The Political Economy of Football V2

Southampton have been kicked out of the Championship play-off final, known as the richest game in football due to the financial rewards from winning it, after the club was found to have broken league rules by spying on opponents’ training sessions.  The English Football League, which runs the second, third and fourth tiers of professional men’s football, said on Tuesday that an independent disciplinary commission had decided to expel Southampton from the play-off final, due to take place on Saturday. It added Southampton had “admitted to multiple breaches of EFL Regulations related to the unauthorised filming of other clubs’ training”. Southampton will also receive a four-point deduction for next season. Southampton had been hoping to bounce back to the Premier League after being relegated last year. The south coast club is majority owned by its chair, Serbian billionaire Dragan Šolak. The club still has tickets for the Championship play-off final advertised for sale on its web...

Hull City could be the losers from the 'Spygate' crisis and the lawyers could be the winners. If the EFL decides that Southampton can stay in the play off final, Boro are likely to sue given the sums that are at stake.  And if the EFL removes them, the Saints will call in their lawyers. Meanwhile Hull City do not know who they are going to face and when they will face them.   This makes it particularly difficult for their disabled supporters who need to book transport and accommodation. One thing that surprised me is how open Boro's training ground is.   I live near Coventry City's training ground and once they started to be a serious club again, big screens were erected.

Middlesbrough rely on owner Steve Gibson to fund a return to the Premier League, but too often they have been the nearly men.  This season they are in the second automatic promotion position, but only one point ahead of Millwall Outstanding away performances have been undermined by some nervous home performances against lowly clubs, exemplified by last night's defeat to Charlton. The Swiss Ramble has been conducting his usual forensic analysis of their 2024/25 accounts and his full analysis is available on his Substack page. Middlesbrough’s pre-tax loss slightly reduced from £12.4m to £11.4m, thanks to profit from player sales improving by £9.2m from £17.1m to £26.3m. Revenue was also a little higher, rising £0.3m (1%) from £32.2m to £32.5m, though there was a steep increase in operating expenses, which rose £7.9m (13%) from £62.5m to £70.4m, while net interest payable more than doubled from £0.5m to £1.1m. Since 2011 Gibson has put £176m into the club via loans, almost all of whic...

Clearly, every club in England’s second tier is desperate to secure promotion to the promised land of the Premier League, but Middlesbrough have a more realistic chance than most, given the backing of owner Steve Gibson. In the last ten years, they have actually been promoted once, though only lasted one season in the top flight, while qualifying for the play-offs no fewer than three times. In addition, they have finished just outside the top six on three other occasions. Middlesbrough’s pre-tax loss almost doubled last season from £6.4m to £12.4m mainly because profit from player sales dropped by £5.2m from £22.3m to £17.1m.   Revenue rose £3.6m (13%) from £28.6m to £32.2m, though this was largely offset by other operating income falling £2.7m (69%) from £3.9m to £1.2m. Middlesbrough’s £32m revenue is obviously much lower than the £121m they earned in the Premier League in 2016/17, but it is worth noting that it has also virtually halved since their first season after relega...

Middlesbrough reduced their pre-tax loss in 2022/23 (for the third year in a row) from £19.5m to £6.4m, largely because of profit from player sales significantly increasing from £1.4m to £22.3m. The largest revenue increase was match day, which rose by more than a third (£2.4m) from £6.4m to £8.8m, though there was also good growth in commercial, up £1.6m (19%) from £8.4m to £10.0m. Against that, broadcasting fell £2.3m (19%) from £12.1m to £9.8m. Even after the significant improvement in the bottom line, the fact remains that Middlesbrough still posted a loss, though their £6.4m was pretty good for the Championship. In fact, it is the best financial performance of the five clubs that have published 2022/23 accounts to date. Middlesbrough’s profit on player sales shot up from just £1.4m to £22.3m, mainly from the sales of Djed Spence to Tottenham and Marcus Tavernier to Bournemouth. Not only is this the highest gain to date in 2022/23, but it is also more than any other club gene...

Middlesbrough's 2022.23 accounts show revenue at  £28.6 m, up 6%  Wages £29,6m up 4%. Operating loss pre player sales £29m up 40%.  Player sale profits of £22.3m offset operating losses . Total losses over years of £250m.   Player signings were £12m. Player sales £23m Boro bought players for over £12m as investment helped take club to playoffs, resulting in squad costing £40m by 30 June 2023. Sale of Spence and Tavernier may be contributor to sales of £23m. £148m owed to Steve Gibson   at year end then converted into shares and effectively written off.   Football finance guru Kieran Maguire comments: 'F ans criticising Gibson should give their heads a wobble as he’s also put in £90m via shares.' Football finance guru Kieran Maguire notes: ' In last 48 hours three Championship clubs. Preston, Middlesbrough and Luton published accounts. Between them they made an operating loss of £178k a day and none are profligate.'

