The Political Economy of Football V2

Whisper it quietly, but it looks like the ownership saga at Sampdoria might just be coming to an end, as the shareholders have approved an agreement for the takeover of the club by Leeds United owner Andrea Radrizzani and his partner Matteo Manfredi through Gestio Capital and Aser Holding. It is also expected that QSI, the owners of Paris Saint-Germain, will take a minority stake. The club had previously been involved in negotiations with Alessandro Barnaba and American investment firm Merlyn Partners, the owners of Lille, but their interest ultimately did not come to anything. However, it looks like the agreement came too late to make the payment of three month’s wages (around €13.5m) before the 30th May deadline, which was needed to avoid a four points penalty next season. After a terrible season, Sampdoria were already relegated to Serie B, but the fans had been concerned that their club might be declared bankrupt, which would have resulted in further demotion to the bottom of...

London-based hedge fund SISU Capital Limited had saved Coventry City from administration in 2007, but came under fire from many supporters for their penny pinching approach. However, the SISU era recently came to a close, after local businessman Doug King took ownership of the club in January 2023, initially through the acquisition of an 85% stake and then buying the remaining 15%. Just to make Coventry’s renaissance even more inspirational, it has been achieved on a very low budget, as can be seen by a review of their 2021/22 accounts. These covered a season when the Sky Blues “achieved another creditable finishing position” of 12th in the Championship. Coventry’s pre-tax loss widened from £4.7m to £7.0m, despite revenue rising £6.3m (53%) from £11.8m to £18.1m. This was offset by operating expenses increasing £6.4m (38%) from £16.8m to £23.2m.   In addition, there were reductions in profit from player sales, down from £1.9m to £0.5m. Although losing money is clearly not i...

Usually, when a club is relegated, its fans can point to a lack of ambition or interest from their owners and management. The opposite is true at Leicester. They have aspired to challenge the “Big Six”, disrupt the established elite of English football, and eventually close the gap and claim a seat alongside them at the top table. By and large, they have done that. They have claimed two top-five finishes and became one of only seven clubs to actually lift the Premier League trophy. Now they are the second former champions to be relegated after Blackburn Rovers in 1998-99 and one of the most expensively assembled squads ever to drop through the trap door.  Leicester have always been an ambitious club under the ownership of King Power and the Srivaddhanaprabha family. They have invested heavily in the club, and continue to do so, but in recent years, that has accelerated. The overreach is shown by the increased expenditure on contracts for new and existing players, taking the...

Running Leeds has given  Andrea Radrizzani status beyond anything he had known before. Prior to investing in 2017, he was an entrepreneur with little or no profile outside niche media circles. He liked the exposure and he liked the attention but, as predicted in certain quarters, he was missing from the stands for the game against Tottenham, conspicuously absent as Leeds gave up the ghost and went down. Previously, his £45million investment in Leeds had risen tenfold to a level where the club were valued at half a billion pounds but at full time this afternoon, Premier League status was gone and so was that price tag. To all intents and purposes, the Radrizzani project has run its course. Leeds are back where they started. From here, though, everything that happens will be shaped by Radrizzani’s next move. The offer of a takeover by minority partner 49ers Enterprises is still on the table, albeit at a significantly lower valuation.  From the very beginning, though, Leeds...

How do the teams in the Uefa competition finals compare financially? Manchester City are much stronger than Inter financially, as their £619m revenue is over twice as much as Inter’s £261m. This is also the case with squad cost, as City’s £1.1 bln is significantly higher than Inter’s £505m.   The difference in wages is smaller, but City’s £354m is still nearly 70% (£144m) more than Inter’s £210m. The finalists in the Europa League are much closer from a financial perspective. Roma’s £166m revenue is slightly higher than Sevilla’s £158m, while the Italians’ £155m wage bill is around 15% more than the Spaniards’ £133m.   There is only a meaningful difference with the squad cost, where Roma’s £302m is 40% (£86m) higher than Sevilla’s £216m. As might be expected, given that one club is from the minted Premier League, there is a much wider financial disparity between the two finalists in the Europa Conference League.West Ham’s £255m revenue is a hefty £155m more than Fiorentina...

