The Political Economy of Football V2

Football stadiums remain unused for most of the year, so it makes sense for clubs to use them for other activities where possible, such as sporting events and music concerts, in order to boost match day income. For example, Old Trafford is used for the annual Rugby Super League Grand Final, while Arsenal hosted Arctic Monkeys at the Emirates and Tottenham staged the World Heavyweight showdown between Anthony Joshua and Oleksandr Usyk. In fact, Tottenham’s new stadium has been designed as a multi-use facility, leading to a 10-year deal with the NFL to stage American Football games, whereby Spurs apparently take all the catering and merchandising revenue. Three key stadium expansions are: Liverpool – third tier added to the Anfield Main Stand, adding 8,500 seats, increasing capacity to 53,000. Opened at start of 2016/17 season. Manchester City – third tier added to the South Stand, adding 7,000 seats, increasing capacity to 55,000. Opened at start of 2015/...

17 of the 20 Premier League clubs have raised season ticket prices ahead of the 2023/24 season with five of them pushing through double-digit increases: Nottingham Forest 20%, Fulham 18%, Aston Villa 15%, Everton 10% and Bournemouth 10%.  As a result of the ticket price increases, this will be the most expensive season ever for match going fans. Seven clubs charge more than £1,000 for their most expensive season ticket, though three of them are in a class of their own, led by Fulham, who charge an almost unbelievable £3,000 for a Platinum ticket in the rebuilt Riverside Stand. This is around three times as much as fans pay at Anfield, Old Trafford or the Etihad. The next highest ticket prices can be found in North London: £2.025 at Tottenham’s new, state-of-the-art stadium and £1,784 to watch Arsenal (though that also includes three Champions League games). However, there is another way of looking at this, which is that the high prices paid by the “prawn sandwich brigade” som...

Scunthorpe United, currently top of the National League North, will see the future of their Glanford Park ground discussed in court this week.   Former chairman Peter Swann is trying to get them evicted. Current Iron chair David Hilton took over from Swann in January, but an exclusivity period over the sale of the ground and the land it sits on expired in May. Hilton has been concerned about lack of progress on an unregistered strip of land which could deny the club access to its training pitch. Swann's company Coolsilk took over the ground in return for Swann writing off £11m of loans made during his tenure.   Given the complexity of the issues, the case could well be put on hold for months to be heard in full.

It's one blow after another for Southend United following a points deduction by the National League:  https://thefsa.org.uk/news/future-bleak-for-southend-united-following-points-deduction/ The match against Eastleigh was disrupted by a tennis ball protest by fans:  https://www.bbc.co.uk/sport/football/66620988

Everton’s hopes of improving their financial situation have received a huge hit after MSP Sports Capital withdrew from talks about taking a minority stake in the club. The New York-based investment group signed an exclusivity agreement with the Toffees in May and the plan was to invest up to £150million ($190m) in convertible debt that would become a stake of approximately 25 per cent in the 145-year-old club. In a complicated deal, £100million of that investment was meant for Everton Stadium Development Company, the subsidiary club owner Farhad Moshiri set up in 2017 to oversee the construction of Everton’s new ground at Bramley-Moore Dock, with the rest going to the club. But that exclusivity period is now over and the deal is dead, with the stumbling block being opposition from one of Everton’s existing lenders, Rights and Media Funding Limited. Everton, currently bottom of the Premier League after losing their first two games of the season without scoring a goal, h...

Barcelona are having problems with attendances at their temporary home at the Olympic Stadium.  They had fewer fans there at their last game than Sunderland.  Tourist revenues are also being hit:  https://www.thenationalnews.com/sport/football/2023/08/22/barcelona-face-uncertain-times-as-club-navigates-camp-nou-rebuild-and-financial-crisis/

Over La Liga’s opening weekend, fans of 19 Spanish top-flight clubs had access to scenes and areas where cameras have never previously been allowed.  Live broadcasts brought us right into the huddle as Barcelona coach Xavi implored his team to play “one or two touches, one or two touches” to get around Getafe’s obstinate defence. All but one La Liga club collaborated with the new broadcast initiatives. Madrid decided to boycott all interactions with rights holders before, during and after their 2-0 win at San Mames. And Los Blancos will miss out on about €13million (£11.1m; $14.2m) if they do not change tack and take part in the extra “voluntary” features championed by La Liga president Javier Tebas. The idea behind these features — newly introduced this season — is to make La Liga more interesting to viewers both in Spain and around the world, with the aim of increasing the money paid by broadcasters for the rights in the future. There were no cameras in ...

