WG

Chaos Reigns At Newcastle United

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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 £40m 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.

Premier League and NBA Discuss Tie-up

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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.

Serie A The Fastest Growing League

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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 €357m (34 per cent) to €1.4 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. €120m aided by new broadcasting contracts. La Liga recorded a 8 per cent (€112m) growth in revenue to €1.4 billion, placing it joint second with the Bundesliga which grew by 4 per cent (€59m).

Setanta Close To Collapse

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Sports broadcaster Setanta is close to collapse. Research group Enders Analysis estimates that Setanta’s annual losses in its UK business amount to about £100m. 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 £3m as part of its £31m a year deal. The Premiership is awaiting a £35m payment on June 15th.

Wages and Transfer Spending Up

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Total wages in the Premier League have exceeded £1bn 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 £1.2bn 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 £172m on salaries, compared with £121m spent by Manchester United, £101m by Arsenal and £90m by Liverpool.

Liverpool FC’s Auditors Issue Warnings

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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 FC paid £36.5m 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.

Championship Revenues Show Steady Growth

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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 £336m in 2007/08. Total revenues of the Football League clubs exceeded £500m for the first time.

Manchester United Secure Biggest Shirt Sponsorship Deal in History

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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 £80m 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 £68m four year agreement that Bayern Munich have with T-home, the telecommunications firm, and dwarfs United’s existing £56.5m contract with AIG.

Premiership Revenue Tops £2 Billion

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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 £1.932m in 2007/8 and revenues are estimated to have reaching £2bn in 2008/9.

Sunderland AFC Doubles Turnover

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Sunderland has doubled its turnover in its first year in the top flight to over £63m. Losses fell from £13.6m in its last year in the Championship to £2.2m in its first Premiership season. TV revenue increased four-and-a-half times to £35.6m, sponsorship revenue doubled to £8.2m and gate receipts rose by 51 per cent to £13.6m. The accounts show that the shareholders, who at the time were the Irish-based consortium Drumabille, were owed £36.6m by their trading division the Sunderland Association Football Club Limited.