According to Deloitte Sports Business Group, reaching the top flight via the Championship play-off final in 2022-23 will earn the winner an increase in revenue of at least £170million across the next three seasons. This figure could rise to more than £290m if the club avoids relegation after their first season in the Premier League. Deloitte, the accounting firm, estimates one season in the Premier League will bring additional revenues of at least £90m. Add on two years of guaranteed parachute payments (the extra financial support that the Premier League gives to relegated clubs), worth close to £80m, and the play-off final will likely yield approximately £170m across three years to its winners, even if their stay in the top flight only lasts 12 months. Brentford, who secured a 13th place finish during their debut Premier League season, secured merit payments of close to £15m in 2021-22. Avoiding relegation in their first season also secured a third year of parachute paymen...

Here is a financial comparison of the two clubs competing in the 2022/23 EFL Championship play-off final, Coventry City and Luton Town.    On paper, the two clubs are pretty evenly matched. Coventry’s £18.1m revenue is slightly higher than Luton’s £17.7m, while their squad cost is £7.4m compared to Luton’s £5.5m. On the other hand, Luton’s £17.8m wage bill is higher than Coventry’s £15.7m. However, what is abundantly clear is that both finalists are punching well above their weight, considering the financial power of many of their Championship rivals.     In terms of revenue, both Coventry and Luton are towards the lower end of the table, well below the Championship average of £27m. Luton’s £2.3m commercial income is one of the lowest in the Championship, less than half of Coventry’s £5.0m. However, both clubs are far below the top clubs, led by Stoke City £16.6m, followed by Bristol City £15.8m and Fulham £14.0m. The real differentiator in the Champi...

A group of local businessmen are in advanced talks to buy Southend United in a deal that could result in English actor Ray Winstone joining the club’s board. Ron Martin has been Southend’s majority owner for the last 25 years but he put the club up for sale in March, a move that delighted most fans as his tenure has been an almost constant battle with the taxman and other creditors. Two weeks before Martin’s announcement, the club avoided liquidation by finally settling a late tax bill of almost £2million only for another winding-up petition to arrive two weeks later over more unpaid tax. That petition, which was joined by three other parties, including the club’s front-of-shirt sponsor, PG Site Services, was adjourned last week until July 12, giving Martin 56 days to either find another £275,000 or sell the club and let someone else settle the bill. The favourites are a group led by Kristofer Tremaine and Simon Jackson, respectively the chief executive and chief financial offi...

A change of ownership is what everything at Elland Road hinges on — and it can be credibly argued that the impasse on that front is a reason why Leeds have stagnated to the point where relegation is nigh. At present, the arrangement in the boardroom is this: Andrea Radrizzani is majority shareholder with slightly more than 50 per cent of the shares. The remainder is held by 49ers Enterprises, a US investment vehicle with close connections to the NFL’s San Francisco 49ers. Were Leeds to stay up following their season-finale at home to Tottenham Hotspur this weekend, contracts are in place for 49ers Enterprises to buy out Radrizzani for a sum which would value Leeds somewhere between £400 million ($496m) and £500million ($621m). The expectation is that the sale would go through by July 1 at the latest but in effect, the handover would start more rapidly. The investment group behind this 49ers Enterprises project — made up of entrepreneurs, private equity firms, busine...

Luton’s progress has been achieved on a very low budget, as can be seen by a review of their 2021/22 accounts. Luton’s pre-tax loss widened from £1.9m to £6.4m, despite revenue rising £5.0m (39%) from £12.7m to £17.7m, as profit from player sales halved from £2.2m to £1.1m and there was no repeat of prior year’s £2.9m other operating income. In addition, operating expenses increased by £5.4m (27%) from £19.7m to £25.1m. Although losing money is rarely good news, Luton’s £6.4m loss was actually one of the best financial performances in the Championship, so they cannot be accused of spending their way to success. Luton have only posted a profit once in the last decade, £3.4m in 2019/20, but they have restricted losses over this period to less than £16m. This is not too shabby for a club at this level, though the £6.4m loss last season was the highest for some time. Luton’s revenue has more than doubled since promotion from League One in 2019, rising £10.0m from £7.7m to £17.7m. A...

