Article Taxonomy: Football Finance

Articles and reports on financial issues within football – soccer – from The Political Economy of Football.

Big Losses at Pompey

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Portsmouth FC made losses of £16.66 m in the 2007-8 financial year, despite winning the FA Cup. The loss was nearly £7m less than the previous year and the club anticipates a further reduction next year. It is hoped to break even by the 2010/11 season. In the meantime, no buyers have been found for the club which has a reported debt of £80m. Last month Pompey postponed ambitious plans to build a new waterside stadium and decided to redevelop Fratton Park, in part because of the global financial crisis.

Why Administration in Football Clubs Common

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Going into administration is a very common reorganisation device for football clubs. Research by John Beech at Coventry University says that since 1986 there have been 68 cases of clubs in English leagues becoming insolvent, some of them more than once, although liquidation remains rare. This is because administration is a tactical move by a financially challenged club. You put yourself in administration, proceed to a company voluntary arrangement and re-emerge with new directors and a refreshed balance sheet.

Taxman Goes After Football Players Image Rights

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HM Revenue and Customs are launching a clampdown on the way top footballers are paid. They have begun a fresh wave of investigations into so-called ‘image rights’ payments by Premiership clubs to their players. Wigan Athletic has already confirmed that it has been examined by the authorities. In its most recent accounts the club states that it has ‘undergone an investigation by HMRC into the correct operation of PAYE/NI on certain payments and expenses made to/on behalf of employees.’ Club chairman David Whelan confirmed that the probe concerned image rights payments.

Football or Arms Race?

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Podcast from University of Nottingham, featuring Dr Wyn Morgan.

Under discussion, the state of finance in football in light of the record-breaking Manchester City takeover.

Liverpool FC’s Commercial Problems

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Liverpool FC may be on track for what their fans hope will be another Champions League triumph which would offset their less satisfying Premiership performance. However, in progressing as far as they have, they are punching above their weight financially. When it comes to money as compared with performance on the pitch, Real Madrid are way ahead of them with a financial Deloitte money list table topping annual revenue of £290m compared with £167m at Liverpool. That puts them seventh in the Deloitte European money league, a quarter-finalist’s performance.

Where The Recession Hits Football

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Recessions, even prolonged and deep ones, do not hit all businesses equally. Domino’s Pizza is an example of a business that has been boosted by the recession as cautious consumers substitute a takeaway for a meal out. Cinemas have also been doing good business, although attendances may have boosted by the success of particular films. The supermarkets that compete on price rather than quality or service have also been doing well. On the other hand, the motor vehicle industry has been hit hard. And estate agents, never the most popular businesses, have also taken a pounding.

Transfer Record Broken

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Spending by Premiership clubs on new players in the January transfer window has hit a fresh all-time high of £160m according to Deloitte’s sports business group. The amount may still go up because the transfer window was extended because of the bad weather so that deals in progress could be completed, but the total is already well above last year’s £150m. Spending between Premiership teams made up around £105m of the £160m. Manchester City and Spurs have been the two biggest spenders.

Will The Credit Crunch Hit Transfer Spending?

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Spending in the January transfer window has soared in recent years from £33m in 2003 to £175m last year. However, will it fall this year against the background of the credit crunch? For example, Manchester United plans to limit its spending to around £15m. There will also be fewer bargains from abroad. Sterling’s fall means that players from the European continent are 20 per cent more expensive this January than they were last. Football League chairman Lord Mawhinney has warned, ‘Things look calm now, but the crunch comes in the run-up to next season.

Smith Wants Rangers Out Of Scotland

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Glasgow Rangers manager Walter Smith has revealed that the club would be prepared to field a ‘B’ team to fulfill their Scottish League obligations in order to bridge the gap with Europe’s elite clubs. The Rangers manager has floated the idea of an updated version of the Atlantic League, an idea unsuccessfully advanced in the late 1990s by the continent’s geographically handicapped. He foresees a new European league made up of the top sides in Holland, Belgium, Scandinavia and Scotland, running in parallel with the domestic divisions and providing entry to the Champions League.