Why do investors buy non-league clubs?
A correspondent sent me some interesting questions about investors who get involved in non-league football and I thought it would be worth reproducing them and my answers here.
Article Taxonomy: Football Finance
Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Charlton takeover talks stall
Talks for a takeover of Charlton Athletic by an Australian football consortium have stalled, but may yet be revived. Unpopular Belgian owner Roland Duchatelet is willing to consider offers.
The consortium were prepared to pay £25m, a substantial sum for a League One club, but had difficulty in raising the money. They are now looking at alternative ways of securing the required funds.
Bid for Port Vale
A takeover offer for relegated Port Vale has been made by the owners of Burslem-based IT company Synectics Solutions. The company has an annual turnover of £13m and its headquarters are near Vale Park.
The offer is for £1.25m which is the amount owner Norman Smurthwaite paid with his then business partner when taking the club out of administration in 2012. However, he claims to have ploughed in £3.7m since then.
Big financial challenges for Sunderland
Sunderland face big financial challenges following their relegation to the Championship. Their latest accounts to July 2016 show a loss of £33m up from £26.6m. Only Chelsea and Aston Villa had higher losses and they had exceptional items in their accounts.
Leeds buy out deal near
Leeds United co-owner Andrea Radrizzani is negotiating to buy out the 50 per cent share of the club held by Massimo Cellino. He had an option to buy the shares at the end of the season.
Cellino has been a controversial figure at Elland Road and has been the subject of various bans by the football authorities. His replacement would give the club some much needed stability.
The financial rewards of the Champions League
Juventus will earn €115m if they win the Champions League (€98m up to now) while Real Madrid will earn €82m (€67m up to now). Barcelona have earned €59m. These figures come from the author of the Swiss Ramble blog.
In the Premier League, Leicester City earned €78m through their progress to the quarter finals. Arsenal earned €62m, indicating how much they stand to lose if they do not qualify this year. Manchester City brought in €48m and Tottenham Hotspur €42m.
Chelsea in good financial shape
Chelsea are in good financial shape to pursue the transfer targets they want over the summer. There were concerns that their absence from the Champions League would adversely affect them. It did generate £58.5m of revenue in 2015-16 and even a good Europa League run could have yielded as much as £35m.
Eisner wants 100 per cent stake in Pompey
Former Walt Disney chief executive Michael Eisner and his Tornante investment group wants to purchase a 100 per cent stake in Portsmouth. He is willing to pay £5.67m.
The Pompey Supporters Trust (PST) control 48 per cent of the shares. Tornante have made a heritage share proposal which would allow the protection of certain identified issues and vetoes exercised by the PST.
Chinese interest in Palace
Crystal Palace could be the latest club to fall into Chinese ownership. There has been interest from Double Edged Sports (Desports), a Chinese marketing company that wants to acquire another football club after purchasing La Liga’s Granada last year.
Value for money for Premier League clubs
A study by Sky looks at the value for money obtained by Premier League clubs in terms of their points total compared with transfer fees paid out.
West Bromwich Albion come out on top with a cost of £1.47m per point compared with Manchester United at the other end of the scale with just under £8m per point. They are closely followed by Manchester City on £7.8m.