The Political Economy of Football V2

Zurich and Burnley are very different places, but the Swiss Ramble is able to run the rule over the Clarets.  He has to rely on last year’s accounts, but as Burnley are heading back to the Championship they are relevant. Burnley’s revenue will have been significantly higher last season after promotion, mainly due to the far more lucrative TV money in the Premier League.    Whenever Burnley are in the Premier League, they face a huge revenue challenge, so it’s very much a case of role reversal compared to the Championship. The magnitude of the financial disparity was clearly illustrated in 2023/24, when their £134m revenue was the second lowest in the Premier League, only ahead of Luton Town.   This was miles below the elite, e.g. the “Big Six” clubs all earned more than three times as much as Burnley, led by Manchester City £715m. Looking at the previous time they went up, their revenue more than doubled from £65m to £134m, mainly due to the much higher TV righ...

An independent commission ruled on Wednesday that Everton must pay Burnley £35.1m after their breach of the Premier League’s Profitability and Sustainability Rules (PSR) in 2021-22 was found to have given them a crucial sporting advantage. Everton stayed up and Burnley went down in that season but, four years, on there is now a big bill to settle. Everton, who said in a statement they were “surprised and angered” by the verdict, intend to fight on but the case is likely to have long-term implications. This all dates back to the 2021-22 season, when Everton were found to have breached PSR with an overspend of £19.5m. Everton finished that campaign in 16th position but, importantly in this case, Burnley ended up relegated in 18th. The final gap between the two clubs was four points. Burnley have always felt wronged, believing that Everton’s breach resulted in them enjoying an unfair sporting advantage. The claim has consistently been made, all the way back to May 2023 with the ...

It would seem that Arsenal are not particularly popular champions this season because of their style of play.  To me it seems that if set plays win you matches, that's fair enough.  In any event the Gooners are laughing all the way to the bank. Arsenal’s first Premier League title for over two decades is expected to generate almost £200million ($269m) in domestic prize money as payouts to England’s top clubs hit new heights this season.   That is before we talk about the Champions League. Arsenal are expected to earn £198.7 million in broadcast revenues from the Premier League this season, a £27.2m increase on 2024-25 and £23.8m more than Liverpool received for winning the competition a year ago.  Arsenal’s takings are expected to be over £20 million higher than the previous single-season record: Manchester City’s £176.2m in 2022-23. The New York Times estimates that five clubs — Arsenal, City, Manchester United, Aston Villa and Liverpool — have all cleared ...

Football finance guru Kieran Maguire is relatively positive about Burnley's financial position after relegation as the Clartes have future proofed themselves against the eventuality, although some players may have to be sold:  https://www.burnleyexpress.net/sport/football/kieran-maguire-discusses-financial-impact-of-burnleys-relegation-from-the-premier-league-7449247 Maguire reckons that the real challenge is to make good use of the parachute payments and not suffer the fate of teams like Charlton and Stoke after they each had several years in the top flight.

Premier League football teams could be banned from accepting sponsorship from gambling companies without a UK licence, as ministers look to crack down on black-market betting. Culture secretary Lisa Nandy on Monday said it was “not right that unlicensed gambling operators can sponsor some of our biggest football clubs, raising their profile and potentially drawing fans towards sites that don’t meet our regulatory standards”. The plans, which will be put out to consultation in the spring, are intended to reduce harm from gambling and “eliminate unfair competition” for companies regulated by the Gambling Commission, according to the government. Several teams in the English football leagues, including the top division, have sponsorship arrangements with unlicensed gambling operators. These partnerships are not prohibited at present, so long as UK customers cannot access the illicit platforms. But the Department for Culture, Media and Sport said ministers were “deeply concerned” that...

Burnley’s owners have completed the purchase of a majority stake in Espanyol. The Athletic  reported in June that ALK Capital, the investment vehicle run by Burnley’s owner Alan Pace, were in talks over buying a stake in the Spanish top flight club. ALK had been exploring investment opportunities at clubs in Europe for some time. Espanyol had been owned by Chinese company Rastar Group, who announced in July a €130million deal had been agreed with Velocity Sports Partners (VSP) — the investment arm of ALK — to acquire the 99.66 per cent stake in the La Liga club.   Rastar Group reported the deal consisted of €65m cash and €65m worth of shares in VSP. “This is not about ownership; it’s about stewardship,” Pace said. “Burnley will remain Burnley. Espanyol will remain Espanyol. Each club will retain its own leadership, identity, independence and decision-making, run by its own people, for its own supporters.” Espanyol had been on the market since their relegation from...

