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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Leeds owner Massimo Cellino is considering a long-term closure of the club’s training ground at Thorp Arch near Wetherby as he says it is too expensive. The facility is temporarily closed in a bid to save money. Cellino is approaching the owner to see if the rent can be cut.
The European Commission has given Uefa’s financial fair play (FFP) rules a clean bill of health, stating that they are compatible with EU competition law. This might seem to be a surprising decision, given that many sports lawyers have argued that the rules are in conflict with competition law. However, the Commission was extensively consulted about the rules.
Managerial turnover has increased and the general view, which I would share, is that this trend has gone too far and the boost obtained by a new manager has been exaggerated.
However, new research takes a different angle on the problem. It splits the Premier League into two halves and finds that there is a boost in the bottom half. Examples in the season just finished would include Sunderland and Crystal Palace, or Crystal Pulis as some now call it.
Manchester City have conceded to ‘practical realities’ in reaching a settlement agreement with Uefa under financial fair play rules. In effect this means that they have given priority to ensuring that they are in the Champions League next season, albeit with a reduced squad.
By holding out €40m of the €60m fine has been suspended and they are confident they can meet break even targets given enhanced commercial and television revenues.
Leeds United owner Massimo Cellino has asserted that he is a good virus in an interview with ITV News Calendar in Yorkshire. He compared the club to a jet plane with too many people and too much luggage on board. ‘If they want to throw me out, like a virus, they will have to try harder,’ he said.
Manchester United has reported a 60 percent increase in quarterly profit, saying it had the financial muscle to improve its squad after a poor season on the pitch.
Liverpool may not have won the league title, but they received the biggest pay out from the Premier League because of the number of their games that were screened on television. They got £97.5m compared with £96.5m for title winners Manchester City.
Bottom club Cardiff City received £62m which is 64 per cent of what Liverpool received. It is also £1.2m more than Manchester United received as title winners last year, reflecting the value of the new television contracts.
A number of academics have carried out statistical analyses of the relationship between spending and success in football, but now The Economist has carried out its own analysis. The data by individual managers and teams is available here.
Last year Premiership wages totalled £1.7bn. They consumed 75 per cent of club revenues, up from 46 per cent in 1996. By comparison, investment banks, who pay well, spend 30 per cent of their revenues on renumeration.
Leeds United are losing £1m a month and the new owner, Massimo Cellino has initiated a programme of cost cutting which includes the temporary closure of the training ground at Thorp Arch. Its long-term future is uncertain. It costs the club an inflation adjusted £600,000 a year to rent on a 25-year lease.
As expected, owner Randy Lerner has put Aston Villa up for sale after a disappointing season. His statement reveals a certain weariness about the struggle to make a success of the club.
The anticipated asking price is around £200m, but whoever acquires the club would need to make funds available to acquire players if the club is not to get sucked into a relegation battle next year. For Lerner, such a sale price would mean that he would recoup £100m less than his total investment in the club.