The Political Economy of Football V2

Football finance guru Kieran Maguire reckons that Bristol City will be one of the beneficiaries of the new EFL finance rules.  However, he admits that the real winners are the clubs that receive substantial parachute payments to the detriment of clubs like the Robins:  https://www.bristolpost.co.uk/sport/football/football-news/bristol-city-backed-among-winners-10998947 The football regulator is looking at parachute payments, but no early decision is expected.

The authoritative Swiss Ramble reviews the 2024/25 accounts of Bristol City.  What fokllows is an extract of some of his main points.  Despite the improvement on the pitch, Bristol City’s pre-tax loss significantly increased from £3.3m to £18.6m, mainly due to a much lower profit from player sales, which dropped from £21.7m to £6.0m. This was exacerbated by a reduction in revenue, which fell £2.5m (6%) from (restated) £42.8m to £40.3m, though operating expenses were cut £2.5m (4%) from £65.4m to £62.9m and net interest payable decreased £0.4m (16%) to £2.3m.   Bristol City’s £40.3m revenue is actually the highest in the Championship – if you exclude clubs that benefit from parachute payments.    With the exception of Leeds United, no club without parachute payments has generated more annual revenue in the history of the Championship than Bristol City. City chief executive Tom Rawcliffe observed, “Although the loss is evidently larger than last year, it is ...

Bristol City’s 2023/24 accounts cover a season when they finished 11th in the Championship, an improvement of three places over 2022/23 and the club’s best performance for five seasons. However, the board acknowledged that this campaign was still below its aspirations, “Once again, the club found itself hovering around mid-table for the majority of the campaign and whilst there was little threat of relegation, there was not much excitement generated for a promotion push either.” This season will be City’s 10th in a row in the Championship. During this time, they have not finished higher than 8th, so have missed out on the play-offs every season. On the other hand, they have now improved their league position three years in a row. Bristol City have steadily managed to reduce their losses from the record high of £38.4m in 2020/21, but they have still lost a hefty £149m before tax in the last decade, when they only managed to generate a profit once with £11m in 2018/19. Bristol Ci...

The Premier League is obviously the top of the tree, generating more than £6 bln in revenue, though the lion’s share is made by the Big Six, whose £3.5 bln accounts for 57% of the total.  The Premier League is the top dog (by far), but within this division, there is effectively a series of mini leagues with the following averages: big North West three £652m, rest of the Big Six £509m, aspirational clubs £227m, mid-table £177m and relegation area £147m. The gap to the Championship is substantial with the parachute clubs averaging £65m, but this is more than twice as much as their rivals. The big clubs in League One generated £20m, but most of them were £5m to £11m. The Championship had £747m revenue in 2022/23, which was just 12% of the Premier League’s £6.1 bln. This helps explain why so many clubs in this league push themselves to their financial limit in an attempt to secure promotion.    The five parachute clubs had £327m of revenue, while the other 19 clubs only g...

Player sales are often viewed as an easy solution for clubs striving to comply with Profitability and Sustainability Regulations (PSR), and there’s some truth in that, but people should really look at player trading as a whole to fully understand the overall impact on a club’s finances. In terms of profit from player sales, there is a clear winner in England, as Chelsea have made a very impressive £417m, which is £80m clear of the next highest club, Manchester City £337m, followed by Leicester City £249m, Brighton £195m and Everton £189m. The third highest member of the Big Six is Liverpool, who are in 6th place with £173m, while the others are all a fair bit lower: Arsenal £117m, Manchester United £94m and Tottenham £80m. It’s still relatively rare for clubs to book impairment, not least because it can be an indication of poor recruitment, but there have been some fairly high charges in recent years, partly driven by the impact of the COVID pandemic on the transfer market. Aga...

Bristol City’s pre-tax loss in 2022/23 reduced by £6.3m from £28.5m to £22.2m (loss after tax £22.1m), as revenue rose £6.9m (23%) from £29.7m to a club record £36.6m and profit from player sales shot up from £1.3m to £9.5m.  On the other hand, operating expenses increased by £7.7m (13%) to £65.3m and net interest payable was up £0.9m (44%) to £3.1m.   (13 month figures) The main reason for the higher income was commercial, which grew by more than a third (£5.6m) from £15.8m to £21.4m, but the other revenue streams also increased. Match day rose £1.1m (21%) from £5.2m to £6.3m, while broadcasting was £0.2m higher at £8.9m.   It is worth noting the importance to Bristol City of commercial income, which now accounts for 58% of total revenue, compared to 24% from broadcasting and 17% from match day.   City had the 6th highest attendance in the Championship in 2022/23, though they were a fair way below the likes of Sunderland 38,480 and Sheffield United 28,746. ...

