The Political Economy of Football V2

The government's gambling review has not called for a ban on betting firms advertising on football shirts. Nine of the 20 Premier League clubs in England and three in Scotland's top flight have shirts sponsored by gambling firms. Gambling on football is worth £1.4bn a year to bookmakers. Two of the firms concerned are based in China, another two in the Philippines and two more in Malta. Only one is UK based. The most lucrative contract is the £10m held by West Ham United with Malta-based Betway, followed by £9.6m at Everton for SportsPensa, based in Kenya. The FA terminated its £4m a year sponsorship deal with Ladbrokes in June one year into the four year contract. The FA admitted that there was a conflict in imposing a ban on betting on football by players and others in the game at the same time as accepting large sums of sponsorship money from a betting firm. If the Labour Party gains office, it will ban gambling adverts on all football shirts.

The following statement has been issued by the owners of Coventry City on the club's website: 'SISU Capital can confirm that it has had neither written nor verbal communication from Mr. Evans; hence,  he has not made an offer to purchase Coventry City FC. We would expect any potential purchaser to follow a professional and confidential process.  Misleading public statements are a distraction to both the Club and fans.' Dale Evans is a self-proclaimed multi-millionaire. Mr Evans claims to have made a fortune playing poker and betting. He previously told the BBC his wealth came thanks to a £10million “big win”, quickly followed by another one. Dale Evans has told the Coventry Evening Telegraph that he is a local man and an avid Sky Blues fan. He said: 'I was born in Nuneaton. I stayed eight years and then moved away with my parents. I have lived in Norwich for 20-odd years now, but I’m a lifelong Coventry City fan.'. Gary Hoffman confirmed that Dale Evans has

Arsenal Supporters' Trust (AST) intend to vote against the reappointment as directors of John Kroenke, the son of majority shareholder Stan, and chairman Sir Chips Keswick at tomorrow's annual general meeting: Vote against directors. Given that they hold only three per cent of the shares, the vote is largely symbolic, but is a means of showing dissatisfaction with the current ownership and governance arrangements. A recent AST survey found that 90 per cent of its members were dissatisfied with 'Silent Stan's' ownership. A similar ratio want 30 per cent shareholder Alisher Usmanov to have a seat on the board. Nearly three-quarters of the fans also backed the appointment of a director of football, which Arsene Wenger has opposed while he is manager.

It's been one of the longest wrangles in contemporary football, but the efforts of Queens Park Rangers to avoid paying a £41m financial fair play (FFP) fine have reached a new stage after the club lost their latest legal challenge. However, the saga is by no means over. An arbitration panel of three QC's has dismissed the club's claim that the Football League's 2012 financial fair play rules were illegal under competition law and that the fine was disproportionate. QPR were relegated in 2015 after one season in the top flight. In 2012, the Football League's FFP rules restricted clubs to losses of £8m per year. New rules were implemented last season that allow losses of £39m over three seasons. The former rules were thought to be too draconian and the new rules harmonised them with those of the Premier League. The club announced losses of £9.8m for the 2013-14 season when they won promotion via the play offs. However, they wrote off £60m in loans as exceptional

The 'big six' Premier League clubs have failed in their bid to get a bigger share of TV cash. Plans to hold a meeting of all 20 clubs today have been scrapped after a majority of clubs made it clear they were not going to accept any of the compromises on the table. Leading clubs had argued that they should have a bigger share of rapidly growing overseas TV revenues because of their greater popularity abroad. It had been suggested that 35 per cent of funds should be allocated according to where clubs finished in the table which would normally benefit the top clubs. Suggested compromises including only distributing the increase in income according to the new formula or capping the ratio of all TV money distributed to clubs at 1.6:1. West Ham United, Leicester City and Everton were prepared to line up with the big six as aspirants to join them, but the agreement of 14 clubs is needed to effect such a substantial change. Stoke, Swansea City and Crystal Palace are understood

