The Political Economy of Football V2

Relegated from the Premier League last season, Sheffield United have been on the market for at least two years, during which time they have twice got into talks with guys who were all mouth and no money, convicted fraudster Henry Mauriss and Dozy Mmobuosi, who was last seen on the run from American justice in his native Nigeria. With those embarrassing experiences in mind, Sheffield United owner Prince Abdullah bin Mosaad Al Saud asked financial services firm Lazard to find someone who might be able to write a cheque that does not bounce. As Sheffield United are known as “the Blades”, a nod to the city’s status as a steel-making centre, Lazard has dubbed its search Project Saif, the Arabic word for blade. The 25-slide sales brochure leans heavily on the club’s long history, recent visits to the Premier League and “six critical, wholly-owned real estate assets”: the stadium, two training grounds, a hotel, an office block and a community sports centre. Among the other assets listed...

When The Friedkin Group pulled out of talks with Everton owner Farhad Moshiri to buy the Premier League club, the two parties issued a joint statement saying they had agreed “to explore alternative options”, without explaining why the deal had collapsed. It quickly became an established fact that The Friedkin Group got cold feet because of legal uncertainties surrounding the £200million ($260m at current rates) that former Everton suitor 777 Partners has lent to the club over the last year. That bid failed to receive Premier League approval and the Miami-based firm is now in quasi-administration, while 777 and its long-term backer A-Cap are embroiled in a $600million lawsuit with a London-based firm called Leadenhall, which believes it is the rightful owner of 777’s assets, including the loan to Everton. It is a complicated situation, so it is hardly surprising that some commentators have boiled this down to saying the takeover collapsed because Leadenh...

Manchester United will decide by the end of the year if they want to revamp Old Trafford or build a new 100,000-seat stadium on the grounds of their present home. Sir Jim Ratcliffe, the Ineos chairman who owns 27.7 per cent of the club, has told the stadium taskforce that was set up in April that they should report back in December with their findings. At present, the taskforce, which is led by Lord Coe and includes figures such as Gary Neville and the mayor of Greater Manchester, Andy Burnham, is leaning towards recommending that a new stadium is built in the car park area behind the Stretford End, rather than a revamp of the existing ground. However, the club say that no final decision has been made. The taskforce acknowledges that building a new stadium would be costly, at an estimated £2billion, and says that any decision will not be made without canvassing the opinions of the supporters. The club have already asked 30,000 fans for their thoughts in a survey. A subcommi...

As Sheffield United get ready for the new season, there remains a sense of uncertainty about the club’s ownership. Talks have been slowly progressing with an American consortium, reportedly led by Tom Page of venture capital firm Vertex Albion, but a deal has not yet been concluded. The hope was that the new owners would be on board before the end of this summer’s transfer window, especially after it was reported that plans had been submitted to the EFL for the owners and directors’ test, but, as of yet, there has been no white smoke confirming that the club has changed hands. In the last few days, there have been reports that John Textor, the American billionaire, is looking to sell his shareholding in Crystal Palace and invest in another English football club, which led to Blades fans speculating that he might enter the “race” to buy United. However, that rumour would appear to be unfounded at this stage. Sheffield United’s current owner is Prince Abdullah, who has been involve...

Rod Liddle is one of those newspaper columnists whose job is to be controversial, but the reinvented northerner is a bit disobliging about promoted Bromley in the Sunday Times today. Leafy but otherwise unlovely and once described by a former resident, Frankie Boyle, as being a “lobotomy made of bricks”, Bromley can now boast an English Football League club for the first time in the town’s thousand-or-so-year history. It was once a Kentish market town, but swelled rapidly with the coming of the railways and even more so the “white flight” to the outer suburbs of London from the 1950s onwards. Ten miles southeast of central London and a non-stop 18 minutes on the train to Victoria, Bromley is exactly the sort of place where you might expect to see a flourishing of our absurdly popular national sport. 'Extremely affluent — residents enjoy one of the highest levels of gross disposable income in the country — Bromley is kind of where English football is heading. It is why we have B...

