The Political Economy of Football V2

Charlton supremo Charlie Methven welcomes the new expenditure controls in Leagues One and Two, pointing out that the prospect of such controls was one reason Global Football Partners bought the ailing club:  https://londonnewsonline.co.uk/sport/charlton-athletic-hierarchy-supportive-of-new-spending-controls-that-kick-in-next-season/

West Ham publish 23/24 accounts, reports football finance guru Kieran Maguire.  Revenue £270m up 14%.   Wages £161m up 18%.  Average weekly wage £74,800.   Underlying losses were £30m up 146 per cent.  Player sale profits £96m up 467%.   Profit before tax was £57m.   Player purchases £124m. Player sales £142m.  Borrowings £1m. Income increased due to more matches on back of European success leading to bonuses from sponsors and higher merch sales. Matchday income works out as £1 in every £6 generated by the club, so Maguire comments that it seems harsh to be targeting senior fans and concessions as broadcast income was £167 million.  Only a few clubs have published 23/24 accounts to date but West Ham at the top of the 'Other 14' although may be overtaken by Villa and/or Newcastle. Main costs for clubs are player based. Euro bonuses were main driver of first significant wage rise for a few years. Wages were well within the U...

Back in the day, Bournemouth was hardly a footballing mecca.  Indeed, the club went through some troubled times.   Now the club is 6th in the Premier League. As for Bournemouth itself, it was an attractive seaside resort popular with Midlanders who often retired there.  I remember going into a pub in Bournemouth with a couple of friends on New Year's Eve in 1965 and it was full of very elderly ladies drinking port and lemon.  Fortunately, one of us was driving and we moved on.  At one time it had a splendid fleet of yellow trolleybuses.   Language schools developed there, but now it is a major high education centre. Ever since Bournemouth were first promoted to the Premier League in 2015 they have punched above their weight. But the ambitions of a club who are the smallest in the Premier League both in terms of stadium capacity and revenue have been fuelled by a man who turns 80 on Sunday. Bill Foley, an American billionaire, was in Bournemouth ...

Hull City’s 2023/24 accounts covered a season that at one stage promised so much, but ended in disappointment, as they ultimately missed out on the Championship play-offs by just three points. That said, the Tigers did improve from the previous year’s 15th to a very respectable 7th place. As manager Liam Rosenior said, “It was a positive season, but we couldn’t quite get over the line.” His achievement was recognised with a nomination for Championship manager of the year, though that was not enough to save the popular Englishman from being dismissed by owner Acun Ilıcalı, who bought the club in January 2022. This could be viewed as a sign of ambition from the Turkish businessman, who has spent big (relatively speaking) in order to improve the club’s chances of promotion to the Premier League - or alternatively as a distinct lack of patience. In fairness, Ilıcalı had initially restored the club’s relationship with its fans after ending the controversial tenure of the Allam family,...

Everton’s new owner The Friedkin Group will begin the task of boosting commercial growth by looking to secure a lucrative naming rights deal for the club’s new stadium at Bramley-Moore dock. The 52,888 all-seater arena is to open at the start of next season and is seen as being transformative in supercharging Everton’s spending power after profitability and sustainability breaches. Everton estimate revenue will increase by £40million a year after the move from Goodison Park with supporters encouraged to use the new venue, which will boast numerous bars and restaurants, for all their match-going experiences. US custodians, The Friedkin Group [TFG], want to bolster that further by sealing a naming rights deal with a blue chip company. The original plan for Bramley-Moore was a £200 million agreement with USM, a company linked to the previous owner, Farhad Moshiri, and his ex-business partner Alisher Usmanov. However, those plans collapsed in the wake of Russia’s invasion of Uk...

Rising high above a stretch of the River Thames familiar to millions around the world thanks to the annual Boat Race, Fulham’s new Riverside Stand is already a worthy addition to the London skyline. Who says so? Simon Inglis, the UK’s foremost stadium expert and author of the seminal book on the subject, The Football Grounds of England and Wales, the first edition of which was published in 1983. “I personally think it’s the best football stand of the 21st century,” he says. “You immediately think, ‘Wow, an architect has been involved in this’. I love the way the roof cantilevers over, almost like a giant wing. And how it’s beautifully articulated round the back, near the river. “It is somewhere with the potential to be a real iconic London landmark. At the same time, I’d say it has a bold and quite American approach to it. Very shiny black cladding, which you  could  say makes it rather resemble a funeral parlour. “But it fits in with Fulham, playing in black and ...

