The Political Economy of Football V2

Championship club Hull City took English forward Louie Barry on loan from Aston Villa in January but then failed to pay his initial loan fee or monthly wages until early July. These sums came to more than £830,000 and the total number of days in default were 311, with the February-to-May wage payments adding up to 168 days between them. Under EFL rules, clubs get a warning when they hit a cumulative late-payment total of 10 days, an automatic fine of five per cent of the amount owed after 20 days and a transfer-window ban on paying fees for players after 30 days. All of this is managed by the EFL’s Club Financial Reporting Unit, with any disputes now handled by the Club Financial Review Panel, a bespoke group of experts on call for expedited decisions. Having been notified of their three-window ban on July 3, Hull City promptly appealed against the decision and were given a hearing on August 6. The club wanted the three-window ban replaced by a suspended sanction for the current ...

Reading fans are over the moon after the takeover of their club was completed:  https://thetilehurstend.sbnation.com/2025/5/15/24430246/after-500-days-of-torture-reading-fc-fans-can-breathe-again-royals The English Football League, who are responsible for a lot of the delays, issued a brief statement:  https://www.efl.com/news/2025/may/14/reading-football-club-under-new-ownership/

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 ...

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

Charlton supremo Charlie Methven welcomes the new expenditure controls in Leagues One and Two, pointing out that the prospect of such controls was one reason Global Football Partners bought the ailing club:  https://londonnewsonline.co.uk/sport/charlton-athletic-hierarchy-supportive-of-new-spending-controls-that-kick-in-next-season/

Leicester will not face a points deduction this season after the EFL were forced to admit that they did not have the legal authority to impose Premier League penalties:  https://www.bbc.co.uk/sport/football/68801570 Any potential points penalty issued by the independent commission Leicester has been referred to will therefore apply next season.

Football finance guru Kieran Maguire reports ' To get to the "promised land"of the EFL cost Sutton United £477k, in their first season in League Two they lost £278k and in their second season they decided to become less transparent & not publish an income statement but lost a further £950k.' They are at risk of relegation. I have nothing against Sutton United, but I wonder how much room there is for another London club in the EFL. But then it's possible that Bromley or Barnet could come up this season (although Barnet have had a setback over permission for a new ground close to their old one).

Reading have been deducted another two points and their owner Mr Dai faces a six figure fine:  https://www.efl.com/news/2024/february/27/efl-statement-reading-fc-and-mr-dai-yongge/ Nevertheless, there are limits to what the EFL can do on behalf of fans which is why a regulator with powers to deal with rogue owners is needed.

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.

AFC Wimbledon's chief executive has called on the EFL to take tough measures against clubs like Charlton and Portsmouth who have been unable to field a matchday squad because of Covid-19, claiming that the Wombles have done a better job of containing Covid.  The 'strongly worded' Wimbledon letter is here:  https://www.afcwimbledon.co.uk/news/2021/december/club-statement2/ The statement has received a mixed reaction from fans:  https://fanbanter.co.uk/afc-wimbledon-receive-mixed-reaction-after-issuing-strong-statement-to-the-efl/?fbclid=IwAR0lVEMX7LsQzW4B2clEtSbrVNyohNvHzCpado9OqdHV3rMnEGqDyrVmOcY

Premier League matches are to go ahead with no special Covid break:  https://www.bbc.co.uk/sport/football/59732905   I have just done an interview for Sky on this.  A short break in matches - 28th to 30th December had been mentioned - would have little impact either on future postponements or revenues.   The underlying problem is that quite a lot of footballers have not been vaccinated making repeated Covid-19 outbreaks likely. The 28th-30th December dates would have been awkward for Amazon who are showing those games.  Amazon has paid £30 million a season to exclusively show two rounds of Premier League matches. Even on Sunday afternoon, Amazon had adverts running on Sky Sports promoting their own upcoming live Premier League action, in which they pledged to deliver 10 games featuring all 20 teams and urging supporters to sign up. The slot is particularly important as a strategy to Amazon as a delivery service, as it runs around the festive-season shop...

Parachute payments mean that the Championship is anything but a level playing field.  In many ways it is a de facto Premier League 2. Relegated clubs receive 55 per cent of the Premier League media rights revenue for each club in year one, 45 per cent in year two and 20 per cent in year three. Clubs who are relegated after one season receive parachute payments for only two years. That adds up to about £42m for each club in year one, £34m in year two and £15m in year three.   The remaining Championship clubs receive £4.5m each, while those in League One and League Two receive £675,000 and £475,000 respectively. QPR chief executive Lee Hoos told The Times : 'The balance is tipping away from the original purpose which was to prevent a fire sale of players and cover the cost of relegation and contractual commitments, to where we are now, where clubs have a ton of extra financial firepower and can blow everyone else out of the water.' The origins of parachute payments are rath...

