The Political Economy of Football V2

On top of his $1.3bn acquisition of Manchester United shares, Ratcliffe will also commit $300million to be used for the redevelopment of Old Trafford. The filing confirms that this $300million investment will come in two instalments — $200million once Ratcliffe’s minority investment is finalised, then a further $100million before December 31 next year. And, interestingly, the $300m is not strictly ring-fenced for Old Trafford alone. Although the filing explicitly states that is the money’s intended use, it may still be put towards the club’s “ordinary course of business” if required. In April 2022, United appointed Populous and Legends International as master planners and consultants for the future of Old Trafford. Plans involving either the renovation of the existing ground or the construction of a new stadium on an adjacent site were subsequently drawn up, with the cost of the latter estimated between £1.2bn and £1.6bn. Sources close to Ratcliffe have described the...

Sir Jim Ratcliffe’s deal to buy a 25 per cent stake in Manchester United is built on a crucial assumption: that the chemicals billionaire and his team have a better idea of how to win football matches than those currently in charge. His experience in European football has the most direct relevance to United. His time as owner of French top tier club OGC Nice charts a steep learning curve, costly mistakes, sporting underperformance and bad luck, but some more recent signs of promise. Football has been part of the Ineos empire since it acquired Swiss club Lausanne-Sport in 2017. The team was relegated soon after. Bob Ratcliffe, Jim’s brother who was then in charge of Ineos’ football interests, admitted afterwards that as owners, the company had been naive by overspending on big name players and “not getting advice from the right people”. Yet some of those mistakes were repeated following the €110mn takeover of French club Nice OGC in the summer of 2019.   The new owners arrived...

Bristol City’s pre-tax loss in 2022/23 reduced by £6.3m from £28.5m to £22.2m (loss after tax £22.1m), as revenue rose £6.9m (23%) from £29.7m to a club record £36.6m and profit from player sales shot up from £1.3m to £9.5m.  On the other hand, operating expenses increased by £7.7m (13%) to £65.3m and net interest payable was up £0.9m (44%) to £3.1m.   (13 month figures) The main reason for the higher income was commercial, which grew by more than a third (£5.6m) from £15.8m to £21.4m, but the other revenue streams also increased. Match day rose £1.1m (21%) from £5.2m to £6.3m, while broadcasting was £0.2m higher at £8.9m.   It is worth noting the importance to Bristol City of commercial income, which now accounts for 58% of total revenue, compared to 24% from broadcasting and 17% from match day.   City had the 6th highest attendance in the Championship in 2022/23, though they were a fair way below the likes of Sunderland 38,480 and Sheffield United 28,746. ...

For much of their 125-year history, Athletic Bilbao have been recognised for their unique player policy. Known as a philosophy by those connected to the club, it dictates that Athletic only use players who have been born or brought up in what is defined as the Basque Country, a region of northern Spain and across the border in France of three million inhabitants that shares linguistic, historical and cultural ties. It has served them well: behind Real Madrid and Barcelona, they are Spain’s third most successful club in terms of trophies won, and remain the only team other than those two never to have played outside the country’s top flight.  Towards the end of a lengthy general assembly in October, however, a group of socios (club members) asked whether the interpretation of Athletic’s “philosophy” should be extended to allow the children and grandchildren of Basque people living abroad to play for the club. Those who are in favour of a change point out the B...

Some commentators have seen Manchester United's second half fightback to beat Aston Villa as a sign of a new spirit at the club after off the pitch changes. Ratcliffe’s company, INEOS, has bought 25 per cent of Manchester United in exchange for sporting control. The deal, which has cost around £1.3billion ($1.6bn), means the club’s football operation will now be overseen by INEOS but the Glazer family, who have owned United since 2005, remain in overall charge. The Glazer family and Class A shareholders will receive the same price of $33 per share. The $300million cash injection will be used to improve Old Trafford and other infrastructure, and INEOS will have the casting vote on any decision related to football — eg, transfer policy or the future of Ten Hag. When the United-INEOS deal was announced, it revealed that Ratcliffe had acquired 25 per cent each of the Class A and Class B shares. By offering Class A shareholders just as much opportunity to participate in the offer as...

