The Political Economy of Football V2

 The key debate around either refurbishing Old Trafford or building a state-of-the-art, 100,000-seat arena on a site adjacent to Manchester United's 114-year-old home continues. Some insiders believe Ratcliffe and his Ineos operation are leaning towards a brand new home, undaunted by the challenge it represents at a time when Ineos is also building the biggest petrochemical plant in Europe for 30 years. Ineos has had to raise close to £3billion to finance Project One in Antwerp, which is roughly a billion more than it will need to fund Old Trafford, even if it does go for the more expensive option. The plan, as things stand, is for the task force chaired by Lord Coe to return in the new year with a feasibility study. Their focus is on “the art of the possible”, with the task force exploring both options within the broader regeneration project. Assisting them at this stage are Foster & Partners, the British firm of architects already working on the £50million regeneration ...

Exeter City's manager sets out the case to changes to the FA Cup:  https://fanbanter.co.uk/exeter-manager-gary-caldwell-explains-hes-saddened-by-changes-made-to-the-fa-cup/ As a supporter of a League One club myself, I did not see why replays had to be scrapped in the first or second rounds as leading clubs are not involved then. However, Í am suspicious of the argument that a FA Cup run or even a replay can 'save' a lower league or non-league club.   It may benefit particular clubs at particular times, but it's a lottery.   It is not a systematic source of revenue. The Cup remains the FA's biggest single source of revenue.   However, there is always the risk of the bigger clubs pulling out and further devaluing the competition.   I am finding the new Champions League format (and Europa League and Conference), if a bit baffling, also more exciting.   

For all the talk of a Premier League engulfed by civil war, business is still ticking along nicely, argue Financial Times writers. ‘Last week the league presented clubs with an update on revenue projections for the coming cycle, which runs from 2025-28. According to people with knowledge of the matter, income is expected to rise by 17 per cent during that period, boosted largely by the increased prices fetched for overseas TV rights. Domestic rights may have flatlined, but international interest is still on the up. The contrast with other European leagues is stark. On the continent, domestic TV is sliding, while international interest pales in comparison to England’s top tier. Broadcasters have diverted their spending to Uefa competitions instead. Italy’s Serie A recently renewed its domestic deal at a reduced rate, while French TV rights for Ligue 1 have fallen sharply. Olympique Lyonnais’ recent quarterly numbers showed that revenue from domestic TV had dropped 61 per cent year...

Since acquiring a 27.7 per cent stake in United, which essentially led to him claiming management control of the club’s football and business operations, Ratcliffe has pursued revolution, rather than evolution, at Old Trafford. Almost the entirety of the club’s senior management team has been turfed out or voluntarily departed, with turnovers of chief executives, the sponsorship team, legal operations, finance and, most notably, the football executive, where a new sporting director, technical director and recruitment lead arrived in the summer months. Much of this change was gleefully received by a United fanbase exasperated by the club’s decade of waste and underperformance following the retirement of Sir Alex Ferguson in 2013. Things could hardly get worse, appeared to be the consensus.   Besides, Ratcliffe provided some sincere cause for optimism. Any gesture, however symbolic, would contrast positively with how the Glazer family had run the club. During their tenure, intere...

Fans of the four Premier League clubs on Merseyside and in Manchester will put rivalries aside to show their support for the Football Supporters’ Association’s #StopExploitingLoyalty campaign. United and Everton fans will come together to protest outside Old Trafford before Sunday’s 1.30pm kick-off . Liverpool and City supporters will do likewise prior to the 4pm kick-off at Anfield with banners being displayed both inside and outside the grounds. Organisers say it is a response to rising ticket prices and the erosion of concessionary rates. Earlier this week it emerged that United were removing discounted rates for children and seniors with some tickets increasing from £25 to £66. There is also growing concern that some clubs are targeting the £30 cap on away tickets — despite the Premier League’s broadcast and commercial revenue rising by 17 per cent to £12.25billion for 2025 t0 2028. A spokesman for United fan group FC58 says: “The rivalry between these four clubs has be...