Bournemouth has changed hands after 11 years under the ownership of Maxim Demin. In December 2022 the Russian sold his 100% stake in the club to Black Knight Football Club, where Bill Foley is the Managing General Partner. Demin had provided Bournemouth with £189m of funding since his arrival, including £36m in 2021/22. The owner had averaged £12m a season in his first six years up to 2017, which very nearly doubled to £23m in the following five years. Split between £168m loans and £21m share capital.   In the 10 years up to 2022 Demin’s £182m funding was one of the highest for clubs competing in the Championship last season, though was much lower than Fulham’s incredible £722m and QPR’s £268m. Foley has experience in running a sports club, as he also owns the Vegas Golden Knights, a successful NHL franchise. Various figures have been reported for the purchase price, but the most commonly quoted is £120m. Importantly, Foley said that there were no borrowings involved in the dea...

The newest US professional football club is worth more than what the Saudis paid for Newcastle United, more than what Abu Dhabi splashed out for Manchester City, more than what John Henry and associates handed over for Liverpool FC — and the buyer is a British power player. Mohamed Mansour, the Egyptian-born, UK citizen and US-educated business mogul, is leading a $500mn purchase of an expansion franchise of Major League Soccer, the US men’s professional football league. The new team, San Diego FC, will join the MLS in 2025 and will be co-owned with the Syucan tribe — an indigenous group native to the city — as well as local Major League Baseball star Manny Machado. The deal marks a record-setting fee for a US football club, part of a recent wave of record benchmarks in the industry across both the men’s and women’s game as North America prepares to host the 2026 World Cup. Last month, private equity firm Sixth Street agreed to pay $125mn, including a record...

Concerns over the financial future of West Bromwich Albion continue after Xu Ke (aka Ken), who is the single director of WBA Group, refused to answer any of the 38 questions submitted by independent shareholders. The questions focused on a £5 million loan taken out by the club's owner Guochan Lai, to prop up his Hong Kong company Wisdom Smart.   Several repayment deadlines have been missed.  The shareholders were told that they were not entitled to the information. The Baggies will not have the benefit of any parachute payments next season and have a high interest £20m loan to service.

 Southend United have had a stay of execution from a winding up order, but fans continue to suffer:  https://medium.com/@jamieforsyth_82335/another-stay-of-execution-208f674e43d

Fleetwood chairman/owner Andy Pilley has been found guilty of fraud. The case is related to his energy supply business and he is expected to face prison time. This has huge implications for the team he has bankrolled from the 9th tier to League One. He has been remanded in custody. The club say they have been planning for this verdict for some months: https://www.fleetwoodtownfc.com/news/2023/may/update-club-statement/

The American investment company, 777 Partners, have firmed up their interest in Everton, although the club’s owner, Farhad Moshiri, is continuing his negotiations with other potential investors. The Miami-based business is understood to have made a financial offer on Wednesday, while MSP Sports Capital, whom Moshiri knows personally, have also been in advanced talks since January. The Iranian billionaire has been seeking a final tranche of funding for Everton’s new £500 million stadium at Bramley-Moore Dock, which is under construction on the banks of the River Mersey. The financial terms on offer from 777 Partners are unclear but are said to be for a “big percentage” of Moshiri’s 94 per cent shareholding. Both firms are already involved in professional football with 777, who had previously suggested investing about £100 million in Everton, having interests in Hertha Berlin, Sevilla, Vasco da Gama and Standard Liege already. MSP, whose Iranian-American chairman Jahm Najaf...

All four of England’s clubs in the Champions League got to the last 16 at least. Manchester City have gone all the way to the final, so lead the way with €127m, which is also the highest in Europe, followed by Chelsea, who earned €94m after making the quarter-finals. Despite being eliminated in the last 16, Liverpool and Tottenham received €82m and €64m respectively. Manchester City have earned the highest prize money to date of €62.2m, including €14.0m from the group stage, €9.6m for reaching the last 16, €10.6m for the quarter-final, €12.5m for the semi-final and €15.5m for the final. Liverpool’s prize money was boosted by winning five games in the group, which was worth €14.0m (€2.8m for each win), plus €1.1m for their share of money left on the table after draws in the group stage. The coefficient payment is based on performances in UEFA tournaments over the past 10 years, including a bonus for winning a European trophy. Chelsea were the highest ranked English club, as the ...

