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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
Manchester City are odds on favourites to take the Barclays Premier League title today. However, on Monday Uefa may spoil their parade by announcing the sanctions to be imposed on them for breaching financial fair play regulations.
Aston Villa effectively secured Premiership survival with their win over Hull City yesterday. But what is the future for the club? Do they have a strategy that will enable them to tap into the potential to be the leading club in the Midlands?
Of course, Midlands football is in a sorry state, notwithstanding Wolves winning League 1. Birmingham City survived by the skin of their teeth yesterday. West Bromwich Albion will end up not far above the relegation zone.
David Conn of The Guardian has provided a thorough and authoritative review of Premiership finances for the 2012-13 season as revealed in clubs’ accounts.
The chasm facing clubs that might be relegated is evident. Fulham would not be able to finance their ongoing contractual commitments over the next two years. Norwich City, praised as a stable, financially well-managed club, would face a ‘multi-million pound trauma’.
Alfreton Town FC have been put up for sale by owner Wayne Bradley after their best ever finish in the Conference. He feels that he has taken the football club as far as he can.
Attendances have been falling with an average of under a thousand. Any new investor would have to ask if the club has reached the highest level that it could reasonably attain given the size and potential of its catchment area.
Letchworth Albion FC were put on sale on eBay and were bought by two of the players for £45. The Hitchin Sunday League Division Two side have kept just four clean sheets in their four year history.
It remains to be seen which three clubs will be relegated from the Premier League this season, but they can expect to pay a high price. Research by Nick Harris shows that the three demoted clubs can expect to see their income fall by at least £20m next season. Crowds will fall, typically by more than 4,000 per game. Only five of the 27 relegated teams from the past nine seasons have gone straight back up.
The chairman of the football board at Rangers, Sandy Easdale, has told BBC Scotland that the financial situation at the club is ‘precarious’. Easdale, who is a major shareholder, raised the spectre of a second administration.
Season ticket sales have been slow and the accounts have been signed off on the basis that there would be a major uplift. It is certainly a matter of concern that the club is reliant on season ticket sales for the next campaign for cash flow.
Even leaving aside the likelihood of relegation to the Conference, Torquay United have been facing a difficult financial situation as they seek to attract new investment.
Only five out of twenty-four Championship clubs made a profit before tax in 2012/13. However, there is great variability in club finances.
There is a very wide range of income (£9-35M) and losses in the division which in turn support a wide range of costs (£10-51M). Low revenue and low losses means a low cost base which virtually guarantees a relegation fight. However, higher up the league table there is simply no clear correlation between costs and on pitch performance. A cost base of c. £20M has served Palace, Watford, Burnley and Derby well.
Football in Northamptonshire is in a bad way. Northampton Town, who enjoyed a brief spell in the top flight, are threatened with relegation to the Conference. Rushden and Diamonds, the product of one man’s vision, are no more (apart from a phoenix club) having reached League 1. Their Nene Park stadium lies quietly rusting, perhaps to be eventually replaced by housing.