The Political Economy of Football V2

Notwithstanding last Sunday’s defeat to Manchester City in the FA Cup semi-final, it’s fair to say that Nottingham Forest have been this season’s surprise package. Guided by the experienced Portuguese Nuno Espirito Santo, who replaced Steve Cooper as manager in December 2023, they are still challenging for a place in the Champions League, which very few pundits (if any) predicted before the season started. The magnitude of their improvement can be seen by looking at the chairman’s comment on 2023/24, when the club was basically happy to simply “secure its divisional status for the second year running”. Forest should be congratulated on the significant progress made since Evangelos Marinakis became the club’s majority shareholder in May 2017. The Olympiacos owner has an 80% stake with the other 20% held by his associate Sokratis Kominakis. When the Greek businessman arrived, Forest had just finished a lowly 21st in the Championship, only avoiding relegation to League One on goal...

The Reading owner Dai Yongge was told at the time of his takeover that he would not be allowed to own the club in the Premier League, it can be revealed, although apparently Reading fans have known this for years. Questions have emerged over how Yongge was allowed to buy the club for £24.5million in 2017 after he was blocked from buying Hull City, who were then in the Premier League. The Chinese businessman was disqualified by the EFL in February and has been given until May 5 to sell League One side Reading, who are in serious financial difficulty. A consortium led by Yongge first tried to buy Hull, but was rejected by the Premier League and he formed a different group, which was allowed by the EFL to take over Reading in May 2017, when they were in the Championship. It is understood that the Premier League advised the EFL against the move on the basis that Yongge had not shown good faith in his application to buy Hull. But the EFL’s legal advice was that it would ...

There are signs that FSG’s vision of a virtuous circle — where success on the pitch powers commercial revenues, which can then be reinvested into the playing squad and the youth academy — is becoming a reality. Liverpool won the title despite spending less than any other Premier League club across the summer and winter transfer windows, according to Transfermarkt data. Its use of sophisticated data analysis techniques to identify undervalued players — such as midfielder Ryan Gravenberch and defender Ibrahima Konaté, each signed for €40mn — means they have spent less on transfers than all their major rivals since their last title win, in 2020. However, keeping a successful group of players together has required Liverpool to extend contracts and increase player wages. The result is that its wage bill is now the second highest in the league. That puts the onus on Liverpool’s commercial department to increase revenues. Ben Latty, the club’s chief commercial officer, told the Financia...

The RFU would be open to the lucrative prospect of hosting Chelsea at Twickenham during the redevelopment of Stamford Bridge but expects that Richmond upon Thames borough council would block the move. Chelsea will be in the market for a temporary home for up to seven years if they choose to build a new 60,000-capacity stadium on the site of Stamford Bridge. The club’s alternative option, to build a stadium in Earl’s Court, would not require a groundshare arrangement. If Chelsea were to rebuild Stamford Bridge, they would have to groundshare with Premier League rivals, hire out Wembley as Tottenham Hotspur did, or revive interest in playing at Twickenham. Chelsea first made a request to play at the home of rugby in 2014. The RFU was interested at the time but the proposal never got off the ground.   Quite a lot of Chelsea's support is within easy reach of south-west London. The RFU, which made record losses last year and is struggling to break even over i...

Long known for their “Galacticos” model, PSG have dramatically changed their strategy in the last couple of years, following the departure of Lionel Messi, Neymar and Kylian Mbappé, replacing their expensive superstars with younger, hungrier players, as manager Luis Enrique has implemented his playing style. Despite all the upheaval, PSG have once again won the league this season, which is their 11th title in the past 13 years (and their fourth in a row), while also reaching the final of the Coupe de France against Reims. Success in Europe’s leading competition would be the icing on the cake for the club’s owners, Qatar Sports Investments (QSI), a subsidiary of Qatar's sovereign wealth fund Qatar Investment Authority (QIA). They acquired PSG back in 2011, instantly making the club by far the richest in France and one of the wealthiest in the world. Big losses However, they have posted huge losses in recent years, which means that they have struggled to comply with UEFA’s...

Under the ownership of US billionaire John Henry’s Fenway Sports Group, which bought the club for £300mn in 2010, Liverpool have made the most of the commercial opportunities that arise from on-pitch success. Winning has powered growth in the club’s commercial revenue, which exceeded £300mn for the first time in 2023-24, roughly half of overall revenue. In a world where media rights growth is under pressure and ticket prices are already pushing the limits of fan patience, commercial revenue is increasingly critical to funding success. Owners also need to limit losses to comply with the financial regulations set by the Premier League and Uefa, European football’s governing body. While Liverpool have dominated this season despite spending less in the transfer market than most rivals, their wage bill has climbed sharply in recent years — highlighting the cost of keeping their star players.   The club has just agreed contract extensions with Egyptian forward Mohamed Salah and centr...