Crystal Palace part owner John Textor says he is closer to an IPO for  his multi-club group Eagle Football Holdings:  https://uk.finance.yahoo.com/news/crystal-palace-owner-raises-40m-171429843.html

Chelsea are nearly a third of the way through the Premier League season and their chances of qualifying for the Champions League look promising. Under the Swiss model, Chelsea would have been guaranteed four home games against high-quality opposition,” Kieran Maguire, a football finance expert and co-host of the  Price of Football  podcast, tells  The Athletic . “We have seen how Aston Villa have approached that in terms of the prices they are selling match tickets. “There is no reason why Chelsea, even though they have a limited capacity at Stamford Bridge, can’t be averaging £60 to £70 a ticket. That is £3million a match from matchday alone. You would then have your sponsorship bonuses thrown in on top.” “It is very beneficial to a club. Finishing in the top four is more important than winning the Premier League.” When their latest set of accounts become available, the price of not playing European football in 2023-24 should be laid...

PSV Eindhoven celebrated their 110th anniversary in some style in 2023/24, as they won their 25th league title, while they also reached the last 16 of the Champions League and won the Johan Cruyff Shield, though they were eliminated in the quarter-finals of the KNVB Cup by Feyenoord. The club said that the 2023/24 season was “not only a sporting success, but also a financial success”, as they managed to post a €13.2m pre-tax profit (€9.7m after tax), though this was a little lower than the previous year’s €17.5m. This was driven by a huge new club record for revenue, which shot up €51.5m (51%) from €100.6m to €152.1m, though this was partly offset by profit from player sales halving from €61.1m to €31.3m. PSV’s revenue growth was on the back of doing well in Europe, which led to a steep increase in broadcasting income: this more than doubled from €28.5m to €62.3m. However, there was also good growth in match day, up €9.0m (37%) from €24.7m to €33.7m, and commercial, up €8.6m (18%...

Football finance guru Kieran Maguire reports that Manchester United have published detailed accounts and some figures not mentioned yesterday include: Cost of squad goes through the £1 billion total for the first time £1,028,947. Club are owed £94 million by other clubs for player sale instalments. MUFC owe over £413 million in instalments for player purchases.   Total borrowings are £714 million. Cost of sacking ETH £10.4m for Manchester United.   Cost of recruiting new manager Amorim £11m Total cost £21.4m

Almost all Premier League clubs are now American owned and some foreign investors have seen the Championship as a cheaper route to the riches of the top flight.   In time the franchise owners will question whether their investments can be relegated which does not happen in the US. Charlton fans, admittedly among football's leading moaners, sometimes assert that League One is a pub or crap league, so it was interesting to read in this week's  Football League Paper  what two newly promoted managers think. Gareth Ainsworth forged Wycombe Wanderers into a League One force and indeed, somewhat to my surprise, they are currently chairing the division. Ainsworth has now taken on the unenviable task of reviving Shropshire's finest and he made a first rate start against moneybags club Birmingham City on Saturday. Ainsworth says: 'Over the years, this division has probably run away from the smaller clubs. League One has got stronger and stronger over the years.   Som...

Turning round Manchester United is posing some financial challenges even as a cull of staff takes place. United fans may need to be patient:  https://finance.yahoo.com/news/man-utd-revenue-falls-champions-150243508.html

Derby County 2023/24 accounts highlights for promotion winning year, courtesy Kieran Maguire.  Revenue £19.4m down 5%. Wages up 28 per cent at £22m.  Wages £113 for every £100 revenue, not so unusual in League One or Championship. Loss pre player sales was £18.8m, up 48%.   Player sale profits £4.6m up 193%. Pre- tax loss £14.2m down 31%.  Player purchases £99k. Player sales £6.1m.  Owner loans £47.9m (owner hopes to bring in new investors). More here:  https://www.bbc.co.uk/sport/football/articles/cvg4r5l4gkzo

As the football governance bill goes through Parliament, is this one of the worst governance failures in modern football? https://www.terraceedition.com/home-haute/the-stand-that-hurt-the-town-sixfields-missing-millions-tom-reed-northampton

