Reports, stats and articles for fans, journalists, students and others interested in the business side of football - soccer http://www.footballeconomy.com contact@footballeconomy.com (JSB) We have been talking for a few weeks on this page about a tougher stance by Revenue and Customs towards football clubs who do not pay their tax debts (which is at the expense of taxpayers in general). It's pleasing to see that the Financial Times has now picked up on the story and has produced a report that exhibits the thoroughness and balance that is characteristic of the Pink 'Un. There is no doubt, as the report suggests, that the campaign is working and may encourage clubs to take a less cavalier attitude towards thier tax debts. Nevertheless, we do not think we have seen the last winding-up petition from HMRC. http://www.footballeconomy.com/ http://www.footballeconomy.com/1 The latest blow at Portsmouth FC was the collapse of the club's website because the relevant bill had not been paid. It can't have been a big bill and I can't remember a case of this happening before when a club had not actually been in administration. The bill was settled and the website came back. However, with many fans wanting ticket news about the classic cup clash at Southampton, Pompey fans involved in the Supporters Trust offered to provide any relevant information on their own new site. More. http://www.footballeconomy.com/archive_2010_jan_25.htm http://www.footballeconomy.com/archive_2010_jan_25.htm 'Glazer: Forever In Your Debt' read the large banner held by Manchester United fans outside Old Trafford on Saturdays. However, the Glazers managed to sell GBP500m of bonds on the open markets to refinance their debts, albeit not without some difficulty and at a relatively high interest rate. The first football club to sell bonds of this kind, United embarked on a week-long series of road shows across three continents. The bond issue was oversubscribed, but United chose to sell more of its bonds in dollars than in sterling and had to offer an interest rate at the high end of the expected range to attract investors. More than 50 low-risk investors such as insurers and pension funds stumped up the cash to receive a fixed interest rate of 8.75 per cent for one tranche and 8.375 per cent for the other. The annual interest bill on the boards will be just under GBP45 million. The bond issue cost GBP15m in fees and expenses to investment bankers and lawyers, enough to buy a player. More. http://www.footballeconomy.com/archive_2010_jan_21.htm http://www.footballeconomy.com/archive_2010_jan_21.htm The Scottish Football Association is likely to veto the re-naming of Stirling Albion as Stirling Albion Meerkats. The cash strapped club which is GBP1.5m in debt and has survived two winding up orders has been in discussion with Compare the Market.com famous for their meerkat adverts. The supporters trust wants to buy the club and sell its naming rights for GBP50,000 a year. However, the proposal is not 'simples' as far as the SFA is concerned. A somewhat stuffy spokesperson at the SFA commented, 'Given that a name change for commercial purposes would have huge implications, the integrity of the game would be paramount in any decision-making process.' However, that may not be the end of the matter. Sources close to the European Commission have indicated to us that any such stance by the Scottish FA could be seen as an abuse of dominant position. http://www.footballeconomy.com/archive_2010_jan_15.htm http://www.footballeconomy.com/archive_2010_jan_15.htm It's nothing like the cold weather events of 1946-7 or 1962-3, but freezing weather in Britain has already had its effect on football. Fixture congestion looms and there are concerns about the possible effect on England's World Cup preparations if the cold weather persists. However, there are also substantial financial implications, particularly for lower league clubs where, as in all smaller businesses, cash flow is king and gate money is a big source of it. League rules also require the home club to pay a visiting club's travel expenses when a game is postponed or abandoned. Although there is no suggestion that they have financial problems, Rotherham United have not played since December 12th. They were expecting some good crowds for their games over Christmas and their hospitality packages were sold out. More. http://www.footballeconomy.com/archive_2010_jan_08.htm http://www.footballeconomy.com/archive_2010_jan_08.htm What do Cambridge University and Manchester United have in common? They are both proposing to issue bonds, in the case of Cambridge to raise funds for further investment, in the case of United as a more efficient and cost effective means of managing their debt. All sorts of companies and institutions are turning to the bond market to raise money because as banks rebuild their balance sheets they don't have as much money to lend as they did before the financial crisis and they charge high rates of interest on what is available. Cambridge Uni are hoping for a triple A rating on their bonds as befits an institution that has been going for around 800 years. Although they are also a global brand, it remains to be seen whether United will do as well. More. http://www.footballeconomy.com/archive_2010_jan_05.htm http://www.footballeconomy.com/archive_2010_jan_05.htm In the present climate of preoccupation with the solvency of football, it is very easy for unfounded rumours to gather pace. Once such reports appear in the press, creditors become understandably nervous about their commercial relationships with a club. Cardiff chairman Peter Ridsdale has moved swiftly to rebut reports that the Bluebirds are close to administration. A story in a Sunday newspaper claimed that the Welsh club, now enjoying their new stadium, must settle a GBP2.7m tax bill with Her Majesty's Revenue and Customs this week or face being hit with a winding-up order. Against a background of government debt, the taxman has become more willing to use such orders recently in relation to delayed payments which would not have attracted such action in the past. More. http://www.footballeconomy.com/archive_2010_jan_03.htm http://www.footballeconomy.com/archive_2010_jan_03.htm Portsmouth failed to pay their players' wages yesterday, the third time this season that payment has been late. The club hopes to get hold of enough funds to pay the outstanding wages by January 5th. Debts at the troubled south coast club are estimated at GBP60m, with GBP10m required by the Premier League to pay off creditors before a transfer embargo can be lifted. Supporters are getting increasingly frustrated with the situation and made their views known during the 4-1 home defeat by Arsenal on Wednesday: one chant was 'Where has all the money gone?'. Supporters would like to take over the running of the club through a Supporters' Trust. To those who say that this would be the lunatics taking over the asylum, Dave Boyle of Supporters Direct commented 'Portsmouth is a case where they would struggle to do any worse.' Dr John Beech, a Portsmouth fan and football finance expert at Coventry University, commented, 'It all seems to depend on "the new investors", but if I was a multimillionaire, I wouldn't invest in them. I would want to keep being a multimillionaire.' That logic often doesn't work in football, but there are better footballing and catchment area prospects than Portsmouth for someone with some money to burn. More. http://www.footballeconomy.com/archive_2010_jan_01.htm http://www.footballeconomy.com/archive_2010_jan_01.htm Milan Mandaric, the chairman of Leicester City is to face legal proceedings for alleged tax evasion from HM Revenue and Customs. The allegations date from his period as Portsmouth chairman from 1998 to 2006. He will face charges of 'cheating the public revenue' alongside Spurs manager Harry Redknapp who was in charge of the Portsmouth first team at the time. Mandaric strenuously denies the allegations. A statement issued by his solicitors Cartwright King read: 'Milan Mandaric is astounded and dismayed that proceedings are to be brought by HMRC in the new year alleging a connection with unpaid tax on a personal payment he made to Harry Redknapp in 2002. These will be vigorously defended. During a two-year investigation he has fully cooperated and has strenuously denied any wrongdoing. Expert tax advice has confirmed that Mr Mandaric has no tax liability. The decision of HMRC to bring proceedings is very surprising.' http://www.footballeconomy.com/archive_2009_dec_17.htm http://www.footballeconomy.com/archive_2009_dec_17.htm The battle for Arsenal Football Club has now entered time added on, although in the Premiership this can be quite a long period of time. American sports franchise owner Stan Kroenke needs to acquire only 17 more shares to trigger a mandatory takeover bid for the club. He has purchased another 25 Arsenal shares at a cost of GBP212,500. It takes his holding to just short of the 29.99 per cent threshold beyond which he would be forced to make an offer the remaining shares under Stock Exchange rules. http://www.footballeconomy.com/archive_2009_dec_12.htm http://www.footballeconomy.com/archive_2009_dec_12.htm Notwithstanding yesterday's 1-1 draw against Chelsea, West Ham remains cash strapped and relegation threatened. Nevertheless, two alternative bids have been made by David Gold and David Sullivan, the former owners of Birmingham City. Gold and Sullivan submitted their formal bid to Rothschild and Standard Bank which has been appointed to handle any offers on behalf of owners CB Holdings. This is the company made up of the Icelandic bank Straumur and other creditors of Bjorgolfur Gudmundsson, the former owner of the Hammers. However, it is understood that Straumur will reject the bid in the belief that they are about to be given some much-needed breathing space by their own creditors in Iceland. One of the offers made by Gold and Sullivan was for a full-time buyout valued at GBP50m and the other for a 50 per cent stake in the club. However, CB Holdings values the club at GBP120m and with debts of approximately GBP40m are hoping for an offer of around GBP80m. More. http://www.footballeconomy.com/archive/archive_2009_dec_11.htm http://www.footballeconomy.com/archive/archive_2009_dec_11.htm The FA has agreed a four year television deal with ESPN to broadcast FA Cup ties as the Walt Disney owned broadcaster strengthens its position in the British market. The new contract, which is worth GBP70m, will run from the next summer to the end of the 2103-14 season and will sit alongside the existing deal held by ITV until 2012. The new contract will fill the void left by the collapse of the British arm of Setanta in June, one year into a four year deal worth GBP150m, over twice the size of the new arrangement. ESPN will have live coverage of up to 25 matches per season, including one semi-final. The Cup Final will be broadcast on ESPN and ITV. http://www.footballeconomy.com/archive/archive_2009_dec_07.htm http://www.footballeconomy.com/archive/archive_2009_dec_07.htm Thierry Henry could pay a heavy price for his hand ball that gave France victory over Ireland. Henry has been earning GBP15m a year from sponsorship deals. He has been the face of global brands including Renault, Nike, Gillette and Pepsi. Between 2001 and 2006 he earned a reported GBP14m from Nike, a company he ditched in 2006 to sign with Reebok for a signing-on fee believed to be over GBP19m. With a certain irony, Reebok use him in advertising campaign entitled 'Play Responsibly'. He replaced David Beckham as one of the faces of Gillette and this earns him around GBP2m a year. The company said it picked Henry because he embodied 'true sporting values'. He also earns GBP3m a year from Pepis-Cola, as well as promoting the Thomas Hilfiger fashion label. However, now his brand has suffered serious reputational damage. http://www.footballeconomy.com/archive/archive_2009_nov_15.htm http://www.footballeconomy.com/archive/archive_2009_nov_15.htm At least 200 European football games are being investigated after police said they had dismantled an alleged international criminal ring suspected of running Europe's biggest ever match fixing scandal. German prosecutors and police stated that the gang allegedly obtained more than Euro10m in illegal betting proceeds by manipulating the outcomes of games in nine countries, including three in the Champions League. Peter Limacher of Uefa commented, 'This is without a doubt the biggest scandal to ever hit European football.' All the games under investigation took place this year. They include matches in Croatia, Slovenia, Turkey, Hungary, Bosnia and Austria. Police sources indicated that the number of games involved and circle of suspects could increase. Police in Germany, Switzerland, Austria and London conducted 50 raids and seized Euro1m in cash. Those detained are suspected of offering payments to players, coaches, referees and officials in exchange for influencing the outcome of games on which ring members would place bets. More. http://www.footballeconomy.com/archive/archive_2009_nov_14.htm http://www.footballeconomy.com/archive/archive_2009_nov_14.htm Scotland's top football clubs are carrying debt totalling nearly GBP100m. Rangers and Hearts owe about GBP30m each, Kilmarnock and Aberdeen approximately GBP9m each, Dundee United GBP6.6m and Hibernian GBP3.6m. Stephen Morrow, head of Sports Science studies at the University of Stirling, said, 'It is difficult to see, in the current trading model that Scottish football is in, how they can find a way to pay that off. That's not to say that can't manage that debt. They can look after the interest payments on it but unless something changes in the structure or the finances of those clubs - or something substantial changes in their trading environment - then all they will be doing is very, very slowly bringing the debt down.' He does not, however, expect to see a SPL club to enter administration in the immediate future. He also pointed out that the sums involved were relatively small compared to most business debts banks were dealing with. http://www.footballeconomy.com/archive/archive_2009_nov_13.htm http://www.footballeconomy.com/archive/archive_2009_nov_13.htm Accrington Stanley fan Ilyas Khan has become non-executive chairman at the club two weeks after staving off a winding-up order with a GBP160,000 donation to pay off a long outstanding tax bill. It is said that Khan, who runs his own investment company after a career in banking, is worth tens of millions of pounds. One of the hopes is that will be possible to build up relations with the Asian community in the area, including businesses with an Asian background. Khan has pledged that he will settle the club's extensive debts and provide some money for a future promotion push. http://www.footballeconomy.com/archive/archive_2009_nov_12.htm http://www.footballeconomy.com/archive/archive_2009_nov_12.htm Former Birmingham City owner David Sullivan and the Gold brothers would prefer to use the money they pocketed from the sale to buy West Ham. They grew up in the area and have an emotional attachment to the club. However, they are worried about the scale of the Hammers' debts. These total around GBP100m with GBP45m owed to various banks, GBP19m to Sheffield United over the Carlos Tevez affair, GBP15m to other clubs for players, plus running losses of GBP20m this year. http://www.footballeconomy.com/archive/archive_2009_nov_11.htm http://www.footballeconomy.com/archive/archive_2009_nov_11.htm The sale of rights to broadcast Premiership football in China, potentially the largest market for the world's most successful football league, is forcing league bosses to paper over widening splits between its big and small clubs. The divide pits clubs such as Manchester United and Chelsea, household names and successful brands in much of Asia, but not yet in China, against the likes of Bolton Wanderers and Wigan Athletic. The bigger clubs have pushed for a return to a free-to-air model in football-mad China, which potentially gives their games exposure to hundreds of millions of viewers. These clubs believe they can translate the exposure from free-to-air broadcasts into revenues through sponsorship and merchandising and related sales. . More. http://www.footballeconomy.com/archive/archive_2009_nov_10.htm http://www.footballeconomy.com/archive/archive_2009_nov_10.htm Scottish football has suffered a big blow after the Premiership effectively ruled out Celtic or Rangers ever joining the competition. The Old Firm have been eyeing Premiership membership as a possible escape route from their financial troubles for some time. However, Premiership clubs voted heavily against a proposal to admit them. There was a recognition that the political and regulatory challenges were likely to prove insurmountable, but also that the commercial value would not be that great. Although Celtic and Rangers enjoy huge support in Scotland and among expatriates, the consensus was that the commercial gains would be relatively small at a time when the league's emphasis is on expansion in growing global markets. Ralph Topping, the new chairman of the Scottish Premier League, has admitted that Scottish clubs lack a clear vision about their place in the world. The income of GBP16m from broadcasting and sponsorship rights generated through the SPL this season compares unfavourably with the GBP29.5m received by the bottom placed clubs in the English Premier League in 2007-8. More. http://www.footballeconomy.com/archive/archive_2009_nov_09.htm http://www.footballeconomy.com/archive/archive_2009_nov_09.htm The FA Cup First Round tie between Oldham Athletic and Leeds United, streamed exclusively live on TheFA.com, achieved an audience 176,000. The FA are claiming this as a UK record for a free-to-view competitive football match on the internet. http://www.footballeconomy.com/archive/archive_2009_nov_08.htm http://www.footballeconomy.com/archive/archive_2009_nov_08.htm Tottenham Hotspur's majority shareholders will not put the Premiership club on the market but would be prepared to sell of a big cash offer