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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Last season Leyton Orient were contenders for promotion. This year they are bottom of League 1. The Italian takeover of the club does not seem to have worked well. Even team talks are being given in Italian.
In one bizarre development, the club has been given its own reality television show in Italy which could lead to a player contract. Owner Francesco Becchetti thinks it will raise the profile of the club and perhaps produce good players.
There has been plenty of moral outrage at the amount of money coming into the Premier League under the new television deal and the amount of money being paid to its players. One political economy blog has already asked me to write a suitably indignant piece which really be a less eloquent rendering of the kind of article that David Conn writes so well in The Guardian.
Once the overseas deals have been completed, total Premier League broadcasting revenue is expected to exceed £8 billion. As a result, Championship clubs not receiving parachute payments can expect to receive about £5 million per season in solidarity payments, more than double the present £2.3 million.
With average turnover for clubs in the Championship of about £15 million, the £5 million represents a large proportion of income. They get about £2 million from their own television deal. Whether the clubs will regard this as enough is unlikely.
The amount paid by broadcasters for three years of Premier League television rights from 2016-17 has exceeded all expectations. Sky and BT agreed to pay £5,16bn over the period: three years ago they paid just £3bn for the rights. Sky is spending more on its own that the City estimated the whole auction would realise.
Doubt has been cast on the future of Lincoln City after the Co-op Bank said that it would be severing all ties with the club. The bank has instructed the club to sell its property assets to meet a debt of £380,000. Around 80 per cent of that sum makes up the club’s overdraft and working capital facility.
The club’s board has spent the last year unsuccessfully purusing alternative financing arrangements. The club is operating at a loss of £3,000 a week.
Lalit Modi, the commissioner of cricket in the Indian Premier League, is interested in buying a 26.6 per cent stake in Rangers. He thinks that the club is currently under valued. He is targeting the shares held by the Easdale brothers.
Talks are at a very preliminary stage, but some argue that events in his past do not make him a suitable person to be involved in a football club.
Sao Paolo’s Corinthians have seen a surplus of €330,000 in the preceding year turn into a deficit of €29.9m in the 2014 financial year. The main factors appear to have been stadium construction costs and a big tax bill.
The transfer window appears to have been relatively quiet, particularly at the lower end of the table. Of course, the January window is always quieter than the one in July because it is thought to be more difficult to obtain value. The high spending in the summer may have led to more restrained spending now.
Thai tycoon Dejphon Chansiri has purchased Sheffield Wednesday. His family controls Thai Union Frozen Products, the world’s largest producer of canned tuna and one of the biggest worldwide general seafood producers. It owns the John West brand in the UK.
The value of the deal was reported to be about £30m. The club lost £3.7m in the 2012-13 season, which is quite a low figure compared with some Championship clubs, on turnover of £15m, It had £11m in debt.
English clubs are dominating the world transfer market to such an extent that they are now involved in nearly as many deals as Brazil, the world’s biggest production line for players.
According to a Fifa report, of the 13,090 transfers in 2014, England was responsible for 9.6 per cent of transfers compared with just over 10 per cent for Brazil. The number of transfers involving English clubs increased by 193 over the previous year, while Brazil’s total declined by 101.