Wrexham have secured their third successive promotion, having started in the National League. The  Welcome to Wrexham  documentary series, steered by co-owners Reynolds and Rob McElhenney, has made global celebrities out of the club, the players and even some of their more interesting supporters. By selling an equity stake to the Allyn family, Wrexham’s high-profile owners brought in welcome financial backing at a time when facing a series of major infrastructure projects, in particular the new Kop stand development that had stalled the previous year. This hold-up has since been remedied, meaning work on both the stand and a new £1m ($1.3m) pitch, complete with undersoil heating, can get under way now the final home game of the season has been played. The Kop’s projected opening date is summer 2026. Further improvements are also planned to Wrexham’s historic home down the line, the intention of a masterplan drawn up by renowned architect firm Populous bein...

I have long argued that while globalisation may be over in international trade it is alive and well in football (soccer).  One sign of continuing globalisation would be regular domestic league fixtures being played abroad. Relevent Sports, the events promoter and media rights company co-founded and owned by billionaire Miami Dolphins owner Stephen M.Ross, this month settled a legal fight with the U.S. Soccer Federation, which brought the question of domestic leagues playing regular-season matches outside of their home countries into sharp focus. The matter had reached the Supreme Court in April 2024, but a sudden breakthrough came when world governing body FIFA was dropped from the initial lawsuit. FIFA said it would review its policy about domestic games abroad — with the FIFA Council approving the formation of a working group on the matter — and Relevent, in a statement, said FIFA would consider “changes to its existing rules about whether games can be played o...

The sad saga at Reading continues with the EFL understandably giving another extension to the deadline for the club to be sold rather than expelling from the league.  However, if Reading make the play offs, the EFL is going to face a difficult decision:  https://www.bbc.co.uk/news/articles/cn8vdjd2ld5o

Tranmere submit their 23/24 accounts reports football finance guru Kieran Maguire. Revenue wass £6m up 10%.  Wages were £4.5m up 13%.    Wages £75 for every £100 revenue. Operating losses £1.5m up 9%. Player purchases £0 Player sales £0. Cost of squad £25k. Borrowings £1.3m.  Total losses over time £7.8m.  Since the accounts were published TRFC has raised £160k in fresh shares and taken out loans   The club is currently 22 nd in League Two.

American consortium GSG LOFC Limited, led by New York businessman David Gandler, has completed a takeover of English League One club Leyton Orient. The group has acquired 100 per cent of the east London club from its previous owner Eagle Investments 2017 Limited. Gandler, who is also the co-founder and CEO of streaming service FuboTV, will be the majority shareholder, owning 78.55% of the club. “Our aim is to become a Championship club in the future,” he said. “We hope to achieve this by making sensible investments in our playing squad and off-pitch projects. Whilst we are very ambitious, we will not spend recklessly and will never make decisions that could jeopardise the future of this special football club.

Since PIF took up a majority stake in Newcastle in October 2021 as the lead party in a consortium that wrested the club from the hands of Mike Ashley, the sovereign wealth fund’s financial commitment now stands at £528.7million ($703.4m) — £244.0m to buy the club (of the £305m total purchase price), and a further £284.7m injected into Newcastle since. In total, the club has received £335.4m in owner cash since the takeover. In a financial sense, Newcastle’s post-Ashley world has been defined by what was a rare thing under their former owner: heavy losses. The first season under new guidance produced a pre-tax deficit of £72.9m, followed a year later with a £71.8m loss in 2022-23.   Last season’s £11.1m in the red looks significantly improved against that backdrop, though were it not for a late-June flurry of transfer activity, the club would have posted three consecutive deficits in the region of £70m. Under Ashley, the club’s highest loss was £46.7m, incurred in the 2016-17 pr...

I was baffled by the following headline in today's  Financial Times : 'Shakespeare makes debut for Stratford FC'.  Did it mean that the Royal Shakespeare Company had signed a sponsorship deal with non-league Stratford Town and that their stadium was to be renamed the Anne Hathaway (following today's simultaneous revelation that she spent time living with the Bard of Avon in London)? I can only think of one Shakespeare actor's son who played for the Bards, and as for the Bardsmen, their language on the pitch is generally industrial rather than 'forsooth' or 'verily'. One of my favourite chants was when Leamington were leading the Bards 2-0 at their old ground and Brakes fans broke into a chant of 'Two nil, or not two nil'? It turns out the latest version of  As You Like It  has a football setting at Messina FC.  Leonato is the club owner, Don Pedro the team manager, Claudio is the man of the match and Beatrice is a football commentator, approp...