came along, according to non-executive director Sir Keith Mills. Last month Spurs submitted a planning application to build a 56,000-seater stadium on the White Hart Lane site to take advantage of a long waiting list for season tickets. However, the location lacks good public transport links which had earlier inspired a search for alternative sites. Rumours of interest from abroad have surfaced in recent years and may return as the stadium plans progress towards completion in 2013. http://www.footballeconomy.com/archive/archive_2009_nov_07.htm http://www.footballeconomy.com/archive/archive_2009_nov_07.htm Kick off times in the Spanish Primera reflects the pecking order of clubs. The least favoured clubs tend to begin their matches at five on Sunday unless they are playing one of the big teams in which case they are given a slot at seven or eight on either Saturday or Sunday. The most favoured slot is tapas time at nine or ten in the evening which is when you are most likely to see Real Madrid or Barcelona. However, the Spanish league is considering moving some clashes to an Asia-friendly 3 p.m. Real Madrid are said to be behind the idea with their interest in marketing opportunities in Asia. http://www.footballeconomy.com/archive/archive_2009_nov_06.htm http://www.footballeconomy.com/archive/archive_2009_nov_06.htm Fans at Newcastle United protested today outside and inside the ground at the re-naming of the stadium as sportsdirect.com@St. James' Park. However, a number of clubs are hoping to secure lucrative naming deals. Chelsea has said that it will consider selling the naming rights to Stamford Bridge with a hoped for fee of GBP10m per season. Tottenham take the view that their plans to build a new stadium which will not be White Hart Lane gives them an advantage in the naming rights race. However, Aston Villa have ruled any such move out. http://www.footballeconomy.com/archive/archive_2009_nov_05.htm http://www.footballeconomy.com/archive/archive_2009_nov_05.htm Spanish clubs have threatened to go on strike following the announcement of Spanish Government plans to remove tax laws that give La Liga a big advantage over the English Premiership. The so-called 'Beckham Law' allows high-earning foreigners to pay 24 per cent income tax instead of the 43 per cent levied on locals. The Spanish League (LFP) have warned that their clubs will face a bill of more than GBP90m and could kill the competition. The law coincided with David Beckham signing for Real Madrid from Manchester United in 2004. It was designed to attract foreign executives to the country, but has helped Real Madrid and Barcelona to sign some of the best players in the world on contracts that would not be affordable to rivals across Europe. The law, due to come into effect on 1 January, would affect foreign players earning more than Euro600,000 a year. It would instantly add GBP2m a year to Cristiano Ronaldo's contract at the Bernabeu. The LFP calculate that the reform would add Euro100m to the bill for Spanish football. A players' strike is one of the responses being considered by the LFP. http://www.footballeconomy.com/archive/archive_2009_nov_04.htm http://www.footballeconomy.com/archive/archive_2009_nov_04.htm Stan Kroenke has snapped up another batch of Arsenal shares, edging the US sports franchise owner to within less than 300 shares from launching a mandatory takeover bid for the club. Kroenke Sports Enterprises paid GBP8,500 a share for a majority of the 1 per cent stake previously held by former Racal chairman Sir Ernest Harrison who died in February. This took Mr Kroenke's holding to 29.6 per cent. Although the purchase tightens the American's hold on the club, it is generally expected that he will sit tight at just under the 29.9 per cent shareholding that would trigger an automatic bid. He is unlikely to want to trigger a mandatory offer until next March at the earliest. More http://www.footballeconomy.com/archive/archive_2009_nov_03.htm http://www.footballeconomy.com/archive/archive_2009_nov_03.htm Wembley National Stadium, a wholly owned subsidiary of the Football Association, made a pre-tax loss of GBP31m last year and could default on finance arrangements if wealthy patrons fail to renew their season tickets. The stadium hosts England football internationals, the FA Cup final and Football League play-off finals. The company made an operating profit of nearly GBP6m in the year to December 2008. However, there was a GBP26.6m interest bill and the GBP10.9m write off of bank fees associated with the stadium financing in 2002. The overall loss was GBP23m after tax, an improvement on the previous year's loss of GBP36m. The company said that its business plan had always forecast that it would not break even until five years after the stadium opened in 2007 at a total cost of GBP757m. During the year, management refinanced the business, although it still has debts of more than GBP320m. The deal cut its interest rate from 7.8 per cent to 6.9 per cent and extended the repayment dedaline from 2018 to 2023. More. http://www.footballeconomy.com/archive/archive_2009_nov_02.htm http://www.footballeconomy.com/archive/archive_2009_nov_02.htm Rangers manager Walter Smith has claimed that Lloyds Banking Group is effectively overseeing the club's spending. Rangers are GBP25m to GBP30m in debt and Lloyds recently appointed their own representative to the club's board. The club's plight has become a political issue with the Secretary of State for Scotland, Jim Murphy, demanding assurances from Lloyds that it had not threatened to put Rangers into administration. The club's decision to sell the rights to its shirts and other merchandise to JJB Sports for a one-off payment and an annual licence was once seen as a master stroke, but has turned out to be a disaster. The club has also been hit hard by the collapse of Setanta. The club is looking for a buyer but so has far received only 'tentative' enquiries. http://www.footballeconomy.com/archive/archive_2009_nov_01.htm http://www.footballeconomy.com/archive/archive_2009_nov_01.htm Newcastle owner Mike Ashley has deepened his bond with Newcastle fans by proposing to rebrand St.James's Park. They were enraged at his intention to welcome offers for the naming rights of the ground. Former Newcastle chairman Freddy Shepherd admitted that the club rejected on principle a similar approach from 'branding specialists' in 1997. 'We we were offered something like GBP3m for a five year deal,' Shepherd recalled. 'But the money could have been ten times that and I would not have been interested.' http://www.footballeconomy.com/archive/archive_2009_oct_25.htm http://www.footballeconomy.com/archive/archive_2009_oct_25.htm Hull City have been warned by their accountants Deloitte that their current financial position threatens the club's 'ability to continue as a going concern'. The club's accounts were filed five months later because of a disagreement between the club and the accountants over the wording surrounding City's financial future and the possible impact of relegation. In the event of relegation they will need to generate a GBP23m surplus just to meet their existing liabilities. In the accounts for the year ending 2008, the club made a GBP9,674,850 loss during a period that culminated in winning promotion to the Premiership. That is attributed to 'significant' bonuses paid to players, management and other staff for achieving promotion, together with the costs of preparing the squad, training facilities and stadium for the Premier League. More. http://www.footballeconomy.com/archive/archive_2009_oct_24.htm http://www.footballeconomy.com/archive/archive_2009_oct_24.htm HM Revenue and Customs are seeking to place League 1 Southend United into administration because of an unpaid tax bill. The Shrimpers were set to go to court to face a winding-up order today, but the hearing has now been postponed until 4 November. Chairman Ron Martin commented, 'Mine and my family's life has been entwined with Southend United, often taking up every waking hour and I have been doing my best, and will continue to do so, to make sure that HMRC do not rip this from us. Their hostile action is not only unwelcome but also destructive.' While one feels sympathy with any club facing administration, Revenue and Customs do have a legal responsibility to look after the interests of taxpayers. It's not unreasonable to expect football clubs to pay their tax bills like anyone else. The Shrimpers, who have been saved from administration twice in the past, have debts of GBP660,000. http://www.footballeconomy.com/archive/archive_2009_oct_23.htm http://www.footballeconomy.com/archive/archive_2009_oct_23.htm Co-owners of Liverpool Tom Hicks and George Gillett, who were the subject of a fans' demonstration yesterday, have hit a brick wall in their attempts to sell the club. Several potential investors think that it makes better sense to wait for the club to be sold at a knockdown price rather than inject money now. There is a strong feeling that Liverpool are heading towards a financial crisis of their own making that will force the owners to sell. Even after the rescheduling of Liverpool's loan with RBS and Wachovia in the summer, and a GBP60m cash injection, the club remains GBP245m in the red. It is believed that interest on the loans has become more punitive, making success on the pitch even more crucial. Prince Faisal, the latest potential buyer, has been left unimpressed by a big asking price (GBP100m plus) for a small stake (20 - 25 per cent) and by Hicks and Gillett's history of feuding. Meanwhile the new stadium which would make them financially competitive with Manchester United is on indefinite hold. More http://www.footballeconomy.com/archive/archive_2009_oct_22.htm http://www.footballeconomy.com/archive/archive_2009_oct_22.htm CB Holdings, which runs West Ham, has hired two investment banks as it steps up its search for a new backer. They have brought in Rothschild and Standard Bank, based in South Africa. Rothschild has advised on a number of football club takeovers, including the purchase of Aston Villa by Randy Lerner in 2006. The appointment of Standard may suggest that the club thinks there may be investment possibilities in Africa. The bank has close ties with African sport and has just signed an eight-year deal with the Confederation of African Football to sponsor some of the continent's biggest tournaments. http://www.footballeconomy.com/archive/archive_2009_oct_21.htm http://www.footballeconomy.com/archive/archive_2009_oct_21.htm The Premiership has secured a three year sponsorship renewal from Barclays worth GBP82.25m. The deal represents a 25 per cent premium on the GBP65.6m agreed with Barclays in 2007 and follows the rejection of an initial GBP70m offer from the bank. Barclays has sponsored the Premier League since 2001, initially in support of Barclaycard. The Premiership's success in securing such a sizeable increase from Barclays provides further evidence that the recession has done little to diminish the marketing appeal of what is regarded as the world's best and most entertaining domestic league. Barclays said that the sponsorship provided 'a cost effective method to market our organisation' to a domestic and global audience. http://www.footballeconomy.com/archive/archive_2009_oct_20.htm http://www.footballeconomy.com/archive/archive_2009_oct_20.htm The Football League's decision on the ownership of Notts County was supposed to be a crucial indicator of the success of the fit and proper persons test for owners of football clubs. But the League has backed away from stringent enforcement, at least in terms of transparency and disclosure. The League has given a green light to the new owners, but no one still knows for sure who they are. The League has said that their names could remain secret and the League would not reveal who they are. This does not fit well with Government demands for financial transparency as takeovers from foreign businesses with money in offshore accounts gather pace throughout football. There has also been no explanation as to why certain people behind the takeover were also allegedly involved with a company closed by the courts. More. http://www.footballeconomy.com/archive/archive_2009_oct_19.htm http://www.footballeconomy.com/archive/archive_2009_oct_19.htm Newcastle owner Mike Ashley has effectively told Tyneside businessman Barry Moat to put up the money to buy the club or shut up. Ashley commented, 'Barry Moat has been driving me mad for two years.' Ashley has slashed the asking price from GBP100m to GBP80m, but has told Moat to come up with the money within a week. Moat wants to pay GBP40m now and GBP40m at the end of the season. Ashley's response was that he had to put GBP20m a year into the club and 'If you can't pay upfront to buy the club, you can't afford it.' With Newcastle's promotion bid suffering a setback after yesterday's defeat at Forest, the continuing uncertainty about the club's future may be having an effect on the pitch. http://www.footballeconomy.com/archive/archive_2009_oct_18.htm http://www.footballeconomy.com/archive/archive_2009_oct_18.htm Blue Square south outfit Weymouth are on the brink again after being hit by three separate demands for debt repayment. Barclays have called in their up-to-their-limit GBP25,000 overdraft. Carlsberg are chasing GBP15,000 the Terras owe after they failed to keep promises of repayment. Most serious of all, former chairman Malcolm Curtis wants to collect his loan of GBP221,000 plus interest, putting the club on the brink of extinction. If the Terras go into administration, property developer Curtis will automatically take ownership of the Wessex Stadium which is the club's only asset. The Weymouth board are fighting back and launched legal proceedings against Curtis claiming 'gross negligence and misfeasance'. This might buy them some more time, as the courts might be reluctant to implement a winding up order with a case pending. http://www.footballeconomy.com/archive/archive_2009_oct_17.htm http://www.footballeconomy.com/archive/archive_2009_oct_17.htm The Intermarket Group, headed by Wall Street mogul Jim Bowe (former head of the New York Board of Trade) are reported to have begun negotiations to buy West Ham. They hope to conclude a deal before the January transfer window. Bowe commented, 'The consortium comprises West Ham supporters who have made serious money in the City, the United States and elsewhere and who see potential in the club, its fanbase, academy and playing staff. The people involved have the money required, and more importantly, the right sentiments.' http://www.footballeconomy.com/archive/archive_2009_oct_16.htm http://www.footballeconomy.com/archive/archive_2009_oct_16.htm It is being claimed that David Sullivan is now interested in buying Charlton Athletic rather than West Ham after his departure from Birmingham. He thinks the Charlton board may be open to an offer after they had to dig into their own pockets recently to keep the club going. The appeal is that Charlton are similar to where Birmingham are when Sullivan stepped in. It is a potentially bigger club with a huge catchment area that extends well into Kent where the club has a network of 'Valley Express' services to bring fans to games. Sullivan knows that Charlton have come through the financial strain of developing their own ground also have a first rate training ground. It might then simply be a case of stepping in and spending cash on players to get them back to the top flight. Sullivan and his ally David Gold are still interested in West Ham, but their massive debts are a deterrent. Outstanding debts at The Valley are far smaller. http://www.footballeconomy.com/archive/archive_2009_oct_15.htm http://www.footballeconomy.com/archive/archive_2009_oct_15.htm The futures of four English clubs - Portsmouth, Leeds United, Notts County and QPR - are hanging in the balance while football's governing bodies demand more information from owners. The Premiership is investigating Ali al-Faraj, the latest of a succession of white knights at Portsmouth, before approving the fourth foreign takeover at Fratton Park. The Football League has asked for more details about the ownership of Notts County and Leeds United. The situation at QPR is under investigation in the wake of the 'Crashgate' scandal: this could be the most difficult of the cases to resolve. The uncertainties are casting a shadow over the game and its ability to apply a stringent 'fit and proper persons' test to weed out potentially unsafe buyers of clubs. The Premiership and Football League operate separate tetss, although both have been tightened significantly. FA supremo Lord Triesman has called for a single test for both leagues and demanded the full details of owners and investors in any club. The Notts County case illustrates fears that the money trail in takeovers too often leads to tax havens where further enquiries are not welcomed. The Football League has issued a new policy that it must in future be told about all 'ultimate beneficial owners' in clubs. More. http://www.footballeconomy.com/archive/archive_2009_oct_14.htm http://www.footballeconomy.com/archive/archive_2009_oct_14.htm Apparently rich individuals often have far more value in assets which cannot be realised in the short run that they do in cash. This has been an issue in the takeover troubles at Portsmouth. Stan Kroneke still owes Arsenal board members GBP50m despite increasing his stake in the club. He has paid for only half his shares since making a GBP100m commitment to increase his stake from 12.38 per cent to 28.3 per cent. It could take him years to pay off the remainder. He still owes Danny Fiszman nearly GBP40m and has not fully paid off Richard Carr whose 4.38 per cent holding was sold to the American for nearly GBP25m 10 months ago. Unlike his rival Alisher Usmanov, Kroenke doesn't have GBP500m sitting in a bank doing nothing. http://www.footballeconomy.com/archive/archive_2009_oct_13.htm http://www.footballeconomy.com/archive/archive_2009_oct_13.htm As it turned out fans were able to watch highlights of England's defeat by Ukraine on BBC1 last night, but the contract signed by the terrestial broadcaster preventing them from announcing this in advance. Most analysts do not see the live internet screening of the match as setting a precedent. Even the chief executive of Perform, Andrew Croker, commented, 'This was a window of opportunity created by that particular match.' It is more likely that second tier sports will use the internet in an attempt to boost audiences. Perform has announcced a deal with men's professional squash to stream 250 live matches a year on the internet. Betfair, the betting exchange operator, already shows a variety of live sports on its website, including Serie A Italian football. Tens of thousands of customers use the service, up 35 per cent in the last year. One online bookmaker, bet 365, offered the match free to new customers. Market leader BSkyB is unconcerned about the Ukraine-England match and sees the internet as serving niche markets where there is appeal to a relatively small but passionate group of people. Sky is more worried about the threat to its coverage from piracy. The Premiership employs a piracy monitoring company, Net Results, to protect its rights. However, Net Rights thinks that copyright law needs updating as it was drafted when live streaming was not an issue. More. http://www.footballeconomy.com/archive/archive_2009_oct_12.htm http://www.footballeconomy.com/archive/archive_2009_oct_12.htm The money of licence fee payers was at risk of being wasted when the BBC paid more than GBP1m to broadcast FA Cup matches on Radio 5Live, the Corporation's regulator has ruled. Responding to a complaint from TalkSPORT, 5 Live's commercial rival, the BBC Trust said that the corporation had not ensured with 'sufficient rigour' that the amount it had bid 'represented value for money'. The BBC controls the radio broadcast rights to all FA Cup matches until 2012, as part of a four year agreement with the Football Association. Although the BBC is regularly outbid for television football rights by BSkyB and ITV, its position in radio is much stronger. Its only serious competitor is TalkSPORT, but the BBC has much more money available. 