The Political Economy of Football V2

Whisper it quietly, but it looks like the ownership saga at Sampdoria might just be coming to an end, as the shareholders have approved an agreement for the takeover of the club by Leeds United owner Andrea Radrizzani and his partner Matteo Manfredi through Gestio Capital and Aser Holding. It is also expected that QSI, the owners of Paris Saint-Germain, will take a minority stake. The club had previously been involved in negotiations with Alessandro Barnaba and American investment firm Merlyn Partners, the owners of Lille, but their interest ultimately did not come to anything. However, it looks like the agreement came too late to make the payment of three month’s wages (around €13.5m) before the 30th May deadline, which was needed to avoid a four points penalty next season. After a terrible season, Sampdoria were already relegated to Serie B, but the fans had been concerned that their club might be declared bankrupt, which would have resulted in further demotion to the bottom of...

London-based hedge fund SISU Capital Limited had saved Coventry City from administration in 2007, but came under fire from many supporters for their penny pinching approach. However, the SISU era recently came to a close, after local businessman Doug King took ownership of the club in January 2023, initially through the acquisition of an 85% stake and then buying the remaining 15%. Just to make Coventry’s renaissance even more inspirational, it has been achieved on a very low budget, as can be seen by a review of their 2021/22 accounts. These covered a season when the Sky Blues “achieved another creditable finishing position” of 12th in the Championship. Coventry’s pre-tax loss widened from £4.7m to £7.0m, despite revenue rising £6.3m (53%) from £11.8m to £18.1m. This was offset by operating expenses increasing £6.4m (38%) from £16.8m to £23.2m.   In addition, there were reductions in profit from player sales, down from £1.9m to £0.5m. Although losing money is clearly not i...

Usually, when a club is relegated, its fans can point to a lack of ambition or interest from their owners and management. The opposite is true at Leicester. They have aspired to challenge the “Big Six”, disrupt the established elite of English football, and eventually close the gap and claim a seat alongside them at the top table. By and large, they have done that. They have claimed two top-five finishes and became one of only seven clubs to actually lift the Premier League trophy. Now they are the second former champions to be relegated after Blackburn Rovers in 1998-99 and one of the most expensively assembled squads ever to drop through the trap door.  Leicester have always been an ambitious club under the ownership of King Power and the Srivaddhanaprabha family. They have invested heavily in the club, and continue to do so, but in recent years, that has accelerated. The overreach is shown by the increased expenditure on contracts for new and existing players, taking the...

Running Leeds has given  Andrea Radrizzani status beyond anything he had known before. Prior to investing in 2017, he was an entrepreneur with little or no profile outside niche media circles. He liked the exposure and he liked the attention but, as predicted in certain quarters, he was missing from the stands for the game against Tottenham, conspicuously absent as Leeds gave up the ghost and went down. Previously, his £45million investment in Leeds had risen tenfold to a level where the club were valued at half a billion pounds but at full time this afternoon, Premier League status was gone and so was that price tag. To all intents and purposes, the Radrizzani project has run its course. Leeds are back where they started. From here, though, everything that happens will be shaped by Radrizzani’s next move. The offer of a takeover by minority partner 49ers Enterprises is still on the table, albeit at a significantly lower valuation.  From the very beginning, though, Leeds...

How do the teams in the Uefa competition finals compare financially? Manchester City are much stronger than Inter financially, as their £619m revenue is over twice as much as Inter’s £261m. This is also the case with squad cost, as City’s £1.1 bln is significantly higher than Inter’s £505m.   The difference in wages is smaller, but City’s £354m is still nearly 70% (£144m) more than Inter’s £210m. The finalists in the Europa League are much closer from a financial perspective. Roma’s £166m revenue is slightly higher than Sevilla’s £158m, while the Italians’ £155m wage bill is around 15% more than the Spaniards’ £133m.   There is only a meaningful difference with the squad cost, where Roma’s £302m is 40% (£86m) higher than Sevilla’s £216m. As might be expected, given that one club is from the minted Premier League, there is a much wider financial disparity between the two finalists in the Europa Conference League.West Ham’s £255m revenue is a hefty £155m more than Fiorentina...

According to Deloitte Sports Business Group, reaching the top flight via the Championship play-off final in 2022-23 will earn the winner an increase in revenue of at least £170million across the next three seasons. This figure could rise to more than £290m if the club avoids relegation after their first season in the Premier League. Deloitte, the accounting firm, estimates one season in the Premier League will bring additional revenues of at least £90m. Add on two years of guaranteed parachute payments (the extra financial support that the Premier League gives to relegated clubs), worth close to £80m, and the play-off final will likely yield approximately £170m across three years to its winners, even if their stay in the top flight only lasts 12 months. Brentford, who secured a 13th place finish during their debut Premier League season, secured merit payments of close to £15m in 2021-22. Avoiding relegation in their first season also secured a third year of parachute paymen...

Here is a financial comparison of the two clubs competing in the 2022/23 EFL Championship play-off final, Coventry City and Luton Town.    On paper, the two clubs are pretty evenly matched. Coventry’s £18.1m revenue is slightly higher than Luton’s £17.7m, while their squad cost is £7.4m compared to Luton’s £5.5m. On the other hand, Luton’s £17.8m wage bill is higher than Coventry’s £15.7m. However, what is abundantly clear is that both finalists are punching well above their weight, considering the financial power of many of their Championship rivals.     In terms of revenue, both Coventry and Luton are towards the lower end of the table, well below the Championship average of £27m. Luton’s £2.3m commercial income is one of the lowest in the Championship, less than half of Coventry’s £5.0m. However, both clubs are far below the top clubs, led by Stoke City £16.6m, followed by Bristol City £15.8m and Fulham £14.0m. The real differentiator in the Champi...