The authoritative Swiss Ramble provides a forensic analysis of Middlesbrough's 2021/22 finances:  https://swissramble.substack.com/p/middlesbrough-finances-202122 Middlesbrough’s £19.5m loss was still fairly large, albeit better than the only other Championship club to publish 2021/22 accounts so far, namely Bristol City £28.5m.   That said, Boro’s loss was only surpassed by three other clubs in 2020/21, a year that was more adversely impacted by COVID. Middlesbrough have now posted three consecutive losses, amounting to £86m. In this period, they have been hit by the double whammy of COVID and the end of Premier League parachute payment.   In truth, like most Championship clubs, Boro regularly lose money, e.g. eight times in the last decade. The last time they were in the top flight in 2016/17 they made a £7m profit. One reason that Middlesbrough losses have increased in the last three years is very low profits from player trading. After £60m of gains in the three ye...

The formidable Swiss Ramble reviews Middlesbrough’s 2020/21 accounts, when they reduced pre-tax loss from £36m to £31m, but still one of the highest in the Championship. Boro reduced their pre-tax loss from club record £36m despite revenue dropping £4.9m (25%) from £19.4m to £14.5m, as other income rose £2.7m to £4.6m, operating expenses were cut £5.7m (10%) and profit on player sales rose £0.8m to £4.3m. Loss after tax was £27m. They have lost money eight times in the last decade with their cumulative losses adding up to £157m. Over the last two years their deficit is £66m, partly due to COVID, but also the end of parachute payments.   They posted a £7m profit in the Premier League in 2017. The club also benefited from parachute payments in 2018 (£42m) and 2019 (£35m), but these have now ended. These are so significant that they make it difficult for others to compete, e.g. in 2019/20 a relegated club received £42m in year one, £34m in year two and £15m in year three.  ...

Steve Gibson has been one of the most generous benefactor owners in football and has got scant return for it on the pitch.   However, it appears that some fans are unhappy even with him, claiming that he has secured tax advantages.   That's possible, but it wouldn't offset the sums he has put in. Football finance guru Kieran Maguire casts some light on the topic here:  https://www.gazettelive.co.uk/sport/football/football-news/steve-gibson-generosity-middlesbrough-finances-23652480

Middlesbrough had reported losses of over £30m with the club battered by the pandemic:  https://www.gazettelive.co.uk/sport/football/football-news/middlesbrough-fc-reveal-30m-losses-23433844 Steve Gibson has been an exceptionally generous owner and hasn't got that much in return, but perhaps this season will bring cup and league success. COVID meant hardly any gate receipts in the year. Broadcast income was due to IFollow. Commercial income was down over 40%.   Boro had the foresight to take out business interruption insurance which paid out £2.75m. Furlough claims were £589k. Wage bill up by 13%. Wages were £186 for every £100 of income, way above the 70 per cent recommended by Uefa. Average weekly wage was £12,500. Middlesbrough owe over £120m to Steve Gibson’s holding company, as well as £7m in transfer fees and £17m in unpaid tax, despite borrowing nearly £8m from the EFL in the year.    In any other sector of the economy, this would be seen as a business in ...

The Football League has given the administrators of Derby County until February 1st to find enough money to fund the club for the remainder of the season, or they could have their “golden share” suspended, which means the EFL could remove them from the Championship.  Given Derby were penalised for breaches of the Profit and Sustainability rules, Middlesbrough owner Steve Gibson believes Derby “systematically cheated” in the 2018-19 season and, as a result, unlawfully prevented his club from competing for Premier League status in the play-offs.   Wycombe Wanderers, feel aggrieved that Derby secured survival last season at the expense of their club. A bidder already has the enormous task of settling debts of £60 million. In previous football administrations, HMRC, who Derby owe £29.3 million, would only be entitled to 25 per cent of what they are owed. However, in response to the country’s effort to rebuild the economy from the pandemic, HMRC regained preferential creditor s...

The Swiss Ramble blogger reviews the 2019/20 accounts of Middlesbrough. Boro’s loss of £36m is the worst reported to date in the 2019/20 Championship, though this result may well look better when other clubs publish their COVID-impacted accounts. In fact, even before the pandemic, many clubs had losses above £20m. Excluding property sales, just three Championship clubs were profitable with only Hull City managing to make money so far in 2019/20. The sad reality is that almost all clubs in this division lose money, as they strive to remain competitive in pursuit of promotion to the top flight. One reason for Boro’s worse financial result is they only made £3m profit from player sales, whereas the prior year’s figures were boosted by £33m, They have increased profit on player sales to an annual average of £16m over the past four years. Revenue has fallen by £102m (84%) from £121m to £19m since relegation from the Premier League 3 years ago, very largely due to £93m decrease in bro...

