The Political Economy of Football V2

Once again, there are whispers that owner Dejphon Chansiri is preparing Sheffield Wednesday for a sale, though there have been similar noises on many previous occasions with no resulting transaction. In 2022/23 Wednesday’s pre-tax loss was virtually unchanged at £7.2m, even though revenue increased by £3.0m (18%) from £16.3m to £19.3m, as this was offset by operating expenses also rising £3.0m (13%) from £23.7m to £26.7m.   Wednesday’s £7.2m loss was one of the highest in League One in 2022/23, though a lot better than Derby County £30.4m and Ipswich Town £18.2m. Although it’s never great to lose money, Wednesday’s losses in the last two years have been pretty small compared to their recent past and the best by far in the Chansiri era.   Wednesday lost a hefty £132m in the five seasons up to 2020/21, averaging £26m a year. Wednesday’s revenue will obviously have increased last season following promotion to the Championship, mainly thanks to the higher TV distribution, bu...

Jiventus made losses of €200m to June this year, but are seeking to bring losses under control and have cut the wage bill:  https://football-italia.net/juventus-increase-losses-cut-wage-bill/

Leeds United have announced plans to modernise Elland Road and increase the capacity from just under 38,000 to 53,000 to make it the seventh largest ground in the country:  https://www.theguardian.com/football/2024/sep/23/leeds-united-plan-to-redevelop-elland-road-into-53000-capacity-football-stadium The ground has been full for every home match played in the last six years.  There are also 26,000 supporters on the waiting list for season tickets. The plans would also see the ground modernised to meet UEFA Category 4 regulations for "elite" European stadia.

US businessman Dan Friedkin has agreed to buy English Premier League team Everton from current owner Farhad Moshiri, potentially ending years of uncertainty at one of football’s oldest clubs. The Friedkin Group, which also owns Italian football club AS Roma, and Everton said on Monday that it had reached an agreement to buy Moshiri’s majority stake in the Liverpool-based football club, subject to regulatory approval. “We are pleased to have reached an agreement to become custodians of this iconic football club,” said the group. “We look forward to providing stability to the club, and sharing our vision for its future.” Friedkin, who has a net worth of around $6bn according to Forbes, had been in negotiations to buy Everton earlier in the year, but those talks collapsed in July. The Friedkin Group, which made its fortune selling Toyota cars across the south of the US, instead became a lender to Everton’s new Bramley-Moore Dock stadium project. The financial details of the deal wer...

The Premier League is obviously the top of the tree, generating more than £6 bln in revenue, though the lion’s share is made by the Big Six, whose £3.5 bln accounts for 57% of the total.  The Premier League is the top dog (by far), but within this division, there is effectively a series of mini leagues with the following averages: big North West three £652m, rest of the Big Six £509m, aspirational clubs £227m, mid-table £177m and relegation area £147m. The gap to the Championship is substantial with the parachute clubs averaging £65m, but this is more than twice as much as their rivals. The big clubs in League One generated £20m, but most of them were £5m to £11m. The Championship had £747m revenue in 2022/23, which was just 12% of the Premier League’s £6.1 bln. This helps explain why so many clubs in this league push themselves to their financial limit in an attempt to secure promotion.    The five parachute clubs had £327m of revenue, while the other 19 clubs only g...

When the European Super League launched (briefly) in 2021, one of the main arguments for tearing down football’s status quo was that fans were being deprived of exciting matches between elite teams.  Evidence this week suggests that argument was built on sand. When Liverpool visited AC Milan in the opening game of this season’s Champions League, one of the main talking points was of empty seats inside the San Siro. While the Italian club had an average home attendance for league matches last season of just under 72,000, local estimates put Tuesday’s turnout at around 60,000. So what’s going on? Milan have started the season slowly — and lost the game against Liverpool 3-1. But more than 71,000 showed up a few days earlier to see the  Rossoneri  host Venezia in an Italian league match.  The main culprit for Tuesday night’s empty seats appears to be rising ticket prices — seats in the lower tier of the San Siro began at more than €120. The issue of rising costs f...

Donald Trump’s former lawyer Joe Tacopina is leading a consortium that wants to buy English League Two side Tranmere Rovers and replicate Wrexham’s climb up the leagues. The 58-year-old New Yorker has been in talks with Tranmere’s owners for at least six months and his proposed takeover is now only waiting for regulatory approval from the English Football League . Tacopina has become famous in the United States for defending a string of celebrity clients, including the late Michael Jackson, former New York Yankees star Alex Rodriguez and rapper A$AP Rocky, as well as being a regular commentator on legal matters on American television. But as well as his combative legal work in American courtrooms, Tacopina is well known in Italy for owning football teams. In 2011, he was part of the U.S. group that bought Roma, before selling up and moving on to Bologna in 2014. He sold them a year later and bought Venezia, where he took the side from the fourth to the second tier and was knighte...