The cost of watching Spurs has always been on the more expensive side and, with the team now playing in what is unquestionably one of the best football stadiums in the world, tickets aren’t going to get any cheaper. However there was anger this summer when matchday ticket prices were increased. Season ticket prices for 2023-24 were frozen, despite demand being extremely high.   That meant the cheapest season ticket remained at £807 (for some corner seats in the lower tier), with the average being around £1,000 behind the goals, then up to £1,400 along the sides and as high as £2,233 for some proper nice seats with access to a private bar and some decent grub. Despite how big a financial commitment is required to take up a season ticket at Spurs, the price freeze was certainly welcome. However, the same goodwill wasn’t afforded to the average match-going Spurs fan. Instead, prices jumped up £17 for the top home matches this season (i.e. Arsenal, Liverpool, Chelsea) and bet...

Boehly and Clearlake have committed north of £300million in transfer fees on central midfielders alone in 2023 once deals for Lesley Ugochukwu and Andrey Santos are factored in. Overall, the numbers are even more staggering: Lavia will take the total transfer fee commitment past the £900million mark since Chelsea’s new American owners assumed control in June 2022 — and they are not done yet. No other club in the world is operating this way, and it is fair to say that Chelsea’s approach is ruffling feathers. There are growing whispers of rival clubs complaining to the Premier League about their spending, the manifestation of a broader disbelief inside and outside the game that such outlay could possibly be compliant with UEFA’s financial fair play (FFP) regulations, which allow clubs to lose around €90million over a three-year period. What is more, last September they were placed on an FFP watchlist by UEFA due to the size of their losses. Yet Chelsea be...

Fan owned clubs, even in the lower leagues, often find it difficult to meet the losses that usually occur and so is is proving with Newport County. The Exiles are currently owned and run by the supporters' trust but posted a loss of £1.2m last year.  They are now looking at a full takeover and there are two investors in discussions.   The club has a threadbare squad of 16 or 17 players which cannot see them through the season.  Beating Charlton in the Carabao Cup did give them a lucrative home tie against Brentford. The Trust intends to retain a minority shareholder and any change would require a 75 per cent vote in favour.

The authoritative Swiss Ramble comments: '  If Moises Caicedo's sale to Chelsea is confirmed, Brighton will have made nearly £300m from player sales in the last three seasons (including add-ons). That's a cash profit, so the accounting profit will be even higher, as the purchase cost will have been amortised. Not bad.' Brighton boss De Zerbi commented, 'The big clubs can take away our players, but they can't take our soul and spirit.' The Seagulls always manage to sign or produce good replacements.

The promotion of Ipswich Town with 98 points and over 100 goals was part of the transformation under the new owners, who purchased the club in April 2021 for a reported £40m. As a consequence, Ipswich Town are now majority owned by the wonderfully named Gamechanger 20 Limited, though the ultimate owner is a US investment firm, ORG, with a 90% stake. The remaining shares are split: 5% for three businessmen (Brett Johnson, Berke Bakay and Mark Detmer), who previously invested in US football club Phoenix Rising: and 5% for Marcus Evans, Town’s former owner. The new owners have certainly put their money where their mouths are to date, spending a lot on the squad and the club’s infrastructure. However, this has been part of a well though-out plan, as they have made some astute recruitment choices. As well as McKenna, they brought in former Bristol City chief executive, Mark Ashton, to lead operations off the pitch. Ashton spoke of the solid nature of Ipswich’s new investors, “In a per...

  I used to see a lifelong Wolves fan for lunch once a month.   He was approaching ninety, but still went to games.   Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules.  Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came ...

Chelsea FC’s US owners believe a major reset will prevent a repeat of a calamitous first year in charge during which the club spent record amounts on players but suffered its worst season in almost three decades.  Speaking to the Financial Times, Chelsea chair Todd Boehly said: “We feel really good about the sporting side of the house. Morale is high and the culture is good. On the commercial side, we’ve got a lot of new hires. We’re excited about the path ahead.” A consortium led by Boehly, co-owner of the LA Dodgers baseball team, and Clearlake Capital acquired the club for a record sum of £2.5bn in a forced sale last year from sanctions-hit Russian oligarch Roman Abramovich. The combination of a private equity firm and a financier with a proven record in the sector was expected to bring financial rigour and sporting savvy following the excesses of the Abramovich era, in which Chelsea lost almost £1mn a week over close to 20 years. The high price raised valuation expectations...

La Liga have made a complaint to the European Commission about Paris Saint-Germain, alleging that they have distorted the internal market in relation to a new policy measure on foreign subsidies:  https://www.90min.com/posts/la-liga-file-complaint-against-psg-european-commission Are we going to see the Commission getting involved in football once again and what would be the politics of taking on PSG?  Their engagement with the Premier League in the 2000s saw prime minister Tony Blair get involved.

