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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Newcastle United have recorded their sixth consecutive year of profits. However, they fell to £4.6m in the year to June 2016, compared with £32.5m in the year to 2015. Turnover was down by three per cent with a £4.5m fall in media income.
The author of the authoritative Swiss Ramble blog has tweeted some information about wages to turnover ratios in the Premier League in the 2015-16 season. The two Manchester clubs have among the lowest ratios: 50 per cent at City and 45 per cent at United.
However, only three clubs are at or below the 50 per cent figure recommended by Deloitte, Tottenham Hotspur being the other club at 48 per cent. At the other end of the scale were relegated Aston Villa (85 per cent), Crystal Palace (79 per cent) and Stoke City (also 79 per cent).
Last Sunday’s game at the Emirates saw the spectacle of demonstrations for and against Arsenal manager Arsene Wenger outside the ground. There were even scuffles in one of the stands at the end of the game. However, this article cautions that Arsenal fans should be careful what they wish for.
Approval from Liverpool City Council for their new £300m stadium at Bramley-Moore Dock is another step forward for Everton. Unlike the club’s previous plan to relocate away from th city in Kirkby, this proposal has the broad backing of supporters.
However, fulfilling the ambition of Everton becoming a top six club will not be easy, even with the backing of millionaire owner Farhard Moshri. In age of financial fair play, clubs can no longer simply spend their way into the elite, as was the case for Chelsea and Manchester City.
Charlton Athletic have reported a loss of £13.5m for the 2015-16 season, up by £9.5m from the previous twelve months. These ‘unsustainable’ losses are attributed to efforts to maintain the club’s Championship status in what turned out to be a rather expensive relegation.
Tottenham Hotspur’s stadium redevelopment is a significant step closer after the club agreed a £350 million funding package with three investment banks.
HSBC, Goldman Sachs and Merrill Lynch will provide almost half of the money required to complete the £750 million rebuilding of White Hart Lane. The rest of the funding will come from advanced ticket sales, a ten-year ground rental arrangement with the NFL and a possible naming-rights deal.
Middlesbrough’s push for promotion to the Premier League led to big losses in the year to 30 June 2016. The club lost £31.9m compared with £9m in the previous year. Wages went up from £18.1m to £28.6m, well above 100 per cent of income when the recommended level is 50 per cent.
Established Premier League clubs want to tighten the system of parachute payments for relegated clubs to stop unscrupulous owners making off with the vast sums of money on offer. Changes and even cuts to parachute handouts are likely to be proposed at the Premier League’s annual meeting in the first week of June.
Despite denials by the club, Charlton Athletic fanzine editor Rick Everitt asserts that the club is being sold. The process is likely to be a long drawn out one of because of various complications such as loans owed to former directors of the club.
However, various straws in the wind all seem to point in one direction. Everitt is confident that it is the end of days for the regime of unpopular Belgian owner Roland Duchatelet.
Southampton have received an improved offer from Lander Sports Development to buy a 100 per cent stake in the club for £190m. The Chinese development company has proposed a phased takeover in which it would initially buy into the club before taking over full control.
Katharina Liebherr, the club’s owner, rejected an offer of £180m in January. Negotiations are now believed to be at an advanced stage. The sale is being handled by the Zurich office of the international bank, UBS.