Article Taxonomy: Football Finance

Articles and reports on financial issues within football – soccer – from The Political Economy of Football.

Why did big investors take stakes in Rangers?

by

Football clubs are not generally seen as good investments. They don’t usually pay dividends and the chances of making gains through capital appreciation are not good with a few rare exceptions. The Glazers might bring it off with Manchester United, given that the money for the purchase was largely borrowed.

The main motivation for investment, usually involving foreign buyers, is for a trophy investment which brings with it prestige, an enhanced profile or political insurance.

Big losses at Carlisle United

by

Carlisle United have posted losses of over £660,000 in their latest set of accounts. This is a substantial loss for a League One club, particularly one that benefits from a lack of competition from other clubs in higher leagues. The results also demonstrate how sensitive financial results are at this level to fluctuations in attendances.

TV revenue boosts Brazilian teams

by

Brazil’s economy may be experiencing sluggish growth, but the country’s football clubs are experiencing boom conditions. It’s largely due to a growth in television revenues according to a study by bank Itaú BBA.

The revenues of Brazil’s top 24 teams grew an average 32 per cent in 2012 to reach a total of almost $1.4bn. Since 2010 club revenue has grown consistently, on average at about 29 per cent a year.

French players to strike in tax row

by

Beleaguered French president Francois Hollande is facing a strike by French footballers over high rates of tax. Condemning the 75 per cent income tax rate as ‘unfair and discriminatory’, Jean-Pierre Louvel, head of the UCPF professional football club union said: ‘We are talking about the death of French football.’

Two bids for Owls

by

Two rival bidders are reported to be battling to take control of Sheffield Wednesday with talks near to a conclusion. Both of them are understood to have completed due diligence and are prepared to pay the asking price of £25m.

One is believed to be led by Hong Kong businessman and former Birmingham City director Sammy Yu. He declared his interest on behalf of a Chinese group five months ago. The identity of the second bidder is not known, but there are rumours of interest from the Middle East.

If Celtic joined the Premiership

by

Celtic would be worse off in footballing terms but better off financially if they joined the Premier League according to calculations made by the statisticians at the The Times Fink Tank.

If they joined the Premier League directly, the stattos calculate that they would be in the thick of the relegation battle, but would not necessarily be relegated. However, they would not qualify for the Champions League.

Real Madrid debt defended

by

La Liga authorities have defended Real Madrid’s finances after it was revealed that the club’s overall debt was €541m.

Reports had suggested that Los Blancos owe almost half a billion euros – a figure backed up by Carlos Mendoza, President of the Association for Madrid’s Values, economist Jose Maria Gay de Liebana and Placido Rodriguez, the director of the Sports Economics Observatory.

It’s getting tougher at the top says Wenger

by

Arsene Wenger reflected changing global geopolitical realities and the way they are changing football when he commented at Arsenal’s annual general meeting, ‘Our world is changing quickly. Europe as a continent is becoming poorer, the rest of the world is becoming richer, especially Asia, and these people invest in football in Europe.’ Erck Thohir, an Indonesian billionaire, bought a 70 per cent stake in Inter Milan this week to become the second foreign owner in Serie A.

Walsall announce small profit

by

It is always commendable when a football club announces a profit and particularly so when that club is in League 1 where there are not big television revenues, substantial gates or lucrative sponsorships. Walsall face a lot of competition in their catchment areas from Premiership and Championship teams or even another League 1 team with a big support base, nearby Wolves.

Championship clubs under risk from FFP

by

A number of Championship clubs are at risk from the Football League’s Financial Fair Play (FFP) regulations. By the 2015/16 season, losses in the Sky Bet Championship can be no more than £5m and shareholders are only permitted to invest £3m of their own cash.

Blackburn Rovers are top of the list of the clubs at risk of incurring penalties. Their announced losses for last year were £27 million which included £3.5m on agent’s fees. At the very least they could face a transfer embargo.