kick offs in Serie A to suit Asian audiences and boost revenues: Earlier kick offs bid Serie A lags behind the Premier League, La Liga and the Bundesliga in terms of revenues. However, they are in a similar time zone so one wonders if some other factors are at work such as the relative excitement of games. Whether it would suit Italian fans does not seem to enter into the equation.

Bury owner Steve Dale has turned down an offer for the club, believed to come from a former chairman of a Football League club. He thinks he can get a better offer: Offer rejected Bury are in real danger of being thrown out of the Football League on Friday and the future for them would be bleak. Dale bought the club for £1.

There is much talk about the so-called 'Big Six' pulling away from the rest of the Premier League financially, but is this actually true asks the authoritative Swiss Ramble? Note that in this analysis the seventh placed club as measured by revenue and wages is not always the same from one season to another. The gap between the club with the 6th highest revenue (Tottenham Hostpur £379m) and 7th highest (Everton £189m) shot up to £190m in 2018, compared to £73m in 2017 (though this would have been higher without Leicester City's £70m Champions League money). Back in 2010 the gap was only £29m. One reason for the growing gap between sixth and seventh highest revenue clubs is investment in new stadia, which has increased match day revenue at Spurs from £37m to £76m, while this has actually fallen at the 7th placed club from £24m to £16m. The equitable Premier League TV deal means there has been relatively little change in the gap between sixth and seventh highest revenue cl

Parachute and solidarity payments from the Premier League to Football League clubs have been cut for the first time since they were introduced. The payments are just over 2 per cent down on last season. Although this may not seem like a lot, it can make a difference to clubs with turnovers of £3m a year like Accrington Stanley where every penny counts. Parachute and solidarity payments are linked to the value of the Premier League's domestic TV rights and they fell by 7.5 per cent for the 2019-22 period from £5.4 billion to £5 billion (the value of overseas rights continues to increase). Parachute payments for the three clubs relegated from the Premier League are £31.8m. Solidarity payments to the other Championship clubs are £4.5m, £675,000 to League One clubs and £450,000 to League Two clubs. Clubs who were relegated from the Premier League in 2018 will receive £34.2m in second year payments with £15.2m for those who receive third year payments. The overall amount the Prem

The price of football is high, reveals Kieran Maguire, with only 11 clubs in the top two divisions having accumulated profits since they started trading (some of these clubs have been trading for only a few years because of new holding companies etc.). Accumulated overall losses are £3.376 billion. Good news [possibly?] for Arsenal fans though is that they are historically the most profitable club.' Football clubs have four main types of finance, notes Maguire: owner loans, bank/third party loans and shares to investors. Owners of clubs in the top two divisions have lent clubs £3.26 billion, with many loans interest free. Roman Abramovich is responsible for over one-third of owner loans. Third parties are often reluctant to lend to clubs due to the risks of relegation and loss of TV money. This finance includes regular bank loans, leases and hire purchase. Total funding from this area was £1.6 billion with 75% taken up by three clubs: Manchester United, Tottenham Hotspur and Arse

Liverpool fans are concerned about the club's move to trademark 'Liverpool' in a football context and also the chant 'allez. allez, allez': Fans against trademark move Similar intellectual property issues have also arisen at Sheffield Wednesday.

Ladbrokes will not be renewing the sponsorship of the SPFL after the end of this season: Sponsorship ends Like other gambling companies, they are pulling back from an involvement in professional sport after the role of betting companies attracted criticism. Parent company GVC holdings called for an end to all advertising of sports betting in the UK, as well as a ban on football shirt sponsorship by bookies. As an established company, challenger companies would have more to lose from such a ban. The SPFL's chief executive is confident of obtaining a new sponsor but they went for two years without one before the Ladbrokes deal.

Providing a reasonable standard of football on the islands around Britain is always a challenge. Jersey Bulls made their debut in the English non-league pyramid season last Saturday. A crowd of over 1,100 saw them beat Ash United three nil in their first ever Combined Counties League Division One game. On Wednesday they had to make a two hundred mile journey to West London to play FC Deportivo Gallicia in an evening game under the lights. Bulls boss Gary Freeman said that a couple of players were not able to make it because of work commitments. He said, ‘We will need to be at the airport at midday on Wednesday so we are hoping the players will have some rather forgiving bosses at work. I am sure that we will soon get sick of the sight of airports. I have been looking at our schedule over the next few weeks and they certainly haven’t made it easy for us. It will tough at times, the players are used to playing an eleven game season in the local league.’ Nevertheless, the ai

