The Political Economy of Football V2

Rumours abound that Newcastle United’s captain, Bruno Guimarães, will be the next big name player to leave St James’ Park. The Swiss Ramble has produced an in depth and highly informative analysis of the related financial position.    Unavoidably it requires making a series of assumptions about the club ‘s future finances.   The full analysis is available on his Substack page. It is evident that clubs like Newcastle face big challenges from financial rules despite their sincere efforts to comply with them.    Many of us believe that the rules are designed to protect existing elite clubs from insurgents.   [WG] The club’s supporters will be somewhat perplexed about losing another one of their stars, given that Anthony Gordon and Sandro Tonali have already been sold this summer, especially after they would have thought that any financial concerns should have been addressed by the record sale of Alexander Isak to Liverpool last September. It was not me...

A top football finance writer has Sunderland to sell a player at a big profit to stay the right side of domestic and European football finance rules:  https://www.bbc.co.uk/sport/football/articles/c2ey8v8pekeo

Aston Villa have been fined €22.5 million for breaching UEFA’s squad cost ratio (SCR) limit — but will only pay €7.5m with the rest only payable if their compliance with the regulations takes a downturn. UEFA, European football’s governing body, say Villa will only have to pay the remaining €15m if the club’s SCR position does not continue to show improvements, having seen a reduction in percentage between 2024 and 2025. For the 2025 calendar year, Villa’s SCR was still found to be above the tightened 70 per cent limit imposed by UEFA. The €22.5m fine is the second most expensive fine to be handed out to a European club for 2025, behind Strasbourg (€25m). Chelsea, meanwhile, were found to have breached and were fined €3m, €2m of which was conditional. UEFA said in a statement: “Regarding Aston Villa FC and Chelsea FC, which had already been sanctioned in the previous season, the CFCB First Chamber took into consideration the improving trend in their squad cost ratio between 2024 ...

Chelsea’s ongoing struggle to comply with UEFA’s financial rules has seen the club hit with another fine, albeit one much reduced from a year ago. Europe’s football governing body announced on Tuesday the club had breached its squad cost ratio (SCR) limit in 2025, resulting in a €3million (£2.6m) fine, of which €2m (£1.7m) is conditional. The latter element will become payable if Chelsea do not continue to “significantly decrease” their SCR figure in 2026. The monetary punishment doled out for Chelsea’s 2025 transgression pales in comparison to those issued to them by UEFA last summer, when the club was found to have breached both their SCR limit and UEFA’s separate football earnings rule, which restricts overall losses at clubs competing in Europe. Chelsea’s failure to comply with the SCR limit in 2024 resulted in an €11m (£9.5m) fine. Their football earnings breach cost them a further €20m (£17.2m), alongside a threat of that increasing to a total of €80m (£69m) and the require...

West Bromwich Albion are facing a possible points deduction after being charged with an alleged breach of the EFL’s Profit and Sustainability  (P&S) regulations.  The charge relates to the three years ending with the 2024-25 season, with Championship clubs allowed to lose £41.5million ($56m) over that period. According to the club accounts posted on Companies’ House, West Brom lost £7.6m in 2022-23, £37.6m in 23-24, and £18.8m in 24-25, amounting to a pre-tax loss of £64m. P&S allows exclusions from this total for “healthy” expenses, such as long-term infrastructure or community projects, which can be added back from the loss calculation.   This includes the Category One academy, which costs the club several million pounds per season in operating costs. Accounting for these exclusions, the breach is thought to be marginal. Under the EFL’s regulations, sporting penalties from the previous term must be applied in the following term, suggesting any potential po...

UEFA’s PSR regulations are a fair bit stricter than the Premier League, as the allowable losses are much smaller, even though these have been increased over the years, while clubs also have to contend with the new squad cost control ratio. Aston Villa In contrast to Arsenal who appear to meet the criteria, the authoritative Swiss Ramble thinks that Villa have missed UEFA’s PSR target by a country mile.    By his reckoning, their adjusted PSR loss for the 2-year monitoring period was a hefty £140m, using figures provided by the club itself for allowable deductions. That would mean a €161m PSR loss, which would be a cool €100m over the allowable target, even though this was boosted by the €55m allowance for an equity contribution. It very much looks like Villa have also breached the new squad cost control limit, though the magnitude of the over-run depends on how the 13th month in their accounts is treated. This has been tacitly admitted by the club, as Villa basically i...