The Swiss Ramble provides a forensic analysis of the accounts of Bristol City from Zurich. The pre-tax loss widened from £10m to £38m, as profit from player sales dropped from £26m to £6m and revenue fell £10m (39%) from £27m to £17m, due to COVID. Wages to turnover ratio was 212%, clearly not sustainable,   gross debt £96m.    Unsurprisingly, the £38m loss is one of the worst in the Championship, though other clubs’ figures will also be bad when they publish 2020/21 accounts. The revenue decrease was largely driven by COVID (games played behind closed doors and stadium lockdown), as commercial fell £6.1m (44%) to £7.7m and match day dropped £4.0m (85%) to £0.7m. Broadcasting was also down £0.4m (5%) to £8.2m. Government grants up £1.0m to £1.6m. The Swiss Ramble estimates the club lost around £15m revenue in 2020/21 from a full season of COVID: £6m match day (games behind closed doors) and £9m commercial (conferences and events “heavily restricted”). This takes the...

Neither Bristol club is doing as well as they would like at the moment.   Steve Lansdown has been a generous benefactor of Bristol City, but promotion to the Premier League has eluded them.  (Lansdown's recent views on the club's situation can be found here:  https://www.bcfc.co.uk/news/steve-lansdown-updates-supporters/   Bristol is a vibrant city and the regional capital of the west of England, but is punching below its football weight. Bristol City — the Robins — have never won the league title. They have never won the FA Cup, nor the League Cup. Bristol Rovers — the Gas — have never won the top-flight title either, nor the FA Cup or League Cup. Bristol City have at least tasted top-flight English football, most recently in 1980, though many will not consider that to be recent. Bristol Rovers have never made it to the top division; they did come sixth in the old Second Division in 1959. Consequently, the city of Bristol has never staged a European football ...

The authoritative and tireless Swiss Ramble has tweeted from Zurich on the 2019/20 accounts of Bristol City.  [I should add that I am client of Hargreaves Lansdown]. The Swiss Ramble states: ' Like most Championship clubs, Bristol City make operational losses, though they have limited the damage with profitable player trading. This revenue source is under pressure (as are others) in the current pandemic, so they are lucky to have a benevolent owner in [Steve] Lansdown.' The Swiss Ramble estimates that Lansdown ' has put in around £203m to date (capital £133m, loan £70m) with little sign of the need for this funding going.' [He is the co-founder of Hargreaves Lansdown which is now a listed company]. [As at many clubs] ' Player trading has become increasingly important at the club with £78m profits in the last four years, compared to only £6m in preceding six years. As Lansdown said, this “is all part and parcel of the process” of making the club sustainable. That s...

Billionaire Stephen Lansdown has sought to end Bristol City's reliance on his fortune, but the Covid-19 pandemic has pushed back these ambitions by several years.  Bristol City has been hit hard by the loss of matchday revenue. The presence of rich owners like Mr Lansdown was one reason the Premier League was reluctant to share revenues with the Championship.   However, he told the Financial Times, 'you just can't keep throwing good money after bad.  There comes a point in time where you have to start making some very difficult decisions.' Lansdown lives in Guernsey for reasons of tax efficiency, but says a lot of his money goes back to his sporting ventures in the UK which also include rugby and basketball.   He rejects the argument that billionaire owners of sports team should cover all the losses.   He told the Pink 'Un: 'I can't run my business because the government isn't allowing me to run it.' Mr Lansdown praised the controversial Project B...

The authoritative Swiss Ramble blogger reviews the recently published accounts of Bristol City. The club reported a £11m profit before tax, a significant improvement on the prior season’s £25m loss, mainly thanks to profit on player sales surging from hardly anything in 2017/18 to £38m last season. The £11m profit would have been third highest in the 2017/18 Championship, only behind Norwich City and Derby County £15m (though the latter included £40m stadium sale profit). This is very good, considering most clubs lose money in this ultra-competitive division. However, this great result was only achieved because of the substantial £38m profit on player sales. Player trading has become increasingly important at Bristol City with £52m profits in the last three years, compared to only £6m in the preceding seven years. Lansdown said: 'Without being mean, players are a commodity. They come and go, they have a value and we need to realise that value.' Profits were boosted by selli...

Kieran Maguire of the PriceofFootball reviews Bristol City's financial results: Empty Skies He comments, 'Bristol City are a classic example of life in the Championship finances, loss making, reliant on a benevolent owner and occasional player sales and unable to keep wages under control.'

Only Bristol City and Hull have published their 2018/19 accounts to date in the Championship, but Bristol City have the second highest income total in the division excluding parachute payments after Leeds United, reports Kieran Maguire of the PriceofFootball. Match day income was £6m (down nine per cent). Broadcasting income was £8m (up five per cent). Commercial income was £16m, up by an encouraging 50 per cent. Total income was up 20 per cent at just over £30m. Bristol City made operating losses of £500,000 a week in 2018/19 which was offset by profits on players sales of Bryan, Flint and Reid. The club have racked up losses of over £123 million over the years [but, of course, they have a generous benefactor owner]. Steve Lansdown [of funds supermarket Hargreaves Lansdown] put another £10 million into Bristol City via a share issue. Bristol City generated cash of £17 million from player sales of £40 million. The difference is due to sales being on instalments due from other c...

