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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Prime minister Gordon Brown has expressed his regret at the announcement that Portsmouth FC has gone into administration. It is all very well for him to express concerns about the state of football governance, but the Government decided not to pursue the regulatory recommendations made by the Football Task Force it set up when it first came into office.
For the sixth successive year, League 2 side Hereford United will record a profit, despite experiencing relegation from League 1 in the year covered by the accounts. In the year to 31 May 2009, Hereford made a profit of £26,899, well down on the £408,467 earned in th previous, promotion year. During the last six years Hereford have announced profits of almost £1.2m. The club is finalising a joint venture agreement with developers, Richardsons, which will account for United’s lomg-term debt and is in the process of securing a new, long lease on the ground.
Keith Harris, a former Football League chairman and executive chairman of investment bank Seymour Pierce, is the latest leading figure in football to call for a boycott of matches at Manchester United while the Glazers are in charge. He reasons that protests of themselves won’t perausde the Glazers to sell, but hitting them in the pocket will. Harris is a United fan who has been involved in several takeovers involving Premier League clubs and he reckons that it would be possible to put together a consortium to buy out the Glazers.
A report by Uefa shows that the Premier League owes 56 per cent of Europe’s total footballing debt – and the figures don’t include Portsmouth and West Ham because their financial problems meant they could not be given Uefa licenses. The combined debts of the Premiership clubs stand at £3.5 billion, four times the figure for La Liga, the second nost indebted division. The report criticises the leveraged buyout model used at Liverpool and Manchester United which is seen as burdening clubs rather than being used to support investment or spending.
Ray Trew, Notts County’s new owner, has told The Daily Telegraph that he intends to invite officers of the East Midlands Police Economic Crime Unit to investigate Munto Finance, the previous owners who assumed control last July.
Portsmouth is to enter administration on Friday unless a firm offer is made for the club by then. This is unlikely as none of the three prospective bidders are in a position to complete that quickly. By waiting they could also acquire a debt free club at a reduced price. One complication is that the Fratton Park freehold is apparently held by the club’s latest owner, Balram Chainrai, so any new owner would have to conclude a rental agreement with him.
Talks between Portsmouth and a South African consortium interested in buying the club have been taking place in London today and it was hoped that a deal could be concluded, but there is no definite news yet. What is unclear is whether the required money is available and it is important to make sure of that given previous disappointments with new owners at the beleaguered club.
A Danish consortium has stepped in to try and save Conference outfit Chester City four days before they are likely to be voted out of the league by their fellow clubs. Businessman Palle Rasmussen reached an agreement with the Vaughan family, the current owners, at the Deva Stadium on Satirday. However, the news has not gone down well with supporters’ group City Fans United. Rather than seeing the Danish consortium as saviours, they think they do not have the exper
West Ham co-owner David Gold thinks the chances of the Hammers moving from Upton Park to the Olympic stadium after the Games are over have increased with an easing of the Government’s insistence that it primarily be used as an athletics venue. He gives his views in full on Radio 5 tonight, but you can read a taster here.
The special civil investigations unit of HM Revenue and Customs is investigating image rights payments to top players. At one time the amount of players’ income designated as image rights was 10 to 20 per cent, but now it can be as much as a third. A court heard recently that Wayne Rooney was paid as much as £760,000 a year by Manchester United for his image rights.