The Political Economy of Football V2

Wrexham co-owners Ryan Reynolds and Rob McElhenney have welcomed New York-based Allyn family as new minority investors in the League One club. In a joint statement, the Hollywood actor duo said: “Wrexham has earned the world’s attention and we are focused on bringing on board world-class partners to help with the next phase of our growth. Based in Skaneateles, New York, the Allyns made their fortune through Welch Allyn, the global manufacturer of medical equipment. By selling an equity stake to the Allyn family, Reynolds and McElhenney have brought in welcome funds at a time when the ambitious League One club is embarking on several major infrastructure projects as well as looking to maintain the upwards trajectory that has seen Phil Parkinson’s side win back-to-back promotions. A state-of-the-art Kop stand is planned that will partly be funded by public money, Wrexham having last week appointed a new architect in Populous with a view to the new structure being open in...

Inter Milan have seen their losses reduce by €50m to €36m.   Revenue has hit a record level not far short of half a billion pounds:  https://www.insideworldfootball.com/2024/10/29/ac-milan-closes-1023-24-finances-e36m-loss-e473m-turnover/

Schalke 04 are carrying a large debt and need to get back to the Bundesliga.  They lost €600k over six months:  https://sports.yahoo.com/schalke-04-release-financial-figures-121500461.html

In a terse statement Manchester United have announced that Erik ten Hag has been sacked as manager. Manchester United had paid out £71.5m in redundancy payments for managers, executives and staff since the year SAF retired until 30 June 2024. Ten Hag was the fifth permanent manager to attempt to right the ship at Old Trafford following Sir Alex Ferguson’s retirement in the summer of 2013. The Dutchman leaves with a reasonable claim of being a successful United manager, given he won silverware, something 14 of his predecessors did not do. In some ways, his tenure underlines how hard it is for anyone to live up to the standards set by Ferguson — who, in a pointed coincidence, recently had his ambassadorial position ended by the club — and, before him, Sir Matt Busby. No club in England has won more top-flight titles than United’s 20, but 18 were won by either Busby (five) or Ferguson (13). Those two also account for 33 of United’s 44 major trophies and, in total, 20 out of ...

A modern Subbuteo set doesn't just need accountants, it also needs lawyers.   Here are some of the recent key legal cases involving football clubs with the law firms involved in brackets: Manchester City challenged the Premier League rules on sponsorship which were found to be unlawful (David Pannick KC who reportedly charges £5k an hour, two other KCs, three additional barristers and law firm Freshfields.   The Premier League's three KCs led by Sports Silk of the Year Adam Lewis KC and four more barristers instructed by Slaughter and May). The European Court of Justice ruled that Fifa's transfer regulations were unlawful after a challenge by former French international Lassana Diarra. A joint action by players' union Fifpro and European Leagues claiming that Fifa's decision to launch a revised version of the Club World Cup had put player health at risk and is in violation of EU law. Leicester, Manchester City, Nottingham Forest and Everton have faced action for all...

 Barcelona actually reported a pre-tax loss of €129m in  2023/24, compared to the prior year’s huge €471m profit, which represented an adverse swing of €600m. However, this is largely driven by the movement in economic levers, which delivered an €800m profit in 2022/23, but €141m of this gain was impaired last season. This alone led to a €941m deterioration in the bottom line. As a reminder, Barcelona had pulled these famous levers (“ palancas ”) to raise funds, albeit at the expense of sacrificing income in the future. Without the benefit of the financial levers, Barcelona would have posted a €459m pre-tax loss in the last three years, instead of the reported €466m profit In terms of normal business, revenue fell €43m (5%) from €806m to €763m, which was actually a pretty good performance, as they had to contend with a decrease of more than €100m following the temporary relocation of the men’s first team to the Olympic Stadium while the Camp Nou is being redeveloped. T...

