The Political Economy of Football V2

Hibernian's chief executive has admitted that the club's losses are not sustainable - £5.8 m in the past year and £18m over four seasons:  https://www.bbc.co.uk/sport/football/articles/cly98887xkgo The chief executive said that the owning Gordon family could not be expected to continue to underwrite losses. The challenges faced by an historic club in Scotland's capital city reflect the financial challenges facing Scottish football as a whole. Another way of bringing extra cash to the club is to find an investment partner. Hibs did this with Bill Foley’s Black Knight group, generating £6m in return for a 25 per cent shareholding of the club in back in February 2024. However, the partnership with the Bournemouth owner ended “amicably” last year, with the Gordons buying the shares back. It is understood there was a difference in strategies. Since then, there has been speculation that other parties are keen to get involved at Easter Road - including Midtjylland owner Anders H...

Hibernian's owner Ian Gordon has said that he will write off the club's £7.2m loss and convert debt into equity:  https://www.scotsman.com/sport/football/hibs/latest-hibs-news/donation-ian-gordon-confirms-he-will-write-off-hibs-ps7m-loss-as-he-addresses-finances-and-ben-kensell-exit Gordon hinted that he was less than satisfied with the club's departing chief executive.

Hibernian’s 2023/24 accounts covered a season when the club finished in “a very disappointing eighth position”. However, they did somewhat better in the cup competitions, reaching the quarter-finals of the Scottish Cup and the semi-finals of the League Cup. This was the second time that Hibernian had finished 8th in the last three seasons, which is clearly below expectations. These are their worst finishes since 2013/14, when they ended up being relegated, spending three seasons in the Championship before returning to the top flight in 2017. The club has not been helped by frequent changes in the manager with four men being handed the reins after the sacking of Jack Ross in December 2021. Shaun Maloney only lasted four months, while Lee Johnson survived for more than a year before also exiting stage left. In terms of ownership, there was a lengthy period of stability after Sir Tom Farmer, the former Kwik-Fit CEO, bought the club and the stadium from the receivers in 1991.  ...

Losses of over £7m are worrying for a club of Hibernian's size and there are clearly some underlying problems at the club:  https://www.scotsman.com/sport/football/hibs/latest-hibs-news/hibs-grotesque-finances-leave-dark-stain-and-no-easy-fix-for-embattled-regime-amid-ps71m-loss-4 980975 The finances have deteriorated over the years and the club is frank about the challenges that it faces:  https://www.heraldscotland.com/news/24919757.hibernian-football-club-accounts-lay-bare-deterioration/ One issue is that players appear to have been overpaid in relation to performance.   The wages to turnover ratio is at a high and worrying level for Scotland.

From his fastness in Zurich, the authoritative Swiss Ramble has been reviewing the 2019/20 accounts of Scottish Premiership clubs. Most Scottish Premiership clubs aim for break-even with five making small profits, led by Hearts £0.5m and Motherwell £0.3m. Rangers’ £17.5m post-tax loss is the big outlier, especially compared to Celtic’s£0.4m deficit, largely due to their recent investment in the squad. Celtic had the highest revenue with £70m, though the gap to Rangers £59m has narrowed. Both Glasgow clubs earn at least four times as much as other Scottish clubs with closest challengers being Aberdeen £14m, Hearts £12m, Hibernian £9m and Kilmarnock £5m. However, it is worth noting that Celtic were boosted by £24m profit from player sales, largely due to Kieran Tierney’s move to Arsenal, which was significantly higher than other Scottish clubs. The next highest were Kilmarnock £1.2m, Motherwell £1.0m. The Old Firm had by far the largest operating losses (i.e. excluding player sales...

The financial hit being taken by medium-sized Scottish clubs is illustrated by the case of Dundee which has already lost half a ,million pounds because of the pandemic and expects to see its revenues halved next season:  https://www.thecourier.co.uk/fp/sport/football/dundee-fc/1386425/breaking-dundee-reveal-500000-revenue-hit-and-warn-of-difficult-conversations-ahead/ The Scottish Championship is not scheduled until October and even then fans may not be allowed back into grounds.  That may not happen until 2021. The small Scottish clubs, which are the equivalent of non-league clubs in England, can probably be survive with donations or share purchases from fans.   For example, Arbroath have passed £75,000 on their Supporters Wall fundraiser and have been left speechless by the level of fan support. A Hibs supporter told me: 'After Celtic and Rangers (admittedly a long way after) they have the largest home gates in Scotland and should survive the crisis. Hearts have a...

Peruvian born American businessman Robert Gordon has taken over Hibernian after looking at several clubs in England and Spain: Takoever He doesn't sound as if he is going to splash the cash: 'Money is not always the answer. Obviously you need resources, but I think creative thinking and looking at things in a different way and developing ideas and teams that can really flourish is, I think, what made my company successful.' He has made a seven figure cash injection into the Easter Road club which is now debt free: Supporters react A Hibs supporter I spoke to commented, 'It has been known for some time that Tom Farmer was keen to pass the responsibility on to a new owner. Farmer took Hibs on as a good deed when they were at a very low point, partly because he has a long term association with Leith. I understand that he has no particular interest in football, and I'm sure that he never expected Hibs to be a very productive investment - it was more philanthropy th...

Full accounts from Hibernian for 2017/18 show income up 25% to £9.6 million as a result of record attendances at Easter Road and the increased prize money associated with the Premiership. The club reported a profit before tax of £0.2m compared to a loss of £0.3m the previous year in the Championship. The main expense for clubs is wages and these increased by 17% to an estimated average of £2,400 a week. Wages still under good control at £56 for every £100 of income which is at lower end of the SPFL. Good wage control saw Hibs reverse the previous season losses. Hibs player spending was moderate by SPFL standards at just over half a million. The wages to turnover ratio reduced to a satisfactory 56 per cent. Player trading resulted in a loss of £0.5m at the end of the year compared to a gain of £0.5m in the previous year. One person who has done well at Hibs last season is the highest paid director who saw pay package rise by 51% to £208,000.