The Political Economy of Football V2

 Bansley have been charged with multiple breaches of EFL regulations:  https://www.efl.com/news/2023/july/efl-statement-barnsley-fc

Multi club ownership (MCO) notionally offers a broad array of benefits: cost-savings, knowledge sharing, player development. To its opponents MCO is an assault on club heritage and traditions, poses huge questions about sporting heritage and even makes clubs “slaves” to bigger interests. Research carried out by Play The Game last October found that 156 clubs from around the world are part of 60 MCO groups. This has increased in the past 8 months. For example, 777 Partners – one of the most prominent MCO groups – have added Standard Liege and Vasco da Gama to its portfolio already this year, and have just this week bought a French club – of which more later. Play The Game argued last Autumn that “the phenomenon raises new questions of governance for everyone from international football federations to clubs, players, and fans.” Its report came shortly after the Italian federation, the FIGC, clamped down on MCOs. This followed Salernitana’s promotion to Serie A last summer. The Salern...

Barnsley have complained to the EFL that they may have been placed at a competitive disadvantage by Reading's financial situation:  https://www.mirror.co.uk/sport/football/news/barnsley-reading-report-to-efl-26404603 This echoes earlier complaints against Derby County by Middlesbrough and Wycombe Wanderers.  The former case has now been settled out of court and the latter one may soon be resolved. Sports lawyers are booming and I suppose one has to accept that clubs will increasingly resort to seeing each other in court rather than settling matters on the pitch.  It is an inevitable by-product of big money in modern football.

The authoritative Swiss Ramble reviews the 2019/20 accounts of Barnsley FC. Barnsley are owned by a group of international investors, led by Chien Lee of NewCity Capital and Paul Conway of Pacific Media Group, who follow the “Moneyball” approach of fellow investor, Billy Beane. They bought 80% from former custodian, Patrick Cryne, in December 2017. The club clearly run a tight ship, as they usually report small losses every year (the highest in the past decade being just £3.4m). The £12.8m profit in 2016/17 is the outlier, which is the main reason that the club has made an overall £5m profit over this period. The operating loss (i.e. excluding player sales and interest) improved from £7m to £6m, which is actually one of the best performances in 2019/20 Championship to date. Almost every club in this division posts substantial operating losses, i.e. half of them are above £30m. Following promotion to the Championship, the Tykes reduced their loss from £3.4m to just £0.3m, as reve...

American investors need not be bad news as the example of play off contestants Barnsley shows.   A consortium led by financier Chien Lee bought the club in December 2017   .Fellow investors include Billy Beane, the baseball executive who invented the data-driven Moneyball system celebrated in a film of the same name. The club must live within its means, with turnover about £10m this year. This is in a league where the average wage bill is £33m and the 24 clubs racked up combined operating losses of £382m last season, according to Deloitte.   Lee and his co-investor Paul Conway had success at Nice in France before Barnsley. They have sold that club but built a portfolio across Europe.  Through Pacific Media Group, an advertising business, they own KV Oostende in Belgium, FC Thun in Switzerland and AS Nancy in France, with each performing better than when acquired. Chien Lee told the Financial Times : “We feel we can do something meaningful using our...

Yesterday's dramatic scenes at Manchester United have captured plenty of media attention and reflected the frustration of the club's fans, but what impact will they have on the Glazers 3,000 miles away.   For them, their commercial interests come first.   This in turn are affected by a changing tax environment in the US. Speaking to  The Athletic , a financier who has helped several entrepreneurs buy and sell sports teams said he “can’t imagine” a circumstance that would see the Kroenkes, or any of the other American owners of the Super League clubs, sell up. Jordan Gardner, a US investor who owns shares in Denmark’s Helsingor, Championship side Swansea and Dundalk of Ireland commented: “They’ve taken the reputational hit, some of them have apologised and they’re ready to move on. Guys like (Manchester United owners) the Glazers and Kroenke were not particularly engaged with their clubs, so I don’t see the fan backlash affecting them much. It’s highly unlikely...