The Friedkin Group (TFG) has already started to look at what life will be like at Everton’s new stadium at Bramley-Moore Dock next season. To be frank, TFG would not be interested in buying the Premier League side if they were not moving into a new, 53,000-seat venue but Everton’s waterfront property will only transform the club’s fortunes if their owner can really maximise its benefits. And that means turning it into an asset that is used every day, not once a fortnight. With that in mind, TFG is looking to increase the club’s footprint at the docklands site, most likely by buying the land around Nelson Dock, which is immediately to the south of Bramley-Moore Dock, to create more space for the type of entertainment and leisure offering any venue-operator must provide these days to make the sums add up. There are also whispers — and that is all they are at present — that TFG might want to increase the stadium’s capacity at some point, which will not be easy giv...

Some more detail emerged this week about who is joining Donald Trump’s former lawyer Joe Tacopina in his attempt to buy Tranmere Rovers. As  The Athletic  reported last month, Team Tacopina has been in talks with the League Two side’s majority owners Mark and Nicola Palios for more than six months and his proposed takeover is being assessed by the English Football League. In their report, they explained that the 58-year-old New Yorker wants “to harness the power of his celebrity contacts” to propel Tranmere and SPAL, the Italian third-tier team he owns, up their leagues, and, if the takeover is approved, we should expect a Welcome to Wrexham-style documentary. Last weekend, the showbiz editor of British newspaper The Sun on Sunday revealed the name of the first of those “celebrity contacts”, although in this case the relationship is also lawyer/client as Tacopina is defending American rapper A$AP Rocky against a charge that he fired a gun at a former friend in Los Angele...

Reading’s holding company, Renhe Sports Management Co Ltd, was served this week with a winding-up petition by Walker Morris, the law firm the club used for several years until its top sports lawyer, David Hinchliffe, left last month to join a new firm, Wiggins, taking the Reading account with him. With Hinchliffe no longer on the payroll, Walker Morris took the not-unreasonable decision that it might be time to call in Reading’s sizeable debt to the firm. Reading — who have now been hit by four winding-up petitions since 2020 — declined to comment. For those new to the boxset that is Reading’s takeover, Chinese businessman Dai Yongge bought the club in May 2017, shortly after that play-off final defeat. His reign in Royal Berkshire has been disastrous — for him and the club — with Reading’s fans in open revolt for over a year. Dai has been trying to sell the club ever since they were relegated to League One in 2023 but received no concrete offer from a credible buyer unt...

Arsenal have started to explore how they could upgrade and expand the Emirates Stadium to try to catch up with their rivals’ match-day income. The ground’s capacity of about 60,000 was the biggest in London when they moved from Highbury in 2006, but its size, catering and corporate facilities have since been surpassed by those of Tottenham Hotspur, who earn close to £6million from every match at their 62,850-capacity venue. Without a renovation, Arsenal cannot significantly increase their match-day income. They earned £102.6million from games in 2022-23, which is estimated by the Arsenal Supporters’ Trust to increase to more than £120million in the next accounts because of the team reaching the knockout stage of the Champions League last season. Arsenal’s matches regularly sell out and they realise that they need to keep pace with the huge demand for tickets, as well as adapt to supporters’ changing catering and corporate needs, for example by improving internet access. It ...

Juventus’ pre-tax loss significantly increased in 2023/24 from €117m to €196m (€199m after tax), which the club said was “heavily influenced by the non-participation in UEFA competitions”, as well as €36m of non-recurring costs.  Revenue fell €89m (19%) from €461m to €372m, while profit on player sales more than halved from €47m to €22m. The main driver for the steep revenue decrease was broadcasting, which dropped €57m (37%) from €157m to €100m. entirely due to the lack of European TV money. The other revenue streams were also impacted by not playing in Europe, as ticket sales fell €4m (6%) from €62m to €58m, while commercial decreased €16m (7%) from €219m to €203m. Unsurprisingly, Juventus’ €196m pre-tax loss was the worst result in Serie A last season: Not all clubs have published their accounts for last season, but for some perspective it was almost twice as much as the largest loss in 2022/23, namely Roma’s €99m. The last time that Juventus posted a profit was back in ...