The 2023/24 Hearts' financial results were adversely impacted by failing to get beyond the play off round of the Europa Conference, where they were eliminated by Greek team PAOK.   Hearts’ loss last season was their first for nine years, when they won the Championship (Scotland’s second tier). So they have been profitable in eight of the last ten seasons, which is pretty good going in the cutthroat world of football. Looking at Scotland’s leading clubs over the last five years, we can see that Hearts have broken even, which places them between Celtic, who made £53m profit, and Rangers, who posted £65m losses. Aberdeen, who are arguably Hearts’ closest equivalent, had £7m of losses in this period. Hearts figures have “benefited enormously” from exceptional items, including £5.5m of donations in 2023/24, split between benefactors £4.0m and the Foundation of Hearts (FOH) £1.5m. In stark contrast, Rangers booked £3.4m of charges, covering legal costs and contractual settlement...

Hours after Olympique Lyonnais was barred from signing players and provisionally demoted to the second tier of French football due to its financial difficulties, owner John Textor sought to reassure fans that all was well.  “This is not a club in trouble”, the American entrepreneur said at a press conference, pointing to a range of planned fundraising initiatives from across his network of football clubs. “Whatever was broken about our finances has already been fixed, and we don’t need help,” Textor insisted, as one of the biggest clubs in France was embroiled in a fight with national regulators that is testing the limits of the multiclub model now pervasive across football. More than 300 teams globally, including 13 per cent of those overseen by Uefa, are now part of such multiclub groups, according to figures from the organisation, which governs the sport in Europe. There were fewer than 40 in 2012. The multiclub template has been adopted by owners including by Abu Dhabi-owned ...

A takeover of Bristol Rovers by a Kuwaiti businessman has been completed after a transition from the former Jordanian ownership:  https://www.bbc.co.uk/sport/football/articles/c30pyg3e69ro I think that Rovers were the only team in the EFL in Jordanian ownership and off the top of my head I can't think of another from Kuwait.   Foreign ownership is consolidating in the lower divisions.

The top Premier League clubs will get even richer over the next three seasons after it was confirmed that the value of overseas TV rights has far outstripped domestic deals. Overseas deals from 2025 to 2028 will bring in £6.5billion, a 23 per cent rise on 2022 to 2025. That will result in the Premier League’s total income, including £5million from domestic rights and commercial income, reaching £12.25billion, a 17 per cent uplift. The revenue figure was confirmed at the Premier League shareholders’ meeting, during which clubs signed off another increased-value overseas TV deal for countries in southeast Asia and the Pacific region. It should result in the club that finishes top earning about £25million more a season, with the distribution then on a sliding scale down to an extra £9million for the club finishing bottom, meaning that in TV money alone the champions could earn £200million. Under a change to the financial distribution rules brought into the Premier League in 2019, ...

 Manchester City tasted defeat in the civil war that has engulfed the Premier League after clubs approved changes to sponsorship rules. To rub salt in City’s wounds, their former chief operating officer Omar Berrada, who is now the Manchester United chief executive, made the first critical interjection backing the Premier League over Associated Party Transactions (APTs). Chelsea, who had previously supported City over APTs, were also among the 16 clubs to vote in favour of the Premier League proposal. Only Aston Villa, Newcastle United and Nottingham Forest joined City in voting against. City had argued that no vote should take place, claiming the APT rules were void and unlawful after a tribunal decision on their legal challenge. Rival clubs are now waiting to see whether City carry out their threat to launch further legal action and cause more ructions in the league. To promote competitive balance in the league, the APT rules put a limit on how much money companies a...

Congratulations to Aberdeen FC on being transparent about their finances and reporting a record revenue up by 49 per cent:  https://www.afc.co.uk/2024/11/23/aberdeen-fc-reveals-record-breaking-turnover-in-latest-accounts/ As they claim, they look like a we ll-run, financially sustainable club.   A somewhat different story in my ancestral city of Inverness.

Sadly, Dumbarton FC have entered administration:  https://www.consultancy.uk/news/38856/dumbarton-football-club-brings-in-quantuma-for-administration Police are investigating suspected fraud at the club:  https://www.heraldscotland.com/sport/24737449.get-rich-quick-pipe-dream-caused-sad-collapse-dumbarton/ Given the troubles at Inverness Caledonian Thistle, there are concerns about the state of Scottish football below the top flight.

