Borussia Dortmund rely on player sales

The authoritative Swiss Ramble reviews the 2019/20 accounts of Borussia Dortmund. They went from €22m profit before tax to €47m loss (€44m after tax), mainly due to profit on player sales falling €43m to €40m. Despite the COVID restrictions, revenue was basically flat at €379m, but operating expenses rose €25m and net interest payable was €2m higher.

The €47m loss was their first since 2010. In the nine years up to 2019, they generated €227m profits, averaging €25m a season. In light of the high degree of uncertainty related to all revenue streams, the board expects a net loss in 2021 between €70m and €75m.

The only revenue item to decrease was match operations, down €12m (27%) to €33m, but the pandemic restricted growth in broadcasting, up €3m (1%) to €170m, commercial, up €10m (6%) to €168m, and other operating income, up €1m to €9m.

In 2018/19, i.e. before the pandemic, the €22m pre-tax profit was fifth highest in the Bundesliga, only surpassed by Bayern Munich €75m, Eintracht Frankfurt €56m, Hoffenheim €26m and Mainz 05 €25m. Their €17m after tax was fourth best.

BVB have been increasing their profits from player sales, although a fair way below the Italian clubs. The club benefited from €40m profit on player sales, mainly Diallo to PSG, Alacer to Villarreal, Weigl to Benfica, Philipp to Dynamo Moscow and Bruun Larsen to Hoffenheim, though €43m lower than prior year.

Broadcasting is (just) the most important revenue stream at the club with 45%, having overtaken commercial (44%) in the last two years. TV share has more than doubled since 2010, while commercial has fallen from 57%. Match operations has also declined from 22% to 9%

Bundesliga clubs including BVB benefited from the new TV deal in 2017/18, which shot up 85%, but the new deal from 2021/22 will see a 4% reduction. Still third best in Europe, though a long way below Premier League and La Liga, while Ligue 1 will narrow the gap.

Based on the Swiss Ramble's estimate, the club earned €69m from the Champions League after going out in the last 16, a bit higher than prior season’s €66m. Worth noting the influence on Champions League money of UEFA coefficient payment (based on performances over 10 years), where they have 10th highest ranking of clubs competing this season, giving them €25m.

The club have earned a healthy €232m from European competition in the last five years, though Bayern Munich €402m is almost twice as much.

The wage bill rose €10m (5%) from €205m to €215m, which means wages have grown by almost €100m since 2015 with wages to turnover ratio worsening from 42% to 57% (still very respectable). Players and coaching staff have taken pay cuts, saving “a double-digit millions amount”.  Despite the growth over this period, the wage bill is still significantly lower than Bayern Munich: in 2018/19 the gap was higher than it has ever been at €151m (€205m vs. €356m).

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion. Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs. An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site. He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned. He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long. What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do

The Political Economy of Football V2

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