French billionaire and LVMH chairman Bernard Arnault has partnered with Red Bull to enter exclusive negotiations over buying Paris FC. Agache, the holding company of France’s richest man Arnault, is in discussions over purchasing a majority stake in the French club. Red Bull is advising Agache and is also in negotiations to buy a minority stake. Paris FC’s men’s side are top of Ligue 2 and last competed in Ligue 1 in 1979. The women’s team are fourth in Division One Feminine and reached the group stages of last season’s Champions League. The club was initially part of a merger when Paris Saint-Germain formed in 1970, but they split from the club two years later and re-established themselves as a separate entity. PSG are the only club from the French capital competing in Ligue 1 — in contrast, London has seven top-flight men’s sides this season and Madrid five. Since 2020, Paris FC have been 20 per cent owned by by the Kingdom of Bahrain, who also act as the club’s main...

Football finance guru Kieran Maguire takes an in depth look at growing American ownership in the Premier League (and other leagues) with a particular focus on Manchester United.  He discusses why investment in England is so attractive, noting that buying a club combines a mature (men's football) and a start up (women's football):  https://theconversation.com/why-america-is-buying-up-the-premier-league-and-what-it-means-for-the-future-of-soccer-240695

Chelsea have an arrangement unique in football: Chelsea Pitch Owners (CPO), a supporters’ group which holds the freehold to the land on which Stamford Bridge, the club’s home stadium since they were founded in 1905, sits. The creation of CPO is part of the bigger story of how Chelsea almost lost their ground. For the uninitiated, here’s a brief summary: in 1992, at the end of a long, attritional battle with property developers who wanted to evict the club from a hugely valuable plot of land in south-west London, Chelsea’s chairman at the time, Ken Bates, and his lawyer Mark Taylor set out to devise a novel plan to ensure it could never happen again. Bates’ initial idea was to divide up the freehold for the pitch into 70,000 squares and sell them to supporters for £100 each, but that ran into problems with VAT (a tax on nearly all goods bought and sold within the European Union), land registry and corporation tax. Bates and Taylor realised the same result could be achieved by esta...

Shareholder loans are money loaned to a club by their shareholders. They amount to a form of funding, a means for owners to inject cash into the football project without seeking equity in return. Typically these are long-term arrangements, often free of interest payments.   Following the recent legal case involving Manchester City and the Premier League, they are coming under more scrutiny in terms of APT rules. And clubs are certainly fond of them. Fourteen of the 20 Premier League teams in the 2022-23 season had shareholder loans recorded in their most recent set of accounts and City’s legal team were only too happy to highlight the extent of their use during this case. It was cited that £1.5billion ($1.96bn) out of £4bn total borrowings across the division — 37 per cent — were through shareholder loans. “The main motivation (behind shareholder loans) is that it’s an easier mechanism for an owner getting their money back,” says Chris Weatherspoon, an accountant and finan...

Ajax supporters could probably find some choice words to describe the club’s 2023/24 season, though the board opted for “disappointing” in the recently published annual report. This was completely understandable, given that Ajax slumped to fifth place in the Eredivisie, while “another sporting low point” came when they crashed out to amateur club USV Hercules in the second round of the KNVB Cup. Despite only competing in the Europa League, they still failed to get out of the group, thus dropping down to the Conference League, where they were eliminated by Aston Villa in the last 16. As the club pointed out, financial prospects are often driven by sporting results, so the lack of success last season has also been reflected in the bottom line.   As a result, Ajax went from an impressive €55m pre-tax profit to a €13m loss in 2023/24, a massive €68m deterioration. This was largely due to revenue falling by €44m (23%) from €196m to €152m, while profit from player sales decreased b...

As part of a shake-up of the domestic game in Wales, plans are afoot for Cardiff, Swansea, Wrexham and Newport to enter the Welsh League Cup, alongside the current Cymru Premier (Welsh Premier League) clubs. The winners, if the proposal is agreed by the Football Association (FA), Football Association of Wales (FAW) and UEFA, the European game’s governing body, would compete at continental level in the following season’s Conference League. For Phil Parkinson, the Wrexham manager, the prospect is an exciting one. “To bring European football back to Wrexham would be amazing,” he says. “Great to test yourself against teams from different countries around Europe. Be fantastic to have that opportunity.” Speak to those pushing for change and there’s a sense it could be given the go-ahead before the end of this calendar year, meaning Cardiff, Swansea, Wrexham and Newport would enter next season’s Welsh League Cup, and its winners would enter the 2026-27  Conference League, UEFA’s ...

