The Political Economy of Football V2

Movers and shakers from the world of football gathered in London this week for the annual Financial Times Business of Football summit.   Here are a few highlights. The long-term prospects for football’s broadcast model is always a hot topic of debate, but Chelsea chair Todd Boehly floated one idea: sell global Premier League rights to Netflix.   Boehly’s interests in sports include stakes in the LA Dodgers baseball team and the LA Lakers in the NBA, and he has a history of making moves when it comes to media rights. So he’s someone worth listening to. His point was that the Premier League is a rare beast: content that is in demand globally. “If you really think about what it could do to unlock a global media platform, there’s nothing like this. I’m not saying that is the direct answer right this minute, but I think that’s where we’re headed,” he said. Illegal feeds have long been a big problem for football rights holders and their partner broadcasters. Some of the f...

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...

Clubs building new stadia face rising interest rates and a significant increase in construction costs, but bigger teams should have few problems securing capital. Sport finance experts tell Off The Pitch global interest rates, the Covid-19 pandemic and the war in Ukraine are raising the cost of materials, labour and borrowing for large infrastructure projects. Last month, Aberdeen chairman Dave Cormack said the club's new stadium was likely to cost between £70 million and £75 million, up to £30 million more than was estimated five years ago. Cormack blamed "construction inflation" for the increase. The Scottish Premiership club hope to move into the stadium by 2025. Dutch Eredivisie club Feyenoord have also abandoned plans for a new stadium, blaming "through the roof" prices for building materials and rising mortgage interest rates. Greg Carey, a managing director at Goldman Sachs with almost 40 years' experience in stadium and infrastructure financing...

An Off The Pitch analysis highlights how Dutch clubs outperform much bigger European clubs on commercial income. Feyenoord's commercial income is greater than that of many clubs like Sevilla, AS Roma and Southampton, all playing in leagues with more exposure than the Dutch. Lower income from TV deals forces clubs to focus on other, more controllable revenue streams, explains Feyenoord's commercial director. An extensive KPI-model along with database utilisation are the focal points of their strategy. More than 50 per cent of Feyenoord's turnover stems from commercial revenue while the figure is less than one fifth for many other clubs.

The authoritative Swiss Ramble has provided financial overviews for leading Dutch clubs. Ajax's pre-tax profit fell €42m from €69m to €27m, mainly due to revenue dropping €37m (19%) from a record €199m to €162m and expenses increasing by €17m, partly offset by profit on player sales rising €12m to €84m. Debt now includes €151m financial leases. PSV's revenue fell €25m (26%) from €97m to €72m, as they competed in the Europa League, rather than the Champions League in the prior season. As a result, their operating loss widened to €41m, but pre-tax profit only fell from €6m to €2m, due to profit from player sales rising €26m to €47m. Feyernood r evenue was up 4% to €73m thanks to reaching Europa League group stage. However, their pre-tax loss slightly worse at €9m, highest in the Eredivisie, as profit from player sales fell from €8m to €4m. Wages up €3m to €38m, but 51% wages to turnover ratio lowest in league. AZ had the second highest pre-tax profit in Netherlands of €8m, despit...