The Political Economy of Football V2

A takeover of Rangers by a US consortium including the investment arm of the San Francisco 49ers has been completed:  https://www.bbc.co.uk/sport/football/articles/cqj7gj2w0k5o £20m will be made available for investment over the summer and it looks like a new era for Rangers fans. 49ers Enterprises are the owners of Leeds United.    This will mean Leeds have a new sister club contained within the 49ers' sporting sphere of influence. However, the running of the two clubs will remain largely separate, aside from standard industry information sharing and promoting strategy best practice. A spokesperson for 49ers Enterprises Global Football Group said: “The strength of our commitment, resources, and ambition for Leeds United remains unchanged. We look forward to competing in the Premier League next season.”

An American consortium that includes the San Francisco 49ers is believed to be moving closer to agreeing a substantial investment into Rangers.  The deal is being led by Paraag Marathe, an executive who leads the venture capital arm of the 49ers NFL team, but also includes members who have not yet been named. 49ers Enterprises already has a controlling stake in Leeds United after taking control at Elland Road in 2023 in a £170 million deal. Marathe is chairman at the Yorkshire club. Talks are at a relatively advanced stage and may pave the way for an agreement to be announced in the coming months. There is potential for the consortium to attempt to buy out other Rangers investors and build up its stake in the Ibrox club over time.. Rangers already has a US presence in its boardroom and on its shareholder register.   John Halsted, a Wyoming-based private equity investor, has been a non-executive director since August 2023. He originally bought sha...

The revenue available for distribution to Europa League clubs has increased by 22% (€100m) from €465m to €565m, which is good going at any time, but especially when domestic broadcasting deals are struggling to deliver any growth or are even falling in value. Again like the Champions League, the distribution mechanism has been amended, as two of the previous elements, namely the TV pool and UEFA coefficient, have been combined into a new “value pillar”.    The maximum amount a club could earn in prize money, including the participation fee, has increased by €9.3m (40%) from €23.4m to €32.7m. Calculations by the Swiss Ramble suggest that five clubs have already received more than €20m from this season’s Europa League with English clubs filling two of the top three places: Manchester United are first with €22.7m, while Tottenham are third with €21.7m. The country that has earned most to date from the Champions League is England with €44.4m, ahead of Netherlands €42.4m, fol...

When I was at Strathclyde University taking a MSc in 1968/9 we were discussing the rise of Scottish Nationalism and the sources of Scottish identity.   The tutor was expecting us to come up with the conventional answers: education system; legal system; Church of Scotland.   I knew that the Celtic Supporters Club was the largest student organisation at Strathclyde (reflecting the then composition of the student body).  I suggested that the national team -  together with the separate national competition - reinforced a distinct identity in a nation that was fitba’ crazy. The tutor, who was from Missouri, asked what hypothesis I would advance to test the relevant importance of football compared with other sources of identity, a methodologically impossible task.   However, I did know that his American colleagues were sneaking into Old Firm matches when they could.    They simply had nothing like it back home.     (English expats tende...

 Rangers currently do not have a chief executive nor a director of football operations, while the chairman is only a temporary appointment. Since Steven Gerrard was tempted by the riches of the Premier League, moving to Aston Villa in November 2021, Rangers have had three different managers, which has not helped matters, as they have all had their own playing styles, requiring much turnover in the squad. Rangers legend Ally McCoist gave a damning assessment of last season’s financial results, “Those figures are really, really concerning. They’re trying to put a positive slant on it, but those losses, man, dear me.” Ranger’s pre-tax loss shot up from £3.1m to £17.3m, despite revenue rising £4.5m (5%) from £83.8m to a club record £88.3m, as profit from player sales dropped from £23.6m to £5.6m.   Rangers’ revenue growth was largely driven by higher gate receipts amd hospitality, which rose £4m (10%) from £40m to £44m, though there was also an increase in commercial, up £...

Celtic have earned €36.1m from the Champions League, which is much more than Rangers’ €20.2m in the Europa League and Aberdeen’s €4.8m in the Europa Conference. This is despite the fact that Celtic finished bottom of their group, while Rangers came first in their group, thus proceeding to the last 16. Celtic were Scotland’s sole representative in the Champions League group stage this season, earning €36.1m, which was made up of €15.6m participation fee, €4.0m prize money, €10.2m UEFA coefficient payment and €6.2m TV pool.   In other words, nearly half of their income is just for making it to the group stage, i.e. in the shape of the €15.6m participation fee. Rangers’ overall UEFA ranking was a bit behind Celtic’s at 58th, but their UEFA coefficient payment in the Europa League was much smaller.   Rangers will have a better coefficient next season, as they will drop a season without any ranking points, possibly overtaking Celtic. Rangers have earned €20.2m, including €5.0...

