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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Hearts owner Vladimir Romanov has virtually all his assets and money wiped out after his bank Ukio Bankas was placed into interim administration. Romanov has said that he will sell 51 per cent of the club to supporters’ groups and he doesn’t care about the price. Hearts are currently around £25m in debt.
Much has already been said and written about Paolo di Canio’s appointment as manager at Sunderland. I do not want to add to the controversy about what his political views are and how they should be interpreted.
This is not because I do not have a view: indeed, knowing Italian society and politics quite well, and having written with Italians, I would have a perspective. However, there has already been overkill and people are taking up entrenched positions or jumping on a bandwagon to publicise their own agenda.
We have consistently taken the view that Uefa’s financial fair play (FFP) rules are open to challenge in court. It is therefore interesting to see Belgian lawyer Jean-Louis Dupont, who was part of the team who won the Bosman case in 1995, arguing a similar case in the Wall Street Journal.
One in eight Scottish football clubs are still facing financial distress according to new figures from leading business rescue and recovery specialist Begbies Traynor, but overall progress is being made.
A number of controversies have arisen from the last two matches of the English national side. However, there is increasing concern about the possibility that England might have to qualify for Brazil via the play offs.
The Football Association has reached preliminary agreements to stage what should be lucrative friendly internationals against Germany, and Uruguay or Argentina, at Wembley in November. These would have to be called off if England had to go down the play off route.
Bahrain-based International Investment Bank (IIB) has bought a 10 percent stake in Leeds United from the owners (Gulf Finance House, GFH) who took over the football club three months ago. The price paid has not been revealed.
Dubai-based GFH Capital said the deal was part of its strategy of bringing in additional investors to develop the Championship club. It paid 22 million pounds in December to buy out shareholders including Ken Bates, the former Chelsea owner.
As expected, Coventry City have been deducted 10 points by the Football League, effectively ending their chances of promotion this year. It is believed that Coventry’s ‘golden shares’ in the Football League and Football Association are still with Coventry City Football Club Ltd. which has gone into administration rather than Coventry City Football Club (Holdings). Hence, Arena Coventry Limited (ACL) were able to ask the High Court to dismiss their own application for an administration order.
Administration is often seen as a reorganisation device and not just in football. It can be seen as a way of re-launching a business in a leaner and fitter shape free of debt. The creditors pay the price, but employees of a company can also suffer.
Football commentator and investigative journalist David Conn has raised a number of issues about governance and transparency at Birmingham City. These concern the role of Peter Pannu as acting chairman while leading shareholder Carson Yeung deals with allegations of money laundering in Hong Kong.
Newcastle United have reported a profit for the second successive year of £1.4m. For most companies of their size, that would be disappointing, but in football it’s a good outcome to be in the black. The new Premier League television deal that begins next season should lead to even better financial results.
The wages-to-turnover ratio is over two-thirds and hence well above the recommended 50 per cent level, but it is still much better than at many Barclays Premier League clubs.