The Political Economy of Football V2

QPR moved out of the relegation places at the weekend, but there was real sadness at the passing of their legendary player Stan Bowles.   Sincere condolences to everyone who knew him, he was a true bright light in football. QPR’s pre-tax loss reduced from £24.7m to £20.3m, as revenue rose £1.2m (5%) from £22.1m to £23.3m and profit from player sales increased from £0.2m to £1.0m. The main reason for the revenue growth was commercial, which increased £1.4m (19%) from £7.3m to £8.7m, while gate receipts were slightly up, rising £0.1m (2%) to £5.7m. However, broadcasting fell £0.3m (4%) to £8.8m. QPR’s £20.3m loss is still one of the worst of the nine clubs that have published 2022/23 accounts to date, only surpassed by Norwich City £27.2m and Bristol City £22.2m. That said, very few clubs manage to make money in this very challenging division with only Watford in the black so far last season. Although QPR increased their profit from player sales from £0.2m to £1.0m, this w...

Another defeat for QPR yesterday and the latest set of accounts  from March, showed the club was losing around £2million ($2.4m) a month, and sporting director Les Ferdinand left his position in June and has not been replaced.  The Athletic reckons this is the sorry tale of a club stuck in an ominous downward spiral. A big part of QPR’s problems has centred on their recruitment, namely their inability to cash in on prized assets.    Kevin Gallen, who now works as a full-time scout for Crystal Palace, says: “Recruitment in a football club is the most important thing. QPR’s recruitment over the years hasn’t been good. That part drastically needs to improve. With QPR unable to bank a hefty fee since Eze joined Crystal Palace for £20m in August 2020, they are sailing close to breaching financial fair play (FFP) rules. This means they have little spending power to improve the squad. Under the rules, Championship clubs are allowed losses up to £39m in a three-yea...

The authoritative Swiss Ramble reviews the finances of QPR:  https://swissramble.substack.com/p/qpr-finances-202122?utm_source=substack&utm_medium=email QPR’s pre-tax loss significantly increased from (restated) £4.1m to £24.7m, mainly because profit on player sales fell £17.4m to just £0.2m. Revenue rose £7.6m (52%) from £14.5m to £22.1m, as a result of COVID restrictions being lifted and business returning to normal.   The revenue growth was eaten up and more by operating expenses increasing £10.8m (30%) to £46.4m.  QPR’s cost base shot up, as the club appeared to return to the dark days of gambling on promotion. The wage bill increased £3.4m (14%) from £24.2m to £27.6m.    QPR’s £24.7m loss is the second highest reported to date in the 2021/22 Championship, only surpassed by Bristol City £28.5m. Since Tony Fernandes arrived in August 2011, total losses have amounted to £254m – or £314m if we exclude a £60m loan write-off in 2014. Since Tony Fernande...

The authoritative Swiss Ramble reviews the latest accounts of QPR.   Thrpre-tax loss narrowed from £16.4m to £4.5m, despite revenue falling £3.8m (21%) from £18.3m to £14.5m, as profit on player sales rose £11.7m to £17.6m and there was no repeat of prior year’s £4.5m write-off of previous training ground development. The £4.5m loss is actually one of the better results in the Championship. Even before the full effects of the pandemic were felt in 2020/21, many clubs lost more than £20m, while Bristol City and Millwall lost £38m and £14m respectively last season. Although QPR continue to lose money, their turnaround is emphasised by the 2020/21 £4.5m loss being the lowest since 2006. However, since Tony Fernandes arrived in August 2011, total losses have been £230m – or £290m if we exclude the £60m loan write-off in 2014. The £3.8m revenue reduction was entirely due to the COVID driven £3.8m fall in match day income from £4.0m to just £207k. Broadcasting rose £0.1m (2%) ...

The EFL has never done much to enforce its financial fair play rules that would serve as a warning to other clubs.  In part this is because it knows that the whole FFP structure is open to a legal challenge as a breach of competition law. One exception was the fine imposed on QPR.   Now that QPR's chief executive Lee Hoos has sent a letter to Championship clubs asking for the fine to be cut. Kieran Maguire of the PriceofFootball reckons that the fine wasn't £42m as £20m was a debt to equity swap of loans that would never be repaid.  £3m was legal fees and the remainder was not to be repaid until 2028 so Maguire prices its current value at about £9.5m - still a lot of money at that level. Hoos believes that the punishment was too harsh and refers to the impact of Covid-19.  What the reaction of other clubs was is open to debate:  https://www.dailymail.co.uk/sport/football/article-9165339/QPR-CEO-Lee-Hoos-sends-letter-fellow-Championship-clubs-request-cut-42m...

QPR chief executive Lee Hoos has back calls for a wage cap in the EFL and discusses different types of wage cap, drawing on the earlier experience of the Super Hoops:  https://en.brinkwire.com/sports/qpr-chief-executive-lee-hoos-backs-the-wage-cap-crusade-in-the-football-league-amid-pandemic/ He also talks about a closer alignment between the Premier League and the Championship. He notes, 'The problem is, if you talk about Premier League 2 it sounds like a breakaway. But I’m just talking about the Championship being more closely aligned to the Premier League.' In many ways the Championship is already a de facto Premier League 2 in terms of its spending patterns, but these may turn out not to be sustainable if they ever were.