The joke used to be 25 years ago that any modern Subbuteo set required an accountant.   Today a VAR team needs to be added, but above all a team of lawyers. Burnley have brought an action against Everton for £50m in relation to their relegation from the Premier League a few years ago when Everton broke Profitability and Sustainability Rules:  https://toffeeweb.com/season/24-25/news/46685.html It's not something I like to see, but Burnley would no doubt argue it's worth a try.    If they do get compensated, I doubt whether it will be £50m.   Once again the growing band of sports lawyers will be the real winners.  If there is not an out of court settlement, the case could last for two months. Burnley were one of five clubs — also including Leeds United, Leicester City, Southampton and Nottingham Forest — who had indicated earlier in the process that they would consider legal action should Everton’s breach be confirmed. Burnley will argue...

Life has certainly been more of a rollercoaster for Clarets fans since Alan Pace took over the club in December 2020, when his company ALK Capital purchased an 84% majority shareholding, as his tenure has so far included two relegations and two promotions. The last available accounts for Burnley are from the 2023/24 season, which means that they are a full year out of date, but they are still relevant for our analysis, as they neatly illustrate the club’s financial status in the Premier League. Despite promotion to the Premier League, Burnley still lost £28m before tax, though this improved from a £36m loss in the Championship. Revenue more than doubled from £65m to £134m, while profit from player sales increased from £11m to £15m. Burnley have rarely generated big money from player trading, only twice making more than £15m in the last decade. Indeed, their profit was £7m or less four times in this period.   However, this was largely offset by a steep increase in operating exp...

Burnley have become the first Premier League club to launch a formal commercial partnership with X.  The social media platform, owned by the world’s richest man, Elon Musk, and formerly known as Twitter, is becoming Burnley’s first ‘strategic digital platform partner’ as they prepare for their return to the top flight. The agreement will see X and Burnley work together to produce content and, according to their press release, “deliver world-class fan engagement, content and brand amplification”. A key component is the production of a series of ‘X Originals’ films, which will chronicle the club’s first season back in the Premier League following relegation in 2024. There will be 20 episodes, each between 10 and 12 minutes, with one released every fortnight. Similar films have been commissioned for tennis stars Serena and Venus Williams and the NFL this summer. X is keen to use this partnership and its associated content to engage the “fandom audience”. It hopes ...

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 ...

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...

 Mike Garlick, the former chairman of Burnley, in February embarked on a fresh footballing challenge — to help lead Antequera up the Spanish league ladder, just as he had previously supported Sean Dyche in achieving the Lancashire club’s longest spell of top-flight tenancy since the 1960s. “I didn’t want to buy a big club,” Garlick says, sitting in the reception of the hotel across the road from the stadium. “The most enjoyable thing about Burnley wasn’t the day you won something or got promotion but the actual journey — and I wanted a journey. I looked at Antequera and thought, ‘We could go on a journey here.’ ” Garlick, who stepped down as Burnley chairman after the club’s purchase by ALK Capital in December 2020 and left the board altogether last year, adds: “I knew I’d miss the buzz of football and I got offered a lot of different clubs in England but I’m a Burnley fan so I wasn’t that keen. “We already had a house in Spain, near Marbella, and my wife speaks Spanish ...

2022/23 is the second full season at Burnley under the ownership of Alan Pace, who has presided over a rollercoaster period, including one relegation and one promotion, since taking over Burnley in December 2020, when his company purchase an 84% majority shareholding. This represented a dramatic change in approach for Burnley, as the new owners put in very little of their own money, instead making the acquisition via a leveraged buy-out, placing debt on the club for the first time in years and using the club’s own cash reserves. Burnley’s auditors (and indeed the club itself) have noted a “material uncertainty” around the the ability to continue as a going concern if they were not able to achieve the forecast player sales and cost reductions in the event of relegation. Some might greet this as a classic case of “No shit, Sherlock”, but it’s clearly not ideal to see such a comment included in the accounts, as it’s relatively rare for an auditor to sound such a note of caution. F...

This week football’s simmering issues around multiclub ownership topped the agenda at a Premier League shareholder meeting. Eight clubs voted to block a proposed ban on interlinked clubs loaning each other players, meaning those in favour fell short of the two-thirds majority required to get their way. That means Newcastle United is clear to borrow footballers from the four Saudi Pro League teams owned by the kingdom’s sovereign wealth fund when the transfer window reopens in January. The vote itself shone a light on some of the tensions and contradictions within football over these issues. Some of the clubs that backed a ban have clear connections to other clubs, such as Crystal Palace through its shareholder Eagle Football, which also owns Olympique Lyonnais. Yet those that knocked down the rule change included teams that have no external ties, but perhaps have aspirations in that direction — Burnley, for example. The real benefits of multiclub ownership are sti...