The  Financial Times  publishes some data today on how much clubs are reliant on match day income.  The average figure for the Premier League is 14 per cent, for the Championship 17 per cent and for League One/Two 32 per cent.  The latter figure is incomplete as some clubs at this level take advantage of a loophole in company law to publish shortened accounts. The Pink Un's figures show that there is considerable variability around the mean in all divisions.   In the Premier League five clubs generate more than 20 per cent of income in this way - in order Sheffield United, Leeds United, Arsenal, Tottenham Hotspur and Aston Villa.  Below 10 per cent (in order) are Leicester City, Fulham, Everton, Crystal Palace, Wolves and Burnley. In the Championship, Barnsley are way ahead of everyone else at 40 per cent, followed by Millwall and Notts Forest at around 30 per cent.  The bottom three (in order) are Watford, Huddersfield Town and Bournemouth. ...

According to The Athletic Barnsley are one of several clubs considering legal action against the English Football League if they are relegated this season.  However, the report states that Birmingham City, Derby County and Sheffield Wednesday will be allowed to start next season in the Championship on minus points because of financial fair play sanctions (the sale of stadiums to sponsors). It is not clear on what basis the legal action could be brought (Hearts are also contemplating legal action given their relegation from the SPL).  Just because something is unfair or rough justice does not mean it is illegal.  Legal actions often succeed on procedural grounds, but I cannot detect any prima facie procedural failures. One club that could be affected by a points per game relegation is Charlton Athletic. With the club locked in a civil war between directors and fast running out of money, the Addicks are in no position to launch a legal action about a points-per-game releg...

The 2018/19 accounts of football clubs are appearing in rapid succession and one of the latest is from Barnsley. They had an operating loss of £4.8m in League One, reports Kieran Maguire of the PriceofFootball. Turnover after relegation was down from just under £14m to just under £8m. The main factor in lower income was a 45 per cent decrease in TV money following relegation. Barnsley paid £105 in wages for every £100 income as they sought to return to the Championship, well above the recommended maximum of 70 per cent. Player purchases of £1.3m were dwarfed by sales of £5.1m. Barnsley are in danger of a return to League One with a consequent impact on their finances. Luton Town It looks as if another club promoted from League One, Luton Town, lost £2.1m in 2018/19. Income was up by about 30 per cent.

Faced with a sale to an international group, Partick Thistle fans are launching a campaign for community ownership of the club: Thistle Forever The proposed sale to the owners of Barnsley FC will be subject to scrutiny under dual ownership rules. One concern is that Firhill could be sold for housing development as the area gentrifies.

Barnsley FC have agreed to a takeover by a duo of investment groups. The deal is headed up by NewCity Capital led by Chinese billionaire Chien Lee and Pacific Media Group led by Paul Conway and Grace Hung. It involves Billy Beane, the US baseball executive behind the stats-heavy 'Moneyball' approach to sporting success. He is understood to be taking a 10 per cent stake in the club. He was attracted to Barnsley as they are already using a version of the data-driven methodology that he pioneered in Major League Baseball with Oakland Athletics. He believes that the modest price for a Championship club represents a good investment. Neerav Parekh, a Mumbai-based technology entrepreneur, is another investor. The sale is believed to have been somewhere in the range £10m-£20m, although some sources use the higher figure. Chien Lee and Pacific Media Group led a group which purchased 80 per cent of OGC Nice in June 2016. The consortium have been trying to break into the English f...

An excellent piece of in depth analysis by Wigan fan Richard Pike about the Championship: New financial realities He points out that the Championship is increasingly becoming like a Premier League Division Two. One would be hard pressed to find a second tier league anywhere else in world football with so much prestige. He argues that a growing gap is emerging between the Championship and Leagues One and Two. Ten year income projections suggest that by 2027 each Championship club will receive an average of £13m each season from solidarity payments from the Premier League and the television deal, an increase of £6m on the current figure. League One clubs will see their income from these sources go up by only £0.25m from £2m. League Two clubs will see only the same £0.25m increase from £1.5m to £1.75m. He makes an interesting comparison between Sheffield United and Bolton Wanderers. Sheffield has a population of over half a million and is able to sustain two Championship clubs. ...