Teams promoted to the Premier League are hampered by PSR rules which allow established clubs to spend more.  Football finance guru Kieran Maguire assesses how this affects Sunderland and sees grounds for optimism:  https://www.sunderlandecho.com/sport/football/sunderland-afc/sunderland-face-psr-warning-expert

The Premier League may have good intentions in trying to curb over spending by clubs and level the playing field to some extent.  However, clubs keep finding loopholes, most recently in the case of Chelsea and their women’s team. The League then changes the rules (if it can get consent from member clubs) but it is often a case of closing the stable door after the horse has bolted.    Fans of particular clubs often feel they are being unfairly targeted while others get away scot free.   We are still waiting for the result of the Manchester City case, but whatever it is, I anticipate further litigation.    The real winners in these cases are the lawyers who charge fees that reflects their expertise and their ability to deliver results off the pitch.    The Premier League continues to insist  that there is no case for an externa; regulator while failing to put its own house in order (and the EFL is no better). The Premier League has moved ...

Bournemouth managed to avoid breaching the Premier League’s profitability and sustainability rules (PSR) after having a £71.4million shareholder loan write-off approved by the league.   The tone of the following article might imply that I have some grudge against Bournemouth: far from it, I find them an interesting side to watch on television.   But I do get puzzled by the complexity and application of Premier League rules and whether they create as level a playing field as is practicable. The south-coast club lost £77.2m pre-tax in the 2022-24 PSR cycle, which included the £71.4m loan write-off.   This means that if the Premier League had blocked the write-off from counting towards PSR, Bournemouth would have breached the financial regulations, with pre-tax losses at £148.6m over a three-year cycle against a limit of £83m. Bournemouth’s PSR loss would have been lower than their pre-tax one, but the allowable expenditure the club could claim would not have b...

Manchester City have mounted another legal challenge against the Premier League’s associated party transaction (APT) rules. I am not a lawyer, but I have published on competition policy in the past and it is always been my view that the rules of football leagues, in particular the Premier League, may not be compatible with competition law.    At least they need to be tested in court to see whether a de facto cartel is operating. One thing is certain: expensive lawyers are making a lot of money out of both the Premier League and individual clubs, not least City.    The Premier League's legal bill last season was £48m, six times the budget and a lot of that was spent on City who have deep pockets. Richard Masters, the Premier League’s chief executive, informed the top-flight clubs on Thursday that the reigning champions have initiated a fresh arbitration challenge to the amendments that were voted through in November.   Masters’ letter to clubs, which w...

Over recent years, Manchester City have tended to sidestep transfer business in January, where pressures and fees are typically heightened. Yet their behaviour in the opening weeks of 2025 indicated a club attempting to salvage their season via the market. And those efforts came at a cost.   In the region of £178million was spent on City’s four new additions, making it a significant window for Pep Guardiola’s squad. Only once before, when Chelsea went all out in January 2023 to sign Enzo Fernandez, Mykhaylo Mudryk, Noni Madueke and more in a £270million spree, have any club made a greater financial commitment at the midway point of a season. Barcelona, who signed Philippe Coutinho from Liverpool in 2018, had been the only other club to ever go north of that £100m mark during a winter window. That level of business also made City the clear outlier of another circumspect January across the Premier League. Their spending roughly accounted for 44 per cent of all incoming business...

The Premier League is not pursing an outstanding profitability and sustainability rules (PSR) dispute with Everton, it has been confirmed.  A lingering dispute between the league and club had remained over the club’s 2022-23 accounts. Everton had already admitted to a breach of £16.6million ($21m) for their 2022-23 PSR calculation and were deducted two points by an independent commission in April. However, a dispute had continued concerning a difference of opinion over the capitalisation of interest payments.  On Friday it was confirmed by both parties that the dispute has been resolved and as a result the club will face no further action. An Everton statement read: “Everton can confirm the club has resolved all outstanding profit and sustainability rules (PSR) charges brought by the Premier League. “The Premier League has formally discontinued the second part of the PSR complaint for the period ending FY23 (financial year of 2023) and has deemed the club ...

Chelsea are in negotiations with the Premier League to agree a financial settlement for secret payments related to transfers made during Roman Abramovich’s ownership. The club are understood to be in talks over a financial settlement rather than a sporting sanction such as a points deduction, on the basis that the new owners discovered the payments during the May 2022 takeover process and reported them to the Premier League and Uefa. The outcome of the negotiations is expected before the end of March, with the club confident there can be an agreement similar to the £8.6million financial settlement made with Uefa in July 2023. The Times revealed in 2023 that the Premier League was investigating alleged irregular payments related to Willian and Samuel Eto’o being signed by Chelsea in 2013. Payments connected to the signing of Eden Hazard in 2012 have also been under investigation. Normally secret payments related to transfers would lead to tough sanctions such as points ...

The three PSR charges heard last season — two for Everton and one for Forest — resulted in a combined 12 points being deducted, the kind of shock therapy that was difficult to ignore. It may never be known just how close Newcastle and others came to going beyond their spending threshold last season. Clubs’ 2023-24 accounts, which are due to be filed by the end of March, will give us clues, but the absence of transparency in the PSR process makes it difficult to offer fully informed analysis. Clubs instead have to be judged by their actions and those madcap days of late June revealed anxieties ultimately born out of the penalties handed to Everton and Forest a few months earlier. That jolted the whole of the Premier League, heightening motivation to find quick profits in the transfer market once the season had concluded. Howe admitted as much — Newcastle had no wish to sell Minteh or Anderson. Certainly not both. But, as Howe, the front-facing figure in that organisation, accepts,...