Chelsea’s £408m gross transfer spend this summer was almost twice as much as the next highest club in the Premier League, which was Tottenham with £216m. Two other clubs spent more than £200m, namely Manchester City £210m and Arsenal £204m. In fact, half of the clubs in the Premier League had gross spend above £100m, including Bournemouth £111m and Nottingham Forest £107m. Some of the smallest outlays were at two of the promoted clubs (Luton Town £20m and Sheffield United £56m), while Everton and Crystal Palace also spent a relatively low amount with £35m and £34m respectively. Chelsea also led the way in terms of player sales with £232m, followed by Brighton £165m, Wolves £149m, Manchester City £139m and West Ham £136m. In contrast, five Premier League clubs made less than £10m from player sales: Brentford £9m, Burnley £3m, Bournemouth £1m, Crystal Palace £1m and Luton Town, who sold nobody for money (according to Transfermarkt). The big spenders Chelsea also had the highest...

Despite relegation, Burnley actually managed to deliver a £36m pre-tax profit in 2021/22, compared to a £3m loss the previous year. Revenue rose £8m (7%) from £115m to £123m, but the bottom line improvement was very largely driven by profit from player sales shooting up from £5m to £55m. Burnley’s £36m profit was actually the second best financial performances in the 2021/22 Premier League, only surpassed by Manchester City’s £42m. In contrast, many clubs reported huge losses last season. Burnley’s profit from player sales rose £50m from £5m to a club record £55m. Many players were released for nothing, but the club got decent money for four departures: Chris Wood and Nick Pope to Newcastle United, Nathan Collins to Wolves and Dwight McNeil to Everton. This was a deliberate strategy to raise funds “in anticipation of lower turnover next season due to relegation”. The club then used a portion of these proceeds to pay down £20m of debt with the remainder available to invest in the ...

Despite relegation Burnley made a £36m profit in 21/22. This would have been a £19m loss had it not been for player sales.  Burnley bought players for £41m and had sales of £69m.  Most player sales on credit and in summer 22 so Burnley now owed £64m in instalments on sales from other clubs. Total profits over the years are almost £89m. Burnley parent company repaid £20m loans in the year.   Third party loans down from £65m to £45m.    Looks as if Burnley repaid the original loan and have taken out a cheaper one. Wages up in 21/22 from £86m to £92m despite there being no relegation avoidance bonuses.

Burnley's promotion to the Premier League has been achieved against a difficult financial background.  Relegation forced owners ALK Capital to repay a significant portion of a £65m loan taking out when buying the club in December 2020, effectively wiping out a £42m parachute payment.   About £70m was raised from player sales, of which about £30m was reinvested in 16 players.  Lingering doubts among supporters about ALK's leveraged buyout in 2020 resurfaced when Burnley were placed under a transfer embargo for failing to submit their accounts on time, but the club blamed it on a change of auditors.  Given performances on the pitch, most supporters are prepared to give the US owners the benefit of the doubt.

Burnley face big challenges following relegation.  No more Premier League TV money, which made up 90 per cent of the club’s revenue in the latest set of accounts. A significant portion of the £65 million loan taken out to purchase the club is now due in the coming weeks. The finances are a worry. There has been a turnover in staff behind the scenes and the status of the academy is unclear. There will be relegation wage cuts and player sales. Cornet’s £17.5 million release clause is active and Nick Pope and Weghorst, with the World Cup approaching, will no doubt be seeking moves. Discussions will be held regarding Dwight McNeil’s future. All eyes are on owners ALK and chairman Alan Pace for what comes next. They have spent 18 months shaping the club in their image, making improvements to the stadium and installing their core group of staff, but on the pitch, they have gone backwards. They have had many doubters, those who question the leverag...

From neutral Switzerland, the authoritative Swiss Ramble casts a judicious eye over the complaint about Everton’s spending made to the FA by Burnley and Leeds United. It is difficult to know how this will play out, though it does look like Everton have a case to answer. Leeds United and Burnley have asked for an independent inquiry, which they want to be fast-tracked, though it is debatable whether the Premier League will make a quick decision. The Premier League Profitability and Sustainability (P&S) rules allow a £5m loss a year, which can then be boosted by £30m equity injection, giving allowable losses of £35m a year. This works out to £105m over the 3-year monitoring period.     However, the Premier League have relaxed the regulations in order to help neutralise the adverse impact of COVID, so the 2022 monitoring period will assess the seasons 2019/20 and 2020/21 as a single (average) period. This is important, as it means that Everton’s loss over the adjus...