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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Rich individuals sometimes think that investing in a non-league club can be a route to football glory. It can work, Fleetwood Town being an example. It can also go pear shaped when the money runs out, as happened at Rushden and Diamonds. At AFC Fylde, in the play off positions in the National League North, the jury is still out.
Blackburn Rovers have announced losses of £17.2m for 2014/15, seeing their overall debt swell to £104.2m. This includes £87m of interest free loans to owners Venky’s. The losses do represent an improvement on the £42.1m pre-tax losses recorded in 2013/14.
Blackburn manager Paul Lambert commented, ‘There has to be leadership and talking about how to reduce the debt. You can’t just magic that sort of thing out of the air.’
In stark contrast to the poor financial results from QPR reported below, Burnley recorded a record profit of £30.1m in the financial year to June 2015. Only Tottenham Hotspur and Manchester United had a bigger profit in the Premier League.
The latest accounts from Queens Park Rangers show that the club’s holding company recorded a £45.7m loss last season despite having the benefit of Premier League television income. They earned £65.9m from Premier League television money last season, which contributed to an overall turnover of £85.8m.
However, £38.8m was spent on players and there was a wage bill of £72.9m. This represents 85 per cent of turnover, well above the recommended 50 per cent level. The club’s net debt, mainly in the form of loans from shareholders, has risen to £193m.
Former Aston Villa chairman Sir Doug Ellis has defended current owner Randy Lerner, saying that he is a ‘good man’ and he does not regret selling the club to him.
Last week Ellis told the Birmingham Mail, “I warmed to Randy Lerner. He kept his word, has put his £200 million into the club and has little return for it.
The author of the Swiss Ramble blog has used his Easter break to good effect to take his usual in depth look at the finances of a club, this time surprise package Leicester City.
Owners can make or break a club. In the latter category just ask the fans of Aston Villa, Charlton Athletic and Leeds United.
Shahid Khan may feel that he got something of a bargain when he acquired Fulham for £150m. However, unlike the American sports he is familiar with, relegation is always a possibility. It seems that Khan has been far from sure how to avert the threat.
I think it is very unlikely that they will be relegated, but it will need quite a change in their current form if they are going to be promotion contenders next season.
The money being poured into Chinese football is one of the biggest stories of the last few months. It has changed the global financial balance of the game. Chinese Super League clubs spent $280m in the winter transfer window, more than the Premier League. The services of leading players have been secured, rather than fading stars as in the past.
But how sustainable is this trend? It is largely driven politically by the ambitions of President Xi Jinping to make China a world football power.
Premiership clubs have been given the green light to spend more TV money on wages next season. Under current rules, clubs are able to use television money to increase total wage bills by £4m a year. From next season, that figure will increase to £7m a year.
The rules only apply to TV money. Clubs can spend gate money, sponsorship revenue and merchandise sales how they like. They will apply only to clubs with wage bills higher than £67m next season, £74m in 2017-18 and £81m in 2018-19. However, a typical mid-range club now has a wage bill of around £70m a year.
Which is the worst owner: Roland Duchatelet at Charlton or Massimo Cellino at Leeds United? Both are rather eccentric individuals who are determined to do it ‘my way’. Both have fallen out with the bulk of their fans.
Charlton are almost certain to be relegated, Leeds are safe. However, for a club with Premiership potential, lower mid-table mediocrity in the Championship is not good enough.