Fans of my generation can remember the great days of Nottingham Forest and I feel that I have to salute them as the year comes to an end. The last time Forest won four Premier League games in a row was in May 1995, towards the end of a campaign that culminated with a third-place finish under Frank Clark. Forest are third this time around, just a point behind second-placed Chelsea, and, when they face Everton at Goodison Park on Sunday, it will mark the halfway stage of the season. This is more than just a good start now. And the dream that Forest could possibly secure a return to Europe for the first time in nearly 30 years is becoming more vivid with each passing week. Nuno has turned this Forest side into one that complements that impressive defensive resolve, with an ability to hurt teams with their pace on the counter attack.  But the biggest quality Nuno has instilled into this Forest side is harder to quantify with statistics. He has given them confidence...

Many rival fans have had a good laugh at Tottenham and their wildly fluctuating results this season.  This violent inconsistency (or perhaps downward trend) is a problem for Tottenham, attributed to a variety of factors from Ange Postecoglou’s dogmatic style to a simple lack of common sense and basic individual errors from their players. But this is not just a problem for Tottenham — it’s also a problem across the division. Inconsistency has been a theme of the Premier League season so far. In fact, it’s been the most inconsistent in a decade, since the 2015-16 season when Leicester won the league, and one of the most inconsistent in the history of the division. After 15 games there were 39 instances of teams winning back-to-back games. That’s compared to 47 at the same stage last season, 45 in the two seasons before that, 43 in the two seasons before that and in 2018-19, there had been 59. Tottenham are the inconsistency poster boys, which is partly ...

How football ownership has changed, for the worst according to the author of a book on the subject:  https://www.theguardian.com/world/2024/dec/26/first-edition-boxing-day-football There is a counter argument to be made, but perhaps I should read the book first, and in any case I don't have the energy on Boxing Day!

To mark INEOS’ first anniversary of operating United,  The Athletic  has spoken to numerous sources within the club’s ecosystem, all of whom spoke confidentially to protect their jobs, to detail what measures have been taken at the club and with the men’s first team. Among much more, The Athletic reveals: A fear of further job cuts Approvals to sign off anything costing £25,000 or more go above Berrada Ratcliffe proposed X owner Elon Musk or Amazon’s executive chairman Jeff Bezos help pay for new stadium Club looking at significant ticket price rises Further ambassador cuts and high-profile exits, including former chief executive David Gill’s £1million-per-year retainer More INEOS executives getting involved at United on a day-to-day basis Ratcliffe resented the fact United are a loss-making enterprise, in the red for over £113n n the last financial year.   While the initial deal agreed Ratcliffe would assume spor...

The administrators at Dumbarton FC, Quantuma, part of the AIM-listed K3 Capital Group, have provided an online and video update on their work in trying to salvage the club, clean up the financial situation, and bring it into responsible and sustainable ownership moving forward. Fans have done an incredible job in raising nearly £100,000 through a GoFundMe ‘Save Our Sons’ fundraiser at  https://www.gofundme.com/f/save-our-sons-1872 . That will keep the team on the pitch through to March 2025, but Quantuma estimate that another £30,000 will be required to reach the end of the season – so the effort will now need a new burst of energy.  It is reported that there have been some 20 expressions of interest in purchasing Dumbarton, one of Scotland’s most historic clubs. A group of people close to the Sons are also putting in a Letter of Community Interest, seeking a pathway forward “to progress possibilities for a form of future ownership which prioritises the safeguarding a...

New owners at Swansea appear to have injected £20m into the club, but there appears to be some confusion surrounding the money, or at least there is in this local report which is not written by football finance experts:  https://www.fansnetwork.co.uk/football/swanseacity/news/63514/

After Derby County published their financial results for the 2023/24 season, many observers expressed surprise at the amount of money the Rams had lost while securing promotion from League One to the Championship. The bottom line of promoted clubs is adversely impacted by the payment of promotion bonuses, which can be quite substantial, so there is clearly a cost to be paid for teams that go up. As you would expect, the cost of promotion increases the higher the division, so in 2022/23 (the last season where all clubs have published accounts) the average pre-tax loss in the Championship was £27.9m, compared to £9.6m in League One and £1.4m in League Two. Championship to Premier League Five clubs have reached the Premier League in the last decade despite generating less than £20m: Luton Town (2022/23) £18m, Watford (2014/15) £18m, Huddersfield Town (2016/17) £16m, Brentford (2021/21) £15m and Bournemouth (2014/15) £13m. Parachute payments give clubs relegated from the Premier ...