Financial challenges are building up for Guichan Lau whose company WBA Holdings owns 66 per cent of West Bromwich Albion.   His company's accounts show that it is in default on a £2 million from a West Midlands heating company called Warmfront Holdings. Warmfront has agreed to take no action to reclaim the loan and interest until February next year.  Given a punitive rate of interest of 5 per cent a month, the amount outstanding will then be around £4 million. Lai has missed three deadlines to repay a loan from the Baggies to his Hong Kong company Wisdom Smart Corporation.  [sic]  Meanwhile the club have a £20m loan from MSD UK holdings at an annual interest rate of 13.8 per cent.

Chelsea FC has a few problems. One disappointing season and a spending spree have left the club and its new American owners with a lot to prove.  Private equity firm Clearlake Capital and financier Todd Boehly paid £2.5bn to buy Chelsea last year from sanctioned Russian billionaire Roman Abramovich, still the record for a football club anywhere. But the spending didn’t stop there. Since summer 2022, Chelsea has splashed out more than €800mn on players, although the club has recouped €320mn in player sales. Contrast Chelsea’s fortunes with Newcastle United. The £305mn that a Saudi-led consortium paid for the Tyne and Wear club in October 2021 is looking cheaper by the day after it qualified for the Champions League. There teams compete for €2bn of cash distributions from governing body Uefa — but Chelsea won’t be one of them. Under Saudi ownership and with British financier Amanda Staveley at the helm, the Magpies have spent around €440mn on players, making back less than €60m...

In a survey conducted by  The Athletic  this week (before the developments on Thursday and Friday which brought the transfers of Moises Caicedo and Harry Kane closer to being completed), we asked how supporters of each of the 20 teams are feeling about the new season. Ninety-nine per cent of Villa respondents said “optimistic”, making them the most positive bunch in the division. They’re far higher than fans of treble-winning Manchester City (83%), higher than big-spending Newcastle (91%, down 5% on last year), who they play first, and a world away from Tottenham (79%), who they finished a point above last season. Emery is one of three Basque managers in the Premier League this season, with followers of Andoni Iraola’s Bournemouth (97%) and Mikel Arteta’s Arsenal (90%) also in high spirits. There was a fourth until Tuesday evening, when Julen Lopetegui left Wolves. He had spent much of the summer agitati...

Barcelona has announced plans to spin off its media operations arm as a public company in a bid to raise tens of millions of dollars as it scrambles to shore up its finances. Barça Media, which controls the Spanish football club’s online assets, including videos and social media, and licences its brand for TV series and video games, will list on New York’s Nasdaq stock exchange. It plans to go public via a so-called “blank cheque” merger with Mountain & Co I Acquisition Corp — a Cayman Islands-based shell firm — in a deal which values the business at about $1 billion. Joan Laporta, the president of FC Barcelona, claimed that it had made “considerable progress in the digital and audiovisual spaces to ensure that Barça Media will grow into a multifaceted content creation hub that leverages the power and unique assets of the world-renowned FC Barcelona brand”. Hiving off such a division is an unusual move. It comes as Barcelona grapples with a string of financial problems,...

The contrast in the business models of the ‘Big Six’ comes out in this comparison by the Swiss Ramble. Arsenal In the five years up to the 2021/22 season Arsenal had the lowest revenue of the Big Six. As a result, their wages and player purchases lagged behind, being only ahead of Tottenham. They still had to use £150m of the cash reserve that they had built up in better times. External loans were replaced by an owner loan. This will reduce annual interest payments going forward, though this transaction did incur a once-off £32m, refinancing fee. Chelsea This review covered the last five years of the Abramovich era, when Chelsea benefited the most in the Big Six from owner funding with £416m, which was made up of share capital £211m and loans £205m. As part of the sale of the club to Todd Boehly’s consortium, the debt owed to the owner has reportedly been written-off.   However, the Blues were hit by £132m adverse working capital movements. Chelsea generated the most ca...

Whether the concept of the 'Big Six' in the Premier League is quite what it was with the financial boost at Newcastle is an open question, but anyway here are some comparisons over the last five years from the Swiss Ramble. Manchester in the lead The Big Six Premier League clubs had a total of £18.2 bn of available funds in the last five years. Manchester City led the way with £3.4 bln, closely followed by Manchester United £3.3 bln. There were three other clubs around the £3 bln level, but there was then a big gap to Arsenal, who lagged the others with “only” £2.5 bn. Manchester United generated the most revenue in the last five years with £2.8 bn. They were just ahead of Manchester City £2.7 bn, even though they were overtaken by their rivals in the last two seasons. Four clubs increased their revenue by more than £100m in the last five years with the largest growth at Liverpool, whose income rose £230m (nearly two-thirds) from £364m to £594m. Manchester United’s revenue ...

