The Political Economy of Football V2

A story in The Guardian claimed Farhad Moshiri is willing to sell Everton for £500million ($620m) and has instructed Deloitte’s sports business arm to handle the process:  https://www.theguardian.com/football/2023/jan/24/everton-for-sale-farhad-moshiri-asking-price-more-than-500m Around 20 minutes later, the club released an interview with Moshiri in conversation with fan advisory board (FAB) chair Jazz Bal, recorded before Saturday’s 2-0 defeat to West Ham United, in which he insisted he does not want to sell. “The club is not for sale but I’ve been talking to top investors, real quality, to bridge a gap on the stadium finance,” Moshiri said. “I can do it (finance the new stadium) myself but the reason I want to do it is to bring top sport investors into Everton — for some of the reasons the fans want: improvement, more talent. “I’m committed to this club, not just the stadium, but to join the elite. We are close to having a deal done. We are very close to stadium fina...

Fair Game have produced a sustainability index for Premier League and Championship clubs.  Liverpool and Norwich City come out on top.  Nottingham Forest are bottom and Bournemouth are secnd bottom:  https://fcbusiness.co.uk/news/liverpool-norwich-city-top-sustainability-index-tables/ Whilst such rankings appear to be objective, they necessarily involve subjective judgments about what is included and how it is weighted.

As Deloitte’s annual rich list suggests, Manchester United are still one of the game’s aristocrats. Their turnover for the 2021-22 season was up almost a quarter on the pandemic-hit season before, with matchday income rebounding from £7million to £111million. Total revenue — broadcast, commercial and matchday — was £583million, up from £494million in 2020-21, which saw United climb from fifth to fourth in the Money League, “A couple of things stand out in relation to Manchester United,” explains football finance guru Kieran Maguire. “The first is that their costs are rising faster than their income. Since Sir Alex Ferguson retired as their manager in 2013, the wage-to-turnover ratio has increased from 50 per cent to 66 per cent. Thanks to Cristiano Ronaldo and other signings, last season’s wage bill went up by more than £60million to £384million — a Premier League record. “The second is that in respect of income generation, the Old Trafford commercial ma...

The authoritative Swiss Ramble reviews the latest Deloitte Money League:  https://swissramble.substack.com/p/money-league-202122 Manchester City retained its spot at the top of the Money League with £619m, once again just ahead of Real Madrid £605m, with Liverpool £594m climbing four places to third, their highest ever position. Four other clubs reported more than half a billion Pounds in revenue: Manchester United £583m, Paris Saint-Germain £554m, Bayern Munich £554m and Barcelona £540m (down three places).  The number of English clubs in the Top 20 increased from 10 to 11, the first time that one country has contributed more than half the teams. English clubs occupy three of the top four places with City, Liverpool and United. There are three London clubs in the Top 10: Chelsea £481m (8th), Tottenham Hotspur £443m (9th) and Arsenal £367m (10th). The Gunners rose from 11th, the first time that a new club has entered the Top 10 since 2018/19, thanks to their high match day i...

The authoritative Swiss Ramble provides an in depth analysis of the accounts of Preston North End:  https://swissramble.substack.com/p/preston-north-end-finances-202122 Preston’s £20.2m loss is still one of the largest in the Championship. It is only surpassed by Bristol City £28.5m to date in 2021/22, though others could obviously be even higher when they publish their accounts.   Many clubs offset their operating losses to some extent via profits from player sales, but Preston only generated £0.3m here, down from prior year £0.7m. The last time Preston reported a profit was in 2018, so they have lost money four years in a row. Not only that, but the losses have been worsening, rising from £14m in 2019 to £20m in 2022. This is the cost of trying to be competitive in the Championship. Not a single club managed to deliver an operating profit in 2020/21 in this ultra-competitive division. Over half of them lost more than £20m from day-to-day business. Since the Hemmings fa...

Preston North End made a £20m loss on revenue of £13.8m in 2021/22, reports Kieran Maguire. Losses were used to reduce taxes of other group companies so post tax loss was £16.8m. Preston total losses over the years almost £69 million, funded by interest free owner loans In cash terms Preston spent over £11m more than it generated in 21/22 on day to day trading. A net £2.5m cash spend on transfers also arose. Owners loans of almost £15m plugged this gap. Biggest contributor to turnover was TV money from Premier League solidarity payments and EFL TV deal.     This brought in 58% of the total. Wages were £178 for every £100 of income, down from £196 in Covid hit 2021. Director pay quadrupled. Preston bought players for £2.2m and had sales of £300k. Maguire says that Preston offer a 'scary example' of Championship finances:  https://www.lep.co.uk/sport/football/preston-north-end/preston-north-end-are-scary-example-of-championship-finances-kept-afloat-by-investm...

The authoritative Swiss Ramble considers whether Chelsea's transfer spending will break financial fair play rules:  https://swissramble.substack.com/p/will-chelseas-transfer-spend-break Total transfer spend to date in 2022/23 of £372m (or £385m if £13m loan fees are included). Total expenditure would increase to a staggering £436m if £51m add-ons are included. Perhaps surprisingly, the net result of Chelsea’s transfer activity over the last two seasons is actually positive, improving net profit by £107m. Big spending is nothing new for Chelsea, who splashed out nearly a billion pounds on gross transfers in the five years up to 2020/21, which was joint highest in the Premier League alongside Manchester City, but far ahead of Manchester United £850m, Arsenal £676m and Liverpool £660m. Chelsea will clearly have to be conscious of Financial Fair Play, but their big spending does not automatically mean that they will fall foul of the regulations, especially if they maintain their ...