5Live and 5 Live Sports Extra have editorial budgets totalling GBP59.1m, well ahead of TalkSPORT's budget, which is closer to GBP12m. http://www.footballeconomy.com/archive/archive_2009_oct_11.htm http://www.footballeconomy.com/archive/archive_2009_oct_11.htm Former Conservative minister Lord Mawhinney has called for wage controls in his capacity as chairman of the Football League. He noted that most clubs were trading at a loss and increasing their debts. The league has seen 25 clubs go into administration since 2002. Cristiano Ronaldo's GBP80m summer transfer to Real Madrid not only had a 'ratcheting effect' for top Premiership clubs, but for Football League clubs as well, he said. Player wages in the Football League rose 24.1 per cent last season, when revenues for all professional clubs rose to GBP2.5bn, but operating losses hit GBP529m. A first step would be to match the Premiership's financial reporting requirements, while other possibilities included a pooled compensation system, paid by club's higher up football's pyramid, to mitigate the effect of wage increases. http://www.footballeconomy.com/archive/archive_2009_oct_10.htm http://www.footballeconomy.com/archive/archive_2009_oct_10.htm The Premiership model is a highly successful one, but can it be readily extended to other sports? Premiership clubs could set up professional basketball teams to play in a new British league under their football brand names as part of a US-led $25m plan launched next week. US owners of clubs at Aston Villa, Liverpool and Manchester United are investor targets of the new British Basketball Association, led by a group of former US National Basketball Association executives and US businessmen. The BBA said that it had tried to co-operate with the existing British Basketball League but now intends to set up its own league - initially of eight teams in big cities playing 42 games a season - to start in November 2010. The $25m would enable BBA clubs to pay between five and 10 times the wages paid in the BBL and to market the game in the run-up to the 2012 Olympics. Basketball is one of the three big sports in the US alongside baseball and American football. There it relies a lot on television rights as the number of spectators you can feasibly get into a court is limited by football standards. Ron Scott, chief executive of the BBA, said the UK was 'the last uncharted territory' of basketball and that the game was primed for the type of resurgence it experienced in Spain after the 1992 Barcelona Olympics. http://www.footballeconomy.com/archive/archive_2009_oct_09.htm http://www.footballeconomy.com/archive/archive_2009_oct_09.htm Liverpool co-owner George Gillett will fly to Saudi Arabia next week for further talks with Prince Faisal bin Fahd bin Abudullah au-Said about buying a stake in the club which could be a complete buy out of the American owners. But football fanatic Price Faisal is far from convinced about a Liverpool investment, despite his respect for the club and its fans. He is worried about the high debt levels at the club and the relationship between the two owners. Barry Didato, director of strategic investments for the Saudi prince's investment vehicle F6 commented, 'The debt has to be at a manageable level before Prince Faisal would invest and the current level is high. He cannot be looked to as someone who is going to clean up the balance sheet - Gillett has to deal with this.' He is also concerned about the strained relationship between Gillett and co-owner Tom Hicks, Didato explaining that Prince Faisal 'is not a marriage counsellor.' http://www.footballeconomy.com/archive/archive_2009_oct_08.htm http://www.footballeconomy.com/archive/archive_2009_oct_08.htm Former West Ham chairman Eggert Magnusson is prepared to make a cut-price offer for the club. The so-called biscuit baron (in fact it was his father who made his money in biscuits) was part of a 2006 Upton Park buyout. The former Icelandic FA chairman feels that he was unfairly made a scapegoat when things fell apart. When ex-owner Bjorgolfur Gudmundsson's Icelandic banking empire collapsed in the global credit crunch, ownership passed to CB Holdings - owned by Icelandic bank Straumur. Magnusson still lives in London and would like to return to the helm at the Boleyn Ground, a prospect not greeted with much enthusiasm by West Ham fans. http://www.footballeconomy.com/archive/archive_2009_oct_07.htm http://www.footballeconomy.com/archive/archive_2009_oct_07.htm Premiership clubs have kept their fans and in some cases increased attendances since the start of the season, providing further evidence of football's ability to withstand recession, according to Deloitte. The first six weeks of the season have seen clubs using 91 per cent of their stadium capacity, in line with previous seasons. Blackburn Rovers and Manchester City have increased attendances by 10 per cent. Deloitte's Sport Business Group said attendance figures vindicated the decision over the summer by more than three-quarters of Premiership clubs to freeze or reduce season ticket prices. However, the gulf between the top clubs and smaller ones in the Premiership remains a wide one. Dan Jones of Deloitte commented, 'We are seeing a fight to quality whereby the largest clubs perform well but for smaller clubs the challenges are greater.' http://www.footballeconomy.com/archive/archive_2009_oct_06.htm http://www.footballeconomy.com/archive/archive_2009_oct_06.htm Saturday's World Cup qualifier between England and Ukraine will be shown live only on the internet, angering many fans. The UK live rights to the match became available after Setanta Sports, which owned them, went into administration. No free-to-air or pay-TV company made a sufficiently large offer to gain the rights for what is hardly a crucial match given that England has already qualified for the World Cup. Perform, working on behalf of Kentaro, an international agency selling the rights for the Ukranian football authorities, has entered partmerships with most UK newspapers to show the game on their websites. It is planned to charge between GBP4.99 and GBP11.99 to view the game, with the price rising as match day gets closer. Most broadband connections should be able to cope with the video stream, but whether online viewing is 'a realistic alternative to old-fashioned TV broadcasting' as Kentaro claim will not be really be tested by this match. It will not be a good indicator of potential demand for video-on-demand services or the ability of the UK's broadband infrastructure to handle them. Analysts think that if they get a six figure audience they will be doing well. As a comparison, the BBC's iPlayer streams three million to five million views a day. http://www.footballeconomy.com/archive/archive_2009_oct_05.htm http://www.footballeconomy.com/archive/archive_2009_oct_05.htm Troubled Conference club Chester City say they could be only weeks away from folding. They are forecasting losses of GBP660,000 for the current financial year. Attendances are struggling to hit four figures, half of what was predicted. They have given up hope of appealing against their 15-point deduction and look likely to suffer a second consecutive relegation. They also face a legal challenge from Vauxhall Motors after they refused to pay for Paul Taylor, the striker they agreed a GBP30,000 fee for last year. There are no signs of any investors in the offing. http://www.footballeconomy.com/archive/archive_2009_oct_04.htm http://www.footballeconomy.com/archive/archive_2009_oct_04.htm Leading bookmakers are facing the prospect of profit warnings in the next few weeks following heavy losses on football since the start of a Premiership season that until yesterday had seen just four draws - the bookie's favourite result. Bookmakers would expect an average about one in four of the 66 matches played until yesterday to have ended in draws, which would enable them to clean up because of punters' preference for betting on wins. Bookmakers have also been hit by a run of wins by the Premiership's leading and most heavily backed clubs, although yesterday's draw between Manchester United and Sunderland should have helped them. With good reason, some bookmakers are wondering whether the shortage of draws reflects a change in on pitch strategy. Clubs may be thinking that going all out for the win is likely to yield more points over the course of a season than playing conservatively for a draw. The betting industry's anxiety about the unusual pattern of results reflects the shift in gambling patterns away from horse racing towards football. Football offers the attraction of quirky bets such as the number of corners or the time of the first goal scored in a game. More. http://www.footballeconomy.com/archive/archive_2009_oct_03.htm http://www.footballeconomy.com/archive/archive_2009_oct_03.htm Arsenal increased revenue and profits in the year to 31st May. Gate and match day revenue rose from GBP95m to GBP100m but failed to meet a total wage bill of GBP122m, including a GBP23m loss on transfer activities. But total turnover rose from GBP225m to GBP316m, aided by broadcast income of GBP73m and improved retailing and commercial revenue. The biggest contribution to the jump in turnover was GBP88m booked on property development, centred on the transformation of the old Highbury stadium into 655 residential apartments. Overall net debt fell from GBP318m to GBP298m with a net finance cost of GBP16.6m covered by profits which rose from GBP37m to GBP46m. More http://www.footballeconomy.com/archive/archive_2009_sep_16.htm http://www.footballeconomy.com/archive/archive_2009_sep_16.htm Liverpool are playing down the high profile interest of a Saudi prince in acquiring a stake in the club. Nevertheless, American sources are insisting that Prince Faisal Bin Fahad Al Saud is in talks to buy a 50 per cent stake in the team from its US owners, George Gillet Jr. and Tom Hicks, for as much as GBP350m. The Wall Street Journal noted that Liverpool was 'one of the most successful franchises in English and European soccer' and 'could be a trophy asset for the prince.' The prince is the son of the commander of Saudi Arabia's Royal Navy and is married to King Abdullah's granddaughter. The acquisition would be made by the F6 group, a sports investment company which was formed by the prince to bring Formula One powerboat races to Saudi Arabia. The company signed a deal with Mr Gillet and Richard Petty Motorsports on Saturday to form a venture that could bring a football academy and Nascar motor races to Saudi Arabia and other countries in the Middle East. The prince visited the club's academy in Kirkby on Saturday before attending Liverpool's home match against Hull City. The club needs to reduce its GBP250m debt and bring in cash to build its new stadium at Stanley Park, but is not expecting immediate investment from the Saudi prince. Indeed, talks with another potential investor were held in London on Sunday. http://www.footballeconomy.com/archive/archive_2009_sep_15.htm http://www.footballeconomy.com/archive/archive_2009_sep_15.htm Sports minister Gerry Sutcliffe has demanded that the Football Association speed up its plans to modernise. At one point he appeared to suggest that the GBP25m in funding that the FA receives from the government was at stake, but officials at the Department of Culture, Media and Sport subsequently downplayed that suggestion. Mr Sutcliffe is irritated at the delay in the appointment of two independent non-executive directors to the board of the FA. The appointments were among recommendations in Lord Burns's 2005 review of the FA structure, aimed at improving the accountability of a body often criticised for its outdated views and ageing, male-dominated hierarchy. Although the review led to the appointment of Lord Triesman as the FA's independent chairman in 2007, the FA is still working out how to complete the recommended changes in its board's membership. http://www.footballeconomy.com/archive/archive_2009_sep_14.htm http://www.footballeconomy.com/archive/archive_2009_sep_14.htm Some of Europe's leading football clubs, especially those in the Premiership, are preparing to oppose plans bu Uefa to curtail the ability of club owners to buy their way to success. Michael Platini's campaign, which some think is aimed at Premiership clubs, has been approved by Uefa's executive committee and will come into force over the next three years. The concept has the approval of the European Club Association, which represents about 150 clubs. Uefa claims that 50 per cent of clubs in Europe are losing money but it acknowledges that applying new rules across the continent's different financial systems will be complicated. http://www.footballeconomy.com/archive/archive_2009_sep_10.htm http://www.footballeconomy.com/archive/archive_2009_sep_10.htm Premier League clubs have agreed to a rule change that will see them subject to financial regulation with immediate effect, leaving Liverpool, Portsmouth and West Ham under pressure to satisfy their auditors if theu are to avoid intervention. The new regulation allows the league to step in and agree a budget for running a club and even impose a transfer embargo if it believes the club are in danger of falling into administration. http://www.footballeconomy.com/archive/archive_2009_sep_09.htm http://www.footballeconomy.com/archive/archive_2009_sep_09.htm The Football League has declined to comment on Flavio Briatore's departure from the Renault Formula One team, but is understood to be monitoring the situation closely. If Briatore were to be investigated for alleged race fixing, then charged and found guilty by the FIA, his position as chairman of Queen's Park Rangers could be placed in jeopardy. If Briatore were to be suspended by the FIA, the Italian might no longer be acceptable to the League as a 'fit and proper person'. Anyone who is the subject of a ban from another sporting governing body is liable to be disqualified from owning a football club. Any disqualification could lead to questions about the continued involvement of Bernie Ecclestone, with whom he took over the club two years ago. Some QPR fans have already called on Briatore to stand own, arguing that he has put QPR in the headlines again for the wrong reason.. More. http://www.footballeconomy.com/archive/archive_2009_sep_08.htm http://www.footballeconomy.com/archive/archive_2009_sep_08.htm England's qualification for the World Cup should provide a big boost to the economy. Estimates suggest a revenue boost of between GBP1.5bn to GBP2bn to various sectors of the economy. Events such as the international football tournaments are resistant to recessionary strains and create a micro-economy of their own. Simon Chadwick, professor of sports business strategy at the University of Coventry, commented in the Financial Times that one of the main psychological effects of a national side reaching a World Cup is 'birging' or basking in reflected glory. The opposite effect when qualification is not achieved is 'cofting' or cutting off from collective failure. No estimates are available at this time of differential impacts on the English and Scottish economies. More. http://www.footballeconomy.com/archive/archive_2009_sep_07.htm http://www.footballeconomy.com/archive/archive_2009_sep_07.htm Liverpool have secured a new shirt sponsorship deal that equals the most lucrative in football history. They have signed a four year agreement with Standard Chartered, the London-based international bank, worth GBP80m over four years. Carlsberg had enjoyed a 17-year association with Liverpool, but was unwilling to match the GBP20m a season offer made by Standard Chartered. This equals the deal struck by Manchester United with Aon Corp, the American financial giant, in June. http://www.footballeconomy.com/archive/archive_2009_sep_06.htm http://www.footballeconomy.com/archive/archive_2009_sep_06.htm As Michel Platini has become increasingly bullish about his 'financial fair play' strategy which many see as targeted at the top