The Political Economy of Football V2

Football finance guru Kieran Maguire reports the 2022/23 financial figures for Peterborough United.    Revenue was £10.1m down 4%.  Wages £7.3m down 5%. Wages £72 for every £100 revenue, a healthy ratio. Highest paid director £182k down 18%.  Underlying loss £5.5m down 2%. Player sale profits £4.1m up 25%.  Pre tax loss £2.3m down34%.  Losses over the years £21.5m. Player purchases £1.1m.  Player sales £4.2m.  Total transfer fees for squad £5.2m. Borrowings £19.8m. The current season has been a disappointment on the pitch as the club was expected to be in contention for promotion. AI overview:  Peterborough United Football Club's finances have seen a period of significant challenges and recent stability, with the club facing debt issues and a potential administration risk, but now having a long-term loan settlement agreement with OKR Financial .  

As the deadline approaches, clubs are filing accounts at a fast and furious pace.   Thanks to Kieran Maguire for this data.  Fleetwood Town lost more than £6m in 22/23, taking total losses over the years to nearly £31m.  Fleetwood owe other parts of the Pilley empire over £31m in terms of interest free loans advanced to the club. Burton Albion, one of the most sustainable clubs in the pyramid, lost just over £1m in 22/23. Player sale profits reduced these losses to £133k Burton bought players for £200k in 22/23 and had sales, presumably of Bosman or academy players, of £973k.    Peterborough United   have submitted their   accounts: Revenue £10m up 42%. Wages £7.7m up 15%. Underlying loss pre player sales £5.4m.   Player purchases £775k. Player sales £4 million.

A Canadian investment fund that claims it is owed £14.6million by a company that owns half of Peterborough United has mentioned the possibility of putting the League One club into administration. This could be a negotiating ploy rather than a serious threat. Set up in Calgary in 2016, OKR Financial’s main business is lending money to technology start-ups. In 2018 its co-founders, Dr Jason Neale and Randy Thompson, bought a 50 per cent stake in the English club via a different Canadian firm, Kelgary Sports and Entertainment. Neale and Thompson paid Peterborough chairman Darragh MacAnthony £2.5million for the shares and loaned the club another £3million, but their business relationship ended last year when OKR’s investors accused Neale of making unauthorised loans from OKR to Kelgary and other businesses. Neale denies any wrongdoing but he was forced out of OKR and recovery agents were brought in to chase those loans. In November, OKR sent a demand to the club for repaymen...

Peterborough United think they could still avoid relegation as Reading face the possibility of a further points deduction:  https://www.peterboroughtoday.co.uk/sport/football/peterborough-united/why-there-is-still-a-bit-of-hope-peterborough-united-can-avoid-relegation-this-season-3684927

Peterborough lost almost £90,000 a week from day to day operations but sale of Tomey offset most of these losses. Loan interest up x12 took loss before tax to £1m, reports Kieran Maguire of the PriceofFootball. Peterborough spent £9m more cash than the club generated in day to day activities, partly due to COVID. Player sales brought in £4.8m cash and the club borrowed a net £6.2m from owners.    Peterborough spent £2.35m on players in 2020/21 and had sales of £4.95m Peterborough istechnically insolvent but owner loans and commitment aim to cover the going concern issue. Total losses exceed £16.5m.    Peterborough loans, mainly due to owners,   up from £7.4m to £13.6m Peterborough wage bill up despite staff numbers probably due to promotion bonuses. Wages were £103 for every £100 of income.    Many Championship clubs have far higher (worse) ratios. Peterborough claimed £395k in furlough in 2020/21. The big challenge for the Posh is to stop be...

Peterborough United have reported an increased loss of over £3m, mainly due to a decline in player sales.  However, it should be noted that the accounts do not include the sale of star striker Ivan Toney to Brentford for an eventual fee reported to be £10m:  https://www.peterboroughtoday.co.uk/sport/football/peterborough-united/posh-announce-a-near-ps35-million-loss-3155886 Meanwhile the club is pushing for promotion to the Championship, showing a capacity to replace lost talent.

Clubs are increasingly been approached by external funders.   Contrary to what one might expect financial institutions see clubs as secure assets, despite a perception in some quarters that the sector is financially unsophisticated. Aldermore, one of the UK's leading challenger banks, has in the past couple of months increasingly become engaged with clubs over factoring deals after a period of disengagement. Both Brighton & Hove Albion and Leeds United are understood to have dealt with the financial institution. Meanwhile, much larger Barclays has for years been reducing its exposure to football but recently been behind several loans to West Ham. Peterborough have borrowed money from Shawbrook Bank, secured on the two outstanding instalments due from Brentford for just over £2m in relation to Ivan Tomey’s £6m transfer

Kieran Maguire of the PriceofFootball reports, 'Peterborough United have borrowed money from Shawbrook Bank, who last week lent to Sheffield United, secured on remaining instalments of £2.5 million for the £4 million transfer of Jack Marriott to Derby County. Interest rate is the same at 6.5 per cent above base.' This is a reasonable rate of interest. Borrowing against a transfer fee paid in instalments is a relatively new development. Sheffield United borrowed £7.5m from the Essex-based bank: Borrowing The loan will be used for bills and day-to-day expenses at the club and will be repaid from the sale of David Brooks to Bournemouth for £11.5m. Shawbrook is a retail and commercial bank established in 2011: Shawbrook

Last Saturday during the international break League One and League Two fans were able to watch their matches live through iFollow. Normally the live screening of matches kicking off on a Saturday afternoon is permitted, although sites overseas may offer this service illegally. The concern is that if this became a regular practice away fans might be deterred from travelling as would some home fans who have a long journey (two and a half hours each way for me). It has also been claimed that the EFL misled fans about their intentions. Andy Holt, the chairman of Accrington Stanley, has claimed that the decision to allow the 3pm streaming was never made clear at the annual meeting of clubs in June. Darragh MacAnthony, the outspoken chairman of Peterborough United, took a different view: 'I'm OK with it to be honest. I think it is the way of the modern world whereby all and every sports match and event will be available online.' Streaming could potentially occur again on O...