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...

The Friedkin group takeover of Everton has collapsed:  https://www.skysports.com/football/news/11671/13180901/everton-takeover-latest-friedkin-group-end-talks-as-toffees-now-explore-alternative-options The American investors had agreed a £500m deal to buy the club from Farhad Moshiri but withdrew on Thursday evening. Friedkin had already paid £200m to help complete the building on Everton’s new stadium at Bramley Moore Dock but dramatically decided against going through with a transaction that would have seen them purchase the 94% stake currently held by Moshiri’s Blue Heaven Holdings. It was a surprising move and left those involved in the deal shocked. The club and potential investors had entered an exclusivity period spearheaded by the Texan billionaire Dan Friedkin last month that sought to end Moshiri’s long-running attempts to sell up. The British-Iranian businessman had previously agreed a deal with 777 Partners only for that takeover to collapse in May.. It is bel...

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

Real Madrid has reclaimed its title as the world’s most valuable football club brand, surpassing 2023’s winner Manchester City FC.   With its brand value up 16% to EUR 1.7 billion, Real Madrid’s return to the top is driven by record revenue gtowth resulting from continued accomplishments both on and off the pitch. With a brand strength index (BSI) score of 96.3/100, and equivalent AAA+ rating, Real Madrid also remains the world’s strongest football brand. This exceptional score also makes it one of the strongest brands in the world, even stronger than brands such as Google, Coca-Cola, Ferrari, and Rolex, according to Brand Finance. Real Madrid’s status as one of the world’s most recognisable and prestigious football clubs is underscored by its perfect scores across several metrics, including squad investment, stadia, and sponsorships. Behind Real Madrid ,  Manchester City FC  (brand value up 7% to EUR1.6 billion) is the second-most valuable football clu...

Manchester United’s pre-tax loss for the first 9 months of 2023/24 nearly tripled from £31m to £89m, despite revenue increasing by £39m (8%) from £481m to £520m and profit on player sales almost doubling from £16m to £31m. However, this was accompanied by operating expenses rising £79m (16%) to £587m, while net interest payable also increased by £32m from £20m to £52m. This is the third season in a row that Manchester United have reported a pre-tax loss in the first 9 months. Revenues and costs are not evenly phased during the financial year, but it is perhaps worth noting that the previous season’s £31m loss in this period ultimately became a £33m loss, so little change in Q4. It is a little concerning that the £89m loss in the first 9 months is by some distance the club’s worst for many years, up from the previous season’s £31m deficit. This would have been the case even without the £40m of exceptional charges. The revenue growth was driven by the return to the Champions League...

Chris Kirchner, who came close to buying two English football clubs, has been sentenced to 20 years in prison for fraud. Kirchner, 36, was sentenced at Fort Worth courthouse in Texas and also ordered to pay $65,415,938.12 in restitution. His sentence will be followed by three years of supervised release. The fall of Kirchner was sudden and spectacular. His deal to buy English Football League (EFL) club Derby County collapsed in June 2022, just a few months after he walked away from a similar deal to purchase Preston North End, another Championship club. He was previously named as the preferred bidder to take over Derby, who were then being run by the club’s administrators and was backed by then-manager Wayne Rooney.

Manchester United’s quarterly losses soared due to costs from the sale of a major stake in club to chemicals billionaire Sir Jim Ratcliffe. Man United reported a third-quarter net loss of more than £71mn in the three months ended March 31, up from £5.5mn a year earlier, while revenue decreased almost 20 per cent to £136mn, it said on Wednesday.    Lower revenue on back of no European matches was a factor. Wages still up 7%.   Interest costs over £1m a week, taking total interest since 2005 to £960m The sale of a 27.7 per cent voting stake to Ratcliffe’s Isle of Man entity in December saw the club incur exceptional costs of around £30mn for previously disclosed advisory and legal fees. Ratcliffe agreed to inject $300mn of fresh capital as part of the deal and United has moved to slash up to 250 jobs and reduce costs as part of a turnaround project.   