Europa League winners, Eintracht Frankfurt, earned the most with €38m, while another German club, Bayer Leverkusen, secured third place with €22m. The two English clubs also did well with semi-finalists West Ham in second place with €32m, while Leicester City were sixth highest with €18m. Interestingly, losing finalists Rangers only earned the fourth highest revenue of €21m, even though they received the second highest prize money. This was because their TV pool was very low. The TV pool is a major differentiator in earnings in the Europa League, while the UEFA coefficient plays a much smaller part, especially compared to the Champions League. West Ham earned an impressive €32.1m for reaching the Europa League semi-finals, including the highest TV pool payment in the competition of €17.4m plus €1.1m for winning their group. Leicester City only received €17.8m after finishing third in their group, but this was boosted by another €6.5m after dropping down to the Europa Conference...

The authoritative Swiss Ramble reviews the latest accounts of Rangers:  https://swissramble.substack.com/p/rangers-finances-202122?utm_source=substack&publication_id=1203438&post_id=87157076&utm_medium=email&utm_content=share&triggerShare=true&isFreemail=true He comments: ' It is worth noting that Rangers small loss is one of the best performances of the leading European clubs that have reported 2021/22 figures to date. In stark contrast, large losses have been posted almost everywhere else, e.g. PSG £327m, Juventus £225m and Barcelona £157m (excluding their famous economic levers).' 'Rangers’ strategy of investing in the squad has had “clear effects on our financial statements” in recent years, with their pre-tax losses adding up to nearly £100m in the last decade. Obviously, the huge deficits in 2020 and 2021 were exacerbated by the pandemic. That said, the £2m loss in 2021/22 is the club’s smallest in the last 9 years, as the club has pushed for ...

The authoritative Swiss Ramble looks at the money to be earned from the Champions League. Champions League overall prize money is 3.6 times the Europa League and 5.5 times the Europa Conference, but this varies by round. In general, the difference becomes smaller the further a club progresses, e.g. last 16 it’s 8x and 16x, while for the winners it’s only 2.3x and 4x. In 2022/23 each of the 32 clubs qualifying for Champions League group stage gets €15.64m plus €2.8m for a win and €930k for a draw. Additional prize money for each further stage reached: last 16 €9.6m, quarter-final €10.6m, semi-final €12.5m, final €15.5m and winners €20m. Each club in the Europa League group stage get €3.63m plus €630k for a win and €210k for a draw. Additional prize money: win group €1.1m (runners-up €550k), knockout round €500k, last 16 €1.2m, quarter-final €1.8m, semi-final €2.8m, final €4.6m and winners €8.6m. Each club in the Europa Conference group stage get €2.94m plus €500k for a win and €16...

The Swiss Ramble responds from Zurich to requests about how much Rangers earned for reaching the Europa League final.  His estimate is £17m (€19.3m) TV money.   They would have got another €4m if they had won the final. This compare to Celtic’s £9m (€10.5m) for group stage plus Conference League knockout round. Celtic’s earnings boosted by having a higher UEFA coefficient payment (€3.4m) than Rangers(€0.9m), as they are ranked higher based on performances in UEFA tournaments over the last 10 years (Celtic 38th vs Rangers 98th). Figures will be updated after this season. In addition, both clubs' revenue will include money for additional gate receipts and bonuses in commercial deals, partially offset by higher variable compensation for players and other staff.

With Steven Gerrard moving as manager from Rangers to Aston Villa for a reported £4.5m in compensation for the Glasgow club, Kieran Maguire of the PriceofFootball makes a few financial comparisons between the two clubs for 2019/20. Rangers make about three times the matchday income as Villa (£35.7m versus £11.1m). The Villa wage bill is £65 million higher than that of Rangers (£108.8m versus £31.1m). Villa spent £156m on players in 2019/20, compared to £11m at Rangers.   [One might add that the failure of some of these signings was a factor in Dean Smith's downfall.   Wealthy owners are prepared to splash the cash, but expect a payback].

From his fastness in Zurich, the authoritative Swiss Ramble has been reviewing the 2019/20 accounts of Scottish Premiership clubs. Most Scottish Premiership clubs aim for break-even with five making small profits, led by Hearts £0.5m and Motherwell £0.3m. Rangers’ £17.5m post-tax loss is the big outlier, especially compared to Celtic’s£0.4m deficit, largely due to their recent investment in the squad. Celtic had the highest revenue with £70m, though the gap to Rangers £59m has narrowed. Both Glasgow clubs earn at least four times as much as other Scottish clubs with closest challengers being Aberdeen £14m, Hearts £12m, Hibernian £9m and Kilmarnock £5m. However, it is worth noting that Celtic were boosted by £24m profit from player sales, largely due to Kieran Tierney’s move to Arsenal, which was significantly higher than other Scottish clubs. The next highest were Kilmarnock £1.2m, Motherwell £1.0m. The Old Firm had by far the largest operating losses (i.e. excluding player sales...