English clubs, some fans of those clubs may feel they are justified in being paranoid. Uefa slapped a two match ban on Eduardo for diving: nothing wrong in that, except that many such offences are ignored. Then Fifa imposed a transfer ban on Chelsea for inducing a French player to break his contract and join them. Chelsea do, of course, have previous with Ashley Cole and some fans of other clubs welcomed the move. But many Chelsea fans see it as part of an anti-English vendetta by the international football authorities. The fans suspect that these bodies resent the Premier League's elite clubs for using wealthy owners' money to entice the best talent. Poaching players doesn't just happen in England. Fifa took similar action against Italy's Roma four years ago and against a Swiss club in May. However, the global profile of the Premiership's top four puts their player purchases under intense scrutiny. http://www.footballeconomy.com/archive/archive_2009_sep_05.htm http://www.footballeconomy.com/archive/archive_2009_sep_05.htm Transfer spending involving Premiership clubs in the summer transfer window is expected to total GBP450m, down 10 per cent on last summer's GBP500m. Moreover, Manchester City alone accounted for more than a quarter of the total buying eight players for more than GBP120m. Another GBP80m was accounted for by the sale by Manchester United of Cristiano Ronaldo to Real Madrid. The value of transfers from overseas clubs is about 40 per cent down on each of the past two summers. The top four clubs spent only moderately with the result that Premier League clubs' net transfer spending will be GBP80m, compared with GBP215m last summer and GBP240m in the summer of 2007, according to figures compiled by Deloitte's sports business group. More. http://www.footballeconomy.com/archive/archive_2009_sep_04.htm http://www.footballeconomy.com/archive/archive_2009_sep_04.htm Blue Square Premiership club Salisbury City have gone into administration. A winding-up order was filed against the club with Salisbury reportedly owing the taxman around GBP200,000. The club was put up for sale for GBP1 in April, but no buyer has been found. It was considered by the club that administration was the only hope of getting a buyer in. Salisbury is a 'stand alone' city with a good sized population that should be able to sustain a Conference club, but the cathedral city does not have a strong football tradition. http://www.footballeconomy.com/archive/archive_2009_sep_02.htm http://www.footballeconomy.com/archive/archive_2009_sep_02.htm Alexandre Gaydamak, who has all but completed the sale of Portsmouth to a Dubai investor has admitted that his three-year involvement with the Premiership will leave him out of pocket. 'I turned out much worse off,' he admitted. 'It turned out not to be a good commercial transaction.' Mr Gaydamak bought out Milan Manadric for GBP30m in 2006 and was thought to be looking for GBP60m. He has declined to reveal how much he was paid for the club by Al-Fahim Asia Associates, but it is likely to be a lot less than he was hoping for. He also spent heavily on players when he first took over. More http://www.footballeconomy.com/archive/archive_2009_sep_01.htm http://www.footballeconomy.com/archive/archive_2009_sep_01.htm Two non-league clubs relegated from the Blue Square Premier last year are facing a battle for survival. In both cases, it could be said to once again represent vaulting ambition over-reaching itself. Lewes must find GBP30,000 by Wednesday or face being the latest non-league club to go to the wall. Weymouth will go into administration if they cannot find GBP50,000 in the next ten days. Blue Square South side Lewes owe HM Revenue and Customs GBP110,000 and with tax revenues falling the authorities have finally run out of patience with the debt-ridden Rooks. The Sussex side face a make-or-break hearing at the High court where they must present at least GBP60,000 or face instant closure. In May, London side Fisher Athletic were wound up after owing a reported GBP250,000 in tax. An anonymous donor has pledged GBP30,000 to keep Lewes alive, but only if the club raises the same amount through donations, a tough assignment. More http://www.footballeconomy.com/archive/archive_2009_aug_27.htm http://www.footballeconomy.com/archive/archive_2009_aug_27.htm Uefa president Michael Platini has given Premiership clubs a three year ultimatum to clear up their debts or be booted out of the Champions League. Of course, other clubs such as Real Madrid could be affected as well, but there is no doubt that Platini's real target is English dominance of the Champions League. Under Platini's scheme clubs will have to break even on their football budgets, only spending what they earn from ticket sales, television rights, sponsorship and prize money. Clubs will be able to go into debt to pay for stadium improvements and youth development, which Platini hopes will inspire investors to pump money into these areas rather than transfer fees and inflated wages. Under the plan a club GBP1m in debt would be treated more leniently than one GBP50m in arrears. More http://www.footballeconomy.com/archive/archive_2009_aug_26.htm http://www.footballeconomy.com/archive/archive_2009_aug_26.htm In a letter to the Financial Times Alan Evans has some interesting statistics on the increasing cost of watching football, although I don't agree with the conclusions that he draws from them (and have written to the Pink 'Un to that effect). Using figures adjusted to 2007 values, he shows that in 1977 a first division ticket cost on average GBP4.30 while the average wage was GBP17,554. Thus, 'Attending top class football was a reasonable weekly outlay for a family of average to low income.' In 1992 the average ticket cost GBP11.26 compared with an average wage of GBP28,508. 'If we take the average wage for 2008 at GBP29,993 and compare it with the price schedules of premier clubs for this season, the cost increase is alarming. The average cheapest ticket is GBP28.' More http://www.footballeconomy.com/archive/archive_2009_aug_25.htm http://www.footballeconomy.com/archive/archive_2009_aug_25.htm The long-awaited takeover of Portsmouth has been completed. Sulaiman Al-Fahim, the Dubai businessman who fronted the takeover of Manchester City by Abu Dhabi investors, has announced that he has become the sole owner of the club. The deal was reached after the club announced that it had started talks with an alternative group of buyers led by chief executive Peter Storrie. Mr Al-Fahim had already passed the Premiership's fit and proper person test. The takeover is the first since the fit and proper person test was tightend up. No details of the terms of the takeover have been released. The club made losses of GBP16.7m in the 2007-8 season on turnover of GBP70m and has loans of GBP36m. http://www.footballeconomy.com/archive/archive_2009_aug_23.htm http://www.footballeconomy.com/archive/archive_2009_aug_23.htm Football has not been completely recession proof but it has survived the recession much better than many other sectors which is perhaps not so surprising as this is just the sort of time that people want entertainment that is associated with controversy and excitement and offers an escape from everyday chores. There might seem to be a strong contrast between the GBP110,000 a week said to be earned by Fernando Torres and the GBP479 average wage in Liverpool (for those who still have a job). But though the sight of footballers from poor and/or ethnic minority backgrounds earning fabulous wages may cause the readers of 'middle England' newspapers to splutter over their cornflakes, the fact is that something in very scarce supply can command a high price. This is as true of a talented striker as it is of a rare painting. In both cases there is an element of subjectivity in the assessment of worth, although aids like ProZone are making it easier to arrive at precise estimates of a footballer's performance.. More. http://www.footballeconomy.com/archive/archive_2009_aug_22.htm http://www.footballeconomy.com/archive/archive_2009_aug_22.htm Football clubs are becoming price takers rather than price makers when it comes to shirt sponsorship deals. Sport+Markt, the sports consultancy, estimates that the value of shirt sponsorship deals in the Premiership fell from GBP69.2m during the 2007-8 season to GBP68.2m last season after years of continuous growth. Carlsberg has so far declined to extend its GBP7.5m a year deal with Liverpool which finishes at the end of the season. Talks are continuing, but there is speculation that the Danish brewer might walk. The corporate failure of several sponsors has hit the market. Manchester United's sponsor insurance giant AIG hit the rocks, but their GBP19m a year deal was replaced by one with Aon said to be worth GBP25m a year. However, relatively few clubs have the global marketing clout of United. West Ham were forced to patch over the logo of its sponsor XL when the travel company went into administration. There was a certain synergy between Northern Rock's sponsorship of Newcastle United and the relegation of the Magpies. Another relegated club, West Bromwich Albion, began the season without a sponsor at all. Bolton Wanderers and Wigan Athletic had to settle for a joint deal with 188BET, an Asian-focused online gambling company. Instead of getting the GBP1m each they hoped for, Bolton is thought to be getting about GBP750,000 a year and Wigan GBP650,000 in a two-year deal. More. http://www.footballeconomy.com/archive/archive_2009_aug_21.htm http://www.footballeconomy.com/archive/archive_2009_aug_21.htm Owners of football clubs are often living out some kind of fantasy, but they are rarely fit enough to appear on the pitch (sometimes hard-up teams do raffle a slot for a supporter who then gets a shirt number and a puffing few minutes on the pitch in an inconsequential fixture). Michael Knighton, who turned out not to have the wherewithal to buy Manchester United, did get the chance to play 'keepy uppy' at the Stretford End. Despite lacking the promised readies which would have given him control of United at a knockdown price, he did serve on the board for a few years, ending up at Carlisle (which apparently became the club of choice of space aliens which suggests that they don't know that much about football). Now there has been a first: the boss of a club has been red carded and fined by the manager. Tom Mitchell, described as a 'shaggy-haired 21-year old' playing in midfield, was sent off for head butting an opponent in the Blue Square South fixture between Dorchester Town and Newport County. His dad, the Magpies owner Eddie Mitchell, handed control of the club in the summer to Tom and his brother Josh. Manager Roy O'Brien is insising that Mitchell must toe the line and earn the right to play. He remains manager. http://www.footballeconomy.com/archive/archive_2009_aug_20.htm http://www.footballeconomy.com/archive/archive_2009_aug_20.htm Faced with an early exit from this year's Champions League, Celtic's strategy to overcome what their chairman calles the 'Setanta effect' has been badly dented. Former Home Secretary John Reid has warned that much of Scottish football was now 'edging the narrow line of insolvency' because of the recent collapse of Setanta. Celtic had always favoured linking up with BSkyB last summer in preference to the deal the SPL struck with Setanta. Supremo Reid said, 'The recently agreed arrangements with Sky/ESPN are significantly less than could have been the case had Sky's offer been accepted last year, and are a hard lesson in what could and should have been a far more positive outcome for all of the SPL clubs.'. More. http://www.footballeconomy.com/archive/archive_2009_aug_19.htm http://www.footballeconomy.com/archive/archive_2009_aug_19.htm It had to happen sooner or later: a government bailing out a financially inept football industry dissatisfied with its television contract. And what was the betting that it would happen in Argentina, a fanatical football nation where presidents know they have to engage in crowd-pleasing populist politics? Nevertheless, this is quite a step even for the country's populist First Family, president Cristina Fernandez and her husband and predecessor Nestor Kirchner. The president ended a two-week delay in the start of the football season by signing a USD155m a year deal to broadcast league matches on state television, replacing an existing and far less generous cable contract. Matches will now be available on Channel 7, a terrestial station which is free to air. Ms Kirchner portrayed this as a blow for the poor. Fans may be grateful that the season has at last started and she may be able to recover some of the loss of prestige she suffered in a legislative election in June when her government lost its majority in the lower house of Congress. It is also perhaps convenient that one of the main partners in the discarded cable contract is Clarin, a Buenos Aires media group with a daily newspaper of the same name that has been increasingly critical of the Kirchners. More. http://www.footballeconomy.com/archive/archive_2009_aug_18.htm http://www.footballeconomy.com/archive/archive_2009_aug_18.htm Burnley's 1-0 midweek victory over Manchester United, followed by a 1-0 win over Everton today. gave a big boost to Clarets fans and their hopes of Premiership survival. But just the arrival of the club in the Premiership is giving a boost to a town that has had more than its fair share of problems. The old economy based on cotton and mining disappeared. The town became blighted by some of the worst scenes of urban desolation I have seen outside the United States. The politics of the town have been the subject of a recent analysis in the journal British Politics. Perceived neglect by the local council formed a backcloth to race riots in 2001 and the emergence of the British National Party as the second largest group on the council two years later. However, now things are on the up. Alastair Campbell, Tony Blair's former spin doctor and one of the team's most famous fans said that the mood of the town had lifted after Burnley's promotion. Unemployment has doubled during the past year, but its manufacturing base, which employs a quarter of workers, and is predominantly in the aerospace industry, has held up well. More. http://www.footballeconomy.com/archive/archive_2009_aug_17.htm http://www.footballeconomy.com/archive/archive_2009_aug_17.htm Birmingham City may face another lengthy period of uncertainty about a takeover bid. The Birmingham board is atempting to flush out Carson Yeung's latest takeover bid by demanding that he bank a non-refundable six figure sum as proof of intent. The Hong Kong businessman already owns a 29.9 per cent stake in the club. Birmingham have yet to receive an offer from Grandtop International Holdings, the company owned by Yeung, which is considering a GBP70m offer to secure a majority shareholding in the club. More. http://www.footballeconomy.com/archive/archive_2009_aug_16.htm http://www.footballeconomy.com/archive/archive_2009_aug_16.htm The takeover of Portsmouth by Sulaiman al-Fahim looks increasingly in doubt. It is thought that the main outstanding issue is the level of debt to Alexandre Gaydamak, the existing owner and to Barclays and Standard Bank - who are thought to be unwilling to transfer the debt to al-Fahim. The proceeds of the sales of Glen Johnson and Peter Crouch, along with the first tranche of the season's television money, have gone into paying down the bank debt. Hence, administration is not an immediate threat. But the gravity of Pompey's financial situation is emphasised by the fact that Kanu has only signed a one month contract. The underlying structural problem is that the club serves one of the most relatively impoverished areas in southern England and does not have a big income, but it does have a large wage bill. http://www.footballeconomy.com/archive/archive_2009_aug_15.htm http://www.footballeconomy.com/archive/archive_2009_aug_15.htm The extent to which the financial crisis has hit hard at the lower levels of football is shown by the fact that two clubs have started the season late, Chester City (relegated at the end of last season from League 2 to the Conference) and Livingston who are still fighting a decision to relegate them from Division 1 to Division 3 of the Scottish league. Neither case is that straightforward, however, as both clubs have been blighted by poor management at board level. More http://www.footballeconomy.com/archive/archive_2009_aug_14.htm http://www.footballeconomy.com/archive/archive_2009_aug_14.htm The sports goods industry is hope that next year's World Cup will help it to revive its flagging fortunes. Puma, the continent's leading football brand, particularly hopes to boost sales. Chief executive Jochen Zeitz commented. 