Bournemouth owner Bill Foley is in talks to buy Portuguese club Moreirense.  Foley, 79, is the managing partner of Black Knight Football Club, the group of investors who bought Bournemouth in December 2022 and then acquired a 30 per cent stake in French side Lorient a month later. Black Knight then bought Auckland, an Australian Professional Leagues (APL) expansion franchise in New Zealand’s largest city before buying a minority stake in Scottish Premiership side Hibernian. The group have been evaluating the option of buying a Portuguese club and had been in talks with Lisbon-based Casa Pia, but conversations with their owner Robert Platek broke down. Foley explained to The Athletic why he does not mind saying that Bournemouth are at the top of the Black Knight tree, an admission that has caused some annoyance in France.   “I’m just being honest,” he said. “Many players in Ligue 1 want to move to the Premier League, and we want to give them that opportunity. ...

The issue with Monday afternoon’s verdict from City’s legal challenge to the Premier League over associated party transaction (APT) rules is that there was room for both sides to claim victory. Even trained legal professionals could not reach a consensus on who had got the better of things, if anybody. On Monday, a Premier League statement said that City were “unsuccessful in the majority of its challenge. Significantly, the tribunal determined that the APT rules are necessary, pursued a legitimate objective and were put in place to ensure that the profitability and sustainability rules (PSR) are effective, thereby supporting and delivering sporting integrity and sustainability in the Premier League”. City had released their own statement highlighting the five significant blows they had landed on the league, and actually provided a direct link to page 164 of the independent panel’s document, which summarises the independent panel’s findings to back up their stance — although it is ...

A legal; ruling is seen to favour Manchester City over the Premier League, although the league also sees it as a victory losing on just some points of detail and says it will continue with business as usual:  https://www.premierleague.com/news/4144828 The key facts are: ·          Rules deemed unlawful because they did not take into consideration interest-free loans from shareholders to clubs ·          Likely change in the regulations could lead to City striking more lucrative deals and seeking damages from the Premier League ·          Clubs with high levels of borrowing now in danger of breaching Profitability and Sustainability Rules ·          Arsenal, City’s title rivals, have borrowing of more than £200million made up entirely of shareholder loans ·          Premier League’s sta...

From a financial perspective, 2023/24 was “an exceptionally successful year” for Borussia Dortmund, as pre-tax profit more than quadrupled from €11m to €49m (€44m after tax). Revenue shot up €95m (22%) from €425m to €520m, a new club record and the first time that Dortmund have broken through the €500m barrier. This was further boosted by profit from player sales also increasing by €25m (35%) from €73m to €98m. This was partially offset by significant growth in operating expenses, which rose €92m (19%) to €572m. However, interest swung from €6m payable to €3m receivable. Broadcasting was the star of the show, rising €49m (31%) from €157m to €206m, though commercial also significantly increased by €33m (15%) from €217m to €250m. Match operations was up €9m (21%) from €44m to €53m. Unlike many other leading leagues, German clubs very largely operate sustainably with no fewer than 13 of the 18 Bundesliga clubs posting a profit. The losses at four of the other five clubs were less ...

Newcastle United hope to reach a “decision stage” in their long-term stadium plans by “early” next year after completing the first phase of their feasibility study into expanding St James’ Park.  The club commissioned an in-depth report into the possibilities of extending the present ground — which is the preferred option of many inside the club, including Eddie Howe, the head coach — and alternative sites for a new purpose-built stadium have also been explored. While no final decision has been reached, Newcastle insist they are “several steps forward” in understanding what is deliverable and, although there are opportunities associated with staying at St James’, there are also “several risks”. Expanding St James’ Park’s capacity beyond its present 52,300 is expected to cost hundreds of millions. The East Stand has listed buildings directly behind it on Leazes Terrace, while the Gallowgate End also backs on to Strawberry Place, a through-road, and has an underground line below ...