The Political Economy of Football V2

The works team was once a common feature of football in the UK, particularly at the non-league level, including my non-league club Lockheed then AP Leamington and still referred to as the Brakes. My father as a non-league footballer thought that works clubs were particularly difficult to play against given that their players were given cushy jobs in the factory and plenty of time off to train. As implied by the club’s name, Philips Sport Vereniging (Philips Sports Union), the electronics giant Philips has close ties with PSV Eindhoven.   Indeed, the club started out in 1913 as a works team for employees of the conglomerate. It has extended its sponsorship of the club to 2031, covering stadium naming rights and participation in an innovative cooperation with four other Dutch companies under the Brainport Eindhoven name, which features on the front of the shirt. The Swiss Ramble has undertaken his usual forensic analysis of the club’s accounts; much more detail is available on ...

As Ajax has pointed out in the past, its financial prospects are often driven by sporting results, so the lack of success has also been reflected in the bottom line. As a result, Ajax’s pre-tax loss significantly widened from €13m to €52m, which is the worst result in the club’s history, reports the Swiss Ramble. As Shashi Baboeram Panday, the finance director, explained, “The result is a consequence of the past few years: not playing the Champions League and having the cost management that comes with the Champions League. As a result, there is a loss.” The deterioration was very largely driven by much lower profit on player sales, which dropped €72m from €82m to just €10m. Revenue actually rose €26m (17%) from €152m to €178m, while operating expenses decreased €3m (1%) from €242m to €239m and net interest payable more than halved from €6m to €3m. After tax, the loss was smaller at €37m, due to a €14m tax credit, but this was still almost four times as much as the prior year’s ...

PSV Eindhoven celebrated their 110th anniversary in some style in 2023/24, as they won their 25th league title, while they also reached the last 16 of the Champions League and won the Johan Cruyff Shield, though they were eliminated in the quarter-finals of the KNVB Cup by Feyenoord. The club said that the 2023/24 season was “not only a sporting success, but also a financial success”, as they managed to post a €13.2m pre-tax profit (€9.7m after tax), though this was a little lower than the previous year’s €17.5m. This was driven by a huge new club record for revenue, which shot up €51.5m (51%) from €100.6m to €152.1m, though this was partly offset by profit from player sales halving from €61.1m to €31.3m. PSV’s revenue growth was on the back of doing well in Europe, which led to a steep increase in broadcasting income: this more than doubled from €28.5m to €62.3m. However, there was also good growth in match day, up €9.0m (37%) from €24.7m to €33.7m, and commercial, up €8.6m (18%...

PSV did very well off the pitch in 2022/23, as they managed to increase their pre-tax profit from €1.4m to €17.5m, with revenue rising €7.4m (8%) from €93.2m to a new club record of €100.6m, which was the first time they broke through the €100m barrier. However, expenses also grew €7.9m (6%) from €134.8m to €142.7m, so the club still made an operating loss of €42.1m. This was more than offset by €61.1m profit from player sales, up from €44.2m, which produced the overall positive result. PSV’s revenue growth was almost entirely driven by match day, which rose €7.0m (40%) from €17.7m to €24.7m, though there were also small increases in the other two revenue streams. Broadcasting was up €0.3m (1%) from €28.2m to €28.5m, while commercial was €0.1m higher at €47.5m. Unlike many other leagues, the majority of clubs in the Eredivisie generally make money, but PSV’s €17.5m pre-tax profit was the second best result, only behind Ajax’s very high €55m. The other member of the Dutch “big thr...

The authoritative Swiss Ramble takes a look at the finances of Feyenoord, currently leading the Eredivisie:  https://swissramble.substack.com/p/feyenoord-finances-202122 In 2010 Feyenoord found themselves “in serious financial difficulties” with sizeable debts, negative equity and “a serious threat to the club’s continued existence”. This was due to significant investment in the squad, allied with a failure to qualify for the Champions League. They narrowly avoided bankruptcy, only thanks to the intervention of a group of wealthy supporters, Feyenoord’s pre-tax loss in 2021/222 reduced from €17.8m to €9.7m, as revenue rose €25.4m (41%) from €61.8m to €87.2m and profit from player sales increased €1.8m from €3.8m to €5.6m.  Feyenoord have now posted pre-tax losses for four years in a row, losing €44m in this period, which followed seven consecutive years of profits. The last time that they managed to make money was 2017/18, which was also the last season that the Rotterda...

The authoritative Swiss Ramble provides a forensic analysis of the latest accounts of Ajax. Ajax swung from €27m pre-tax profit to €12m loss (€8m loss after tax), a €39m decline, largely due to revenue dropping €37m (23%) from €162m to €125m. Profit on player sales rose €2m to €86m, while operating expenses were up €1m. The €12m pre-tax loss is the highest in the Netherlands, though it should be emphasised that these accounts are the first published for the 2020/21 season, so the only ones that include a full year of the pandemic. In 2019/20 no fewer than 11 of the 18 clubs were profitable. The €8m post-tax loss is dwarfed by the massive losses reported by other leading European clubs for the COVID impacted 2020/21 season, including Barcelona €481m, Inter €246m, Juventus €210m. Ajax have a sustainable business model, so their 2021 loss was only the second they have reported since 2010 (the other loss was less than €1m in 2016). In fact, in the last 10 years they have accumulated ...

The wealthiest club in the Netherlands, Ajax, will pay €3m into a solidarity fund to help other clubs.  The three other leading clubs will pay in €500,000 each:  https://www.sportbusiness.com/news/eredivisie-clubs-reach-agreement-on-tv-money-distribution/

The authoritative Swiss Ramble blogger reviews Ajax's accounts for 2018/19. He notes, 'Their 2018/19 accounts cover their most successful season in years when they won the Dutch league and cup double (for the first time since 2002) and reached the Champions League semi-final with a dazzling brand of football.' Profit before tax shot up from €3m to €69m (€52m after tax), largely due to revenue more than doubling from €93m to a record €199m (thanks to the CL exploits) and profit on player sales rising from €39m to €73m. The price of success was expenses increasing by €74m. The wage bill grew €39m (74%) from €53m to €92m. The club's €106m revenue growth was very largely due to the Champions League run with all three streams increasing: broadcasting surged €76m from €13m to €89m; match day rose €20m (63%) from €31m to €51m; and commercial was €11m (22%) higher at €60m. Few clubs in the Eredivisie make big profits, e.g. in 2017/18 the highest was Feyenoord €16m. Therefor...

The Swiss Ramble notes, 'After that stunning performance against Juventus, it’s maybe worth remembering how well Ajax have done, given their financial challenges: revenue €92m, wages €53m.' They do, of course, have a very young side with a 19-year old captain. Their 2017/18 accounts cover a season when they finished second in the Eredivisie (for the fourth year in a row), but failed to qualify for the Champions League or Europa League group stages (the first time since 1990/91). Profit before tax decreased from €67m to €2m (profit after tax down from €50m to €1m), largely due to profit on player sales halving from €79m to €39m and revenue dropping €26m (22%) from €118m to €92m following the lack of income from European competition. They are essentially a profitable club, reporting profits in seven of the last eight years (and the only loss in 2015/16 was less than €1m). Over that period, they have accumulated €159m profits, averaging €20m a season. All three Ajax revenue st...