Franchise relocations are part and parcel of most US sports, but Major League Soccer in the US has largely avoided them. However, the owner of Columbus Crew, one of the league's original franchises, has announced that the team is not meeting his 'revenue targets' and is exploring the possibility of moving the club 1,200 miles south to Austin, Texas. Fans are understandably furious, but the alternative would be for local government to stump up for a new stadium, something that does sometimes happen in the US either though the economic benefits are questionable. It should be noted that clubs joining the MLS have to pay a 'franchise fee'. Minnesota United had to stump up £114m when they joined last year. It would cheaper to move a club to Austin than setting up a new one. There is even some debate about abandoning the closed 'franchise system' and introducing promotion and relegation. The Court of Arbitration for Sport will soon rule on whether the US So

Expectations for the upcoming auction of television rights are helping to drive interest in buying top flight football clubs. Forecasts of how much the current £5.1bn fee could rise vary from £200m to £1bn. A lot depends on whether Amazon and Facebook throw their hats in the ring and if they do so on their own behalf or in conjunction with conventional broadcasters. One club where there is uncertainty is Arsenal. Alisher Usmanov could be prepared to sell his stake. He could then put the proceeds into Everton, teaming up with his long-term business partner Farhad Moshiri. Moshiri sold his 15 per cent stake in Arsenal last year to Usmanov. Liverpool could be available for sale at the right price. John Henry is keen to put the loss-making Boston Globe newspaper on a stable footing. Bids of around £800m for Liverpool have been knocked back with the club valued by Fenway at £1.5bn. It is felt that countries are the real value investors these days. However, clubs are no longer

Leicester City earned €81.7m (about £73m) from the Champions League last season while title winners Real Madrid got €81.1m. Only beaten finalists Juventus earned more than the Foxes. (€110.4m). Uefa splits the cash depending on the size of each country's TV deal, how far each club progressed in the tournament and how a club performed compared to others from the same country. Leicester edged Real Madrid because the 2015-16 Premier League champions had a bigger share of broadcasting rights money - the BT deal for the UK rights is considerably higher than Spain's in terms of value. Arsenal earned €64.4m, Manchester City €50.2m and Spurs €43.3m. The growing value of winning the Europa League is emphasised by Manchester United, €44.5m, more than Tottenham, although Spurs got past the United figure by receiving an additional €2.4m for their brief spell in the Europa League.

Moving into a new stadium involves some risk for a club, but often a necessary one. Southampton could not have stayed at The Dell and maintained a solid presence in the Premier League. The Emirates may be less atmospheric than Highbury, and its cost may have held the club back for a while, but it generates much needed revenue for Arsenal. The problem at Sunderland and Middlesbrough is not the new stadiums, but the football played within them. Everton's failure to move away from the faded charms of Goodison Park has held them back. Liverpool decided to rebuild Anfield rather than move to Stanley Park, but their stadium is a very special place. Manchester City's revival was helped by the move from the down market surroundings of Maine Road to the splendour of the City of Manchester Stadium, all at a very reasonable price. No doubt West Ham thought they could repeat the trick when they moved to the London Stadium in a deal which has been criticised for the level of taxpayer

Charlton Athletic is set to become the first Australian owned club in Britain. A takeover is imminent according to fanzine Voice of the Valley , and an Australian consortium that has been interested in the club for some time look like the most likely buyers. As revealed in the fanzine, this involves businessman Andrew Muir, former owner of the Good Guys retail chain who has considerable funds at his disposal. Ramsgate fan Rick Everitt who edits the fanzine reveals, 'Voice of The Valley has been told by multiple independent and well-placed sources that due diligence on a potential sale has been taking place – and today that a deal could even go through before the end of the next week.' VOTV understands that the deal would now include the acquisition of Charlton Athletic Holdings Limited, the entity that owns The Valley and Sparrows Lane, as well the football club itself. Suggestions to the contrary were a source of concern to some fans following the initial report. Details r

An excellent piece of in depth analysis by Wigan fan Richard Pike about the Championship: New financial realities He points out that the Championship is increasingly becoming like a Premier League Division Two. One would be hard pressed to find a second tier league anywhere else in world football with so much prestige. He argues that a growing gap is emerging between the Championship and Leagues One and Two. Ten year income projections suggest that by 2027 each Championship club will receive an average of £13m each season from solidarity payments from the Premier League and the television deal, an increase of £6m on the current figure. League One clubs will see their income from these sources go up by only £0.25m from £2m. League Two clubs will see only the same £0.25m increase from £1.5m to £1.75m. He makes an interesting comparison between Sheffield United and Bolton Wanderers. Sheffield has a population of over half a million and is able to sustain two Championship clubs.