After years of hard work financially stabilising the club, QPR are close to the edge again because of the coronavirus pandemic: Close to the edge

The Swiss Ramble insists it's just a hobby, but his forensic analyses of club accounts are invaluable. Latest to come under the microscope are QPR. The club's loss significantly decreased from £38m to £10m, largely due to no repeat of the previous season’s £20m FFP fine, though there was also operational improvement: revenue rose £3m to £35m, profit on player sales was up from zero to £3m, while expenses were cut by £7m. The wage bill was cut by £7m (22%) to £24m, reducing the wages to turnover ratio from 98% to 69% - significantly better than the 195% of the Redknapp era. QPR's £75m wage bill in 2013/14 was the second highest ever in the Championship, only surpassed by Newcastle United £80m in 2016/17. Their wages have been reduced by over two-thirds (£51m) since then. All three revenue streams were higher. Main increase was in broadcasting, which rose £1.8m (9%) to £22.0m, due to slight uplift in parachute payment and FA Cup run. Commercial was up £0.9m (15%) to £7.2...

QPR decided to give their naming rights to a local charity and Loftus Road will be known as the Kiyan Prince Foundation Stadium next season following a vote by fans. Kiyan was a promising Academy player who was stabbed to death when he tried to break up a fight outside his school: New stadium name

QPR chief executive Lee Hoos admits the club have been baffled by Hamilton and Fulham Council's angry response to the club's plan to develop the Linford Christie stadium. They want to leave Loftus Road and turn the athletics stadium into a 30,000 all seater facility. They see it as their only option to stay in W12 and claim the stadium would bring £60m into the area if built. The Council responded by accusing the club of playing property developer in White City. The Council have said they would help QPR in finding other sites in the area or assist them in redeveloping Loftus Road. For their part the club argue that they have been explaining for three years that redeveloping Loftus Road would not work and they are not aware of any other sites in the vicinity.

QPR need to leave Loftus Road if the club is to be sustainable according to their chief executive Lee Hoos. He says that a proposed move to the Linford Christie Athletics Stadium is the last chance to stay in the Shepherds Bush area: Must seize last chance

The four year legal battle between the EFL and QPR over financial fair play has come to an end with an agreed settlement of £41.965m. They will also be under a transfer embargo in the January window. The club will pay a £17m fine to the EFL over a ten year period, contribute £3m to cover the EFL's legal costs and convert £21.965m of existing loans into equity. QPR were ordered to pay a world record £40m fine last year. QPR launched an appeal which they have now withdrawn as part of the settlement. Although the fine has been substantially reduced, the owners will still have to pay out a total of £42m. Kieran Maguire of the Price of Football offers his views on the deal here: FFP Fine

The latest club to publish their 2016/17 accounts as the financial year comes to an end are Queens Park Rangers. I am reproducing here some tweets from the authoritative Swiss Ramble. QPR reduced their loss by £4.6m from £11.0m to £6.4m, their lowest deficit since 2008, as revenue rose £6.1m (15%) to £48.0m and the wage bill was cut by £10.1m (25%) to £30.7m. However, profit on player sales was down £5.4m to £7.3m and interest payable was up £3.3m to £5.7m. The main reason for the QPR £6.1m revenue growth was the new Premier League TV deal, which resulted in a higher parachute payment, thus increasing broadcasting income by £5.7m to £35.3m. Most clubs in the Championship get just £7m. Commercial income rose £0.7m, a respectable total for this division, but gate receipts were £0.3m lower at £5.2m. Average attendance decreased from 15,994 to 14,616. This was the 17th largest in the Championship and way behind the top two - Newcastle on over 51,000 and Aston Villa on over 32,000. Th...

Success elsewhere in business does not readily translate into football which is a world with own special customs and rules. Tony Fernandes built up low cost airline AirAsia almost from scratch, then spent £200m on Queens Park Rangers only to end up lower in the league than when he started. Big name internationals were brought in on £80,000 a week contracts with no relegation clauses. A wage bill of £75.4m on a turnover of £38.7m in the Championship was the result. Now Fernandes has published a memoir Flying High, My Story from AirAsia to QPR. He admits, 'Pure naivety. I thought every player would run their socks off, because that's always been my character. I never thought there would be guys who would take a salary and do **** all.' Fernandes says that the club now has a wage cap, believed to be about £20,000 a week. They have stopped dealing with certain agents. Work is expected to start next year on a new training ground at Ealing and while plans for a 40,000 c...

It's been one of the longest wrangles in contemporary football, but the efforts of Queens Park Rangers to avoid paying a £41m financial fair play (FFP) fine have reached a new stage after the club lost their latest legal challenge. However, the saga is by no means over. An arbitration panel of three QC's has dismissed the club's claim that the Football League's 2012 financial fair play rules were illegal under competition law and that the fine was disproportionate. QPR were relegated in 2015 after one season in the top flight. In 2012, the Football League's FFP rules restricted clubs to losses of £8m per year. New rules were implemented last season that allow losses of £39m over three seasons. The former rules were thought to be too draconian and the new rules harmonised them with those of the Premier League. The club announced losses of £9.8m for the 2013-14 season when they won promotion via the play offs. However, they wrote off £60m in loans as exceptional...