The Political Economy of Football V2

As we are learning in the context of Ukraine, there are different types of neutrality.   The Swiss went for armed neutrality which meant that anyone trying to invade them would incur significant costs. From his fastness in Zurich, the Swiss Ramble comments with analytical authority on the accounts of leading clubs, maintaining dispassionate neutrality (mostly) while he does so.    I wouldn’t think that he takes prisoners though.    Today it is the turn of Southampton to be subjected to his scrutiny. Their pre-tax loss narrowed from £76m to £23m, as revenue rose £30m (24%) from £127m to £157m, profit on player sales increased £2m from £14m to £16m and operating expenses fell £25m (12%). Net interest payable was up £6m to £9m. Loss after tax was down from £62m to £15m. The £23m loss is not great, but it’s one of the better financial results reported so far in 2020/21. A full year of the pandemic resulted in some very high losses, e.g. Chelsea £156m, Ars...

From his Zurich bastion, the authoritative Swiss Ramble analyses the latest accounts of Liverpool FC. Liverpool’s 2020/21 accounts show they reduced their pre-tax loss from £46m to £5m, despite a large COVID impact. Revenue was slightly lower at £487m. Profit from player sales was up £12m. Wages were down £11m to £314m. Gross debt cut £70m to £198m The small £5m loss is pretty impressive, given there was a full year of the pandemic. The only Premier League clubs that have posted profits in 2020/21 are Wolves £145m (loan write-off) and Manchester City £5m. Others have made big losses, e.g. Chelsea £156m, Arsenal £127m and Spurs £80m. Liverpool have lost a total of £51m in the last two years, having made £207m profits in the preceding three years. That included a huge £125m profit in 2018, which is the third highest ever profit in the Premier League, plus £42m in 2019 and £40m in 2017. Revenue was significantly impacted by COVID. The Swiss Ramble estimates the loss as £87m in 202...

Crystal Palace turned a £36m loss into a £5m profit in 2018/19 and the authoritative Swiss Ramble explains how they did it.   For Palace fans an overview is available in the form of a two page fact sheet via the Swiss Ramble's Twitter account @SwissRamble. Kieran Maguire's Price of Football site has also provided an analysis of Palace finances:  http://priceoffootball.com/crystal-palace-2018-19-dissidents/ Writing from his Zurich fastness, the Swiss Ramble states ' very largely due to profit on player sales (mainly Aaron Wan-Bissaka’s move to United ) surging from £2m to £46m, though revenue also rose £5m (3%) to a club record £155m. Partly offset by expenses increasing £8m.' Player sales significantly improved from a very low £2m to £46m, mainly due to the lucrative Wan-Bissaka transfer. This was 3rd highest in the Premier League, only surpassed by Chelsea  £60m and Leicester City  £58m. The Eagles have made £83m from player sales in the last three seasons. Exc...

There are three leading experts on football finance. Dan Jones is the head of the Sports Business Group at Deloitte. He and his colleagues provide authoritative analyses of football finances, including an annual report on trends and the Deloitte Money League that ranks clubs by financial success with Real Madrid often coming out on top. The expertise and analytical ability of Jones and his colleagues is beyond doubt but, given their client base, they are necessarily looking at football from a corporate finance perspective. That said, someone needs to defend the Premier League. Many think that the highest standards in impartial analysis of football finance are set by the Swiss Rambler who tweets as @SwissRamble from Zurich. Kieron O’Connor has spent a lifetime in finance and is also multilingual. Hence, he is able to produce in depth analyses of football clubs from across Europe. I find the amount of detail he provides and the perceptiveness of his comments just stunning. Last...

Does the Swiss Ramble spend every day hunched over a computer? Or does he ever get the chance to enjoy Zurich and Switzerland more generally? In any event the accounts of Liverpool FC for 2018/19 are the latest to be subjected to his forensic and authoritative analysis. He notes, 'success on the pitch, both domestically and in the Champions League, has driven significant revenue growth and profitability, which has enabled the club to make substantial investments in player recruitment and infrastructure in a bid to create a virtuous cycle.' Since FSG acquired the club, Liverpool have had £680m available cash: £492m from operations, £144m from owner loans and £44m from bank loans. £396m went on players (net), £203m capital expenditure, £38m stadium loan repayment and £25m interest payments. Commendably, the board invests almost all profits back into the club. [One must always avoid a domestic owners good, foreign owners bad narrative]. The inter-company loan is interest-fr...

Writing from his fastness in Zurich with football matches in Switzerland called off, the Swiss Ramble casts his analytic eye over the recent accounts of Arsenal. He says, 'A £32m loss before tax is obviously not great, though to place this into perspective it is much better than Everton and Chelsea, who both reported deficits above £100m. That said, other clubs have posted good profits in 2018/19, especially Liverpool £42m and Manchester United £27m.' The low player trading profit (which I discussed in a post last Saturday) combined with a second consecutive season in the Europa League meant that Arsenal recorded its first loss since 2002. This is a huge financial comedown, given that Arsenal have delivered five of the top 20 profits ever registered in the Premier League. It should be note that player sale income this season will be higher after sales of Iwobi, Bielik, Koscielny, etc. Arsenal have made £170m profit on player sales in the last five years, which is around hal...