'The soccer championship in South Africa will be a home match for us. Nobody has such a deep understanding of the African market as we have.' In the past year the continent accounted for about 3 per cent of Puma's Euro2.5bn revenues. This may seem a small slice of the total market, but sales of football, shoes and apparel have doubled every two years in Africa. Puma is confident that revenues on the continent, with its almost 1bn inhabitants, would continue to grow faster than elsewhere. Puma, which is trying to make up lost ground on rivals Adidas and Nike, may not have as big a marketing budget for the World Cup as these competitors. But it sponsors 11 African teams, as well as Cameroon football star Samuel Eto. Puma is a supporter of the 'Cotton made in Africa' initiative which aims to improve the lot of African cotton farmers. Unfortunately, US and EU subsidies to their cotton farmers squeeze them on the world market. More http://www.footballeconomy.com/archive/archive_2009_aug_13.htm http://www.footballeconomy.com/archive/archive_2009_aug_13.htm Newly wealthy Notts County have got director of football Sven Goran Eriksson on the cheap. His basic salary is 'only' GBP250,000 a year and he will have to meet a number of ambitious targets to break through the million pound barrier. One of these is to lead the team into the Premiership. However, many of the targets relate to building up the long-term infrastructure of the club such as producing a home-grown player who goes on to international football and upgrading County's centre of excellence to academy status. This will not be easy as the club is still looking for their own training ground. http://www.footballeconomy.com/archive/archive_2009_aug_12.htm http://www.footballeconomy.com/archive/archive_2009_aug_12.htm Blackburn Rovers have been named as the most exciting team in the Premiership. Average excitement scores at matches were calculated at 189, compared with 157 at lowest-placed Newcastle, which is surprising given the reputation of Toon fans for fanaticism, but doubtless reflects the fare served up on the pitch last season. The high tension at Blackburn was put down to the team's frustrating performances and failure to meet expectations. Pyschologist Dr David Lewis said, 'Fans are willing their team out of the mid-table comfort zone, causing tension levels to increase more than fans of big clubs who expect their team to win and are therefore calmer.' Manchester United fans' heart rates stayed higher for longest after games, presumably caused by a sense of strong satisfaction. The scores were based on measuring the heart rate and levels of conisol, a stress hormone, among supporters of all Premiership sides for Wrigley Extra. http://www.footballeconomy.com/archive/archive_2009_aug_11.htm http://www.footballeconomy.com/archive/archive_2009_aug_11.htm Firms that make and sell alcoholic drinks are important sponsors of football clubs given that they give access to young males who are likely to buy their products. However, boorish behaviour by cricket fans may be the final straw that leads to a ban on sponsorship by drinks firms, as has already happened for tobacco. It is felt that the glamorous association between sport and drink may contribute to the rise in alcohol abuse and alcohol-related illness in Britain. As a book called Bar Wars pointed out New Labour got itself into an unholy alliance with the drinks industry, but that is another story. However, the Government is unlikely to make a move before the election and a new Government may take a different view, although the medical lobby is strong and the pressure against tobacco told in the end. Carlsberg have a long-running association with Liverpool and Heineken paid GBP66m over three years to put its name on the Champions League. It may not be last drinks yet, but the end of the party may be in sight. http://www.footballeconomy.com/archive/archive_2009_aug_10.htm http://www.footballeconomy.com/archive/archive_2009_aug_10.htm Newcastle owner Mike Ashley is having difficulty selling the club and now he faces a probe into his Sports Direct chain. He is under investigation over the purchase of 31 stores from rival JJB Sports. The Office of Fair Trading referred the case to the Competition Commission after Sports Direct failed to find buyers in five areas of the country where the OFT is concerned the retailer would gain a monopoly. The probe is the latest stage in a long-running battle by the OFT to expose the links between the country's biggest sportswear retailers which could allow them to make bigger margins on kit bought by fans. Indeed, the margin on shirts and other football products is already very high. The news is another blow to Mr Ashley who saw pre-tax profits at Sports Direct fall by more than 90 per cent in the year to April. http://www.footballeconomy.com/archive/archive_2009_aug_09.htm http://www.footballeconomy.com/archive/archive_2009_aug_09.htm One of the most important books to be published on the political economy of football in the recent past has been written with this title by football writer Simon Kuper and sports economist Stefan Szymanski. I have got the book and once I have read it, I will review it here in some detail. More. http://www.footballeconomy.com/archive/archive_2009_aug_08.htm http://www.footballeconomy.com/archive/archive_2009_aug_08.htm Argentine football fans face the prospect of a delayed start, and possibly the suspension, of the coming season. Argentine Football Association (AFA) spokesman Chequis Blaio said that 'No games will start at any level.' Not surprisingly, this upset some of the most dedicated fans in the world and the AFA headquarters was sprayed with graffiti. Tension between the country's top clubs and cable television providers has been brewing for weeks as the country's top league teams trying to extricate themselves from debts estimated at $300m. Argentina has been hit by the global recession and many commentators consider that the current government has mismanaged the economy, doctoring statistics to make out things are better than they really are. To try and solve the debt problem, the AFA is lobbying to squeeze more money from television rights. AFA supremo Julio Grondona is pushing for $720m per season, almost three times the current rate. 'The money that television gives us doesn't suffice. Once and for all, we want figures that football deserves,' the embattled AFA president said. More. http://www.footballeconomy.com/archive/archive_2009_aug_07.htm http://www.footballeconomy.com/archive/archive_2009_aug_07.htm Long suffering Newcastle fans may face another year with Mike Ashley as owner. The two consortiums still interested in buying the club have been given an informal deadline on Friday. They have already missed a deadline of 31 July, but Ashley takes the view that the takeover needs to be sorted one way or another before the Coca-Cola Championship season starts this weekend. The closure of the transfer window at the end of the month would stop any new owner buying or selling players. If he stayed on, Ashley would pump as much as GBP40m of his own money into the club. At present, Newcastle are operating on a Barclays Bank overdraft of about GBP40m. Their annual wage bill stood at GBP67m in their last published accounts, but will have been reduced by a number of high profile departures. It has been suggested, however, that the prospective purchasers want to see further evidence of the wage bill being reduced before they commit themselves. http://www.footballeconomy.com/archive/archive_2009_aug_06.htm http://www.footballeconomy.com/archive/archive_2009_aug_06.htm Virgin Money are claiming that more fans are planning to ditch football due to cost. One has to be very careful about these analyses based on surveys that pose hypothetical questions. There is a difference between what people say and what they do. Football fans are notorious for saying they won't renew their season ticket or ever go to the ground again unless the manager is sacked, but then turn up as usual for the first game of the season. Nevertheless, the findings are not without interest. It is said that one in three football fans plan to reduce attendance at matches and one in five disaffected fans are going to turn to lower league football for a less expensive fix of live football. Of course, again, this will not matter very much if they fail to attend one or two matches - and season ticket holders are counted in attendance figures whether they are there or not. The research suggests (but we shall see) that the top four clubs are most at risk with 33 per cent of fans planning to go to fewer games. The clubs that have the least to worry about include newly-promoted Burnley plus Fulham and Hull but even they face a one in five loss if the survey is to be believed. More. http://www.footballeconomy.com/archive/archive_2009_aug_05.htm http://www.footballeconomy.com/archive/archive_2009_aug_05.htm At a time when football fans are mourning the death of the gentleman giant Bobby Robson, it is sad to see the state of Newcastle United. Of 30 clubs relegated since the Premiership was founded in 1992-3, only 13 have rebounded straight back and some like Leeds United have fallen even lower. With their ownership unresolved, the Magpies are not well set up to face the season. Despite the fanaticism of many of their supporters, disillusionment has hit season ticket sales. Now restructuring firms are said to be hovering round the club. Sources close to owner Mike Ashley have emphatically denied that he will put the club into administration and incur a ten point penalty, even though it would bring tax advantages for his businesses. Ashley is believed to be offering loans of up to GBP40m for a buyer to take the club off his hands before the start of the season. It is understood that talks are being held with a Middle East consortium, but any deal is expected to fall short of Ashley's GBP100m asking price. Payments may be made in stages depending on how the team performs. As Ashley himself has admitted, his takeover has been catastrophic for everyone involved, not least the fans. http://www.footballeconomy.com/archive/archive_2009_aug_04.htm http://www.footballeconomy.com/archive/archive_2009_aug_04.htm Britain has done well recently in securing global sporting events and is bidding for the World Cup in 2018. But how much they are really worth? The government view is that they give a boost to the economy, but some sports economists are not so sure. An article in Urban Studies last year noted, 'There is now a considerable accumulation of evidence that the direct economic benefits of hosting sporting events are limited.' Admittedly, the Euro 96 football tournament attracted as many as 280,000 overseas visitors to the UK, while tourism and travel spending rose by 3 per cent in the second quarter of the year. Such effects are typically short lived, however, as tourism lasts only as long as the event and may even deter other holidaymakers. The 2006 football World Cup in Germany was estimated to have provided a GBP3bn boost to the German economy, but only a month after the tournament the Bundesbank said the 'one-off' effects were already disappearing. More. http://www.footballeconomy.com/archive/archive_2009_aug_03.htm http://www.footballeconomy.com/archive/archive_2009_aug_03.htm Chester City, relegated from the Football League last year, face a crunch board meeting tomorrow. With the season starting next Saturday, the club lack a licence to play. What's more the High Court revoked their Company Voluntary Arrangement that allow them to exit administration. The FA have to decide if they will grant Chester mandatory affiliation even though they are in clear breach of insolvency rules. Meanwhile, Blue Square North outfit Northwich Victoria have seen the tax authorities reject the club's bid to exit administration through a CVA. More. http://www.footballeconomy.com/archive/archive_2009_aug_02.htm http://www.footballeconomy.com/archive/archive_2009_aug_02.htm Financially strapped Scottish club Livingston have been given a ray of hope after owner Angelo Massone agreed to sell his shares to new investors. His departure followed, but was not necessarily related to, a conviction at Edinburgh Sheriff Court. Gordon McDougall and Neil Rankine have persuaded the Italian businessman and lawyer to accept GBP50,000 for his shares. Massone had earlier turned down an offer of half that amount from the club's interim manager who had started the process of putting the club into liquidation after Massone refused to sell his shares. The interim manager, Donald McGruther, had been appointed by the Court of Session last week after West Lothian Council took action to recover a GBP330,000 debt. He concluded that the club was 'hopelessly insolvent' and said Massone must sell his shareholding to allow a full takeover that would enable the club to survive. He commented, 'It has been the most difficult negotiations I have ever been involved in'. McGruther agreed a rescue package with former Cowdenbeath supremo Gordon McDougall and former Dumbarton boss Rankine. The pair agreed to fund the club for a year and McGruther gave the Scottish Football League sufficient guarantees to continue playing in Division One. More. http://www.footballeconomy.com/archive/archive_2009_aug_01.htm http://www.footballeconomy.com/archive/archive_2009_aug_01.htm League 1 club Tranmere Rovers are furious after a company they hired to find a buyer for the Wirral club put them up for sale on e-Bay with a reserve price of GBP6m. The attention of potential purchasers was drawn to the club's potential for growth, 'historic brand' and the chance to 'upgrade the fan experience' (whatever that means). The listing was apparently placed on the site by Dornoch Capital Advisers, a North Carolina-based company appointed this year by Peter Johnson, the Tranmere chairman, to find a buyer for his shares. The club has been on the market since last year. Johnson was 'absolutely appalled'. He emphasised that it had been done without his permission, pointing out 'it's not a second-hand bike we're selling.' More. http://www.footballeconomy.com/archive/archive_2009_jul_13.htm http://www.footballeconomy.com/archive/archive_2009_jul_13.htm Newcastle United sources have categorically denied that Mike Ashley will place the club into administration if a buyer does not emerge over the next few weeks. The club has already cost him over GBP250m. However, it seems likely that the Ashley regime will continue if none of the three bidders for Newcastle who have been in detailed discussions with investment bank Seymour Pierce proceed with a takeover. It is believed that Newcastle is being run on a day-to-day basis through a bank overdraft of GBP35m or more. The Singapore-based Profitable Group has announced that it has withdrawn its bid for the club. However, given that it consistently failed to demonstrate that it could meet the GBP100m asking price, the credibility of its interest was in doubt. http://www.footballeconomy.com/archive/archive_2009_jul_12.htm http://www.footballeconomy.com/archive/archive_2009_jul_12.htm Liverpool which owes two banks GBP350m has renegotiated its debt with the Royal Bank of Scotland. Although Liverpool fans will be relieved that a deal has been done, after fears that the loans might be called in, the sequence of events does nothing to reassure them that the American co-owners, Tom Hicks and George Gillett, have the financial clout the club needs, particularly to build the Stanley Park stadium. The two supporter groups, ShareLiverpool FC and Spirit of Shankly, warned against another short-term fix and have stepped up their efforts to launch a serious bid to buy the club. ShareLiverpool FV have launched a revised initiative to raise GBP150m that would be used to make an offer to buy 60 per cent of the club, with an additional GBP100m sought from a commercial partner. The remaining GBP100m debt would be exchanged for convertible loan stock in the club, which would be bought from the banks in instalments over a 20-year period. More. http://www.footballeconomy.com/archive/archive_2009_jul_11.htm http://www.footballeconomy.com/archive/archive_2009_jul_11.htm Portsmouth became the second Premiership club to be owned by investors from the United Arab Emirates with the completion of a takeover led by Sulaiman-al-Fahim. The takeover was confirmed after the Premier League announced that Al-Fahim had become the first person to pass their new 'fit and proper person' test for club owners. He will become the club chairman, 31 years old, with a MBA and PhD from American business schools, he founded Hydra Properties in 2005. He is ranked 16th on the list of Most Powerful Arabs, playing a Sir Alan Sugar role in an Apprentice style show. Sporting interests for Hydra Properties include sponsoring Dubai sports television, a Costa Rican soccer team and the German Bundesliga. They are building a football academy in Abu Dhabi with Inter Milan. http://www.footballeconomy.com/archive/archive_2009_jul_10.htm http://www.footballeconomy.com/archive/archive_2009_jul_10.htm Celtic and Rangers are unhappy with a television deal with Sky-ESPN approved by two-thirds of the Scottish Premier clubs which more or less halves the revenue received from Setanta. Instead of GBP125m over four years the SPL had to accept GBP65m over five, or a minimum of three. Instead of the Scottish top flight receiving GBP20.25m during the 2009-10 season, they will have to make do with just GBP13m. Admittedly, they were not in a strong bargaining position as Setanta paid over the odds in an effort to build their business. However, in the summer of 2008 the Old Firm had wanted to go along with a four-year deal with Sky. Moreover, they had an alternative plan for an SPL TV channel along the model recently pursued by the Dutch League. However, with four weeks to go until the start of the season, the other clubs decided there wasn't enough time left to pursue a new option. http://www.footballeconomy.com/archive/archive_2009_jul_09.htm http://www.footballeconomy.com/archive/archive_2009_jul_09.htm Aside from those teams relegated from La Liga, Spain's second division has also included the reserve teams of the country's top soccer clubs, known as B teams. These B teams allowed sides to nurture new talent at minimal cost, as well as to recycle older players. But reserve teams cannot play in the same division as their senior team, and are thus ineligible for promotion to La Liga. Reserve teams are also no longer permitted to enter the Spanish Cup. In short, there is often no incentive for a reserve side to do well. This was illustrated last season by Sevilla Athletico, Sevilla's reserve side, which won one only one game all season and was relegated to the third division, known as Segunda B. Following the Bosman ruling, young players who do not quickly make it up to the main team move on to other sides. When players move on, they are often replaced by younger players who are not up to the standards required, unless they are foreign players. More. http://www.footballeconomy.com/archive/archive_2009_jul_08.htm http://www.footballeconomy.com/archive/archive_2009_jul_08.htm In one of the more unlikely recent football takeovers, a Middle East consortium has bought Notts County which is the world's oldest professional club but finished sixth from bottom of League Two last season. Munto Finance have promised to provide the funds to establish the Magpies as a Championship club within five years. Munto is a special purpose vehicle which the club described as a Middle East-backed investment fund based in Switzerland. The club's new executive chairman will be Peter Trembling, previously head of sport at MBNA International Bank and commercial director at Everton. Peter Willett, described as the client representative of the al Thani family, is also joining the board although it is unclear whether this refers to the Qatar ruling family. The club was 60 per cent owned by a supporters' trust which gifted its shareholding to Munto in a vote last month. http://www.footballeconomy.com/archive/archive_2009_jul_07.htm http://www.footballeconomy.com/archive/archive_2009_jul_07.htm The split among Arsenal's main shareholders has widened after Alisher Usmanov cast doubt on the club's ability to provide enough money for the team to challenge for honours. It was no surprise when the Arsenal board rejected the Uzbek-born Russian billionaire's plan to provide fresh funds for transfers as well as reducing the club's debt by issuing new shares. Arsenal's shortage of money is in part a legacy of building the Emirates Stadium which cost about GBP440m. They borrowed GBP260m with the rest coming from sponsors and other contracts that were structured with most of the money being received early in the deals, leaving little coming in now. In addition, the club's redevelopment of Highbury into flats has run into problems with the downturn in the property market and they must re-negotiate a GBP133m loan by April. More http://www.footballeconomy.com/archive/archive_2009_jul_06.htm http://www.footballeconomy.com/archive/archive_2009_jul_06.htm Reading chairman Sir John Madejski is determined to see the club remain on an even keel. 