Manchester United have published their financial results for the 2023/24 season, which even their most fervent supporters would admit was not a great success on the pitch.  Manchester United’s results were a mixed bag. On the plus side, revenue rose £14m (2%) from £648m to a new club record of £662m, and profit from player sales increased by £17m from £20m to £37m, their best result for 15 years. However, the good news ends there, as the pre-tax loss quadrupled, widening by £98m from £33m to £131m, the second worst in United’s history.    United’s £131m pre-tax loss was higher than any other club in the previous season’s Premier League, though ten others lost more than £50m that season, led by Aston Villa £120m, Tottenham £95m and Chelsea £90m. The revenue growth was driven by the return to the Champions League, which ed to an increase in broadcasting, up £13m (6%) from £209m to £222m, while match day was slightly up from £136m to £137m, though this was a new high for...

The Championship loss before tax has actually widened since fans returned to the stadium, rising from £217m in 2020/21 to £300m in 2022/23. Looking at the last decade, it is clear that this division bleeds money with total losses of £2.6 bln, including £1.5 bln in last five years alone.   To highlight the overall deterioration, operating losses were £2.8 bln in the last five years, compared to “only” £1.9 bln in the preceding 5-year period. Put another way, this was equivalent to £4.7 bln in the last decade, which is not exactly small change. Of course, many football clubs aim to offset operating losses with player trading, but there is little sign of any comfort here, as profits from player sales have fallen off a cliff in the Championship, decreasing from the record £322m in 2020/21 to just £113m in 2021/22 and £181m in 2022/23. Only two Championship clubs made more than £20m from player sales in 2022/23, namely Watford £59m and Middlesbrough £22m, while no fewer than 15 cl...

Manchester United’s full-year losses have risen after a tough season on the pitch and exceptional costs from Sir Jim Ratcliffe’s purchase of a minority stake in the club in December. Revenues increased 2.1 per cent to £661mn in the year ending on June 30, while operating expenses were £768.5mn, a 12.8 per cent rise. United also crashed out of the lucrative Champions League in the early stages and, despite winning the FA Cup, the men’s team slumped to eighth in the domestic table, its worst result since the Premier League began in 1992. Full-year net losses rose to £113mn from £28.7mn the previous year, partly because of higher spending on players and wages. The club also incurred £47.8mn of exceptional costs, primarily from the sale of a 27.7 stake to petrochemicals billionaire Ratcliffe. It expects to generate £650mn to £670mn in revenue this season and adjusted earnings of £145mn to £160mn, against a figure of £147mn in the year to the end of June. United expects to cut about...

Todd Boehly has been, for many outsiders, the face of the American consortium that paid £2.3billion ($3bn) to acquire Chelsea from sanctioned Russian oligarch Roman Abramovich in May 2022, but the ugly public fallout from his breakdown in relations with majority shareholders Clearlake Capital — and in particular the private equity firm’s co-founder Behdad Eghbali — has exposed that he is not the main driver of decision-making at Stamford Bridge. Clearlake largely flew under the radar during the Chelsea sale process, but its 61.5 per cent stake in BlueCo — the parent company set up by the consortium that also includes Ligue 1 club Strasbourg among its assets — meant its influence on the club’s strategy was baked into the original ownership arrangement. As its most visible and actively engaged representative at Stamford Bridge and Cobham, Eghbali has been the most powerful figure for the last 18 months. Boehly retains veto power as co-controlling owner; all major Chelsea decisions re...

Hong Kong prosecutors have told former Birmingham City Football Club owner Carson Yeung Ka-sing to sort out his finances in a month or face jail time after he missed a payment over his HK$338 million (US$43.4 million) debt resulting from his conviction in a money-laundering case 10 years ago. Yeung, 64, appeared in the High Court on Tuesday, six years after he was ordered to pay half of the HK$721 million linked to the high-profile money-laundering case. He was first convicted in 2014 and jailed for six years.

The biggest story at Chelsea is finally out in the open: a little more than two years after their £2.3billion ($3.02bn) takeover of the club from sanctioned Russian oligarch Roman Abramovich, majority shareholder Clearlake Capital’s marriage to co-owner Todd Boehly is in tatters. Rumblings of discontent have been audible behind the scenes for some time, but specific accusations of a breakdown in relations between Boehly and Clearlake co-founder Behdad Eghbali — the most visible and actively engaged member of Chelsea’s ownership consortium over the past 18 months — were always denied until now. Now, in the wake of a Bloomberg report last week that revealed Clearlake and Boehly are each exploring the ownership options, all parties have for the first time acknowledged the scale of the rift. People familiar with Boehly’s thinking say he considers his relationship with Clearlake and Eghbali to be “irreconcilable”, and others claim the two men barely speak to one anoth...

