The Political Economy of Football V2

Benfica’s 2023/24 accounts cover a season where they finished second in the Primeira Liga, which was pretty good by most clubs’ standards, but has to be considered a disappointment for the club from Lisbon, especially after they won the league the previous season. President Rui Costa, the former player (and football legend), admitted, “This fell short of what we intended in terms of sport.” In 2023/24 Benfica swung from a €2m profit before tax to a €31m loss, a deterioration of €33m, as revenue fell €17m (9%) from €196m to €179m and profit from player sales dropped €6m (8%) from €64m to €58m.   This was exacerbated by operating expenses increasing €6m (3%) to €252m and net interest payable rising by a third from €12m to €16m. The net result after tax went from a €4m profit to a €31m loss. Importance of player sales Rui Costa attributed the loss to the Euros, which delayed activity in the summer transfer window, thus reducing the club’s ability to make money from player sales....

The Financial Times Scoreboard team caught up with Gian Piero Sammartano, global co-head of sports investment banking at JPMorgan. Sammartano gave the Pink ‘Un folks his take on the trends shaping the industry. JPMorgan worked on Sir Jim Ratcliffe’s acquisition of a stake in Manchester United and is currently running a sale process for the Bolton Celtics.   The bank was also sole placement agent on Porto FC’s recent €115m private placement financing, and lead arranger on a $425m construction term loan for New York City Football Club’s new stadium in Queens. Sports M&A boomed following the pandemic. What’s happening now? On a global level, interest towards sport investments remains strong. US franchises are in high demand, buoyed by healthy media rights trends, caps on player spending and ongoing relaxation of ownership rules to allow institutional investment. Motorsports have likewise seen increased interest, especially Formula One teams on the back of the sport’s continu...