'Last season we went for broke and over-spent on the budget and we are also now in the last season of our parachute payments (of GBP11m) from the Premiership.' The club has seen a 50 per cent drop in earnings from hospitality. Watford have had to be paid close to GBP1m in compensation for new manager Brendan Rogers. Sir John has talked about selling the club in the past, but says it is not for sale at the moment 'as we are still a Championship club.' http://www.footballeconomy.com/archive/archive_2009_jul_05.htm http://www.footballeconomy.com/archive/archive_2009_jul_05.htm Florentino Perez, the recently elected big-spending president of Real Madrid, wants a European Super League and is ready to take on Uefa if they do not adapt the Champions League to better suit the ambitions of the biggest clubs. 'We have to agree a new European Super League which guarantees that the best always play the best - something that does not happen in the Champions League,' Perez said on Spanish television. He indicated he would push for a breakaway 'closed shop' competition if Uefa does not consider his proposal. He says that he does not want to replace domestic competitions, just guarantee that top clubs could rely on participating every season in a lucrative elite competition, no matter where they finish in their domestic league. http://www.footballeconomy.com/archive/archive_2009_jul_04.htm http://www.footballeconomy.com/archive/archive_2009_jul_04.htm Scottish football club Livingston FC is on the brink of administration after sheriff officers served notice on the club for unpaid rent to West Lothian Council. The council took legal action after the club missed Tuesday's deadline to provide evidence that owner Angelo Massone could pay off the GBP280,000 that Livi owes in rent arrears. It means the Lions are on the verge of administration for the second time in their short 14-year history. If the administrators move in then the club could potentially find themselves relegated to the Third Division, as was the case when Gretna found themselves in a similar situation last year. http://www.footballeconomy.com/archive/archive_2009_jul_03.htm http://www.footballeconomy.com/archive/archive_2009_jul_03.htm Wrexham AFC says that it is debt free and owns its own stadium, training ground, land and equipment. Owner Geoff Moss has sold his 50 per cent stake to Wrexham Village Ltd. in which he is a major investor. The Welsh club said the company had secured private equity finance to acquire the club development land and hoped student flats would be ready next summer. Wrexham went into administration in 2004 with debts of about GBP4m before being bought out by a consortium led by local businessman Neville Dickens. At the end of the 2007-8 season the club was relegated from the Football League to the Conference. Last month the club announced losses of GBP940,482 for the year ending June 2008 and forecast similar losses for the next financial year. However, following the sale of Mr Moss's 50 per cent share - which he bought from Mr Dickens - the club said it no longer had any overdraft or long-term loans. http://www.footballeconomy.com/archive/archive_2009_jul_02.htm http://www.footballeconomy.com/archive/archive_2009_jul_02.htm A Bradford businessman is fronting a dramatic last-minute bid to take control of Southampton. Richard Williams is the representative of a consortium of British businessman who have tabled an offer to buy the club. Speaking from his semi-detached home (clearly not one to splash his wealth around) he said his consortium was not linked to any other bids for the club. Mr Williams is the sole director of the West Yorkshire-based company Gillco Limited which will be used to facilitate the deal. The company was registered just 15 weeks ago. Mr Williams would be appointed non-executve chairman if the deal is completed. A price of around GBP12.5m has been mentioned. It would appear than no due diligence has been completed and the administrator has seen no proof of funds. Let us hope that this will not be another false dawn for Saints fans. http://www.footballeconomy.com/archive/archive_2009_jul_01.htm http://www.footballeconomy.com/archive/archive_2009_jul_01.htm Russian oligarch Alisher Usmanov has written to the Arsenal board saying that he is prepared to underwrite a GBP100m rights issue. Usmanov, who is the second biggest investor in the club and is being advised by Lazards, claims that he wants to work with the board. His stated intention is to help address Arsenal's debts and provide money to use during the summer transfer window. The board is expected to discuss the letter at its meeting this week. Usmanov is known to want to have a greater influence over events at Arsenal. Despite his 25 per cent stake in the club, his investment vehicle (Red and White Holdings) is not represented on the board which takes the view that using large sums to buy players could be risky. Red and White believes that the club's GBP350m debts have made it uncompetitive on the pitch, This is denied by the board who want to pursue what they describe as a 'sustainable business model'. They will not allow the club to borrow money it might struggle to repay, making it reliant on a benefactor. The Arsenal Supporters' Trust has mixed feelings about a rights issue. It does not want money 'frittered away' in the transfer market, but thinks there would be benefit in a capital injection that had no impact on ownership and enabled the current debt to be reduced. http://www.footballeconomy.com/archive/archive_2009_jun_34.htm http://www.footballeconomy.com/archive/archive_2009_jun_34.htm The Blue Square Premiership is confident about selling its television rights after the collapse of its five year GBP12m deal with Setanta, although whether it will raise as much money remains to be seen. Martin James of Sport 360, the Conference's official advertising agency, commented, 'We're not talking Top-Up TV or anything like that.' A free to air bidder is a possibility. Setanta's deal guaranteed all Blue Square Premier clubs a minimum of GBP70,000 a year from the league's central funding, with a further GBP8,000 for the home side and GBP3,000 for the away team featured in a broadcast match. Step 2 sides received GBP15,000 a year. The sum paid out to Premiership clubs represents anything between 15 and 25 per cent of most clubs' budgets. For example, Cambridge United made around GBP135,000 from Setanta last season. http://www.footballeconomy.com/archive/archive_2009_jun_33.htm http://www.footballeconomy.com/archive/archive_2009_jun_33.htm Folkestone Invicta, themselves a 'phoenix' club that arose from the ashes of the financially troubled Folkestone, could go into administration on Monday unless they find the GBP70,000 they calculate they need to start next season. The Ryman South club have an outstanding tax bill of nearly GBP100,000. The directors are continuing their fight to reduce the HM Revenue and Customs bill. They fear that the club's debt could rise to GBP300,000 by this time next year. Invicta are still reeling from the loss of their main sponsors over the close season. Recruitment agency HR GO and brewers Shepherd Neame have withdrawn their financial support as the credit crunch hits home. More http://www.footballeconomy.com/archive/archive_2009_jun_32.htm http://www.footballeconomy.com/archive/archive_2009_jun_32.htm BSkyB's status in the pay-television market has come under threat after Ofcom outlined plans to force it to offer premium channels, including live football, to operators on rival platfoms. The regulator also indicated that it would seek to toughen competition controls over auctions for rights to broadcast Premiership football. Ofcom proposes to force BSkyB to sell on the content of its premium channels to rival broadcasters at regulated prices to ensure competition. The plan could save Virgin Media, the only broadcaster that buys the content, up to 30 per cent. Since the wholesale market represents only 4 per cent of BSkyB's revenue, some analysts believed this would not have a dramatic effect on its business model. At the very worst, the proposals could shave GBP30m off earnings annually, according to Deutsche Bank. But some analysts believe that BSkyB could see higher revenues if Virgin Media sold more of BSkyB's premium programming. Under Ofcom's plans, the premium channels could become available on platforms such as Top-Up TV, BT Vision or other businesses. More http://www.footballeconomy.com/archive/archive_2009_jun_31.htm http://www.footballeconomy.com/archive/archive_2009_jun_31.htm It is perhaps symptomatic of the importance of finance in modern football that the Royal Bank of Scotland (RBS) has taken the unprecedented step of writing to Liverpool supporters to justify its continuing financial support of the club's American co-owners. The bank has been flooded with emails from Liverpool fans calling for the plug to be pulled on Tom Hicks and George Gillet's GBP350m debt. Discussions on refinancing the loan have been proceeding well and the sending of the e-mail is virtual confirmation the loan will be refinanced. The message from RBS says the bank has 'a long-term relationship with the club, and we look forward to this continuing for many years to come. In our view and that of the executive management of the club, it is financially healthy and able to service comfortably its debt obligations from cash flow generated by its playing and commercial activities. It is in our commercial interest to support the club so that it can continue to perform successfully on and off the pitch.'. More http://www.footballeconomy.com/archive/archive_2009_jun_30.htm http://www.footballeconomy.com/archive/archive_2009_jun_30.htm Saints administrator Mark Fry has issued a 'grave' warning that he might have to start winding up the club if he can't sell it by next Friday. Fry told the Southern Daily Echo, 'The end of next week is a key tipping point in this. It's the gravest its been in the period of administration. There was a very short timeframe from the point we got involved. We stretched that as far as we can possibly stretch it and a deal really needs to be completed.' http://www.footballeconomy.com/archive/archive_2009_jun_29.htm http://www.footballeconomy.com/archive/archive_2009_jun_29.htm Two groups are leading the bidding for Newcastle United and it is expected that a takeover will be completed by the end of the month. Up to four groups - one of which is fronted by former chairman Freddy Shepherd - have been involved in substantive negotiations but two are understood to have moved ahead of the others in terms of demonstrating their financial strength. A deal needs to be done soon as the players return for training in less a week. The delay in sorting out Alan Shearer's appointment has also caused great frustration among long suffering Newcastle fans. http://www.footballeconomy.com/archive/archive_2009_jun_28.htm http://www.footballeconomy.com/archive/archive_2009_jun_28.htm Expatriate players dominated the 2008-9 season in the Champions League, according to data from www.eurofootplayers.org. Expatriates made up 55.9 per cent of all players, 2.1 per cent more than last season. They also played just under 60 per cent of all minutes played. The club that used the most expatriate players was Arsenal with 82.8 per cent in the squad and 92.7 per cent on the pitch. As in last season, the North London club was also the club with the youngest players, 22.7 years on average. With 90 players, Brazil was the most strongly represented country. France, Spain and Italy, followed by Argentina, were next in the rankings. England was represented by only 30 players, positioning it 7th in the ranking, just ahead of Germany. http://www.footballeconomy.com/archive/archive_2009_jun_27.htm http://www.footballeconomy.com/archive/archive_2009_jun_27.htm ESPN is owned by Disney whose market value beats BSkyB's parent News Corp by USD42 billion to USD26 billion dollars. Yet analysts are saying that ESPN could be an easier opponent in the Premiership live television rights stakes than might appear to be the case at first glance. The game could even turn out to be a friendly. While BSkyB will be cautious of the threat posed by the Disney backed company, it could have been worse. Tony Syfret of Enders Analysis commented, 'I think Sky will be quite happy, because ESPN look like they are looking for a partnership with them, acting as wholesalers for Sky, rather than taking over as a dominant force. Because they don't have their own platform [satellite or cable] the only way they could be really dominant would be to do what Setanta tried and be a retailer of this programming, gaining their own subscriber base. That doesn't fit in with the culture of Disney and ESPN.' It was also a path that Setanta tried to follow without success. Having inherited the halving of games that caused Setanta so many problems, ESPN face disappointing their customers in their second full season. But one analyst commented, 'This surely indicates that ESPN are playing a long game, looking to be in UK football well beyond the end of the deal in 2013.' http://www.footballeconomy.com/archive/archive_2009_jun_26.htm http://www.footballeconomy.com/archive/archive_2009_jun_26.htm Merthyr Tydfil FC have been saved from extinction after the supporters' trust forced the club into administration. And the trust, Martyrs to the Cause, will now step up their efforts to take control at the club by making an offer to the administrators. The decision to call in the administrators is a major victory for the trust in their long and bitter battle with owner Wyn Holloway. Despite debts of around GBP600,000, Holloway had refused to enter administration, preferring to see the club liquidated. But the trust were able to go over his head as they had loaned the club GBP1,700 and were officially listed as a creditor. Merthyr were due to be wound up today by the Inland Revenue, but are now protected from creditors. http://www.footballeconomy.com/archive/archive_2009_jun_25.htm http://www.footballeconomy.com/archive/archive_2009_jun_25.htm ESPN, part of Walt Disney, has bought both the packages of live games forcibly relinquished by Setanta. It has acquired both the two packages for next season and the one package that runs for three years from 2010. ESPN intends to retail them through the Sky platform and hopefully also through Virgin Media and BT. It has not yet been announced how much they paid for the packages with various figures floating around but it is thought that they probably paid less than Setanta had for next season's two packages, for which it was generally agreed Setanta had paid over the odds in their desire to build their business. http://www.footballeconomy.com/archive/archive_2009_jun_24.htm http://www.footballeconomy.com/archive/archive_2009_jun_24.htm After talk last week of Kevin Keegan being brought in as manager, the Pinnacle consortium bid for Southampton is in trouble. Pinnacle's 21-day period of exclusivity ended on Friday with no deal being completed. The Matt Le Tissier-backed consortium refused to accept that they will be barred from appealing against Saints' ten point deduction should their takeover bid go through. Lawyers told the Pinnacle group that it was worth appealing against the deduction. As Pinnacle insisted that they wanted to appeal, the League did not issue them with a licence to play in the 2009/10 season. http://www.footballeconomy.com/archive/archive_2009_jun_23.htm http://www.footballeconomy.com/archive/archive_2009_jun_23.htm The Scottish Premiership, English non-league clubs and possibly the FA stand to lose the most from the prospective collapse of Setanta. The Scottish Premiership may be able to negotiate another deal. But Scottish Television had been hit by the downturn in advertising revenue like all ITV companies and would not be able to offer a fraction of the amount provided by the Setanta deal which has nearly five years to run. Setanta were prepared to pay over the odds for Scottish top flight football as part of their effort to build up the business. Now the rumour mill is suggesting that as many as three SPL clubs could be in danger of going into administration. More. http://www.footballeconomy.com/archive/archive_2009_jun_22.htm http://www.footballeconomy.com/archive/archive_2009_jun_22.htm Production company Endemol has been considering