Wigan’s trials and tribulations started when the Hong Kong-based International Entertainment Corporation (IEC), a company that runs hotel and casino business in the Philippines, acquired the club in November 2018 for £22m (a price of £15.9m plus taking on £6.5m loans), ending 23 years of ownership by the Whelan family. In June 2020, ICE sold Wigan Athletic to the mysterious Hong Kong based Next Leader Fund (NLF) for £17.5m, giving ICE a £1.6m profit, plus the repayment of the £24.6m they had invested. However, the club was immediately put into administration, as a result of the new owners not putting any funds into the club. The club was kept going during administration by the sale of some of its young players, thus losing some of its prized “assets”, while the Supporters Club launched a fighting fund, raising more than £800,000, with former players joining fans in helping keep Wigan Athletic afloat. Wigan Athletic had been in the Premier League as recently as the 2021/13 season,...

Chelsea's co-owners are looking to buy each other out after a rift at board level:  https://www.bbc.co.uk/sport/football/articles/c4gz5jg81d0o The club's big spending has not been reflected in results.

How did Leicester City end up struggling so much with PSR? They had been the shining example for clubs outside of the traditional elite, when they shocked all and sundry by winning the Premier League in 2015/16, then reaching the quarter-finals of the Champions League the following season. However, this success came at a price, as chief executive Susan Whelan admitted, “Over recent years the club’s financial results have reflected necessary levels of investment in the playing squad that allowed Leicester City to compete effectively in the Premier League.” In fairness, this ambitious strategy very nearly worked, as Leicester then finished fifth in the Premier League two years in a row, which meant that they only just missed out on again qualifying for the lucrative Champions League. However, the 2022/23 season was very different, as “the regrettable results of the men’s team on the pitch” ultimately leading to relegation to the Championship, ending a nine-year spell in the top f...

Talks on the sale of Shrewsbury Town are ongoing.   The club made a £3m loss in 2022/23:  https://www.shropshirestar.com/sport/football/shrewsbury-town-fc/2024/09/04/shrewsbury-town-sale-talks-ongoing-says-ceo-liam-dooley/

Aston Villa earned €18.6m for qualifying for the Champions League, will get €2.1m for a draw & €700k for a draw in the group stages, €11m for getting into the last 16 etc. in addition they get a share of a €835m pot linked to prior performance & money put in by TNT. So why the high match ticket prices asks football finance guru Kieran Maguire? Fans are complaining generally about high ticket prices in the top flight.

Leicester City will avoid a points deduction after the Premier League suffered a serious blow in its enforcement of the Profitability and Sustainability Rules (PSR). The club won an appeal against a charge for an alleged breach and said the appeal board, made up of three very senior lawyers, had identified “flaws” in the Premier League rules. The club had been charged by the Premier League for breaching the PSR limit of £105million in losses over three years for the 2022-23 season, when they were relegated from the top flight. Leicester, who were promoted again last season, launched a legal challenge on the basis that the Premier League did not have jurisdiction after they had been relegated. The ruling of the appeal board means the league is unlikely to be able to take similar action against any other relegated club. The challenge was initially dismissed by an independent commission but an appeal board made up of the Rt Hon Sir Stanley Burnton, the Rt Hon Sir Maurice Kay a...

Arsenal’s £112m gross spend was their lowest since the 2018/19 season, which was not overly surprising, given that they had splashed out around half a billion pounds in the previous two seasons. The Gunners also sold well, as their £92m was the highest the club has made from player sales since 2017/18, including two Academy products, Emile Smith Rowe to Fulham and Eddie Nketiah to Crystal Palace, plus Aaron Ramsdale to Southampton. Their net spend was only £19m, which was firmly in the bottom half of the Premier League. You have to go back as far as 2012/13 for the last time it was this low. Aston Villa Villa spent big this summer, but also recouped a lot of money via player sales.The £183m gross spend was their second highest ever, only surpassed by £204m in 2021/22, and the fourth highest in the Premier League this summer. However, they set a new club record for sales with £172m, which was much more than the previous peak of £103m in 2021/22 that included the mega sale of J...

Taking the raw figures directly from Transfermarkt, we can see that reports of the demise of the Premier League, at least in terms of transfers, are a little over-stated, as the €2.4 bln outlay is the second highest in history for the summer window. That said, this was €0.4 bln (15%) less than last season’s €2.8 bln record. Although gross spend held up pretty well, the Premier League’s net spend this summer was its lowest since 2015/16 (though the January window is still to come). Chelsea had the highest gross transfer spend for the third year in a row, i.e. ever since the Clearlake Capital crew bought the club from Roman Abramovich, with a chunky £265m. The second highest spending club was Brighton, who used some of their gains from the last couple of years to fund a £235m outlay, while Manchester United again spent big with £219m. Perhaps unexpectedly, the two lowest gross spends this summer were Manchester City £25m and Liverpool £43m, while the next smallest were clubs faci...