There is an increasingly stark trend of teams going up to the Premier League coming straight back down, almost as if sides need a specialist in the Championship and another in the division above. 49ers Enterprises — the investment vehicle controlled by the San Francisco 49ers and the majority stakeholder at Elland Road — didn’t set out to run a Championship team. It sought a top-flight acquisition but changed its plans after Leeds were relegated in 2023. Two seasons in England’s second tier have been expensive, largely because Championship clubs are money pits. In 2023-24 alone, Leeds lost £60million ($80m). Promotion, though, means Premier League revenue, which in turn creates big opportunities, just as it did when Leeds last went up in 2020. If recent briefings are accurate, the 49ers will press the button on the long-overdue stadium development soon (see earlier story on progress). Leeds have a long summer now in which to reorganise their squad, ready for the ...

Plans to increase Elland Road’s capacity up to 56,500 seats have taken a step forward for Leeds United after two key recommendations were approved by the council. The first recommendation agreed to negotiate the sale of council-owned land behind the stadium’s Don Revie and John Charles stands to the club for the purpose of stadium expansion. United would, in theory, buy the land from the council at an independently valued rate that reflects the wider market. The second recommendation agrees to negotiate and enter into a memorandum of understanding (MoU), a non-binding agreement between two or more parties that outlines their shared understanding and intentions to collaborate with Lowy Family Group (LFG), United’s development partner. This agreement between the council and LFG would see them work together on a regeneration strategy for the council-owned land around Elland Road. These parcels of land include the park and ride adjacent to Fullerton Park, Lowfields Road and the car p...

Football finance guru Kieran Maguire reckons that Shrewsbury Town could take a £1m hit following relegation to League Two:  https://www.bbc.co.uk/sport/football/articles/c77nk7e3r6xo Efforts have been made to sell the club, but a prospective American bidder ran into difficulties. Those interested in takeovers are often advised to look at clubs which have no immediate geographical competition.  The Shrews are the only EFL club in Shropshire, but (leaving aside Telford to the east) it is a predominantly rural county. Thus, if one makes a comparison with Norwich City as a stand alone club, Shropshire's population is 325k whilst that of Norfolk is not far short of one million.

Everton Football Club and its new American owners want to accelerate development around the Liverpool-based team’s new waterfront stadium, in a call to politicians and investors to help revive a neglected stretch of the city. With months to go until the Premier League side moves from Goodison Park, its home since 1892, to Bramley-Moore Dock, the latest addition to the north Liverpool skyline stands out in an area that has not kept pace. The stadium is the foundation of fans’ hopes for a brighter future under the Texas-headquartered Friedkin Group, which became the latest US company to buy into the top flight of English football last year. Marc Watts, Everton executive chair and Friedkin Group president, told the Financial Times it would be “such a shame” and a “missed opportunity” not to use the stadium as a “catalyst to lift up that whole area of the northern docks and the development of the whole Liverpool area”. Overlooking the river Mersey, the 52,888-capacity venue is cappe...

The legal battle between Manchester City and the Premier League is likely to continue into next year with a hearing for the latest dispute over sponsorship rules not due to take place until the autumn. Last month City issued a new claim in response to the Premier League’s attempt to amend sponsorship rules that were declared unlawful and void by an independent tribunal. The English champions have accused the Premier League of distorting the competition in favour of Arsenal and other rival clubs who have benefited from huge loans from their owners. In the new statement of claim, City complain that Arsenal, as well as Brighton & Hove Albion, Everton and Leicester City, have had an unfair advantage. They say that shareholder loans — where the owners lend clubs money — worth hundreds of millions of pounds at those four clubs have not been treated the same as other Associated Party Transactions (APTs), such as sponsorship deals with companies linked to club owners. Acco...

Although the teams I support are below the top two divisions, I was pleased to see Leeds United promoted back to the Premier League.   In my view a vibrant regional capital like Leeds, one of the main cities outside London, merits a top flight team. Leeds United’s accounts for last season were published at the start of this month. Only Leicester City carried a bigger wage budget last term. Leeds had a promotion-ready squad and should have gone up in May 2024. Falling short of that had to be considered a failure by Farke. But there was never any meaningful consideration given to sacking the German after the Wembley loss. 49ers Enterprises could see Farke had amassed a points tally that would have been good enough for promotion from the second tier in most years. Last summer’s recruitment drive prioritised character over anything else. Leeds sources say Farke wanted players with the mettle and steel to get over the line. Forget resale value and development — they wanted play...

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...