taking a share in troubled sports broadcaster Setanta. But earlier plans by Endemol, one of the world's largest television production companies, to be an equal partner in Setanta with Access Industries have been scaled down. Access, the investment vehicle of Russian-born US billionaire Len Blavatnik, said last Friday that it had offered Setanta's board GBP20m in return for a 51 per cent stake. That move seems to have played a part in Endemol's cooling attitude. It is understood that Endemol was interested in going in with Access as equal partners and taking the whole of Setanta over, but they are less interested in taking a minority stake in Setanta. An alternative might be to take on some of Setanta's sports production businesses. Endemol has a small sports production house, but is best known for reality formats such as Big Brother. More. http://www.footballeconomy.com/archive/archive_2009_jun_21.htm http://www.footballeconomy.com/archive/archive_2009_jun_21.htm Thaksin Shinawatra, the former owner of Manchester City, has denied that he has a financial interest in the proposed takeover of Portsmouth. The Premier League had indicated that it would veto the sale of the club to Dr Sulaiman al-Fahim if reports of involvement on the part of the former Thai prime minister were confirmed. After being convicted of corruption and sentenced to two years in jail, even the Premier League would not want to claim that he was a fit and proper person to be involved in a club. Peter Storrie, the Portsmouth executive chairman, had admitted that he was introduced to al-Fahim by Pairoj Piempongsant, an associate of Shinawatra, but denied any knowledge of Shinawatra's possible involvement. More. http://www.footballeconomy.com/archive/archive_2009_jun_19.htm http://www.footballeconomy.com/archive/archive_2009_jun_19.htm Real Madrid have said that they have a euro300m transfer budget his summer, but euro68m went on Kaka followed by euro92m on Ronaldo. It is understood that euro100m will come from cash in hand, euro100m from additional revenues hopefully generated by new players and euro100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year euro300m facility. Real has been hit by the loss of sponsors and corporate hospitality during the recession, but it is still among the richest clubs, if not the richest, in the world in terms of cash flow and assets. With 50 per cent of the commercial rights, and the chance that signings like that of Ronaldo, will boost merchandising income, the club believes that the deal makes business sense. A club insider told the Financial Times, 'It is better to buy Ronaldo for euro92m than pay euro20m for a player of slightly less calibre and profile.' More. http://www.footballeconomy.com/archive/archive_2009_jun_20.htm http://www.footballeconomy.com/archive/archive_2009_jun_20.htm Blue Square South side Weymouth may be forced into liquidation after they had their overdraft cancelled by Barclays. Relegated from the Conference, the club need GBP50,000 over the close season if they are to survive. They are being pressed by former owner Malcolm Curtis for repayment of money he says he loaned the club. Pledges of financial support the club received when it was saved from the brink three months ago appear to have disappeared. The club has a legacy of debt and a schedule of payments that must be made. The Weymouth board, facing crippling debts of around GBP500,000 after years of mismanagement, are walking a tightrope with creditors who are far from happy about their four year plan to pay back what they are owed. The club cannot borrow any money because the collateral in the form of land has gone. http://www.footballeconomy.com/archive/archive_2009_jun_18.htm http://www.footballeconomy.com/archive/archive_2009_jun_18.htm En route to a football workshop in Amsterdam last Thursday, I was diverted into the Sky News studios at Isleworth to give my views on how Manchester United might spend the money they have obtained from the GBP80m deal to sell Ronaldo to Real Madrid. Whilst United has very large debts, it is able to service them from its still growing revenue stream. That stream depends on continued success on the pitch so a good proportion of the money will be spent on players, in particular on up-and-coming players with potential whose value can be developed. United have subsequently made it clear that some of the money would go towards interest payments which amount to GBP69m a year to service a GBP699m debt mountain. However, in part this a question of managing expectations. United don't want potential sellers of players to get the idea that they will be willing to meet ridiculous valuations. More. http://www.footballeconomy.com/archive/archive_2009_jun_17.htm http://www.footballeconomy.com/archive/archive_2009_jun_17.htm Access Industries, a company run by billionaire businessman Len Blavatnik, will pay GBP20m for a 51 per cent stake in Setanta to help it to avoid administration. Setanta run into financial trouble when it lost half its Premiership live games from 2010-11, leading to fears of a mass exodus of subscribers from the already loss-making company. The crisis revived memories of the collapse of ITV Digital in 2002, when the operator went under owing Football League clubs GBP180m with serious financial consequences for some of them. It had been thought that ESPN might use acquiring Setanta as a way of breaking into the live rights market, but it distanced itself from any deal last week. More. http://www.footballeconomy.com/archive/archive_2009_jun_16.htm http://www.footballeconomy.com/archive/archive_2009_jun_16.htm While most of the Spanish sports media concentrated on the double transfers of Kaka and Ronaldo to Real Madrid, another important football-related event occurred last week in the Spanish capital. After three years of court cases, confusion and chaos the broadcast rights to La Liga and the Copa del Rey (the Spanish FA Cup) were finally settled. From next season and lasting until season 2011/12, following an accord between Sogecable and Mediapro, all matches will be shown on Digital + except for the final of the Cup which is considered an event of national importance and will therefore be shown on terrestrial free-to-air. The agreement means Digital+ get the Sunday night match exclusively with the rest of the games shown on a non-exclusive basis - two games a week on pay TV and the rest most likely to be shown on a pay-per-view basis. More. http://www.footballeconomy.com/archive/archive_2009_jun_15.htm http://www.footballeconomy.com/archive/archive_2009_jun_15.htm Football was a banker's playground for much of the last decade. But have banks now reached a point where they will take their ball away and end the game? Banks have done well out of deals with Russian oligarchs, Middle Eastern royalty and American hedge funds. Banking consortia were put together to fund the takeovers of Manchester United and Liverpool, and the stadium financing for Arsenal. From the clubs' perspective, it was reasonable to believe that banks would continue to roll over their loans given the reputational damage they would incur for allowing such high-profile community assets to descend into financial crisis. That view may prevail since banks would be left selling clubs as distressed assets. But Premier League clubs' debts are running at GBP3.1bn. Any chance of another Liverpool-style debt-finance deal in the Premiership looks remote. More. http://www.footballeconomy.com/archive/archive_2009_jun_14.htm http://www.footballeconomy.com/archive/archive_2009_jun_14.htm League 2 Notts County are the target of a takeover bid from the Middle East. A consortium of Middle East investors is on the verge of pouring millions into the oldest club in the world, known as 'The Pies'. Apart from giving a new angle on the terrace chant 'Who ate all the pies?' the move by Munto Finance Ltd. illustrates that interest from the Middle East in UK footballing assets has not been dimmed by the economic downturn. Harry Philp, financial adviser at Hermes Sports Partners, commented 'There are a lot of wealthy individuals in the Middle East looking at this. They see a real estate play in some of these smaller clubs, pretty attractive grounds and city-centre locations.' http://www.footballeconomy.com/archive/archive_2009_jun_13.htm http://www.footballeconomy.com/archive/archive_2009_jun_13.htm West Ham changed owners yesterday in a deal orchestrated by Icelandic bank Straumur-Burdaras to head off the threat of foreclosure and a damaging points deduction. The club has been sold to CB (Claret and Blue) Holding, a consortium of four Icelandic banks led by Straumur. Former owner Bjorgolfur Gudmundsson, who bought the club for GBP85m in 2006, has stepped down as chairman. Straumur, which it itself insolvent, is a major creditor of Mr Gudmundsson, who saw his fortune wiped out in the Icelandic financial crisis. It will hold 70 per cent of CB Holding, with the balance held by Byr Savings Bank, MP Bank and state-owned Landsbanki. The move protects the club against the threat of any creditor of Mr Gudmundsson's Hausa investment vehicle seeking a forced liquidation of its assets, the most prominent of which is West Ham. Court papers issued in December by Hausa suggest that it was seeking the sell the club for up to GBP250m, although a price tag of GBP100m would be more realistic. The club's latest accounts for the year to May 2007 show that the club's bank borrowings were GBP36m on turnover of GBP49m. However, they noted that the club was in the process of agreeing extended facilities of GBP47m. More. http://www.footballeconomy.com/archive/archive_2009_jun_12.htm http://www.footballeconomy.com/archive/archive_2009_jun_12.htm Chaos reigns at Newcastle United after the club was put up for sale on its website. Bidders for the relegated club were invited to contact an E mail address. Predictably, the club received some derisory offers and abusive E-mails from Sunderland fans. Putative manager Alan Shearer had hoped that Barclays Bank would extend the club's overdraft, making GBP40m available as working capital to buy players and pay wages, but he has heard nothing. The club is set to lose 120 members of staff. Mike Ashley has offered the club for sale at GBP100m, but despite it being talked up as potentially a top seven Premiership club, it is thought that he will be lucky to get GBP80m. http://www.footballeconomy.com/archive/archive_2009_jun_11.htm http://www.footballeconomy.com/archive/archive_2009_jun_11.htm The Premiership and the National Basketball Association (NBA) in the US are exploring a marketing and commercial tie-up that would draw on the strengths of the world's two most popular sports leagues as they expand into new international markets. Representatives from the football and basketball associations have met in London to discuss how they might work together. They have also compared notes on their respective rights strategies - particularly in Asia, which is a huge and still largely untapped market for western sport. Although a Chinese consortium is reportedly seeking a stake in the Cleveland Cavaliers, the Premiership has a better hit rate when it comes to attracting international investors from Russia, the United States and the Middle East. http://www.footballeconomy.com/archive/archive_2009_jun_10.htm http://www.footballeconomy.com/archive/archive_2009_jun_10.htm Serie A was the fastest growing league in Europe in the 2007/8 season reveals the latest Deloitte Football Finance report. Total revenue increased by Euro357m (34 per cent) to Euro1.4 billion. The change of mix of clubs in Serie A for 2007/08, notably Juventus' return, contributed two-thirds of the increase. The other clubs increased revemues by c. Euro120m aided by new broadcasting contracts. La Liga recorded a 8 per cent (Euro112m) growth in revenue to Euro1.4 billion, placing it joint second with the Bundesliga which grew by 4 per cent (Euro59m). La Liga's growth was driven by Real Madrid and FC Barcelona, the world's highest and third highest club revenue earners in 2007/08. More http://www.footballeconomy.com/archive/archive_2009_jun_09.htm http://www.footballeconomy.com/archive/archive_2009_jun_09.htm Sports broadcaster Setanta is close to collapse. Research group Enders Analysis estimates that Setanta's annual losses in its UK business amount to about GBP100m. Accountancy firm Deloitte is on standby to put the company into administration. Setanta has 1.2 million customers, well short of the 1.9m it needs to break even. The broadcaster has until Monday to pay the Scottish Premier League GBP3m as part of its GBP31m a year deal. The Premiership is awaiting a GBP35m payment on June 15th. Disney company ESPN is understood to be interested in acquiring its rights, but would pay less for them. If Setanta did go into administration it would be a big blow to the Scottish Premier League which held an emergency meeting to discuss the situation last week. http://www.footballeconomy.com/archive/archive_2009_jun_08.htm http://www.footballeconomy.com/archive/archive_2009_jun_08.htm Total wages in the Premier League have exceeded GBP1bn for the first time as England's elite football clubs take advantage of extra television rights revenue in a scramble for talent. The Premiership wage bill rose 23 per cent to GBP1.2bn in the 2007-08 season according to Deloitte's annual review of football finance. Chelsea comfortably topped the wages league, with Roman Abramovich's club spending GBP172m on salaries, compared with GBP121m spent by Manchester United, GBP101m by Arsenal and GBP90m by Liverpool. The latest Deloitte review of football finance shows that gross transfer spending across the top 92 professional clubs grew to GBP779m in 2007/08, up 35 per cent from 2006/07/. Over 85 per cent (GBP664m) was spent by Premiership clubs. More. http://www.footballeconomy.com/archive/archive_2009_jun_07.htm http://www.footballeconomy.com/archive/archive_2009_jun_07.htm Liverpool's auditors have issued a warning about the club's ability to meet soaring interest payments. The club's latest accounts revealed that Liverpool paid GBP36.5m in interest on their debts in the financial year ending 31 July 2008. Auditors KPMG warned of a 'material uncertainty which may cast significant doubt upon the group's ability to continue as a going concern.' It is realised inside the club that not enough money is being generated to cover the interest payments of Kop Football (Holdings) Ltd., the club's holding company. This is in spite of the announcement of a record turnover of GBP159.1m and a pre-tax profit of GBP30.2m. Even so, the club's net debt - not including that of the holding company - almost doubled from GBP43.9m to GBP86m. Kop Football (Holdings) Ltd. made a pre-tax loss of GBP40.9m, with its net debt rising to GBP299.5m. It has not helped that the club's American owners made a poor call on the direction of interest rates, entering into fixed agreements between 4.3 per cent and 6 per cent as the Bank of England cut its rate to a record low of 0.5 per cent. More. http://www.footballeconomy.com/archive/archive_2009_jun_06.htm http://www.footballeconomy.com/archive/archive_2009_jun_06.htm The Championship has resumed its path of steady growth, according to Deloitte's Football Finance report. It has achieved annual revenue growth of almost 12 per cent, while Leagues 1 and 2 have grown at around 10 per cent. 'In almost any other industry this would be lauded as outstanding,' the report notes. Championship revenues increased by about 2 per cent to GBP336m in 2007/08. Total revenues of the Football League clubs exceeded GBP500m for the first time. Operating losses for Championship increased from GBP75m to a record GBP102m despite increased parachute payments to relegated clubs, and the first solidarity payment to the rest of the Football League. The new improved Football League broadcasting deal which starts in 2009/10 provides a much needed opportunity to address the losses in the Championship. Championship clubs' total wage costs increased by GBP32m (12 per cent) in 2007/08, the second consecutive year of double digit growth. More. http://www.footballeconomy.com/archive/archive_2009_jun_05.htm http://www.footballeconomy.com/archive/archive_2009_jun_05.htm Manchester United have once again demonstrated their financial pulling power by securing the biggest shirt deal in football history. They have secured a four year contract worth GBP80m with Aon Corporation, the American financial giant, which will replace AIG as the club's shirt sponsors from the start of the 2010-11 season. The deal comfortably eclipses the GBP68m four year agreement that Bayern Munich have with T-home, the telecommunications firm, and dwarfs United's existing GBP56.5m contract with AIG. It is believed that United received a strong bid from a betting company, which enabled them to drive a competitive race among three to four suitors, said to include Standard Chartered. Beyond the GBP20m a year rights fee, the deal provides for Aon to pay commissions to the club from the sale of insurance policies to its fan base plus match-related bonuses. http://www.footballeconomy.com/archive/archive_2009_jun_04.htm http://www.footballeconomy.com/archive/archive_2009_jun_04.htm The publication of the authoritative and comprehensive Deloitte report on football finance is always one of the highlights of the year for those of us interested in the business side of football. We will be providing further analysis from this year's report over the next few days. It shows that the new television rights deal sent the revenue of Premiership clubs soaring to GBP1.932m in 2007/8 and revenues are estimated to have reaching GBP2bn in 2008/9. In a sign of football's resilience to the economic downturn, Deloitte expects England's top clubs will continue to grow revenue in 2009/10, albeit at a slower pace. Dan Jones, a partner in Deloitte's Sport Business Group commented, 'The domestic and international popularity of the Premier League continues to generate remarkable growth. Between 1992 and 2008, revenues for the top 20 clubs grew at a compound rate of 16 per cent, compared with 5.4 per cent for the UK