Managerial turnover is a feature of modern football. It is always the manager who gets blamed for poor performances by owners and fans, rarely the players.  But although it is headlined 'This has to be a brutal year to be a manager' a Chris Dunlavy story in The Football League Paper actually suggests otherwise. There could still be one or two dismissals, but it's a bit late to make a change.   This season 35 managers have been dismissed in the English Football League, three below the 2015/16 peak of 38. What is remarkable is the consistency of the figures.   In general over a ten year period they hover around the mean of 30.   In the past four seasons they were never more than four away from this figure.   In other words, about 42 per cent of managers get sacked each season. What has changed this season is that the pandemic has led to new hires being offered shorter contracts, often as little as six months  or until the end of the season...

Arsenal and Tottenham Hotspur, together with the Football Association showed the way.  Now the EFL is hoping to secure a low interest loan from the Bank of England under its Covid Corporate Financing Facility (CCFF). The scheme, which was Treasury backing, is intended to help 'larger' companies with cash flow problems arising from the pandemic.   The central bank buys commercial paper issued by businesses. The EFL would like to borrow as much as £225m, but £150m is a more likely figure.   However, private lenders are also interested in lending money to the EFL, including US insurer MetLife.   Perhaps they would like a deal similar to that negotiated by Serie A where private investors in effect acquire a stake in the league. It should be noted that the Premier League has pledged to cover £15m of interest payments and loan costs for Championship clubs.

Football finance guru talks about the Government's decision not to give any money to the EFL, leaving the Premier League to bail out their loss-making clubs.  As usual, he talks a lot of sense:  https://insidersport.com/2020/11/26/kieran-maguire-the-premier-league-cannot-be-expected-to-come-to-efls-financial-rescue/

The Government has announced its winter bailout package for sport.  By far the largest sum goes to egg chasing. The National League, which has already received  £10m of funding via the National Lottery to enable it to begin its 2020-21 season, will be given a further £11m to cover the period between January and the end of March. Steps three to six of the pyramid will receive £14m, while the Women's Super League and Championship have been awarded £3m. The government has repeatedly said professional men's football is wealthy enough to support itself through the crisis.  The EFL will have to rely on a subvention from the Premier League and negotiations have yet to be completed. New Charlton Athletic owner Thomas Sandgaard has told the BBC he expects to lose £20m in his first year at the club:  https://www.bbc.co.uk/sport/football/54994484

The EFL rejected a £375m offer from an American investment firm for a 20 per cent stake in the league.  It is rather similar to the offers that have been made for a stake in Serie A. TPG Capital would have put in place a management team to handle the EFL's broadcasting and commercial rights, believing it would have a much greater ability to maximise its potential.

Liverpool and Manchester United have come up with a radical plan to shake up the Premier League which would see it reduced to 18 clubs:  https://www.bbc.co.uk/sport/football/54499998 The plan is being opposed by the league itself, but is expected to attract the backing of the other top six clubs who have been involved in talks.  They would have special voting status, alongside three other clubs with a long-term Premier League record (Everton, Southampton and West Ham United).   Changes could be made with the support of just six of these nine long-term 'shareholders'. The EFL would get its £250m bailout package and 25 per cent of all future revenue, but the highly distorting parachute payments would be scrapped.   Another sweetener is fan away tickets to be capped at £20. Football finance guru Kieran Maguire is concerned that every time Championship clubs get more money they spend it on wages.  He also thinks a big issue is that the top six would get a ...

Football finance guru Kieran Maguire looks at the ability of EFL clubs to survive Covid-19.   He notes that they were in financial trouble before the pandemic with a combined loss of £286m in 2018/19:  http://priceoffootball.com/the-same-deep-waters-as-you/ Maguire thinks that there is a real danger of insolvency, especially in Leagues One and Two. Of the various sources of funds he looks at, I would add that much will depend on whether a club has a benefactor owner with sufficiently deep pockets.

According to The Times this morning, the Premier League is prepared to offer the English Football League just £50m in bailout money.  Another £100m would be available as loans with interest rates similar to those charged by banks. The EFL says it needs up to £250m to cover losses arising from the coronavirus pandemic.  Some clubs in League One and League Two doubt whether they will be able to pay their wage bills at the end of the month. Some top flight clubs are questioning why they should have to subsidise EFL clubs.   Crystal Palace Steve Parish says that he knows of no other industry that has been asked to bail out its competitors.  Of course, in football without competitors the sector would not be viable. However, as Parish points out, supermarkets are not asked to bail out corner shops.