The Political Economy of Football V2

At Newport County  majority owner Huw Jenkins has made no secret of his desire to find a partner or a way out. The former Swansea City chairman bought the Welsh club two years ago, but has already loaned Newport £3m without seeing any improvement on the pitch. Newport are not the easiest sell, as they do not own their stadium or training ground, and they are currently one point and one place above the drop zone with three to play. But that does not appear to have put off Nicholas Beddis, a former soldier from nearby Pontypool, who went on to build a successful career in real estate in Dubai before more recently setting up AGS Capital Global, a financial advisory business aimed at professional athletes. There is, however, another chapter in his story: a stretch in prison for an assault that took place at a Halloween party in 2012 when he was 19. Neither Beddis nor Jenkins wanted to comment on the status of their talks, but  The Athletic  understands that Beddis knows...

As part of a shake-up of the domestic game in Wales, plans are afoot for Cardiff, Swansea, Wrexham and Newport to enter the Welsh League Cup, alongside the current Cymru Premier (Welsh Premier League) clubs. The winners, if the proposal is agreed by the Football Association (FA), Football Association of Wales (FAW) and UEFA, the European game’s governing body, would compete at continental level in the following season’s Conference League. For Phil Parkinson, the Wrexham manager, the prospect is an exciting one. “To bring European football back to Wrexham would be amazing,” he says. “Great to test yourself against teams from different countries around Europe. Be fantastic to have that opportunity.” Speak to those pushing for change and there’s a sense it could be given the go-ahead before the end of this calendar year, meaning Cardiff, Swansea, Wrexham and Newport would enter next season’s Welsh League Cup, and its winners would enter the 2026-27  Conference League, UEFA’s ...

Fan owned clubs, even in the lower leagues, often find it difficult to meet the losses that usually occur and so is is proving with Newport County. The Exiles are currently owned and run by the supporters' trust but posted a loss of £1.2m last year.  They are now looking at a full takeover and there are two investors in discussions.   The club has a threadbare squad of 16 or 17 players which cannot see them through the season.  Beating Charlton in the Carabao Cup did give them a lucrative home tie against Brentford. The Trust intends to retain a minority shareholder and any change would require a 75 per cent vote in favour.

Financial reports from two clubs who have battled their way up into the EFL from non-league, as featured by Kieran Maguire of the PriceofFootball. Newport County made a £14k profit in 2020/21 despite Covid. Cup progress may have helped the results. The Exiles have historic losses of over £1.8m but shareholder injections mean club is solvent and has plenty of cash in the bank. Newport repaid about £75k of loans in 2020/21. Accrington Stanley lost £43k in 2020/21 and had £167k in the bank at end of season.    They are sandwiched between two clubs with Premier League histories – Blackburn and Burnley. Accrington signed players for £69k in 2020/21 and spent significant sums on new infrastructure projects, with more spending commitments for 21/22. Both clubs have players signed from my non-league club, Leamington: Colby Bishop at Accrington and Courtney Baker-Richardson at Newport.

There have been lots of gloomy predictions about EFL clubs going out of business, but so far owners have stepped up to the plate and stemmed the losses. Football is a very unusual sector of the economy because producers hardly ever disappear unlike what happens elsewhere.   Accrington Stanley was the longest disappearance and even it eventually reappeared. The only real disappearance is the sad story of Third Lanark in Scotland:  https://thesefootballtimes.co/2019/04/19/how-scottish-football-lost-third-lanark-a-cherished-club-destroyed-by-one-mans-greed/ Nevertheless, one should not underestimate the challenges faced by EFL clubs, particularly if they are only allowed to fill one-third of their grounds, or even worse, 17 per cent.   On average they fill 60 per cent of capacity, but obviously this varies between divisions.   Here are some case studies. Queens Park Rangers QPR costs £8m a year to run before you pay any players or coaching staff.   The players defe...

Newport County income was up £900k to a turnover of £3.2m in 2017/18 due to FA Cup matches with Leeds and Spurs. The club reduced operating losses by £250k to £122k and player sales turned this into a profit. Newport County spent £30,000 on new players in 2017/18 and had sales of £216,000. The Exiles had borrowings of about £250k at 30 June 2018 but all from related parties and interest free. Following the cup run experienced again in this year's competition, the board anticipates that the club will make a profit again in the year to 2019.

Key financial figures comparing Newport to Leicester provided by Kieran Maguire of the PriceofFootball. Leicester City earned £100.60 for every £1 of income made by Newport. The Foxes spent £101,887,000 on players compared to Newport's £3.600, It took Leicester 6 days 21 hours to pay Newport's annual wage bill. Newport County's annual wage bill is £895,000 and turnover is £2.2m. That's a healthy 41 per cent of turnover, well below the recommended 50 per cent figure. The Exiles will get about £300,000 from their win and television fees. Their share of the away takings at a big club would give their finances a further boost. Kieran Maguire comments on the Foxes, 'If you are wondering why Leicester put out a half-hearted team for yesterday's match at Newport, winning the 3rd round of a FA Cup tie is worth £135,000, every extra game over 10 shown on TV in the Premier League is worth £1.13m and every additional final place in the PL table is worth £1.93m.' ...

The 2016/17 accounts for Newport County state, 'During the 2016/17 season, the Club experienced poor performances both on and off the field which have resulted in a loss for the year ending 30 June 2017. The Board have prepared financial forecasts for the year ended 30 June 2018 and following the successful FA Cup run and the likelihood of remaining in the Football League, the Board anticipate the Club will making a profit [in 2017/18].' 'The Board have prepared strict budgets for the 2018/19 season with a view to reducing unnecessary costs and increasing revenue streams into the Club.' Turnover increased slightly from £2m to £2.3m. The operating loss was more or less steady at £370k, amounting to some £7k a week. Just £3.5k was spent on signing players. Shareholders pumped in £236k in new shares to keep the club afloat. Overdrafts and loans from current and former directors amounted to £241k, the loans being interest free.