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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Despite enhanced parachute payments relegation from the Premier League is a big financial challenge for clubs, particularly if they have spent heavily in a bid to stay up. Relegation clauses in player contracts have become more common and can benefit players as well as clubs, but they are not a sufficient answer.
When I started watching football in the early 1950s, Cardiff City seemed to be an established top flight side. In fact, when I checked back, they spent just 15 years in the top flight, finally leaving in 1962, although they are the only team outside England to have won the FA Cup.
Today’s Times publishes an informative survey of the finances of each club in the Barclays Premier League. Net debt figures at many clubs are high in relation to turnover. But one has to remember that many businesses operate on the basis of a platform of debt. Of course, if insecure debts are divided up, re-packaged and sold on, that is when you get the kind of problems that led to the global financial crisis.
The Barclays Premier League has voted to implement new financial rules from next season. The vote was only secured after chief executive Richard Scudamore wrote to all clubs and Swansea defected from the ‘Gang of Six’, allowing the supporters of the move to secure the necessary two-thirds majority.
A new report, the first of its kind, shows that Manchester’s economy is boosted by £330m a year by the presence of two Premiership clubs in the city. It’s the equivalent of hosting the Olympic Games once every four years and eight times the similar effect from football in Glasgow.
Coventry City owners Sisu are trying to get talks restarted on their tenancy of the Ricoh Arena. They have made a direct appeal to the chief executive of the city council, Martin Reeves. As has been the case for some time, the main sticking point is not the rent, where Arena Coventry Limited have made a substantially reduced offer, but matchday revenues.
Reports are appearing on social media that Pompey Supporters’ Trust (PST) have agreed a deal in principle to buy Fratton Park from Balram Chainrai have now been confirmed by the BBC. It is thought that the out of court settlement involves the payment of £3m plus add ons to Chainrai’s Portpin Group.
A £10m debt to former players will be covered with a £9m parachute payment from the Premier League. Ordinary creditors such as local businesses will receive 2p in the pound.
Bury FC could go bust within days unless they can raise £1m. They are appealing to local business people to contribute £100k each to a consortium, although assurances that they would get their money back need to be treated with some caution.
It’s fair to say that Mrs Thatcher was no fan of football. She tended to see it through a ‘law and order’ lens, although it has to be admitted that there were serious problems of that kind during the time she was prime minister.
She came up with a completely unworkable membership card scheme for football fans which, if implemented, would have seriously damaged the game. It was another case of treating football fans as second class citizens, although unfortunately that still happens today.
Crystal Palace have reported a trading loss after tax of £2.2m for twelve months to June 2012. This compares with a loss of £9.4m in the previous corresponding period. It also compares well with recent results from other Championship clubs who do not benefit from parachute payments or wealthy foreign owners. Charlton, Ipswich and Sheffield Wednesday have all reported larger operating losses.
The club also has £13.3m in hand in respect of player sales. This is thought to be largely the result of the sale of Zaha to Manchester United.