Burnley’s game against Sheffield United this evening is being shown on terrestrial television and if the Clarets win they will be promoted to the top flight. This would be the second promotion under American Alan Pace’s reign, which began with a leveraged takeover like that of the Glazer family, who saddled Manchester United with debt when they bought the club in 2005. ALK took out a substantial loan from MSD Holdings while also using the club’s own money in the bank to fund the £170million deal to buy Burnley. The club’s most recent accounts from 2023 show bank loans of £70million. Burnley also owe other clubs up to £65million in transfer fees or bonuses. Failure to win promotion this year would put pressure on the club because parachute payments for teams that are immediately relegated last for two seasons rather than three. “My big issue with Burnley is that they do have substantial debt,” Kieran Maguire, the football finance guru, said. “It is dependent upon either Premier Le...

Nassef Sawiris, who is Egypt’s richest man and co-owner of Aston Villa, has told the Financial Times that he recently moved his residency from London to Italy and Abu Dhabi.  In an interview at his long-standing office overlooking Mayfair’s Berkeley Square that he has since vacated, he said the decision to move abroad after 15 years of living in the UK was due to a government crackdown on non-domiciled residents announced by the previous Tory administration. Sawiris, whose net worth was estimated at $9bn by Forbes, is the youngest son of the late Onsi Sawiris, who founded a construction company in the 1950s and built it over decades into a large multinational corporation now called Orascom Construction. As the business grew, the family diversified, entering the cement industry and expanding operations from Egypt into other emerging markets. The UK “gave me a home when the Muslim Brotherhood came to Egypt and I will always be in debt”, he said. “I’m keeping my house, I’m growing...

Ten years ago, Leicester City had defied the odds to tee up the most astonishing period in the club’s history, winning a Premier League title, lifting the FA Cup, and competing in three European campaigns. That Leicester side had unity, work ethic, dependable leadership, good planning, excellent recruitment and a never-say-die spirit that pulled them through. This season’s Leicester have none of those, and have meekly surrendered to a relegation that was confirmed on Sunday. Their 1-0 defeat against Liverpool was a ninth consecutive home defeat without scoring — a top-flight record. Acrimony against members of the hierarchy is growing, with some fans hiring a plane that flew over the stadium carrying a banner that read: “King Power Clueless. Sack the Board.” Another banner displaying similar sentiments was seen in the corner of the Kop at full time. Director of football Jon Rudkin is the figure many protesters see as the most culpable for Leicester’s decline. Others can certain...

A rich individual or individuals buy a non-league club and declare their ambition to reach the EFL and then the Premier League. OK, it has worked so far with Wrexham who are likely to be in the Championship next season, but they are a former Football League team with a strong support base. Nene Park: no more Rushden & Diamonds reached the third tier, but once the benefactor withdrew his money, they effectively collapsed and their neat Nene Park stadium has since been demolished. AFC Fylde, formed from a merger of two non-league clubs, have an EFL standard stadium, but are currently in danger of relegation from the National League. So I am a little sceptical about developments in Bedford and I am not referring to the giant new theme park planned for near the town. In 2021 Peter McCormack, a bitcoin broadcaster and film maker, bought FC and changed its name to Real Bedford.  However, nerger talks with Bedford Town have broken down and they could be playing in the same league next...

The Championship has the most stretched finances of any UK football league and in effect functions as a Premier League Division 2, reinforced by the distorting effects of parachute payments.   What follows is an edited and slightly enhanced version of forensic analysis by the Swiss Ramble. The 24 clubs generated just under £1 bln of revenue (£956m to be precise) and £22m other operating income, but then paid out £1.7 bln in operating expenses, split between £892m wages, £260m player amortisation and £505m other expenses. This led to a sizeable £678m operating loss, exacerbated by £73m net interest payable, which was only partially offset by £420m profit from player sales and £17m exceptional items. As a result, the division as a whole lost £314m. Revenue shot up £207m (28%) from £749m to £956m, while profit from player sales more than doubled from £183m to £420m. However, this was offset by a steep increase in operating expenses, which were a third higher, rising £417m; ...

The Premier League may have good intentions in trying to curb over spending by clubs and level the playing field to some extent.  However, clubs keep finding loopholes, most recently in the case of Chelsea and their women’s team. The League then changes the rules (if it can get consent from member clubs) but it is often a case of closing the stable door after the horse has bolted.    Fans of particular clubs often feel they are being unfairly targeted while others get away scot free.   We are still waiting for the result of the Manchester City case, but whatever it is, I anticipate further litigation.    The real winners in these cases are the lawyers who charge fees that reflects their expertise and their ability to deliver results off the pitch.    The Premier League continues to insist  that there is no case for an externa; regulator while failing to put its own house in order (and the EFL is no better). The Premier League has moved ...