Manchester United are planning to go on a post-season trip to Malaysia at the end of the current season for a money-spinning tour that may earn the club $10million (£7.96m, €9.6m) in revenue. Premier League teams usually travel overseas for pre-season tours, with United likely to return to the United States once again later next summer, but post-season tours are also becoming a trend as clubs seek to maximise revenue streams and comply with the Premier League’s profit and sustainability regulations, as well as UEFA’s Financial Fair Play regulations. This is a particular challenge for United, who have also been pursuing an aggressive strategy of cost-cutting under the minority ownership of Sir Jim Ratcliffe, who has cut 250 jobs from the club, as well as raising ticket prices at Old Trafford, clamping down on staff expenses and cancelling the annual staff Christmas party. Football finance guru Kieran Maguire comments acidly: ‘I'm sure the players will be delighted, e...

It has been a momentous week for Everton, and for the region as a whole. The Friedkin Group’s takeover means both of Merseyside’s Premier League clubs are now controlled by Americans. Meanwhile, a third, League Two side Tranmere Rovers, could join them if the English Football League (EFL) ratifies a takeover by a consortium led by Donald Trump’s former lawyer Joe Tacopina. In football terms, Liverpool is on the verge of becoming the USA’s 51st state — the name of the 2001 movie starring Samuel L Jackson and Robert Carlyle, which was filmed in the city and used Anfield, the home of Liverpool FC, as a backdrop. Everton is a club of contrasts.     Much of their mainly local support comes from some of the United Kingdom’s most economically challenged districts in the north end of Liverpool, near Walton where Goodison Park is located, and the ‘People’s Club’ — as former manager David Moyes christened them — has long taken pride in not being co...

Newcastle United returned to the Champions League in 2023/24 for the first time in over 20 years, after securing a top-four finish in the Premier League during the previous season.   Off The Pitch’s financial forecast for 2023/24 predicts a record turnover for the club, driven by their significantly improved Premier League performance. Since the Saudi Public Investment Fund took over in 2021, expectations have been sky-high. While the club is now set to report a profit, results on the pitch have begun to decline.  Under Mike Ashley’s ownership, the club prioritised financial prudence, often reporting profits but consistently underperforming on the pitch. Now the risk of repeating a similar pattern is beginning to emerge. In recent years, Newcastle United have become one of football's compelling stories, transforming from a club battling mediocrity to one challenging the elite. With substantial investments following their...

Sir Jim Ratcliffe’s Ineos has agreed to inject $100mn into Manchester United, cementing the billionaire’s influence at the English football club.  The move completes the $300mn worth of funding into the company pledged by Ratcliffe when he agreed a year ago to become a co-owner alongside the six Glazer siblings who still have majority voting control.   The $100mn, which will reinforce the club’s balance sheet, has been earmarked for infrastructure investment rather than signing players in the transfer market, according to a person with knowledge of the matter.  After the latest capital injection, Ineos will hold almost 29 per cent of Manchester United shares, according to people familiar with the matter.  Ratcliffe has already put money towards improving the club’s training facilities, and he has wider ambitions of renovating Old Trafford or building a new stadium altogether. Under Ratcliffe, Man United has made redundancies and slashed other costs in order ...

Valencia club president Lay Hoon Chan says the club is not up for sale but that owner Peter Lim would study any offers received. Lim, 71, is one of Singapore’s richest men and took over at Valencia in 2014. He has become deeply unpopular with a large majority of the club’s supporters and his ownership has been the subject of protests from Valencia’s fan base in recent years. Supporters had hoped Lim would restore the club, which thrived domestically and in Europe during the 2000s, to prominence after taking over in 2014. Yet Valencia’s ownership have continued to cut costs in recent seasons with diminishing returns on the pitch and their planned Nou Mestalla stadium has yet to be finished. On Thursday, Lay Hoon added that work at the new stadium would resume on January 10 — believed to be a necessary step towards any future takeover of the club. Valencia have not finished higher than ninth in any of the five seasons since and are 20th in La Liga with just two wins from th...