Not only did Napoli win the scudetto last season, but they achieved this in a lot of style, playing some brilliant football under head coach Luciano Spalletti to seal the deal with six rounds to spare. This was only the third title in their history, over 30 years after the Maradona inspired triumph in 1990. Give Napoli’s financial disadvantages compared to the traditional “big” Italian clubs, this was a very impressive feat, especially as this came after they had sold (or released) some of the team’s bigger stars before the season started, replacing them with relative unknowns. This was very much in line with the modus operandi established by owner, Aurelio De Laurentiis, who had bought the club in 2004 after Napoli went bankrupt and were relegated to the third tier. They soon bounced back with two promotions in three seasons, with the Italian film producer insisting that the club follows a sustainable strategy. Napoli swung from a €66m pre-tax loss to an all-time Italian recor...

Fifa and Uefa rules blocking a potential European Super League have been ruled to be “unlawful”, a landmark ruling has found.  The European Court of Justice (ECJ) delivered its long-awaited verdict in Luxembourg on Thursday morning after the European Super League Company (ESLC) first took legal action against both governing bodies in April 2021. “The FIFA and UEFA rules making any new interclub football project subject to their prior approval, such as the Super League, and prohibiting clubs and players from playing in those competitions, are unlawful,” said the ECJ. The ruling will embolden those aiming to break down UEFA’s powers, with Real Madrid and Barcelona still fully committed to the notion of a breakaway league. A22, the sports management company aiming to launch a new European competition, has published plans for new men’s and women’s tournaments which it proposes would run midweek and provide “competitive drama and decisive matches throughout the entire footbal...

Steve Cooper has gone as Forest nanager.  That will leave many Forest supporters with conflicting emotions given that the manager and owner have, between them, conjured up the happiest times at the City Ground since the turn of the century. On the one hand, the fans’ affinity to Cooper could be gauged by the remarkable support that was shown to him during the recent 13-match sequence when Forest won only once and fell to 17th in the Premier League table, leaving them five points above the relegation zone. On the other hand, those fans are also grateful, in the extreme, for the financial backing from Marinakis and have come to appreciate that, at the heart of everything he does, there is a determination from the Greek shipping magnate to keep the club on an upward trajectory. His methods can be unorthodox sometimes and anyone who has followed the story of Olympiacos — conspiracies, riots, near-unremitting drama and an official statement recently claiming Greek football was run...

Hearts have come a long way since the club was placed into administration in 2013, when they were deducted 15 points and then relegated to the Scottish Championship. Much of the credit is due to Ann Budge, who took ownership in June 2014 in partnership with the Foundation of Hearts, following the misguided Romanov regime. In August 2021 Budge signed over 75% of her shareholding to the Foundation, making Hearts the largest fan-owned club in the UK. The club described this as “Heart & Soul Day”.   This approach has served the club well, though the model going forward is likely to still require the support of benefactors. Hearts once again posted a pre-tax profit, though this dropped from £1.7m to £0.3m. Revenue rose £6.2m (42%) from £14.6m to a new club record of £20.8m, but this was more than offset by £7.4m (38%) growth in operating expenses. Hearts’ record turnover was driven by their involvement in the Europa Conference League group phase. This led to increases in both ...

Celtic have earned €36.1m from the Champions League, which is much more than Rangers’ €20.2m in the Europa League and Aberdeen’s €4.8m in the Europa Conference. This is despite the fact that Celtic finished bottom of their group, while Rangers came first in their group, thus proceeding to the last 16. Celtic were Scotland’s sole representative in the Champions League group stage this season, earning €36.1m, which was made up of €15.6m participation fee, €4.0m prize money, €10.2m UEFA coefficient payment and €6.2m TV pool.   In other words, nearly half of their income is just for making it to the group stage, i.e. in the shape of the €15.6m participation fee. Rangers’ overall UEFA ranking was a bit behind Celtic’s at 58th, but their UEFA coefficient payment in the Europa League was much smaller.   Rangers will have a better coefficient next season, as they will drop a season without any ranking points, possibly overtaking Celtic. Rangers have earned €20.2m, including €5.0...