Morecambe are bottom of League Two, the fourth and last tier of English league football.  Never the biggest of EFL clubs, and rather fittingly nicknamed the Shrimps as a nod to the local fishing industry on the Lancashire coast in the north-west of England, Morecambe have been particularly hamstrung in recent years by their majority owners’ inability — or refusal — to fund them adequately. This happens, unfortunately, but normally owners suck it up, sell the club and move on. The Bond Group, however, has spent the past 26 months trying to sell Morecambe to people who clearly cannot afford the inflated price the Bond Group wants. For much of that period, the intended buyer was Sarbjot Johal, a 21-year-old from Birmingham, in the English Midlands, who claims to have made millions in soft drinks, property and crypto. The Bond Group, where the sole director is a businessman called Jason Whittingham, eventually gave up on Johal ever being able to convince the EFL he had the m...

An example of some bad business in football: the 2016 takeover of Swansea City (Dinas Abertawe) by a group of U.S. investors led by Steve Kaplan, who owns a minority stake in the NBA’s Memphis Grizzlies, and Jason Levien, the co-chairman and CEO of MLS side D.C. United. Swansea were nearing the end of their fifth consecutive season in the Premier League when Kaplan and Levien bought a majority stake in the Welsh club at a valuation of £110million. Unfortunately, they were relegated to the Championship in 2018 and have haemorrhaged money in that division ever since. But now — for Kaplan and Levien, at least — the bleeding has stopped, as they have sold their 65 per cent stake in Swansea to three investors they first introduced to the club last year: Andy Coleman, Brett Cravatt and Nigel Morris. A shareholder at D.C. United, Coleman has been Swansea’s chairman since May 2023, while private-equity firm boss Cravatt and Welsh-American fintech entrepreneur Morris have be...

Chinese businessman Dai Yongge bought Reading in May 2017, the same month they narrowly failed to achieve a return to the Premier League via the play-offs. Since then, however, the club have been hit with points deductions for missing payments, sold most of their best players, downgraded their women’s team, lost staff and been relegated to League One.  Rob Couhig has advised clients in thousands of legal disputes, argued cases in hundreds of courtrooms, bought and sold businesses, run a successful baseball team and taken former non-Leaguers Wycombe Wanderers to the second-tier Championship but he has never experienced anything like his attempt to buy Reading. After months of difficult negotiations, the 75-year-old American’s takeover of the club in League One, the third division of English football, collapsed at the final hurdle in September, without any explanation from Reading or their Chinese owner Dai Yongge. Since then, Couhig has ...

Alan Sugar acquired Tottenham Hotspur in 1991.  He was born in a council house in east London, left school at 16 and sold car aerials out of a van. He called that business Amstrad, as in Alan Michael Sugar Trading. By the mid-1980s, Amstrad was listed on the London Stock Exchange and Sugar had moved on to a full range of consumer electronics. In 1991, he beat media baron and infamous fraudster Robert Maxwell in a takeover battle for Spurs. Sugar’s time in charge is best remembered for his rows with managers, flashy signings and observation that money goes through clubs like prune juice, “in one end and out the other”. But he was instrumental in making sure Sky Sports got the media rights to the “new” league, which was handy as Amstrad made satellite dishes. In 2001, he sold a chunk of Spurs to British investment firm ENIC   with the rest of his shares going in the same direction six years later. They were the first club to test their worth on the stock market, are also s...

When the top 22 teams broke away from the Football League to form the Premier League, 21 were English-owned (Wimbledon was the exception).  Now, just over three decades later, there are only three Premier League clubs that are entirely English-owned, with one more that is majority English-owned, two run by Englishmen with minority stakes and one still owned, for a few weeks at least, by a Monaco-based, Anglo-Iranian whose eight-year spell as custodian was generously supported by his Russian-Uzbek patron. That last one — Everton — should become the 10th American majority-owned club in the league by Christmas, while three of those other clubs are on the market, to one extent or another. It is entirely possible that by next November, the 1992 equation will have flipped, with just one English flagship in very international waters. Brentford Brentford’s no-longer secret benefactor Matthew Benham is, in some ways, a throwback to an earlier era. But in others ...