Guernsey-based millionaire Steve Lansdown has paid £10m into Bristol City for a new share issue. Bristol has punched below its weight as a city in football. After a trip to Barcelona, he developed a model of a club covering several sports. Barcelona incorporates not just football, but other sports such as basketball and water polo. When Bristol Rugby was going through a financial crisis more than a decade ago, Lansdown took it over. A model in the executive bar shows plans for a convention centre which will be built adjoining the Ashton Gate stadium and will house a 4,000-seater facility for Bristol Flyers basketball team, which has become another prong in the Bristol Sport trident. Season ticket-holders can attend all three sports and the different codes share some training facilities, along with coaching, medical expertise and innovation in areas such as social media. His clubs are also following the Barcelona model of producing young talent through his various academies. Lansdo...

Bristol City are yet another Championship club hit by the skewed playing field caused by parachute payments concludes the authoritative Swiss Ramble in a review of their recently published accounts. The Swiss Ramble notes, 'Despite the growth in revenue, Bristol City's £26m revenue is still only mid-table in the Championship. For some context, in 2016/17 Newcastle led the way with £86m, a full £60m more. So far in 2017/18, Norwich City and Hull City have posted £62m and £56m (with Sunderland and Boro to come). It’s difficult to compete with clubs receiving Premier League parachute payments with no fewer than eight clubs benefiting from these in 2017/18.' 'If parachute payments were to be excluded, it would be a very different story. In this case, Bristol City would have the seventh highest revenue in the Championship, which would give them a very decent chance of making the play-offs.' 'Almost all clubs lose money in the Championship, but their £25m loss wou...

It is not unusual for Championship clubs to make big losses as they seek the prestige and riches of the Premier League. Bristol City have published their 2017/18 accounts and losses have increased from £3.5m to £23.5m because of lower profits from player sales and higher wages. The wage bill was up £5m and player sales were down from £16.7m to £1.8m. Fortunately, they have a generous benefactor in the shape of Guernsey resident Steve Lansdown who wants to put Bristol on the sporting map. He made his money from financial supermarket Hargreaves Lansdown which started as a very small venture and is now quoted on the Stock Exchange. [I am one of their clients and a very satisfied one]. His total commitment is £123m of which £65m is in interest free loans. Bristol City made £600,000 from their cup run, a decent sum, but dwarfed by their losses. Kieran Maguire of the Price of Football has tweeted: 'Bristol City parent Bristol City Holdings changes status from private to public comp...

Leading football analyst Kieran Maguire has provided a set of data charts that permit an analysis of how Bristol City compare with other Championship and Premier League clubs: Financial comparison Bristol City are mid-table in terms of revenue in the Championship. On the whole, Bristol City are about average in comparison to the rest of the Championship and are in the top 40 in each chart. There are some sizable clubs that are below City, which is thought to be very impressive from a Reds point-of-view. Guernsey resident and billionaire owner Stephen Lansdown wanted to see sport in Bristol lose its joke status: Man of ambition Lansdown derives his fortune from financial services 'supermarket' Hargreaves Lansdown which is quoted on the stock exchange. The Times had a list of good owners this morning and Lansdown should be there. I am a client of his company.

Bristol City majority shareholder Steve Lansdown has recently sold £130m of shares in financial company Hargreaves Lansdown. He has already pumped £118m into the club, but would he now want to put in more, and how far would he be constrained in doing so by financial fair play rules? Kieran Maguire of the Price of Football addresses these issues: How much could be put in? Maguire says that FFP rules would allow them to lose £39m over the next two seasons, so they could spend reasonably big sums by Championship standards.

Bristol City lost £330,000 a week in 2016/17, mainly because wages were 125 per cent of turnover. This is way above the recommended level of 50 per cent but sometimes it is necessary to take risks to progress and the club has wealthy backers. Judging by recent performance, the £9.5m net spent on transfers in the summer window was well worth it. Income was up 38 per cent and a lot of this was accounted for by the Premier League solidarity payment of £4.2m which represented 30 per cent of total revenue (Championshp clubs get a percentage of the Sky/BT television revenue). Matchday income and season tickets accounted for 35 per cent. A challenge in the longer run is to improve income from sponsorship and merchandise, but promotion to the Premier League would give a big boost to both these streams. For a thriving, prosperous and very lively city Bristol has long punched below its weight in football terms, but this could be about to change. It is, of course, a two club city and somet...