Hull may be the City of Culture but no one wants to buy the football club according to the club's owner. It is too remote and too far from London: Hull City Owner Ehab Allam said, 'The club is for sale but it seems the interest in Hull is only when the club is in the Premier League. The attraction is the Premier League. We’ve seen investment from the US and more recently from the Far East, and the interest is in the Premier League. The location of Hull isn’t attractive either. There may still be interest in some Championship clubs, such as Reading. That’s 20 minutes from Heathrow.' 'They’re the same people who were interested in this club but once we lost our Premier League status, they started looking for a London-based club in the Championship. The interest in Hull is limited compared to a London club, just because of lifestyle. They’re wealthy people and it has to fit in with their lifestyle aspirations as well. Buying a London club is a lot more attractive than

The word 'unique' is often over used, but it must surely be applied to Glasgow team Queen's Park. They are the oldest football club in Scotland and they are celebrating their 150th anniversary this year. They are the only Scottish club to win the FA Cup. They invented the modern passing game, originally referred to as 'combination' football. They are also the only amateur club playing in the Scottish professional league system. There are, of course, no amateur clubs in the English Football League and the separate amateur system in England (sometimes referred to as 'shamateur') has long since disappeared with many non-league clubs having full-time squads. Now the club faces a new challenge. They are based at the national stadium at Hampden Park which is also the home of the Scottish Football Association. However, their lease runs out in 2020 and there is uncertainty about their future there. The income that Queen's Park derives from Hampden is th

It has been rumoured for some time that Mike Ashley wanted to sell Newcastle United, but now the club has been officially put on the market. After a controversial ten years at St. James' Park, which started with the Sports Direct tycoon sitting among the fans, it has all gone sour and his departure will be greeted with relief. Along the way, there have been two relegations and a controversial attempt to rename the stadium. Mike Ashley has extended only modest loans to Newcastle, preferring to spend his personal cash on property investments such as The Clearings, a former John Lewis depot in Chelsea that is being developed into fashionable apartments. His reluctance to spend money did not please the Toon Army. Mr Ashley once said that he had been advised to stay away from games for fear that he might be assaulted. He has not been to a home game this season. As the Financial Times notes today, 'Newcastle is a fiercely tribal club even by the standards of English football;

Scottish Premier League club Hamilton Academical have fallen victim to fraudsters, losing nearly £1m that was put aside for stadium upgrading. The scam was one that is often used on individuals. The club was contacted by persons who claimed to be from the bank's fraud department. They said their account was at risk and they should transfer the money into another account from where it vanished: Football fraudsters The club is the smallest in the SPL, but had been doing well financially. After the scam, directors had to dig into their own pockets to keep the club going and pay wages. Apparently Hearts lost a smaller amount of £80,000 earlier in the year and other Scottish football clubs may have been targeted.

Swansea City are close to agreeing a new 40-year lease at the Liberty Stadium. Under the terms of the deal being discussed with Swansea Council the club would gain day-to-day operational control of the stadium in return for meeting its running costs, which would reduce the potential liabilities faced by the local authority and fellow tenants Ospreys Rugby. If Swansea are successful in securing control they will explore the possibility of selling naming rights and seek to increase capacity from 21,000 to 30.000.