Earlier this year it was widely reported that Arsenal would only have a £45m transfer budget this summer, after failing to qualify for the Champions League, but the club has actually splashed out well over £100m. The authoritative Swiss Ramble explains how this was possible. Player purchases added up to £143m (including £8m add-ons). This comprises club record acquisition Nicolas Pépé £72m plus William Saliba £27m, Kieran Tierney £25m, David Luiz £8m, Gabriel Martinelli £6m and Dani Ceballos (loan fee) £5m. The club had player sales of £64m (including £7m add-ons), mainly Alex Iwobi £34m, Krystian Bielik £10m, Laurent Koscielny £5m and David Ospina £3m. Also picked up useful money for selling some Academy products plus a £4m sell-on for Bennacer’s move from Empoli to Milan. What has become increasingly familiar to supporters this summer is the use of stage payments instead of paying the whole transfer fee upfront. Based on media reports and a few assumptions, we can estimate that A

A late flurry of signings saw Premier League transfer deals reach £1.41bn by the close of the transfer window, just short of the record of £1.413bn. The bounce usually seen at the start of a new tv deal didn't happen, in part because some top flight clubs will see a fall in broadcasting income this year. In the summer of 2013 transfer spending rose by 29 per cent and it increased by 30 per cent year on year in the summer of 2016. The value of the latest domestic tv deal has fallen by eight per cent. Six clubs are potential losers under the new distribution formula and although 14 will get more, but it will be nothing like the increases they have had before. In addition, Chelsea, who are often one of the biggest spenders, are under a transfer ban. There has been a trend towards clubs spending more on defenders. The biggest net spenders were Aston Villa who spent £133.7m on 12 new players, underwritten by the new owners. They were followed by Manchester United on £84.6m and W

With their third game of the season suspended, Bury have been warned that they could be expelled from the Football League after 134 years of membership in 14 days time. The EFL consider that they have not received the financial assurances they require from the owner: Deadline for Bury

The authoritative Swiss Ramble has taken a look at transfer spend over the last decade. It is evident that clubs are increasing transfer spend, particularly since the new Premier League TV deal in 2017. In the last three years (2016-18) the highest gross transfer spend of around half a billion came at Manchester City £559m and Manchester United £487m, followed by Chelsea £416m, Liverpool £351m, Arsenal £288m and Everton £259m. Lowest spend of the Big Six was at Tottenham Hotspur £182m, surprisingly behind Leicester City £195m and Newcastle United £184m. In the last three years (2016-18) Chelsea recouped most with £274m player sales, followed by four clubs around £200m: Liverpool £225m, Spurs £221m, Southampton £207m and Manchester City £191m. Lagging behind were Manchester United £137m and Arsenal £103m, though Aston Villa did well to earn £102m. In terms of net spend in last three years (2016-18), City and United again led the way with similar outlays: £368m and £350m respectively.

Dundee are hoping to relocate their stadium to a new site away from sharing the same road with rivals Dundee United, but have found funding difficult because of the chequered financial history of Scottish football: Stadium hopes The project would include a hotel and, more unusually, a crematorium.

Accountants KPMG have produced their latest leader board for enterprise value in European football clubs and it is no surprise that Real Madrid and Manchester United take top spot: Football rich list English clubs managed to make gains, with Chelsea and Liverpool enjoying boosts of 26% and 32% respectively, joining the €2 billion-plus club for the first time in 6th and 7th spot behind Manchester City, with the country’s champions holding steady in 5th with its own 14%. Following the club’s unprecedented domestic treble, this performance could rise further in next year’s edition, while Liverpool and Chelsea both triumphed in Europe, likely also boosting enterprise value. Tottenham Hotspur also saw its stock rise on the list, and it is only likely to improve in coming years. Spurs leapfrogged Juventus to 9th place in KPMG’s rankings based on last year’s finances – but with a brand new state of the art stadium finally open for business, and having reached the Champions League final in

Kieran Maguire of the PriceofFootball notes, 'Between 2014-18 Premier League income increased by £1,567 million and £954 million (61 per cent) of this went on wages. This allowed clubs to keep in the main below the 'red line' of paying wages less than 70 per cent of income but players benefitted too.' 'In 2014-18 Championship income increased by £258 million, given wages in 2014 were £106 per £100 of income you'd think club owners would use this to restore some financial sense...but instead they allowed wages to go up by £284 million and invented creating accounting schemes to get round FFP.