An extraordinary general meeting agreed this month that majority control  of Norwich City will pass to Michael Attanasio’s Norfolk Holdings group from Delia Smith and Michael Wynn Jones after their 28 years at the helm. Attanasio, the owner of American baseball team Milwaukee Brewers, first purchased a minority 22% stake from former director Michael Foulger in September 2022, before increasing his shareholder to 40% in April 2024. From March 2025 Attanasio will convert his loans into equity, giving him 85% of the football club. Smith and her husband will retain 10%, while the remaining 5% will be owned by independent shareholders, including the supporters’ group, The Canaries Trust. The board emphasised that this transaction “involved no payment to Delia and Michael”, thus “securing the long-term financial security of the club and an effective and positive transition”. Clearly, Norwich City owe a huge debt of gratitude to the former owners, so it feels only right that they ha...

 Mike Garlick, the former chairman of Burnley, in February embarked on a fresh footballing challenge — to help lead Antequera up the Spanish league ladder, just as he had previously supported Sean Dyche in achieving the Lancashire club’s longest spell of top-flight tenancy since the 1960s. “I didn’t want to buy a big club,” Garlick says, sitting in the reception of the hotel across the road from the stadium. “The most enjoyable thing about Burnley wasn’t the day you won something or got promotion but the actual journey — and I wanted a journey. I looked at Antequera and thought, ‘We could go on a journey here.’ ” Garlick, who stepped down as Burnley chairman after the club’s purchase by ALK Capital in December 2020 and left the board altogether last year, adds: “I knew I’d miss the buzz of football and I got offered a lot of different clubs in England but I’m a Burnley fan so I wasn’t that keen. “We already had a house in Spain, near Marbella, and my wife speaks Spanish ...

With the Trump administration in the US threatening punitive tariffs against UK exports (the US is the UK’s biggest single country market at 22 per cent of exports), geopolitics become even more important in top flight football. The UK government is attempting to facilitate investment into one of the British economy’s most successful exports: the Premier League, which broadcasts to 189 of the 193 United Nations member states. In May, the Premier League said 1.87billion people follow the division worldwide and 900million homes globally are able to watch Premier League football. Little wonder, therefore, that North American investors have taken a liking to a product that attracts $450m (£355m) per season for the U.S. media rights alone from NBC. Only 20 years ago, there were no majority American owners in the Premier League. Now nine of the top flight’s 20 teams are majority-owned by U.S. investors: Manchester United, Arsenal, Aston Villa, Liverpool, Chel...

The Athletic has taken a look at the biggest investments in Premier League clubs, including subsequent payments.   They have used data from the Swiss Ramble and Kieran Maguire among others. It doesn’t cost much to this excellent online publication to get the full sp, but here are the top five: 1.        Chelsea (£2.65 bn) 2.        Manchester City (£1.5bn) 3.        Arsenal (£1.26bn) 4.        Fulham (£938m) 5.        Everton (£878m) And last but not least, Ipswich £123m.   Will it be enough for them to survive?    The price of an entry and survival ticket keeps going up.    But then Brentford in 19 th place have done well on £124m.

In 2023/24 that Real Madrid became the first football club to exceed one billion Euros in revenue, as this grew by an amazing €230m (27%) from €843m to €1,073m. However, profit from player sales dropped from €71m to €21m, while operating expenses also broke through the billion Euros barrier, rising €162m (18%) from €911m to €1,072m. In addition, there was an unfavourable €8m swing from €6m net interest receivable to €2m payable. As a result, pre-tax profit was “only” €20m, though this was more than twice as much as the previous year’s €9m. Profit after tax was up from €12m to €16m, as tax payable went from a €3m credit to a €4m charge. This result means that Real Madrid have reported profits in each of the last ten years, adding up to more than a quarter of a billion Euros in that time - €274m to be precise (before tax).   In fact, they have generated profits every season since 2002/03 and there is no sign of this stopping any time soon, as they have budgeted another €28m sur...