Former Wycombe owner Rob Couhig is poised to take over at Wycombe ending the chaos at the club under Dai Yongge:  https://www.theguardian.com/football/article/2024/jul/09/reading-takeover-former-wycombe-owner-rob-couhig-dai-yongge?CMP=Share_iOSApp_Other

In contrast to their stuttering form on the pitch, Bayern’s finances remain rock solid and have arguably never been stronger, as can be seen by a look at their latest published accounts for the 2022/23 season. Bayern’s CFO Michael Diederich described 2022/23 as “a challenging year”, but the club still managed to more than triple pre-tax profit from €17.1m to €54.5m, as recurring revenue rose €90m (14%) from €654m to a club record €744m and profit from player sales shot up from just €7m to €104m.   This was partially offset by sizeable growth in operating expenses, which climbed €153m (24%) from €642m to €795m. Bayern’s €54m pre-tax profit was the best in the Bundesliga in 2022/23, almost twice as much as the closest challenger, Freiburg €28m. Bayern’s €54.5m pre-tax profit in 2022/23 was their largest for four years, underlining the club’s full recovery from the pandemic.     Diederich emphasised the club's financial strategy, “Our mantra is always that, despit...

Swansea have been owned by an American consortium since July 2016, when Jason Levien and Stephen Kaplan bought a controlling interest in the club. They were joined in August 2020 by Jake Silverstein. Coleman, an investor in MLS team DC United (where Levien is also involved), was appointed Swansea’s chairman, having acquired “a significant shareholding” and taking over day-to-day responsibility for the running of the club, leading to the departure of chief executive Julian Winter. Only last month, there was another change to the ownership, when the club announced that Nigel Morris, a British businessman (with Welsh heritage), had made an investment into the club and joined the board of directors. Following this investment, the largest shareholders are now: Swansea LLC (Coleman, Kaplan, Levien and Silverstein) – 74.95% Nigel Morris – 12.59% Swansea City Supporters Trust – 9.42% Swansea have lost money in four of the five sets of accounts published in the C...

The Big Five league are the Premier League (England), La Liga (Spain), Bundesliga (Germany), Serie A (Italy) and Ligue 1 (France).  These leagues accounted for €19.6 bln revenue, which represented 56% of Europe’s €35.3 bln total in 2022/23. Their share has been higher in the past, e.g. 60% in 2019/20, but it’s still a very large slice of the European market. The Premier League remains the clear market leader, generating around €7.0 bln revenue, which is over €3 bln more than its closest challenger, the Bundesliga €3.8 bln.    Put another way, England’s top flight is over half a billion more than La Liga €3.5 bln and Serie A €2.9 bln combined. Much more revealing is the revenue growth over the last ten years, where the Premier League has comfortably outpaced the other leagues, rising by an incredible €3.1 bln from €3.9 bln to €7.0 bln. Much of the Premier League’s dominance is obviously due to its spectacular broadcasting deal, but it is far from being a “one trick p...

For the most part, their 17 years in the second tier Ipswich Town felt like they were running to stand still, as the financial disparity with the parachute clubs continued to widen.   In fact, things got worse before they got better, as the Tractor Boys were relegated in 2019 to League One, where they languished for four seasons before a dramatic change in their fortunes. The transformation was effected under the new owners, who purchased the club in April 2021 for a reported £40m. As a result, Ipswich Town became majority owned by the appropriately named Gamechanger 20 Limited, though the ultimate owner is a US investment firm, ORG. The new ownership group has certainly put its money where its mouth is to date, investing a lot into the squad and the club’s infrastructure. However, this looks like its part of a well thought-out plan, as shown by some astute recruitment. McKenna is the obvious jewel in the crown, but they also brought in former Bristol City chief executive, Mark...