The Political Economy of Football V2

The English Football League (EFL) and Premier League are now only £27 million apart from agreeing a comprehensive new financial solidarity package for the men’s game after years of stop-start talks. While there are still some other details to decide, the EFL has told the Premier League it will accept the so-called New Deal for Football if the latter ups its latest offer of an extra £180m a year in solidarity payments to £207 m annually, with the additional amount ring-fenced for Leagues One and Two. Under the terms of  the last solidarity deal the leagues agreed in 2019, the Premier League currently shares 13 per cent of its £4billion-a-year media-rights income with the rest of the game, just over £430 m a year. Of that sum, more than half goes to half a dozen or so clubs recently relegated from the top flight in the form of parachute payments, with just over £140 m shared between the rest of the EFL’s 72 clubs in solidarity payments and a similar sum dished out to fund communi...

Arsenal have told staff that redundancies are being planned, despite them winning last season’s Premier League title and announcing record revenues for 2024-25.  The club told employees the intention is to make 60 positions redundant, with cuts set to be across a number of departments. The coaches will be among the departments unaffected, along with the performance backroom teams for the men’s and women’s sides, the academy, the club’s community operation, the Arsenal Foundation, security personnel and workers dedicated to the women’s setup. A consultation is underway and the decision could yet be subject to change. The news comes in the wake of Arsenal’s first title win in 22 years and an encouraging set of financial results for the season before last. In February, the north London club announced they had almost broken even for the 2024-25 financial year, recording an overall loss of £1.4million, while posting record revenues of £691m. The biggest rise in revenue was a £45...

PSG taught Manchester City a footballing lesson last night.   With City’s fate in the balance, it may be the last meeting for a long time which will surely undermine the attraction of the Champions League.   Losing European visitors will not be good for the Manchester economy, Both clubs have been generously funded by Gulf states, but PSG managed to stay the right side of financial rules.   Over the past decade or so both clubs established themselves as European heavyweights thanks to unprecedented funding from Gulf owners. Both escaped full bans from Uefa competition as part of sanctions imposed on them because of Financial Fair Play breaches. Both moved on from there to win their maiden European Cups. Both clubs strategically aligned themselves with major investment in their cities from the nations of their transformative backing: the pair of them have been thanked for that by heads of state. English football’s power balance means it needs a successful C...

Football finance guru Kieran Maguire was asked on Radio 5 this morning if the interim State of the Game report issued by the independent football regulator was a surprise.   He said that it was not and he had written a similar report for the Government in 2020. As long as benefactor owners keeping turning up, do fragile finances matter.  As Maguire pointed out, fewer clubs are going into administration than 20 years ago. I cannot think of any other sector of the economy where the producers are largely those in existence 100 years ago, including most of the leaders.   Given their importance to fan identity, mergers usually only occur at the non-league level. It is one thing to identify the problem, another to come up with workable solutions.   Meanwhile, faas and last night even players criticise owners for failing to 'invest'. English football brings in over £9bn but IFR finds 94 per cent of clubs are loss making.  Nearly two-thirds of EFL and Nat...

Concern is growing in business and political consequences of the scandal at Manchester City.  The Financial Times devotes a whole page it today under the headline 'Man City cheating scandal risks growing geopolitical quagmire.' It is important to keep a sense of proportion as the FT does.  The leading sports business paper is not presenting a worst case scenario, simply pointing out some of the risks. Relations between the UK and the UAE are important both economically and politically, but have been subject to recurrent tensions.  They are best described as 'volatile'. The row over the acquisition of the Telegraph caused particular turbulence with some in the UAE taking the view that opposition to the deal (which eventually failed) was driven by racism. As the FT notes, 'Abu Dhabi has a history of using commercial contracts to exert pressure on the UK.'  Britain has often needed UAE funds.  In the global financial crisis the UAE provided a £3.5 billion emergency...

 'We know no spectacle so ridiculous as the British public in one of its periodical fits of morality.'   So said Thomas Macaulay many years ago. There is certainly an outbreak of sporting morality over Manchester City with fans of other clubs salivating at the prospect of their destruction.  However, it is important to weigh up the consequences both inside and outside football. I am not a City supporter and clearly they have to be sanctioned for their conduct (what that sanction should be is above my pay grade).  However, it is also important not to bring the whole horse of cards down.   I deal with the geopolitical concerns in another post, but it is worth quoting at length from what Martin Samuel had to say in the Sunday Times. 'What if the unforeseen consequence of any punishment finishes not just a corrupt regime, but an entire football club? Manchester City’s executives did wrong. That does not mean Manchester City should cease to exist. It does n...