No Premier League clubs have been charged with breaches of the Premier League’s profitability and sustainability rules (PSR) — though Leicester City could still be sanctioned.  Leicester remain in a legal battle with the Premier League over club losses incurred during the three-year accounting period ending in 2023-24. All clubs who had made aggregate losses over the first two accounting periods were required to submit their accounts on or before December 31 with the league committing to informing any in breach within a maximum of 14 days. No clubs were charged, the Premier League has confirmed, but Leicester are still at risk amid ongoing proceedings. The Premier League said on Tuesday morning: “Issues as to the jurisdiction of the Premier League over Leicester City Football Club in relation to PSR compliance are currently the subject of confidential arbitration proceedings. “Accordingly, neither the league nor the club will make any further comment at ...

As the financial regulations surrounding football become more complex and contentious, a first class lawyer is almost as important an asset for a football club as a good striker. We should find out early next week if Leicester are going to be charged with breaching PSR for the 2023-24 season, the campaign that saw them return to the Premier League at the earliest opportunity. Leicester have said nothing about their financial situation, a position they reiterated when contacted by  The Athletic  earlier this week.   But the consensus view in the industry is that once you strip out all the “good” expenditure clubs are allowed to make on community programmes, youth development and so on, they lost about £95million for the rolling three-year period that ended on June 30, 2024. According to the league’s understanding of its rulebook, clubs are assessed annually on the basis of their audited accounts, with the most recent season referred to as “T”, the season be...

The Premier League’s PSR rules may constrain activity by clubs in the January transfer window, although it is never easy to get value for money.   The calculations involved are very complex, reinforcing the view that success in football increasingly requires good accountants and lawyers. There is a wide divergence between individual clubs in the Premier League. Half of them have plenty of headroom, especially Brighton, Manchester City, West Ham, Liverpool and Tottenham, while Brentford and Arsenal are also pretty comfortable. Arsenal Despite making £111m pre-tax losses over the PSR 3-year monitoring period, Arsenal should still be fine, as they can make £125m allowable deductions (mainly depreciation, academy and women’s football), leading to a PSR profit of £14m, which is £119m better than the maximum £105m loss. Assuming the same level of allowable deductions in 2024/25 would suggest that Arsenal could post a massive £164m loss this season and still be compliant with...

The departures of Lionel Messi and Neymar last summer highlighted a dramatic change in Paris Saint-Germain’s strategy, as they appear to be moving away from the “Galacticos” model, replacing their expensive superstars with younger, hungrier players. Indeed, the last of PSG’s incredible front three, French captain Kylian Mbappé, is lined up to join Real Madrid when his contract expires this summer, which would pretty much mark the end of an era. Despite the upheaval, PSG could end up winning the treble this season under Luis Enrique. They are on the verge of winning the league title, which would be the tenth time in the last 12 years, while they have reached the final of the Coupe de France and the semi-finals of the Champions League. Success in Europe’s leading competition would be the icing on the cake for the club’s owners, Qatar Sports Investments (QSI), a subsidiary of Qatar's sovereign wealth fund Qatar Investment Authority (QIA). They acquired PSG in 2011, instantly m...

Now we need lawyers for Subbuteo as well as accountants One of the biggest dilemmas for commentators on contemporary football is the issue of points deductions for breaking financial fair play rules.   Fans of penalised clubs argue that they are the ones that suffer rather than those at the top who have made poor management decisions.  And what about Manchester City, they ask?    All in good time: the charges are so numerous and complex that they are going to take time to resolve, not to mention the court battles that will follow.   Once again, the real winners will be the lawyers. The PSR rules are intended to maintain the integrity of the competition, so would it be fair that clubs who breach the limits should be allowed to do so with impunity, while others respect the rules? To extend Jean-Paul Sartre’s famous quote, “In football everything is complicated by the presence of the opposite team… and PSR”. The harsh reality is relegation could be decid...

The Premier League’s statement this week said it had referred Leicester City to an independent commission for an alleged PSR breach and for failing to submit their audited financial accounts to the league for the 2022-23 season, when they were still in the Premier League. The Premier League has yet to see the accounts — although they were submitted to the English Football League earlier this month — and Leicester believe they do not have to share them with the Premier League as they are now an EFL club and therefore not bound by the top flight’s new December deadline brought in after Leicester were relegated in May 2023. It seems from Leicester’s statement yesterday that they are up for a fight on this, unlike Forest, who opted for a path-of-least-resistance approach to have their penalty reduced for good behaviour. Leicester’s legal team, led by Nick De Marco, has already written to both leagues warning them that they will ask for a Rule K arbitration hearing (the FA sy...