Struggling Swindon Town have been put up for sale according to football finance guru Kieran Maguire:  https://www.swindonadvertiser.co.uk/sport/24806982.football-finance-expert-says-swindon-town-put-sale/ It is uncertain whether the claimed haunting at the training ground identified by current manager Ian Holloway has been resolved. Swindon fans have been through the mill and they deserve a better future.

Dundee United have announced a £2.8m loss for the year they were in the Scottish Championship, but are more sustainable in the top flight:  https://www.footballtradedirectory.com/dundee-united-announce-loss-for-last-financial?cat=3077

Saudi Arabia’s Crown Prince Mohammed bin Salman would have to go through the new tougher owners’ and directors’ test because of their ownership of Newcastle United, a government minister told the House of Lords. Baroness Twycross, a digital, culture, media and sport minister who is overseeing the passage of the Football Governance Bill, told fellow peer Lord Moynihan that anyone who has a high degree of influence over a club would have to pass the independent football regulator’s test — and that would include Bin Salman. However, it is understood Twycross then left the chamber and later passed a handwritten note to Moynihan saying she may have to clarify that position.    In other words, she may have misspoke. The statement by Twycross is potentially a huge embarrassment for the government. One peer involved in the debate said it was “a farce”, but that as it stands Bin Salman would have to go through the owners’ test. The prime minister, Sir Keir Starmer, invited...

With Christmas approaching two years ago, Fenway Sports Group’s ownership of Liverpool Football Club was at a crossroads. Uncertainty reigned. U.S. banks Goldman Sachs and Morgan Stanley had been tasked with sounding out interest from investors. FSG, the Boston-based firm that had paid £300million ($380m in today’s exchange) for Liverpool in October 2010, had long since been open to the idea of selling a minority stake, but the difference this time was that a full sale was also on the table. The backdrop was key. Having seen Chelsea sold six months earlier to a consortium led by Los Angeles Dodgers part-owner Todd Boehly for £2.5billion — with another £1.75bn committed to investing in the club’s infrastructure — FSG wanted to establish what potential buyers would pay, with Forbes valuing the club at around £4bn. With then sporting director Julian Ward and director of research Ian Graham both serving notice to quit their roles and Jurgen Klopp’s side a fadi...

Plymouth Argyle’s 2023/24 financial results cover their return to the Championship for the first time since 2010, following the previous year’s promotion from League One. Argyle have come a long way since they entered 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. James Brent bought the club, took it out of administration and steadied the ship. He then stepped aside in 2018, allowing Simon Hallett to became the majority shareholder before taking on the role of chairman. Hallett’s arrival was not enough to prevent another relegation to the fourth tier, but the club has made excellent progress since then. Argyle bounced back to League One at the first attempt and have steadily improved, leading to promotion back to the Championship after 13 long years away. Following promotion, Argyle’s pre-tax loss narrowed from £3.4m to £2.4m, as revenue shot up by £10.9m (74%) ...

Unfashionable Atalanta are currently leading Seria A.   The combined cost of impressive players for Atalanta was less than the €95million brought into the club’s treasury simply from deals with Manchester United, purchasers of Rasmus Hojlund two summers ago and Amad Diallo in 2020. Though Hojlund represents the most expensive sale the club have ever made, that pair typify a market agility that sets Atalanta apart. Significant annual departures are a necessity because this is a mid-budget provincial club. Among the teams competing at the summit of Serie A, they are unique for having returned a profit every year of the past nine. The striking aspect is that, mostly, they have kept climbing. A would-be superstar now leaves Atalanta thinking twice before he declares he’s upgrading to play more regularly in the Champions League. Atalanta have qualified for the competition more often in the past five years than United, or, for that matter, Tottenham Hotspur, home of Cristian Romero a...

Manchester City’s on-pitch success in 2023/24was replicated off the pitch, as they delivered a sizeable £74m pre-tax profit, albeit down from the prior year’s £80m. Revenue slightly improved by £2m from £713m to £715m, which was the highest ever generated in England, while profit from player sales rose £17m (14%) from £122m to £139m, a new club high. However, this was more than offset by operating expenses growing £26m (3%) from £754m to £780m, while other operating income fell £1.0m to £4.5m. There was growth in match day, which rose £4m (5%) from £72m to £76m, and commercial, which increased £4m (1%) from £341m to £345m. However, broadcasting fell £4m (2%) from £299m to £295m, due to a less successful run in the Champions League. City’s revenue has increased by more than a third (£180m) in just five years from the 2019 pre-pandemic level of £535m. All three revenue streams have grown, but the charge has been led by commercial, which rose 52% (£118m) and now accounts for 48% of ...