Relegation from the Premier League looks inevitable for Leicester City with two matches to play and Dean Smith’s side appearing incapable of raising their game. If results go against them this weekend and they lose away to Newcastle United on Monday night, their fate will be sealed and a number of tough decisions will await the owners and board. The latest financial results, released this year, revealed losses of £92.5 million and showed that Leicester had the seventh-highest wage bill in the Premier League at £182 million. Their wage-to-turnover ratio is 85 per cent — only Everton’s and Newcastle’s are higher. Such figures would be unsustainable in the Sky Bet Championship, where the club’s income would drop by about two thirds without the broadcast money earned in the top flight. While Leicester are confident that their commercial revenue figures are increasing, they are still a world away from competing with the bigger clubs, which means they are further restricted by Financial ...

The Qatari Sheikh looking to buy Manchester United has submitted a last-ditch offer to seize control of the Premier League club. While bidders were invited to submit their final offers to the New York bankers overseeing the sale last month, The Times understands that Sheikh Jassim bin Hamad al-Thani made an improved, final offer on Tuesday in an attempt to see off his main rival, British petrochemicals billionaire Sir Jim Ratcliffe. By the end of last week Ratcliffe and his team at Ineos had emerged as strong favourites to buy the club from the Glazers, with a deal that valued United higher than the Qataris while offering Joel and Avram Glazer the opportunity to retain about a 20 per cent stake. Even now, the new Qatari offer falls short of Ratcliffe’s valuation, which could end up close to £6 billion if he then completes the full purchase of the club in the next two to four years. But Sheikh Jassim is offering to buy 100 per cent of the club now, albeit for a price nearer ...

A group of Premier League clubs have failed in a bid to have Everton’s charge for breaching Financial Fair Play rules fast-tracked so that it is dealt with before the end of the season. Other teams in relegation trouble — understood to be Leeds United, Southampton, Leicester City and Nottingham Forest — had wanted any sanctions to be imposed well before the start of next season. Club sources say the message has come back from the Premier League that the disciplinary hearing must follow due process and cannot be expedited because of the wishes of other parties. In May last year, Burnley and Leeds demanded access to any evidence the Premier League had collected about Everton’s finances and any provisional ruling it may have made about possible rule breaches, and threatened to bring a legal action for substantial damages against the Premier League and Everton. The clubs who asked for the fast-tracked hearing have distanced themselves from reports that they have lodged legal pa...

From my youth I remember Yeovil as giant killers with their famous sloping pitch at their former ground.  They got into the Football League, but once a club falls out t they can find themselves like Yeovil (and Scunthorpe, among others such as Boston United) in the second tier of the non-league system and the sixth tier of the pyramid. Hope   has been in short supply in Yeovil’s corner of Somerset.   Twenty years ago, it was them going up as the free-scoring champions of English football’s fifth tier with a record points total and huge goal difference.   And 10 years ago, a Yeovil side featuring future Premier League stars Luke Ayling and Dan Burn beat Brentford 2-1 in the League One play-off final at Wembley to reach the Championship. At a meeting organised by fans’ group the Glovers Trust last week, speaker after speaker berated Scott Priestnall, the self-styled “strategic and innovative leader” who bought the club in 2019 and promised supporters a better match...

Despite relegation, Burnley actually managed to deliver a £36m pre-tax profit in 2021/22, compared to a £3m loss the previous year. Revenue rose £8m (7%) from £115m to £123m, but the bottom line improvement was very largely driven by profit from player sales shooting up from £5m to £55m. Burnley’s £36m profit was actually the second best financial performances in the 2021/22 Premier League, only surpassed by Manchester City’s £42m. In contrast, many clubs reported huge losses last season. Burnley’s profit from player sales rose £50m from £5m to a club record £55m. Many players were released for nothing, but the club got decent money for four departures: Chris Wood and Nick Pope to Newcastle United, Nathan Collins to Wolves and Dwight McNeil to Everton. This was a deliberate strategy to raise funds “in anticipation of lower turnover next season due to relegation”. The club then used a portion of these proceeds to pay down £20m of debt with the remainder available to invest in the ...

