Article Taxonomy: Football Finance

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

Dubai Bid For Charlton

by

On a day in which global markets have been in turmoil, unfashionable south-east London club Charlton Athletic have received a bid from a Dubai-based investment group headed by His Excellency Mohammed Ali Ali Hashimi. Apparently the group considered a number of football clubs but thought that Charlton offered the greatest potential. In a statement, the prospective new owner has praised the passion of the club’s fans, its heritage and its commitment to the community. He also expressed his determination to get the club back to the Premiership.

UEFA Threat To Debt Ridden Clubs

by

Uefa are threatening to ban debt ridden clubs from their competitions. This is a major threat to leading English clubs to whom Champions League football is a key slice of their income. Some might feel that the move is motivated by continental jealousy at the success of English clubs in the Champions League. Others might feel that Uefa are trying to tackle a genuine problem facing football.

Lord Triesman Blasts Football Debt

by

Lord Triesman, the chairman of the FA, and Richard Scudamore, the chairman of the Premiership, got in an argument yesterday about the effect of the credit crunch on football at the Football Leaders conference, ironically held at Stamford Bridge. What a lot of this is about is a power struggle between the FA and the Premiership over who has the biggest influence on the game.

Calm At West Ham As Icelandic Economy Collapses

by

Iceland could be the first country to go bankrupt since Newfoundland was absorbed by Canada after the Second World War. But at Icelandic-owned West Ham an air of benign calm reigned today, although below the surface there may be more turbulence. The Icelandic bank chaired by the club’s billionaire owner was put into receivership by the Icelandic government. The family of Bjorogolfur Gudmundsson are reported to have owned over 40 per cent of Landsbanki, so their personal finances have taken a hit. Gudmundsson is Iceland’s second-richest person, after his son Thor.

Credit Crunch Could Hit Non-League Football Clubs

by

There has been a lot of speculation about whether the credit crunch will hit a leading Premiership club, but it may be non-league clubs that will be first in the firing line. The sums involved are smaller, but such clubs are often dependent on the patronage of local businesses. Smaller businesses are very reliant on cash flow and banks are reluctant in present circumstances to cut their overdrafts or give them new loans. A number of non-league clubs are currently facing difficulties.

Only Three MLS Teams are Profitable

by

Only three of the teams in North America’s Major League Soccer competition are profitable: Los Angeles Galaxy, FC Dallas and Toronto FC. The last club might seem surprising given that they have served up two seasons of last place soccer. But there are plenty of British expats in that part of Ontario who are hungry for live soccer. However, a local correspondent tells me their presence is not the main factor and the club is attracting a much younger demographic who have no experience of live football in Britain.

Mike Ashley Cuts Newcastle United Sale Price

by

Mike Ashley will now settle for a price of £280-£300m for Newcastle United which would still leave him with a profit of £30-£50m from his 15 months in charge. Prospective buyers would get a debt-free club and one with prime commercial property assets in the vicinity of the club’s St.James’s Park stadium worth in the tens of millions of pounds. Ashley is now taking a more sober view of the situation after his initial sales pitch launched in the Middle East a day after putting the club up for sale, during which he reportedly hawked the club for around £480m.

Financial Worries At Pompey

by

Although Harry Redknapp has denied that there will be any ‘fire sale’ of players in the January transfer window, concern about the financial situation of Portsmouth FC persists. They have the smallest ground capacity in the Premiership and are set to lose about £25m as staggered payments of player purchases become due in January and August. Top earners in the side such as Peter Crouch are pulling in over £50,000 in wages with others not far behind. The club currently brings in around £65m through ticket sales, TV money and merchandising, but £60m of that is swallowed up in staff costs.

Why Buy A Premier League Club?

by

Nine out of the 20 clubs in the Premiership are wholly or partially owned by non-British entrepreneurs and the number may well increase soon. Arsene Wenger has asked, what is the motivation for a billionaire to buy a Premiership club? It’s interesting to look at a perspective from the Gulf states where many of the owners are increasingly likely to come from. Jumana Al Tamini from gulfnews.com argues, ‘While the buyers’ motives might vary, they all share the same goals: more social exposure; huge profits and high financial returns.

Heart of Midlothian Sort Out Pay Problems

by

Last week weekly paid players at Hearts didn’t get paid and those on monthly salaries faced delayed payments, but the problems should all have been sorted out today. Hearts maintain that the failure to pay employees was down to a technical problem. It appears that the problem arose when owners Ukio Bankas Investment Group, who regularly deposit money into Hearts’ bank account, stopped making payments earlier this month. HBOS, who have their own problems, refused to let the overdraft rise above £100,000.