Entrepreneurs are seeking to emulate golf and cricket with a new version of football, but fan resistance may be strong in a very traditional game that resists innovation.   Football does not face the challenge that cricket faced with games lasting several days, but perhaps 100 minutes is too long for the attention span of a new generation. The venture arm of Swedish private equity group EQT is leading a $25mn investment in a new six-a-side football competition that has attracted support from former stars such as Ronaldinho and Gary Lineker. Founded last year, the start-up Baller League hopes to attract fans who prefer shorter 30-minute matches and will watch games on digital channels such as TikTok, YouTube and Amazon-owned Twitch. “Football is the most popular game on earth, so it’s something that’s incredibly relatable,” Ashley Lundström, a partner at EQT Ventures told the Financial Times . “We saw something that can touch audiences around the globe.” Baller League, which ...

Everton’s long-running ownership saga will end next week when the Friedkin Group’s takeover will be finalised. The US-based group will secure approval from the Premier League to take over the cash-strapped Merseyside club, which will raise questions over the futures of the manager, Sean Dyche, and sporting director, Kevin Thelwell, who are both out of contract at the end of the season. The Friedkin Group agreed to purchase Farhad Moshiri’s 94.1 per cent shareholding in September and the deal has been subject to the Premier League’s owners’ and directors’ test for the past three months. That process is understood to be near completion. The group, which also owns the Italian club Roma and is led by the American billionaire Dan Friedkin, was close to agreeing a deal to buy Everton last summer, only to announce it had pulled out because of concerns over loans that the club had taken up with other investors.   More on their stewardship of AS Roma here:  https://foot...

Once a major force in German football, Werder Bremen found themselves relegated to the 2. Bundesliga, burdened by excessive debt and revenue pressures.   Klaus Filbry likens Werder Bremen’s €80 million income decline during Covid-19 and relegation to a near-death experience. However, the club emerged stronger, partly by breaking down internal silos. "Asking managing director of football, a sports director and a head of scouting and recruitment to participate in a two-day meeting is probably the last thing they want to do. But we insist on this four times a year," says CEO Klaus Filbry. In 2021, Werder Bremen resembled many European clubs: effectively two separate entities - the commercial and sporting departments. The club has since successfully integrated these units. It is often said in business that significant change requires a shake-up at the top of an organisation. While this is usually true, Werder Bremen stands out as a rare example of achieving fundamental tran...

Manchester City have announced club-record revenues of £715million in their latest annual accounts, alongside profits of £73.8m. City’s revenue has grown £2.3m since last year, while their profit is down slightly on the £80.4m they posted from the club’s treble-winning campaign, which was boosted significantly by prize money from winning the Champions League. The report also highlights that City have made £405m in player sales over the past five years. That includes £139m for the current period — up until June 30 2024 — an increase on the £121.7m from the previous year. This, the club says, has driven the club’s profits. Matchday revenue has also risen £3.7m to £75.6m, despite playing five fewer home matches compared to the treble-winning season. The club also say City’s men’s and women’s teams in 2023-24 were watched by an audience of 694 million across all competitions while the club’s social media channels, including Facebook, Instagram, X, YouTube and TikTok, reached mo...

Plymouth Argyle reported record revenue on their return to the Championship in 2023/24 and a further increase in turnover is expected this year:  https://www.plymouthherald.co.uk/sport/football/plymouth-argyle-record-breaking-revenue-9786149 If I was a member of the Green Army, I would get a bit fed up with references to Wayne Rooney's Plymouth Argyle.

Roma’s 2023/24 accounts covered a season when they finished sixth in Serie A for the third year in a row, which meant that they once again failed to qualify for the money-spinning Champions League. This was Roma’s fourth season under the ownership of The Friedkin Group, who purchased the club from fellow American James Pallotta in August 2020.   In this period, there has been a fair degree of change at Roma, including five head coaches. Despite all the upheaval, Roma have been the model of consistency in the league, finishing in 6th place in four of the last six seasons (the other two were 5th and 7th). That’s not too bad at all, but it does actually represent a decline in performance, as Roma had finished between 2nd and 3rd in the preceding five seasons.   Importantly, this means that Roma have missed out on qualifying for the lucrative Champions League in recent years, which has placed a strain on their finances. Roma’s pre-tax loss reduced by €23m from €99m to €76m, ...