The Political Economy of Football V2

There was a discussion on Radio 4 this morning of the risks of Everton FC going into administration involving a minority shareholder whose name I did not catch. It does seem to me that this is a worst case scenario and if it did happen someone would come into purchase the club as a distressed asset at a knockdown price, even given the cost of completing Bramley Dock.    There would, of course, be an automatic 10 point deduction penalty. Bloomberg reported a few days ago that main financial adviser, Deloitte LLP, is scrambling to find new backers to save a takeover of the struggling club by US investment firm 777 Partners amid fears that the deal could collapse, according to people familiar with the matter. Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line, the people said, asking not to be identified because the information is private. The current preference is to attract a partner for 777 instead of getting an ent

Warm congratulations to Leicester City on their promotion to the Premier League.   In 1965/8 I was at university in Leicester and many of my tutors, including my personal tutor Bob Borthwick, were Foxes fans. It has been a rough ride for Leicester with the EFL seemingly determined to make an example of them.    Football finances are increasingly convoluted and if I was qualifying as a lawyer today, I would think that football finance was a lucrative area to practice in.   The lawyers collect their fees and the fans suffer.. Leicester’s usual business model was based on them being a Premier League club challenging for European qualification every season. Relegation hadn’t been factored in. There was no safety net, and they had just come crashing down to earth. The reality of dropping down to the EFL after nine seasons in the top flight was they had to sell players and dramatically cut the wage bill. Ten first-team players left, seven of them as free agents as their contracts had b

Football fans tend to be conservative in their outlook and moving stadium is always a risk.  Indeed, it is in financial terms, not just sentimental ones.  The London Stadium has been a great deal for West Ham financially, but arguably it lacks the atmosphere of Upton Park.   Newcastle fans would prefer to stay at St. James’s Park in the city centre: a poll shows that only 19 per cent want to move despite capacity constraints. At a time when the historic appeal of English football combines with the global popularity of the Premier League, when clubs are sports and non-sports businesses and commercialism chimes with heritage and architecture to form a must-see destination, the Tottenham Hotspur Stadium is the model. It is known for its scale, modernity and clear sightlines that have changed how many see football stadiums. It is, to use a phrase, ground-breaking. Arsenal moved from Highbury in 2006, seven years after the decision to leave was made. One of the main reasons was the club

Should a majority of Premier League clubs vote through the proposed hard spending cap for the 2025-26 season, it would not only aid the competitive nature of what is the world’s strongest domestic league, but also enforce a subtle shift in the perceived power base of English football. The cap idea is based on the concept of “anchoring”, designed to limit the amount of money any club can invest in their squad by tying it to a multiple (probably five) of what the division’s lowest earners get from the league’s centralised broadcast and commercial deals. The Premier League’s broadcast revenue sharing has always been, by European football standards anyway, a relatively noble meritocratic arrangement. It is less that sharing ratio which clubs such as Everton, West Ham and Palace are worried about — and more the consistent advantage clubs such as City, Chelsea and Manchester United have accrued from decades of participation in European football. Not only do the ‘Big Six’ tend to pock

2022/23 is the second full season at Burnley under the ownership of Alan Pace, who has presided over a rollercoaster period, including one relegation and one promotion, since taking over Burnley in December 2020, when his company purchase an 84% majority shareholding. This represented a dramatic change in approach for Burnley, as the new owners put in very little of their own money, instead making the acquisition via a leveraged buy-out, placing debt on the club for the first time in years and using the club’s own cash reserves. Burnley’s auditors (and indeed the club itself) have noted a “material uncertainty” around the the ability to continue as a going concern if they were not able to achieve the forecast player sales and cost reductions in the event of relegation. Some might greet this as a classic case of “No shit, Sherlock”, but it’s clearly not ideal to see such a comment included in the accounts, as it’s relatively rare for an auditor to sound such a note of caution. F

The problem with the award of penalties is that a lot of them are marginal decisions, even with VAR.   This is particularly the case with the handball rule which has arguably been applied a little less stringently as the season has gone on, and probably rightly so. Analysis by the Match of the Day team last night suggested that two of Forest’s penalty claims at Everton were not justified, but the third one was.    The referee should have been at least summoned to the screen to review his decision. It is easy to be critical of Nottingham Forest. And the manner in which they used social media to voice allegations over the integrity of match officials after Sunday’s 2-0 away loss against fellow relegation candidates Everton was arguably undermining the foundations of the game.    Officials make mistakes, sometimes bad ones, but they may not qualify as clear and obvious errors and they indicate poor decision-making rather than bias. Yet while they have been criticised for the way the