Paris Saint-Germain are seemingly a club in crisis, even though they are currently on top of Ligue 1, as their results this season have been disappointing by their high standards, while rivals like Lens and Marseille are too close for comfort. Fans have recently called for the board to resign, criticising the club’s management for a lack of a sporting vision and poor recruitment, including many over-rated talents and mercenaries. They say that too many players are only in Paris for the money. PSG’s pre-tax loss in 2021/22 increased by €150m from €225m to a club record €375m, despite revenue increasing by €100m (18%) from €570m to €670m and player sales generating a €32m profit compared to a €5m loss the prior year.   The significant worsening in the bottom line was due to operating expenses shooting up by an incredible €287m (36%), taking these to well over €1 bn.   Loss after tax widened from €224m to €369m. Of course, it is not unusual that leading football clubs lose ...

Under American ownership group Gamechanger 20, who bought out businessman Marcus Evans in April 2021,   Ipswich’s transformation from languishing former UEFA Cup winners to ambitious achievers is complete. Avoiding the play-offs has enabled the early launch of the latest phase of serious investment in the club’s infrastructure: the relaying and multi-million-pound modernisation of the pitch. Proper irrigation channels are being dug, undersoil heating laid, pop-up sprinklers installed and a hybrid pitch set to be grown over the summer months. It is the latest investment by the new ownership, who bought out the unpopular Evans after 13 years of ownership in a deal worth around £40million ($50m). The trio of American businessmen have experience in football with USL side Phoenix Rising, but the majority owners (90 per cent of shares) belong to a US investment firm called ORG, which manages pensions. The takeover saw Ipswich’s debts of around £100million effectively wiped and the ...

France’s most successful club, Paris Saint-Germain, is in transition, and hopes to replace some outgoing players with talent from its youth academy — a way to cut costs and reconnect with the increasingly disgruntled fans. Uefa’s new spending rules have helped force PSG’s hand. Starting next season, clubs competing in European competitions must limit spending on players and coaching staff to 90 per cent of revenue, a figure that will gradually drop to 70 per cent. Across Europe, PSG is the club most in need of belt tightening. The wage bill hit 109 per cent of revenue last year, according to figures from data provider Football Benchmark. The overhaul at PSG has major implications for French football. According to estimates from sports intelligence provider Twenty First Group, PSG’s chances of winning the league next season drop from 59 per cent to 42 per cent without Messi and Neymar. That introduces a level of competitiveness sorely lacking in Ligue 1, making it more excitin...

Sir Jim Ratcliffe has moved a significant step closer to securing Manchester United, with the Glazers and their New York bankers ready to discuss details of a sale with the British petrochemicals billionaire. Sources close to the deal have indicated that the Glazers and The Raine Group are now willing to enter final talks with Ratcliffe and his team at Ineos to thrash out the world-record deal. Ratcliffe moved ahead in the contest with a Qatari group, fronted by Sheikh Jassim bin Hamad al-Thani, and other rival bidders when his final offer represented the highest valuation — it could reach as much as £6 billion — for the Premier League club. Insiders believe that valuation, and Ratcliffe’s willingness to agree a deal that enables Joel and Avram Glazer to retain a 20 per cent stake in the club has proved a significant factor. The Qataris’ third and final offer for a 100 per cent buy-out came in below £5 billion, despite claims to the contrary. Known to have seriously undermi...

The takeover of Yeovil Town by the Hellier Group has been confirmed and they have pledged to work with fans:  https://gloverscast.co.uk/hellier-completes-takeover/ The Glovers have been relegated to the sixth tier of the pyramid.