King's Lynn Town need an injection of £300,000 or they may not see out the season.   The club costs £1m a year to keep going:  https://www.lynnnews.co.uk/sport/troubled-linnets-need-300-000-to-see-season-through-9344959/ 33 prospective investors in the United States had never heard of King's Lynn.

Football deals take a long time. Just ask Paris Saint-Germain, whose Qatari owners have finally agreed to sell up to 12.5 per cent of the French football serial champions to US investors. The deal, which valued PSG at more than €4bn, came after more than a year of talks with potential partners. That’s not unusual considering Premier League sides Everton and Manchester United are still waiting to conclude deals after similar timeframes. And now, the arrival of Arctos Partners, based in Texas and New York with a new office in London, signals a new era for PSG. Qatar Sports Investments took control of PSG in a €70mn deal in 2011 and transformed the club into perennial French champions through €1.5bn of investment and the recruitment of stars like Zlatan Ibrahimović, Neymar and Kylian Mbappé.    Buying stars was crucial to establishing PSG on the global stage, as was rebranding the club as “Paris”. Since 2011 PSG has outspent all but three clubs – Chelsea, Manche...

Manchester City and Real Madrid have earned the most prize money in the Champions Leagueto date with €27.9m apiece. They got €16.8m for winning all six group games (6 x €2.8m), €1.5m for their share of the draws money plus €9.6m for reaching the last 16. They were followed by Bayern Munich €25.8m, who registered five wins and one draw, Atletico Madrid €23.6m (four wins, two draws) and Arsenal €22.7m (four wins, one draw). Three clubs have trousered €21.8m (four wins), namely Barcelona, Porto and RB Leipzig. Red Star Belgrade had the lowest prize money of just €0.9m, as they only managed to produce one draw. Interestingly, Celtic earned the same amount as Manchester United with €4.0m, as both clubs had one win and one draw. The highest TV pool payments are to Paris Saint-Germain €35.1m, followed by Lens €27.5m, which might be a bit of a surprise for some. The reason is that they have benefited from the French TV pool only being divided between two clubs, whereas other countries ha...

While it is impossible to calculate the exact figure Newcastle’s elimination has cost them financially given the TV payments are changeable and determined by several factors, at the very least they have foregone an additional £12m to £15m. Newcastle, meanwhile, were 12th in the Premier League for broadcast revenue in 2021-22, receiving £124m, barely half of Manchester City’s for that campaign. Newcastle’s broadcast revenue will have risen for 2022-23 (their accounts have yet to be released) given their fourth-placed finish and the volume of their matches that were televised, but it will still be significantly lower than English clubs who were in the Champions League last season. Football finance guru Kieran Maguire estimated that, by even reaching the Champions League, Newcastle’s revenue would increase by “minimum £30m”.   For even featuring in the group stage, clubs receive €15.6m. Newcastle also registered a win against PSG, as well as draws in Milan and Paris...

At the home of the Premier League and European champions, it is not a shock to see Haaland and Jack Grealish feature prominently inside the superstore at the Etihad Stadium. Haaland, 23, pulls in huge numbers after helping his side to the treble last season and his No 9 shirt, the first you see when walking inside the City Store, is the most purchased. Fanatics, a global digital sports platform, tells  The Athletic  that Haaland has sold the most shirts across Europe through their site this year, but that Bellingham is quickly catching up. Specific numbers around shirt sales were not disclosed by clubs or retailers when requested by  The Athletic , but at City, this has been a record year for the retail department, highlighted this summer when their new shirt was bought every 12 seconds on the day of release — the busiest 24 hours of trading they have ever recorded. Across town at United, the days of queueing outside Old Trafford to get a printed ‘Ron...