Chelsea is seeking to move in the direction of multi-club ownership.   The club is seeking to raise more funds as it decides whether to redevelop Stamford Bridge or build a new stadium elsewhere:  https://on.ft.com/45iFtvQ   The club has no shirt or sleeve sponsor in place.

Every football club likes to consider itself unique, but in Millwall’s case, it’s unarguable.  The death in a car accident  of chairman and owner John Berylson set shock waves through the club but through football more generally.  Fans of rival clubs such as Charlton expressed their solidarity and sorrow. Squeezed into a defiantly ungentrified corner of south east London, and yet just a couple of miles from some of the UK capital’s plushest postcodes, Millwall have always been fuelled by a siege mentality. Their fanbase is small in comparison to other London clubs — the stadium holds just over 20,000 and is rarely full — but what they lack in numbers they make up for in atmosphere. “No one likes us, we don’t care,” has become the club’s unofficial anthem Despite that chequered history, Millwall have won awards for work in the community, being named EFL family club of the year in 2017, and achieved Family Excellence status for the 2021-22 season, for exempl...

Carson Yeung, the owner when Birmingham City were last in the Premier League, was jailed for money laundering, and points deductions, transfer embargoes, and a long list of broken promises have followed since under different ownership models. Sections of the club’s stadium, St Andrew’s, have also been closed for over two years due to asbestos. The hope is that repair work will be completed before the end of the calendar year and the ground’s full reopening, whenever the exact date of that is, will signal a changing of the times. To get a full picture of just how bad it has been, only last month upon completing the takeover, Tom Wagner — co-chief executive of Shelby Companies, the group which now owns the club — said there was a need to “change everything”. On top of all that, Birmingham hold the tag as the longest-serving club in the Championship: this season will be their 13th consecutive campaign one rung away from the riches and glamour of the Premier League.   At least th...

Ahead of the new season, many supporter organisations are expressing dissatisfaction at ticket price hikes in store for the 2023-24 season, reports the Football Supporters' Association. In London, Tottenham Hotspur Supporters' Trust (THST) accused their club of "exploiting loyalty" with their new matchday ticket prices, which will see some seats reaching £103 for a single game of association football. Spurs fans are now calling for demonstrations against the price hikes before their first home game later this month. "If these rises are not opposed, we believe there will be more to come," THST said. "This is clearly unacceptable so any price increases must be resisted." Across the capital, West Ham United fans are facing price increases of around 8 per cent while the senior concession age is going up to 66. The club's independent supporters committee said the 2023-24 price rises were "unreasonable" amid the ongoing cost of living crisi...

Sheffield Wednesday’s 2021/22 accounts cover a season when they finished 4th in League One, losing to Sunderland in the play-off semi-final. They had been relegated from the Championship the previous season, due to receiving a 6-point deduction for breaching the EFL’s Profitability and Sustainability Rules. Despite relegation, Wednesday’s pre-tax loss significantly decreased from £25.8m to £7.3m, as revenue rose £4.7m (40%) from £11.6m to £16.4m and profit from player sales increased from £0.6m to £1.0m. However, the largest improvement was due to operating expenses being cut £14.2m (37%) from £37.9m to £23.7m. Despite the impressive reduction in Wednesday’s loss, their £7.3m was still one of the highest in League One, only surpassed by Ipswich Town £12.6m, Wigan Athletic £7.7m and Charlton Athletic £7.4m. Wednesday’s profit from player sales increased from £0.6m to £1.0m, as most departures were on free transfers. As might be expected, player trading does not generate huge gai...

NFL legend Tom Brady has become a minority owner of English second division football club Birmingham City. Brady, 46, has entered into a partnership with U.S.-based Knighthead Capital Management LLC —which completed its takeover of Birmingham in July — meaning the seven-time Super Bowl winner takes part-ownership of the team and becomes chair of the advisory board. He will work with the board “on global marketing efforts and the identification of new commercial partnership opportunities”. Brady is not the first former NFL star to invest in English football. Former defensive end JJ Watt become a minority investor in Burnley, who have just been promoted to the Premier League from the Championship. Brady’s investment in Birmingham continues his relationship with Knighthead. Last year, Brady joined Knighthead’s ownership group of a Major League Pickleball team and in March, Brady’s eponymous clothing company became a partner of its World Endurance Championship racing team,...

Football finance guru Kieran Maguire gives his verdict on Sheffield Wednesday and thinks they have finally got control of their finances as they enter the hyper competitive Championship:  https://www.examinerlive.co.uk/sport/football/news/a-year-retrenchment-finance-expert-27432523