United’s quest to qualify for the Champions League remains in their hands — and they should be aided by three home fixtures — but if they weren’t previously looking over their shoulder, they certainly are now. While qualification for Europe’s elite club competition will be invaluable when it comes to attracting players in the summer, myriad financial outcomes also depend on whether United can finish in the top four. As per their accounts for the three months ended December 2022, United currently owe close to £1billion ($1.2bn) and the Glazer family, the club’s current owners, have not shown a desire to dip into their own pockets and bankroll the club. Instead, their controversial ownership has cost United about £1.5billion ($1.9bn) in interest, debt and other outgoings. This puts United at a disadvantage to their domestic rivals, including Manchester City and now Newcastle United, whose owners have far deeper pockets, though Manchester United have one...

Kieran Maguire reports: ' Manchester United share price down 8% yesterday as speculators get jitters following report that Sir Jim Ratcliffe was preferred bidder and wound not be buying the shares listed on NYSE. Share price down almost 50% on peak of 27.34 just over a couple of months ago.'

The ideal outcome for Spurs from here would be to qualify for the Europa League by coming sixth, but as it stands they look marginally more likely than Brighton and Villa to finish seventh and collect the European consolation (or, depending on your perspective, booby) prize. The Europa Conference League is a curious competition, raising a number of issues from a Tottenham perspective, including glory versus pragmatism, Spurs’ current standing in European football, and what their ultimate aims are at the moment. It’s fair to say Tottenham’s first foray into the Europa Conference League two years ago doesn’t conjure up especially happy memories. In fact, the main positive Spurs got from the competition was that early exit, which Antonio Conte later acknowledged helped them qualify for the Champions League at the end of the season. Without those spare midweeks, his view was that Tottenham’s small squad probably wouldn’t have had the legs to overhaul A...

Football finance guru Kieran Maguire says that relegation would be 'brutal' for Leicester City with income hit hard:  https://www.leicestermercury.co.uk/sport/football/football-news/leicester-city-would-face-brutal-8427544

Nine of the 20 highest debts were at clubs playing in the Championship in 2021/22, reports the authoritative Swiss Ramble.  The highest ranked Championship club was Blackburn Rovers, followed closely by Middlesbrough and then Birmingham City. The picture is a bit different if we only look at external debt, i.e. owed to banks, where only four clubs had more than £100m debt: Spurs £853m (stadium), Manchester United £636m (Glazers), Everton £174m and Wolves £105m. Most debt in the Championship is provided by owners, so "soft" in nature. The highest owner debt in England is led by Brighton £406m, Everton £381m, Leicester City £266m and Arsenal £218m, largely driven by infrastructure investment. Much of the debt in the Championship is provided by owners (12 of top 20 clubs).

Blackburn Rovers’ pre-tax loss increased by £4.6m from £6.6m to £11.2m in 2021/22, despite revenue rising £2.1m (15%) from £14.5m to £16.6m, mainly because prior year included £13m profit from the sale of the training ground. Rovers’ £11.2m loss was not great, but it was only middling for the Championship. Indeed, some clubs posted much higher losses, especially the three promoted to the Premier League in 2021/22 (Fulham £57.0m, Bournemouth £55.5m and Nottingham Forest £46.2m), partly because they included hefty bonus payments. Rovers’ loss would have been much worse without £10.1m profit on player sales, up from only £0.6m the previous season. This was largely due to the big money sale of Adam Armstrong to Southampton, though many senior players also left for free.   This was one of the best results in the Championship, though the two clubs that made the most money from player trading were WBA and Fulham. Rovers have only once made a profit under the Venky’s ownership, which...

Southampton’s pre-tax loss in 2021/22 narrowed from £23m to £15m, despite revenue dropping £6m (4%) from £157m to £151m, mainly because profit from player sales nearly doubled from £16m to £31m. Although losing money is rarely good news, Southampton’s £15m loss was actually one of the better financial performances in the 2021/22 Premier League. Many clubs reported much higher losses last season, including Manchester United £150m, Chelsea £121m, Leicester City £92m, Newcastle United £73m and Tottenham £61m. Southampton have now reported losses four years in a row, adding up to £155m, which has completely wiped out the preceding five years of profits. This profitable period was worth £126m in total, including £42m in 2017 and £35m in 2018.   More encouragingly, losses have reduced from the £76m COVID-impacted peak two years ago. The decline in Southampton’s profitability is partly due to making less money from player trading, as profit in the past four years has averaged only £...