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Articles and reports on financial issues within football – soccer – from The Political Economy of Football.
We have seen many sets of annual financial accounts in the past week, not least from Championship clubs. These show big losses from clubs anxious to be promoted to the Premier League and enjoy its fabulous riches. Unfortunately, while the streets of the Premier League may be paved with gold, the route to them is often one of unsustainable debt.
All reports relating to financial fair play and annual results need to come with a health warning as it is more likely that a legal challenge will be launched to the Football League’s plans if they crack down hard on leading clubs.
Nottingham Forest have reported losses of £17m for the 2012/13 season compared with £12.2m for the previous season. Forest have made nine permanent signings since these accounts, in addition to four loan deals. With the associated transfer fees and wages involved, the losses over the current season are likely to have significantly increased
Leicester City FC made a loss of £34m in the 2012-13 season, reflecting how much it can cost a benefactor to get a football club promoted. However, the club are now on track to take the Championship title which is just as well as a similar loss next season would lead to a £20m fine under financial fair play rules.
A fall in ticket sales and revenue contributed to the £4.3m increase in losses from the previous year. But City say the figures also reflect the purchase of the King Power Stadium, and that important progress has been made meeting Financial Fair Play rules.
There was a time when works teams were a familiar feature of non-league football. Westland Yeovil, Lovells Athletic, Betteshanger Colliery, where are you now? (In the latter two cases, the business folded).
In continental Europe it was not unusual for major clubs to be associated with a company, e.g., PSV Eindhoven. In Communist states, such an association was common with the armed forces and even the secret police having teams.
Yesterday’s BBC Midlands News portrayed a rather perplexed Birmingham City fan standing outside St. Andrews expressing his uncertainty about what was happening to his club. Despite the ‘business as usual’ reassurances from the club following the conviction of owner Carson Yeung for money laundering, his perplexity is understandable.
According to the Financial Times, Yeung sold a stake in the club three weeks ago to a mystery Chinese company whose registered address is a government dormitory. It’s not far off having a company registered at a Salvation Army hostel.
A number of non-league clubs are currently facing financial difficulties. This winter’s wet weather has led to postponed matches and hit cash flow. When matches are rearranged for midweek, takings from the gate, bar and burger stand are often depleted.
As anticipated, Eastwood Town have folded and, elsewhere, Bashley FC are facing financial challenges. Corby Town face the threat of administration. As in the case of Eastwood, they are in dispute with the local council. Such disputes are more likely with government funding to local authorities continuing to be cut.
Liverpool have been doing well on the pitch, but they have also been making progress off the pitch. Their latest accounts relate to the first full year that Brendan Rogers was manager and they show a considerable improvement in the club’s financial position. This was in spite of the fact that they did not have Champions League football which is usually worth about £30m.
Aston Villa didn’t exactly announce their latest financial results with a fanfare, publishing them on the club website, even though they show an improving picture.
After finances were spiralling out of control, leading to owner Randy Lerner to bring in cost-cutting methods while ensuring the club’s Premier League status, Aston Villa are now out of the woods, according to the club’s chief financial officer, Robin Russell.
Rangers have rejected internet rumours that the club will enter administration for a second time on Wednesday, but faced demands from supporters to answer claims that former chief executive Charles Green still has influence within the club.
A spokesman for the club said last night: “There is absolutely no truth in these claims [about the club facing administration], which appear to come from agenda-driven bloggers who are out to damage the club. There is no chance of administration while there is no board meeting tomorrow. This is all completely false.”
Are Leeds fans warming to the idea of a Massimo Cellino takeover? It’s difficult to say. Certainly when he signalled his interest in buying Leeds United last month, it’s fair to say that many supporters were not happy.
Amid allegations of corruption and links to the mafia, the Italian, who also owns Serie A side Cagliari, faced boos when he turned up at Elland Road for the first time.