The idea of 18-team British League including Celtic and Rangers as an alternative to the failed Super League does not stack up in my view and football finance guru Kieran Maguire thinks so as well:  https://www.scotsman.com/sport/football/celtic/celtic-and-rangers-in-british-premier-league-doubts-from-football-finance-expert-3222422

From his fastness in Zurich, the authoritative Swiss Ramble takes a look at the 2019/20 accounts of Rangers. The club's pre-tax loss widened from £11.4m to £17.8m, despite revenue rising £5.9m (11%) to £59.0m, though profit on player sales fell £2.4m to £0.7m. This was due to £11.5m (18%) increase in operating expenses, as the club invested in the first team. After tax loss was £17.5m. The main driver of the revenue increase was the Europa League, which was worth £20.7m compared to £14.3m prior year. However, player and other wages surged by £8.9m. To increase their revenue by £6m (11%) in a COVID impacted season is a noteworthy achievement, especially considering the hefty reductions in most other leading clubs across Europe. Rangers have consistently lost money in recent times, aggregating £70m of losses in the last seven years. The £18m loss in 2029/20 is the largest in that period, partly due to the investment in the squad, but also adversely impacted by the pandemic. The cl...

The idea of 'B' teams playing in the EFL has always been controversial and firmly opposed, even if development sides have been allowed into a cup competition.   However, Rangers have suggested that the 'Old Firm' could be allowed 'B' sides as part of the controversial Scottish league restructuring. Meanwhile, Brora Rangers think that the clock is ticking for their hopes of promotion from the Highland League:  https://www.pressandjournal.co.uk/fp/sport/football/highland-league/2245565/clock-is-ticking-for-league-reconstruction-says-brora-chairman-powrie/

The authoritative @SwissRamble has been producing two page financial fact sheets on leading clubs which can be viewed on his twitter feed. His summary for Celtic is 'they have been profitable for the last four years, helped by good profits from player sales. Revenue fell in 2019, due to not qualifying for Champions League group stage. Low debt, high cash balance, declining net transfer spend. Highest revenue, wages and profit in Scotland.' 'Rangers have lost money in the last five years, partly due to low profits from player sales. However, revenue has more than tripled since 2015, driven by improved performance in Europe. Largest loss, debt and transfer spend in Scotland in 2019. Wages up to £34m (65% of turnover).'

Kieran Maguire of the Price of Football reviews the financial condition of Celtic and Rangers: Never let me down It is the strongest rivalry in British football and it is often a case of lighting blue touch paper and retiring when commenting on them as a neutral. Maguire concludes: 'Celtic have a noticeable advantage over Rangers in terms of income generation and profitability, partly due to their ability to buy low and sell high in terms of player trading, and this has allowed them to pay higher wages, which is usually, but not always, reflected on the pitch. Even so, Rangers is potentially going to continue to lose money unless a more successful player trading policy and a resolution to ongoing legal disputes is achieved.'

None of Scotland’s league football clubs are showing serious signals of financial distress, and average attendances are also on the rise, according to football finance experts who report annually on key indicators of business distress in the game. The annual Football Distress Report by corporate insolvency specialist Begbies Traynor has found that for the first time since the report began in April 2012, none of the 42 clubs that make up the first four divisions of Scottish football are currently showing signs of serious distress, down from a peak of four clubs in 2012 and 2013. The Scottish Premiership saw a 1% rise in average attendances to just over 16,000 on average, the highest figures recorded since the survey began. A 7% rise in average Scottish Championship gates to 3,090 was countered by falls in average gates in League 1 and League 2. Overall, attendances have risen by close to 17% since the 2011/2012 season. “We’re a long way from the days of Rangers’ 2012 failure when a cl...

Rangers have announced their financial results and income is up 12 per cent overall in the second season in the Scottish Premiership but is very dependent upon matchday, although Ibrox seems full every game, reports Kieran Maguire of the Price of Football. Rangers matchday income was up to £23m but still £20m behind Celtic last season. Maguire expects to see that gap significantly fall this year as Celtic didn't qualify for the Champions League and Rangers in group stage of Europa League which generates about £1m per match. Rangers made pre tax losses of £275,000 a week last season, and even if one strips out interest and one off costs still losing £190,000 a week. Rangers had to borrow to fund the losses made last season, and this has seen net debt rise to £21 million., Since the year end the club has raised further £12.6m, although nearly all of this was lenders converting their debt to shares and only £1.5m cash was raised. Being a top club in Scotland fails to generate the ...

Rangers have been stopped selling their new kit after an injunction was obtained by Mike Ashley's Sports Direct. Sports Direct are claiming breach of contract and the court has granted an interim injunction: Battle continues