Qualification from the group stage would have seen United receive €9.6million (£8.4m; $10.5m) in prize money. The further a side goes into the Champions League, the more they stand to earn. If United had progressed to the quarter-finals, they would have earned an additional €10.6m, while a spot in the semi-finals is worth €12.5m to the teams that get that far. There are extra matchday and broadcast revenues from progressing to the next stages of the Champions League. It is difficult to ascertain a precise figure for broadcast revenue, but UEFA has a pool of around €300m. Half of this amount is split among the clubs based on their performance in the previous domestic championship, with the other half being paid out in proportion to the number of matches played by each side in the 2023-24 Champions League. If a club qualifies for the group stages, they receive €15.6m from UEFA. This, in effect, is a base salary. Teams can then earn additional payments if they win or draw a game. Ea...

Sevilla have become synonymous with the Europe League, having won it no fewer than five times in the last decade and seven times in total. Even when they have not performed well in Spain, they have invariably managed to find something extra in “their” competition. There is no clear leadership at the top, which is never a good thing for a football club. Del Nido reportedly has the largest shareholding with 24%, with Castro’s group owning 21% and Rafael Carrion, another former president, having 15%. Matters have clearly not been helped by the bitter power struggle off the pitch at Sevilla. Former president Jose Maria Del Nido Benavente is pushing to reclaim control of the club from the current incumbent Jose Castro, who is supported by Jose Maria Del Nido Benavente, who just happens to be the son of Castro’s bitter rival. The situation has been further complicated by the arrival of 777 Partners, an American private investment company, who purchased a minority stake in 2018. To date...

PSV did very well off the pitch in 2022/23, as they managed to increase their pre-tax profit from €1.4m to €17.5m, with revenue rising €7.4m (8%) from €93.2m to a new club record of €100.6m, which was the first time they broke through the €100m barrier. However, expenses also grew €7.9m (6%) from €134.8m to €142.7m, so the club still made an operating loss of €42.1m. This was more than offset by €61.1m profit from player sales, up from €44.2m, which produced the overall positive result. PSV’s revenue growth was almost entirely driven by match day, which rose €7.0m (40%) from €17.7m to €24.7m, though there were also small increases in the other two revenue streams. Broadcasting was up €0.3m (1%) from €28.2m to €28.5m, while commercial was €0.1m higher at €47.5m. Unlike many other leagues, the majority of clubs in the Eredivisie generally make money, but PSV’s €17.5m pre-tax profit was the second best result, only behind Ajax’s very high €55m. The other member of the Dutch “big thr...

Aberdeen’s better results in 2022/23 on the pitch also helped with their finances, as they swung from a £2.2m net loss to a £1.1m profit. Profit from player sales shot up from £1.0m to £7.5m, which more than offset a £6.3m operating loss. Revenue rose £1.9m (14%) from £13.9m to £15.8m, but operating expenses were up by even more, increasing by £2.8m (15%) from £19.2m to £22.0m. Two of Aberdeen’s revenue streams grew: gate receipts were up by more than a third (£1.1m) from £3.0m to £4.1m, while commercial also rose £1.1m (15%) from £7.3m to £8.4m. On the other hand, broadcasting dropped £0.3m (8%) from £3.6m to £3.3m. Not all clubs have published accounts for 2022/23, but Aberdeen’s £1.1m profit is currently the second best financial result in Scotland for last season, albeit miles below Celtic’s record-breaking £33m profit. In general, Scottish clubs tend to run a tight ship, so almost all of them were in a narrow range between £2m profit and £2m loss, i.e. effectively break-ev...

The Plymouth Argyle board had put together a new mission in December 2019 of being a financially sustainable Championship club within five years – which Argyle have now achieved ahead of schedule. Head of Finance, David Ray, explained what they meant by financially sustainable: “Put simply, we will generate sufficient income to cover our costs and therefore will not be reliant on our owner to inject money into the business to cover any losses. This is of crucial importance for the long-term financial security of the club.” Argyle’s focus on sustainability makes a lot of sense if you know the history, as the club went into administration in 2011, when the club was deducted 10 points, leading to relegation to League Two, where they only just avoided dropping out of the football league. Famously, manager Peter Reid sold his FA Cup runners-up medal to help raise funds to pay some of the bills. James Brent bought the club, took it out of administration and steadied the ship, before st...