economy as a whole. Revenue increased by 26 per cent in 2007/8 and Premier League clubs generated GBP800m more revenue than their nearest rivals in the other "big 5" leagues'. More http://www.footballeconomy.com/archive/archive_2009_jun_03.htm http://www.footballeconomy.com/archive/archive_2009_jun_03.htm Sunderland has doubled its turnover in its first year in the top flight to over GBP63m. Losses fell from GBP13.6m in its last year in the Championship to GBP2.2m in its first Premiership season. TV revenue increased four-and-a-half times to GBP35.6m, sponsorship revenue doubled to GBP8.2m and gate receipts rose by 51 per cent to GBP13.6m. The accounts show that the shareholders, who at the time were the Irish-based consortium Drumabille, were owed GBP36.6m by their trading division the Sunderland Association Football Club Limited. It is estimated that new owner Ellis Short spent GBP15m buying the club, is likely to have spent further millions clearing off Drumaville's debts, plus money for transfers last summer bringing his total outlay to a reported GBP80m. http://www.footballeconomy.com/archive/archive_2009_jun_02.htm http://www.footballeconomy.com/archive/archive_2009_jun_02.htm Premiership footballers are hoping to avoid the new 50p income tax rate by asking clubs to pay their salaries as interest free loans. This would allow top players to pay as little as 2.5 per cent tax on some of their earnings. HM Revenue and Customes treat loans as a 'benefit in kind' and taxes only 5 per cent of the amount borrowed. If a future Conservative government cut the top rate of income tax back to 40 per cent, a club could write off the loan and it would be treated as income with the player ending up paying a rate of tax equivalent to 42.5 per cent instead of 50 per cent. Another scheme favoured by footballers including Wayne Rooney and Steven Gerrard has been to put money into film partnerships which allow wealthy investors to defer income tax and capital gains tax. http://www.footballeconomy.com/archive/archive_2009_jun_01.htm http://www.footballeconomy.com/archive/archive_2009_jun_01.htm Second force Premiership television provider Setanta is seeing its financial situation deteriorate and the ultimate outcome may be less money for the Premiership, although its slots could always be bought out by a third party. Shareholders in the company have failed to stump up enough cash to keep it going. It even asked BSkyB for a GBP50m advance payment on a deal that would have seen Sky wholesale Setanta to its own subscribers. The proposal of an interest free loan, which was rejected, would have bridged the gap left by private equity backers which have so far offered to inject GBP50m into the company. Setanta, which has 1.2m customers, could yet be forced into administration. http://www.footballeconomy.com/archive/archive_2009_may_29.htm http://www.footballeconomy.com/archive/archive_2009_may_29.htm The fate of non-league club Merthyr Tydfil is in the balance, but it looks as if the club will go into administration tomorrow. A Welsh-Egyptian millionaire has been told that he can have the club for a pound, but according to owner Wyn Holloway he has not made an offer. Annis Abraham is a Cardiff City shareholder and has pledged to bring league football to Merthyr. He thinks that the debts are nearer GBP600,000 than the GBP315,000 Mr Holloway states. Abraham claims that Cardiff City have already agreed to a link up which may see the club field Cardiff reserve players. He has said that the mooted move to Bridgend is off. http://www.footballeconomy.com/archive/archive_2009_may_28.htm http://www.footballeconomy.com/archive/archive_2009_may_28.htm Accrington Stanley have been issue with a winding up order by HM Revenue and Customs over unpaid debts, but remain hopeful they will survive. They face a High Court hearing on 10 June, but shareholder Ilyas Khan has pledged to stump up GBP250,000. He owns 15 per cent of the club, but has said that he does not want a seat on the board. However, he has expressed concerns about what other debts the club might have club given that things have to be serious before the Revenue takes action. Stanley resigned from the Football League owing around GBP60,000, returning 44 years later after reforming and climbing up the non-league pyramid to win promotion in 2006. Their main sponsor Fraser Eagle collapsed halfway through the season owing well over GBP100,000 to the club. http://www.footballeconomy.com/archive/archive_2009_may_27.htm http://www.footballeconomy.com/archive/archive_2009_may_27.htm Dr Sulaiman al-Fahim has struck a provisional deal to buy Portsmouth FC for an undisclosed sum from its Franco-Russian owner, Alexandre Gaydamak who acquired Pompey for GBP30m from Milan Mandaric, now owner of Leicester, in 2006. Mr Fahim also brokered the purchase of Manchester City for Abu Dhabi's royal family, but is no longer involved with the club, clearing the way for his involvement with Portsmouth. The sale price remains unknown. However, Deloitte have estimated that Premier League clubs have typically been sold at an enterprise value of 1.5 to two times annual revenue. On this multiple range, Portsmouth, with a turnover of GBP70.5m for the year to 2008, would be worth between GBP105.7m and GBP141m. But the credit crunch has depressed valuations of Premiership teams and Portsmouth's debts, of GBP57m last May, would also weigh on its equity value. http://www.footballeconomy.com/archive/archive_2009_may_26.htm http://www.footballeconomy.com/archive/archive_2009_may_26.htm Sunderland are the latest American-owned club in the Premiership after Irish-American businessman Ellis Short acquired the club. Short, who is the billionaire president of Lone Star Funds, now lives in this country. Short said, 'Sunderland is a very big club with a lot of fans, a big stadium, and a lot of revenue - and where you are in the position we are, where you are trying to improve things, it takes money.' Sunderland's battle against relegation this year was consistent with its reputation as a yo-yo club. However, Short has said that he does not want to ever go through a relegation battle again and is aiming at a top ten finish next season. He commented, 'It's a very well-run club, the scouting organisation, and the youth development programme are in place, so it's got all the pieces in place to be a long-term successful, powerful club.' http://www.footballeconomy.com/archive/archive_2009_may_25.htm http://www.footballeconomy.com/archive/archive_2009_may_25.htm The Matthew Le Tissier backed Pinnacle consortium have entered an exclusivity period with the aim of completing a buy out of Southampton within three weeks. The group have paid the GBP500,000 non-refundable deposit that will allow the staff and players at the club to be paid their wages for May. They now have the opportunity to complete full due diligence before deciding whether to proceed with their proposed offer for the club, which has been given the seal of approval by the major creditors. They have beaten three other groups to the exclusivity period - a duo of Irish businessmen, a consortium led by businessmen Stuart Green and Marc Jackson and another group believed to be from Zurich. http://www.footballeconomy.com/archive/archive_2009_may_24.htm http://www.footballeconomy.com/archive/archive_2009_may_24.htm In October 2008 I went to Turf Moor to watch Burnley play Hull and the chairman noted in the programme that 'One year in the Premiership would set Burnley up for 10 years.' He may have achieved his wish sooner than he could have dreamt of. After another visit to Burnley in March 2008, I wrote an article called 'The Burnley phenomenon'. Burnley will have the smallest population of any club represented in the Premiership and the area is far from prosperous. Yet the football club has punched well above its weight even before promotion to the Premiership. Now they face their biggest challenge. There is a fine line between not spending enough and being relegated and splurging all their new found wealth and ending up like a Leeds or Southampton. They probably need to spend about GBP20m to have a reasonable chance of staying up and in particular they need to increase the size of their squad so they have more strength in depth. If anyone can do it, Burnley can. http://www.footballeconomy.com/archive/archive_2009_may_23.htm http://www.footballeconomy.com/archive/archive_2009_may_23.htm Having failed again to secure promotion to the Premiership through the play offs, Sheffield United face their first season in the Championship without a GBP11.2m parachute payment. They will be receiving compensation from West Ham over the Tevez affair. The exact amount has never been publicly disclosed and has been variously stated at GBP15m or GBP20m. It is believed, however, that it is payable over six years so it will not make a big difference to cash flow. However, the club's chairman, Kevin McCabe, who owns 75 per of the club which is no longer listed on Aim, may still be singing on his way to the bank. The property developer, who lives in Brussels, sold his Scarborough property business to the Australian group Valad for GBP865m in 2007. http://www.footballeconomy.com/archive/archive_2009_may_22.htm http://www.footballeconomy.com/archive/archive_2009_may_22.htm Relegation from the Premiership is a big blow for Newcastle United's devoted fans. But it is also a big financial blow as well. The cost of demotion from the Premiership is usually estimated at GBP50m - GBP60m. Newcastle are calculated to have the fifth largest wage bill in the division and a fire sale of players is likely to follow. Magpies owner Mike Ashley put the club up for sale for GBP300m last September. He abandoned the sale in December saying he would have sold the club if it had attracted an offer of GBP250m. He bought Newcastle for GBP134m in 2007 and invested another GBP110m in the club. There has been speculation that a consortium led by US businessmen would be interested in pitching a more conservatively priced bid for the club if it had survived its relegation battle. http://www.footballeconomy.com/archive/archive_2009_may_21.htm http://www.footballeconomy.com/archive/archive_2009_may_21.htm As we have argued for some time non-league clubs are most likely to go bust in the recession. They are often dependent on smaller scale businesses as benefactors which are most likely to be hit by the credit crunch. Also many clubs have over spent in an attempt to compete. With the end of the season we are now seeing a flurry of clubs going into administration. Chester City went into administration after being relegated from the Football League. Northwich Victoria have entered administration for the second time in five years. The Vics have paid back GBP175,000 worth of debts that they inherited from the previous owner. With the taxman still owed around GBP400,000 and pushing for the club to be liquidated, the club had no choice but to go into administration. Vics also owe money to several former players and clubs in the north-west, but these will be paid out of the sale of a player. More http://www.footballeconomy.com/archive/archive_2009_may_20.htm http://www.footballeconomy.com/archive/archive_2009_may_20.htm The Football League wants the Premiership to increase its handouts to lower division clubs in proportion to wage rises at the top level. The League would like to receive a yearly income based on a percentage of Premiership clubs' total wages bill as part of the 'solidarity' payment that the top tier already contributes for youth and community development and as parachute payments to relegated clubs. Last season those were worth GBP31.8m. The idea forms part of the League's response to seven questions put to the football authorities by Andy Burnham, the Everton supporter who is Secretary of State for Culture, Media and Sport. Another concept floated by the Football League is that the League could bundle the sale of its television rights together with the Premier League when the next deals are due for renewal in about three years. In fact the Premiership offered the Football League such a deal 14 years ago, but it somewhat unwisely decided to go it alone. More http://www.footballeconomy.com/archive/archive_2009_may_19.htm http://www.footballeconomy.com/archive/archive_2009_may_19.htm Premiership clubs are braced for a wave of pay demands from star players in anticipation of the new 50p tax rate on higher earners. Figures from HSBC Private Bank and tax experts Saffery Champness suggest that, if most Premiership players are in the GBP50,000-GBP70,000 a week bracket, players at the top end of the range face a GBP330,000 increase in their tax bills to GBP1.7m from next year. Manchester United's Christiano Ronaldo is reputedly paid GBP125,000 a week. If that is the case, he would face a 19 per cent increase on his tax bill under the new rate, equivalent to an extra GBP670,000 a year. An insider at one top club said the implications were a higher wage bill or a reduction in the ability to attract top talent, or both. Arsenal manager Arsene Wenger warned last month that the new tax rate and sterling's decline would be 'a financial problem for all the English clubs. More http://www.footballeconomy.com/archive/archive_2009_may_18.htm http://www.footballeconomy.com/archive/archive_2009_may_18.htm It's an unlikely honour, but Wigan are champions of the Premiership in a 'points for pounds' league that measures the extent to which season ticket holders are given value for money. More http://www.footballeconomy.com/archive/archive_2009_may_17.htm http://www.footballeconomy.com/archive/archive_2009_may_17.htm Not so long ago it looked as if Darlington Football Club might fold. But now the club has taken the first steps to survival when the businessman who put the club into administration announced he had secured a funding lifeline. George Houghton said he planned to remain at the club for the forseeable future until 'a person can offer the club more than I'. More. http://www.footballeconomy.com/archive/archive_2009_may_16.htm http://www.footballeconomy.com/archive/archive_2009_may_16.htm Premiership clubs are facing a buyer's market for shirt sponsorships. 188Bet, an Asia-focused online gambling company unknown in the UK has pulled off a double sponsorship deal. It will be the shirt sponsor for Bolton Wanderers and Wigan Athletic for the next two seasons. It is believed that 188Bet is paying Bolton about GBP70,000 a year, while Wigan is getting about GBP60,000. Both clubs may get bonuses based on team performance. A year ago both clubs could have expected deals in the region of GBP1m a year. But there is a glut of clubs looking for shirt sponsorship renewals or new deals, while the pool of potential sponsors, who have traditionally come from the now stricken banking, financial services and automotive industries has dried up. More. http://www.footballeconomy.com/archive/archive_2009_may_15.htm http://www.footballeconomy.com/archive/archive_2009_may_15.htm The Premier League has made a number of responses to government criticisms of the way it runs its affairs. The proposed changes do not address the competitive balance or debt burden issues raised by culture secretary Andy Burnham, but he has welcomed the Premiership's response. It may be that he has other matters to concentrate on at the moment and cannot afford a confrontation with the Premier League. Richard Scudamore, the Premier League chief executive, said the debt question, particularly the highly leveraged status of elite clubs such as Manchester United and Chelsea was 'overblown' and that Mr Burnham was reacting to 'noise' around the football industry. 'The fundamental base point is the clubs not being jeopardised [in how they run their financial affairs],' he said. More. http://www.footballeconomy.com/archive/archive_2009_may_14.htm http://www.footballeconomy.com/archive/archive_2009_may_14.htm The money is there to buy football clubs, but valuations will have to be more realistic. That is the view of Keith Harris, the executive chairman of investment bank Seymour Pierce. In the case of Liverpool, this means that the owners will have to slash 20 per cent from the asking price if they want to sell the club. Last year they failed to achieve a sale with an asking price of GBP500m. Mr Harris said that the days of the leveraged deals that allowed Malcolm Glazer to buy champions Manchester United by piling his purchasing debt back on the club and the high-risk strategy of the Liverpool owners is probably over. Harris said, 'Banks are either incapable or unwilling to lend money on a leveraged basis. Instead we are now looking at institutions, corporations or individuals who have disposal cash. There is a cocktail of potential owners - a sheikh, an industrialist, a financier, every kind of buyer.' http://www.footballeconomy.com/archive/archive_2009_may_13.htm http://www.footballeconomy.com/archive/archive_2009_may_13.htm Darlington fans are putting in place contingency plans to create a Phoenix club in the non-league pyramid should the League 2 club fold in the next few weeks as looks increasingly likely. The Quakers' future has been described as 'dire' by the administrators who have been searching for a buyer. Former vice-chairman Raj Singh made a last rescue bid, but it was rejected by the administrators as unworkable. The club will be liquidated if a credible buyer does not come forward and the club's insolvency specialists have admitted they have no plans to secure a League place for next season. Last Tuesday's deadline to find new owners has passed and with debts reported to be in the region of GBP5m, the outlook is grim for the 125-year old club. Assistant manager Martin Gray and nine of the club's backroom staff have lost their jobs, leaving just five staff who are deferring part of their wages. The administrators must show there is an exit plan from administration, which happened in February, in order to justify to the Football League that the club can start the 2009-10 season. More. http://www.footballeconomy.com/archive/archive_2009_may_12.htm http://www.footballeconomy.com/archive/archive_2009_may_12.htm