Middlesbrough income  was down 65% and operating losses pre player sales £38 million in year to 30 June 2020 reports Kieran Maguire of the PriceofFootball. Middlesbrough total losses now total £206 million and club have £147 million of creditors. All three revenue sources, matchday, commercial and broadcast down in 2019/20, but end of parachute payments main driver of fall as TV income went from £40m to £8m.   The Importance of Premier League and parachute payments clear from total revenue figures over the last decade. Middlesbrough received £581k from furlough and £1.1m from PL grants at rear end of 2019/20.   Wages follow income at all clubs. Average weekly wage at Boro now 'just' £14,390 a week. Player trading for ‘Boro 2019/20: Purchases £6m sales £14m Middlesbrough owe £7m to other clubs for transfer fee instalments (down from £29m) and £116m to Steve Gibson’s Gibson O’Neill, taking his total investment to £205 million. Steve Gibson says that the club'...

From his Zurich fastness the Swiss Ramble casts his analytical eye over the 2018/19 accounts of Middlesbrough. Boro improved from a £6m loss before tax to a £2m profit, even though revenue dropped £6m (10%) from £62m to £56m and expenses were £3m higher, because profit on player sales more than doubled from £15m to £33m. They are actually one of just four Championship clubs to report a profit to date in 2018/19 with their £2m only behind Bristol City £11m, Hull City £3m and Rotherham £3m. This is a good performance, considering that almost all clubs lose money in this ultra-competitive division. That said, Boro would have also posted a hefty loss without £33m profit from player sales, including Adama Traoré to Wolves, Ben Gibson to Burnley and Patrick Bamford to Leeds. This was the second highest in the Championship, only surpassed by Bristol City £38m. Boro have made a profit twice in the last three years after accumulating £112m of losses in the previous six years, including a £32...

Middlesbrough have released accounts which show the club made a pre-tax profit of £2m in the year to June 30, 2019. The club’s coffers were swelled by a £33m profit on player sales, as stars such Adama Traore and Ben Gibson departed. Middlesbrough had an operating loss of £30m in 2018/19 despite parachute payments. Boro total operating losses averaged £359,000 a week over the decade. The period covers the club’s unsuccessful promotion campaign last season under Tony Pulis. The accounts reflect the club’s bid to adjust to life outside the riches of the Premier League and stay within financial fair play rules. The profit contrasts with a £6.4m loss a year earlier. Boro also revealed it had recouped a another £4.4m since last June in further player transfers. The club’s revenues fell from £62m to £55.6m after a drop in income from broadcasting from £46m to £40m while gate receipts were down by £1m to £6m. However Boro’s costs remained steady at £51m as spending on wages fell. Kieran...

One has to be very cautious about discussing the impact of Brexit on football as we are in a transition period when very little changes and we do not know what sort of agreement, if any, will be concluded between the UK and the EU at the end of the year. In the meantime, everything is speculation, so I give this link with a health warning: Big impact of Brexit on finances and transfers The Sunderland Echo is carrying the same story, except that it talks about the impact on Sunderland.

When parachute payments come to an end it can hit a club's finances hard and that is certainly the case at Middlesbrough: Need to rationalise finances Last year's revenues were around £65m. This year it will be around £21m. And the fixed costs of the club remain: with rates, utilities, maintenance and staff at the stadium and the training ground it costs Boro around £15m before a ball is kicked. That leaves the wage-bill to deal with. The first year after relegation the wage-bill was £49m. Last year it was still over £30m. This year it is still north of £20m.

It hasn't been a good few weeks for the English Football League and now they are being sued by one of their own clubs, Middlesbrough. They are alleging that the league failed to enforce its financial rules over Derby County's purchase of its own stadium. Derby beat Boro to a play off place by one point last season, denying them the possibility of a £180m Premier League bonanza. Derby are one of number of clubs who exploited a loophole in the EFL rules to buy their own stadium and thus make themselves meet financial fair play rules. Mel Morris, the club's owner and chairman, used a separate company to buy Derby's Pride Park ground for £80m, with a deal to lease it back, when it was listed as an asset in the club's books with a value of £41m. It meant that Derby posted a pre-tax profit of £14.6m when losses of over £13m a year over a three year period are a breach of the EFL's profit and sustainability rules. The EFL has ordered an independent valuation of P...

Kieran Maguire of the PriceofFootball comments, 'Boro paid an average wage of £23,400 a week in 2017/18. Would expect this to fall this season as otherwise would only be able to afford 19 players (and no managers, coaches or support staff) before the money runs out . Boro had 237 staff in 2017/18.' 'As a result Middlesbrough had the highest costing squad in the Championship by summer 2018, but that has come back to bite them as parachute payments stop in 2019/20. Boro spent more on players in 2017/18 than any other club [in the Championship], twice as much as the next club, as it bought players for £66 million.' Staff at the stadium and the training complex have been invited to apply for voluntary redundancy: Job cuts

Middlesbrough chairman Steve Gibson has stepped up his crusade on clubs he calls financial fair play (FFP) 'cheats', giving to large to the EFL: EFL must act Aston Villa and Derby County are among the clubs that he has criticised and there were even rumours of legal action against the Rams. There is no doubt that the FFP rules have been imperfectly enforced with a somewhat diluted example being made of Queens Park Rangers. However, I have always thought (and some lawyers agree) that they are open to legal challenge because they are potentially in conflict with competition law. The EFL therefore has to tread carefully.