The Political Economy of Football V2

The latest development in the saga of legal battles at Charlton Athletic when Paul Elliott, described as a 'Manchester businessman', was interviewed by Jim White on Talksport this morning. Elliott said that Charlton's declared owner Thomas Sandgaard has not recognised money he claims to have put into the club.   He said that Sandgaard had produced 'cheap tricks' and 'sound bites'.   Elliott said he had never come up with any lies. He says that a 'sealed' legal order has gone to Sandgaard's legal team, but he cannot discuss that for legal reasons.  I am not sure what a 'sealed' legal order is or why is it superior to an unsealed order.  If it is sealed with wax, it will be a new experience at Sandgaard's lawyers Freshfields. Elliott again claimed to own Charlton Athletic, but the court order refers to the empty vessel of East Street Investments rather than the club. Richard Cawley of the South London Press reports, ' Elliott says h...

 An academic study at Sheffield Business School has found that the big six clubs in the Premier League are almost too big to fail.  Liverpool are in a particularly strong position because of good management and the club is becoming more commercially minded, an area where some of its rivals have been ahead:  https://www.liverpoolecho.co.uk/sport/football/football-news/liverpool-financial-strength-highlighted-research-19266094 The financial position in the Championship is much bleaker.

The authoritative Swiss Ramble reviews the 2019/20 accounts of Olympique Lyonnais.   Because of the effects of Covid-19 they swung from €8m pre-tax profit to €36m loss, as revenue fell €40m (18%) from €221m to €181m, though partly offset by €13m government aid and profit on player sales rising €6m to €83m. Also adversely impacted by €25m increase in costs. R evenue had risen €42m (19%) to record levels in the first nine months of 2019/20, but it fell off a cliff in the last three months. Club estimates COVID revenue impact as €100m: €50m operating revenue and €50m player sales, as transfer window shifted to 2020/21. Operating loss from COVID estimated as €58m, as €100m revenue reduction (match day €25m, broadcasting €6m, commercial €18m, player sales €50m) was partly offset by €42m cost savings (wages €21m, other expenses €21m. In the last full season for Ligue 1 clubs, the club's profit before tax of €8m was third best in France, only surpassed by Paris Saint-Germain €32m an...

Hopes of a new stadium for Coventry City on the edge of the University of Warwick campus have improved after positive talks between the University authorities and the club:  https://leamingtonobserver.co.uk/sport/sky-blues-stadium-plans-on-university-of-warwick-site-pick-up-pace-after-recent-talks-25279/ The Sky Blues are currently playing in exile at Birmingham City.

Financial reports from clubs obviously show worrying trends following the pandemic, but they could be a lot worse.  Some of the claims of impending doom have been overdone. A tenth of the clubs in the Off The Pitch database have released their 2020 financial reports.  They have taken a closer look at the most eye-catching developments. The financial reports thus far released show an overall decrease in revenue of 14 per cent. A major shortage of broadcasting revenue is partly explained by its deferment due to the prolonging of last season. The average wage bill decreased as clubs tried to offset pandemic-related income shortages in the latter part of the financial year. However, cutbacks averaged a mere five per cent. The total operating cash flow of the clubs fell from a €315 million surplus to a €270 million deficit, revealing the significant cash gap created by the awkward finish to last season. The overall profitability of the clubs plummeted by €28 million per club on ave...

A review of the takeover talks at Burnley where a cash injection is arguably needed to boost the club:  https://www.soccerex.com/insight/articles/2020/burnley-takeover-talks-continue The article notes: ' although Burnley are often viewed as the bastion of financial management in the division, there are also in great danger of being left behind and in a competition where even the "have-nots" have the ability to spend at will, just balancing the books is no longer deemed good enough.'

Birmingham City owners have sold a quarter of the club to Oriental Rainbow Investments Ltd for £5.4 million, reports football finance guru Kieran Maguire. The company was originally registered in Hong Kong, but is now domiciled in the British Virgin Islands.