The Political Economy of Football V2

Real Madrid president Florentino Pérez is in election mode. He says the Spanish football giants are worth €10bn and rising. “In a few years it will be worth €20bn,” he told the Financial Times this week. He’s not the only one who thinks his club’s value has hit 11 figures. Manchester City chair Khaldoon Al Mubarak, who also leads Abu Dhabi sovereign wealth fund Mubadala, says the club has multiplied in value since Sheikh Mansour first bought in at an estimated valuation of $100mn-$120mn in 2008. “If you’re going to sell all this today in the market, you wouldn’t sell it for less than $10 billion minimum,” Khaldoon said in his annual interview published by City. He went on to say the club wasn’t for sale, just to be clear. So far only the Los Angeles Lakers have hit the $10bn mark, although the Seattle Seahawks might soon join them. Minority deals are getting done in that ball park too. But can a football team really be worth that much? Real Madrid have been crowned champion...

UEFA’s PSR regulations are a fair bit stricter than the Premier League, as the allowable losses are much smaller, even though these have been increased over the years, while clubs also have to contend with the new squad cost control ratio. Aston Villa In contrast to Arsenal who appear to meet the criteria, the authoritative Swiss Ramble thinks that Villa have missed UEFA’s PSR target by a country mile.    By his reckoning, their adjusted PSR loss for the 2-year monitoring period was a hefty £140m, using figures provided by the club itself for allowable deductions. That would mean a €161m PSR loss, which would be a cool €100m over the allowable target, even though this was boosted by the €55m allowance for an equity contribution. It very much looks like Villa have also breached the new squad cost control limit, though the magnitude of the over-run depends on how the 13th month in their accounts is treated. This has been tacitly admitted by the club, as Villa basically i...

FIFA has finally confirmed the revenue distribution model for the expanded version of the Club World Cup, which will take place in the United States from 15 June to 13 July.  The big headline is that a cool One Billion Dollars will be shared between the 32 participating clubs, so the teams that reach the latter stages of the tournament can look forward to receiving a substantial windfall. The highest ranked European club, namely Manchester City could earn a massive $125.8m (including $38.2m participation pillar), while the top South American club would only receive $102.8m, as their participation pillar is much lower at $15.2m. Chelsea’s maximum earnings of $116.6m (£97m) are less than Manchester City’s $125.8m (£105m).   It’s worth noting that the big money only accrues in the later stages of the tournament. For example, City would receive “only” $51.7m for reaching the last 16 with the other $74.1m up for grabs from the quarter-finals onwards. One obvious concern about...