The Political Economy of Football V2

QPR lost £474k a week pre tax in 2021/22 reports Kieran Maguire.   This took QPR total losses over the years to £332 million. Losses covered by a combination of shares issued to owners and loans.    In terms of cash, QPR spent £20m more than it generated in 2021/22, this was funded by borrowings from owners. Total revenue up over £7m mainly due to fans returning to matches post Covid.    Wages were up 10% mainly due to increase in playing staff. Wages are £124 for every £100 of income. QPR bought players for £2.8m and had sales of £250k. Also spent £8.5m on new training ground. QPR owe almost £6m to EFL for Covid loans, £10.2m on FFP settlement, £68m on loans and £2.1m on player transfer instalments. New investor Richard Reilly now owns 12% of QPR. QPR badly need a new stadium to generate income.

Grimsby Town publish 2021/22 accounts, reports Kieran Maguire. Figures don't tie in the previous year as club have remapped some numbers (nothing wrong with that). Turnover up 44% Wages up 25%. Went from £204k profit to £930k loss.  Owners put in a lot of money. Maguire notes: 'Getting promoted is a great event, but is expensive too, as Grimsby had biggest loss in a decade. Shows that the National League is a challenging division, especially with so many former EFL clubs in the competition.' For the fifth consecutive season Grimsby did not sign any players for fees. Grimsby owners lend the club £1.5 million interest free in 2021/22. Over £1.1m of loans were repaid. Presumably their FA Cup run will boost their finances this year.

Orthodox ways of valuing Manchester United (or any other leading football club) fail to come up with figures that reflect the distorted realities of the bidding process.  It's like looking in a hall of distorted mirrors which puff up your size. The Financial Times admits as much in a 'Lex in Depth' look at the club's valuation.   Out come discounted cash flow and other tried and tested techniques to arrive at a figure of $1.6bn which the Pink 'Un admits is 'very low'.  What works in other economic sectors does not fit football. The share price implies a valuation of $4.5bn, although that is hard to justify in terms of the underlying financials.     However, that does not account of the potential for growth through non fungible tokens and sports betting.   Even so, people may start to see through NFTs as a gimmick and sports betting faces some challenges.   Chelsea's sale went through at five times its revenue, although in United's c...

The authoritative Swiss Ramble examines Napoli's finances:  https://swissramble.substack.com/p/napoli-finances-202122 Napoli reduced their pre-tax loss from €78m to €66m, despite revenue falling €14m (8%) from €179m to €165m and profit from player sales dropping €44m from €48m to just €4m, as operating expenses decreased by a hefty €71m (23%).   Loss after tax also narrowed from €59m to €52m. Napoli’s €66m loss was one of the highest in the league, though it was less than half of Juventus €237m (restated after their accounting shenanigans), Roma €219m and Inter €137m. They were pretty much in line with Milan €60m. tThe big five Italian clubs have lost a staggering €2.1bln between them in the last three seasons (€613m in 2019/20, €813m in 2020/21 and €717m in 2021/22).    In fairness to Napoli, their €130m loss over this period was by some distance the least bad, comfortably “beaten” by Roma €609m, Juventus €554m, Inter €488m and Milan €358m. Napoli have now rep...

Manchester United’s Women’s team publishes accounts for 21/22. Revenue quadrupled to £5m and club made a profit of over £1m, although much of this was due to financial rather than football transactions, reports Kieran Maguire. Manchester United Women’s FC does not own any property or equipment assets itself. Main assets are amounts owing to other parts of Manchester United group and financial assets. MUFCW main income source is commercial, which is 88% of the total. Still a challenge turning fan interest into cash, with ticket sales generating £377k compared to £112 million for men’s team. Modest rise in wages to £2.3m for the year.    MUFCW did not sign any players for fees in 21/22.    MUFCW bought players for £445k since 30 June 2022, mainly on credit with instalments over four years.

Following the proposed acquisition of Birmingham City, the EFL has charged the club and individuals with breaches of its regulations:  https://www.efl.com/news/2023/february/efl-statement-birmingham-city/ Fans have recently been protesting against the ownership as the club slides towards the relegation zone. The Blues could face a suspended points deduction:  https://www.theguardian.com/football/2023/feb/20/birmingham-could-face-suspended-points-deduction-after-efl-charges

Arsenal Women’s team publishes 21/22 accounts. Revenue up 62% to £6.9m which puts it ahead of many League One clubs and breaks even for the year, but is there a but, asks football finance guru Kieran Maguire.? Main assets are player transfer registrations (£250k) and debtors from other institutions. Company owns no property or equipment assets itself. In terms of income sources, new WSL television deal (worth £8m a year) quadruples money from that source, fans returning post Covid helps ticket sales but 74% of revenue comes from parent company. Wage bill up to £4.3m, again exceeding some L1 and L2 clubs in EFL. Wages 63% of total revenue (which looks good) but 242% of revenue if exclude money from parent club. Staff numbers up 20% Arsenal Women’s team signed players for £320k in 2021/22, taking total squad cost to £1/2 million. A lot of debts sloshing around owing both from (£575k) and to (£1.7m) other parts of the group.