This week the 19th Congress of the Communist Party will be held in Beijing. It is an opportunity for President Xi Jinping to consolidate his hold on the party as his begins his second five year term. It will also enable him to reinvigorate his long march into global football. Earlier this year the Chinese government clamped down on foreign football investment as part of a move to slow capital flows of the country. Some Chinese investors got round this restriction by using money they had stashed in Hong Kong or elsewhere. In any case the decision to add sports clubs to a list of restricted overseas businesses by the State Council was only seen as a temporary measure. President Xi is expected to reverse the measure and unleash a new wave of Chinese investment in English clubs. Crystal Palace and Newcastle United are among likely targets.

It's not a revelation that clubs will take financial risks to access the riches of the Premiership but a new report does provide some detailed data on how big those risks can be and how value can be destroyed. A good strategy can be to accept that promotion may be followed by relegation and to preserve the balance sheet. Without generous benefactors, the situation is unsustainable in the longer run. Building on the success and international coverage of its examination of Premiership football finances, financial analysts vysyble have announced further football-related research with the launch of a new report entitled ‘Over The Line – The Economic Cost of Promotion into the English Premier League’. This report is a detailed assessment of those clubs and their economic demands during their promotion-winning season into the Premier League. The report covers the period 2008-9 through to 2015-16 (last available accounts) and is based upon their usual metric of examination – economic p

Football has become increasingly reliant on income from betting companies. They account for some forty per cent of perimeter advertising and half of shirt sponsorships, amounting to some £50m a year in total. The growth of this relationship has in part been driven by the growth of online gambling. Betting on matches is also very important in Asia where Premier League games are seen as free of any form of fixing. However, there are risks in this relationship. The gambling industry has come under criticism for failing to do enough to deal with the problem of addiction. It would claim that it has taken measures and, in any case, the vast majority of those who bet just enjoy the occasional flutter. However, the Labour Party has pledged to end betting advertising in football which would have considerable financial implications, although they might allow a transition period (and the legislation would take time to pass). There is an interesting review of these issues here: The odd re

Dulwich Hamlet are one of the highest profile non-league clubs in the country. It is not easy being a non-league club in London because of the lack of clear community identities in some parts of the city, the existence of a wide range of leisure options and competition from Premier League and Football League clubs. However, Hamlet are the epitome of metropolitan cool, and indeed have little direct competition in the immediate area. They attracted a bumper crowd on Non-League Day for a match against Needham Market. Their future is in doubt because of a complex three-cornered struggle between the property group that bailed them out, Southwark Council, and the club itself. The intention is to redevelop Champion Hill and relocate them to a new site. Meanwhile, they face financial challenges in terms of their wages budget when compared with the likes of Billericay Town (although it is still bigger than many non-league clubs at their level). The Independent has produced an excellent

Premier League matches could be shown simultaneously as part of the new television rights package which will go out to tender soon and is expected to be agreed in the first three months of 2018 It is one way of dealing with a Premier League commitment to Ofcom to give viewers more choice, although some might regard it as overload and it could well reduce domestic viewing figures. It would be limited to bank holiday and midweek games. Under the existing deal BT and Sky Sports have separate slots to show matches. Champions League matches are shown simultaneously by BT. The Premier League has just held its bi-annual meeting with the Football Supporters' Federation (FSF) and one topic for discussion was the question of showing live matches on Christmas Eve. The question here is not so much a religious one as what is seen as a new low point in putting the interests of broadcasters over those of match going fans: A new low The FSF was told that any live game on Christmas Eve wo

Premier League clubs are keen to boost their commercial income by attracting new sponsors, not least from the lucrative and still under exploited Asian market. However, they can get themselves in hot water by doing so as Liverpool FC have found. In July they thought they had found an environmentally friendly winner when they signed up a company that produces mineral water at a Tibetan glacier. The Hong Kong-listed Tibet Water Company became the club's 'official water partner' in China in July. In return the company was promised digital media rights and access to players. However, the Free Tibet Group has started a campaign against Liverpool's partnership, arguing that by working with the company the club was in effect condoning human rights abuses stemming from China's occupation of Tibet in 1950: Campaign Beijing considers that Tibet is an inseparable part of China, although it operates as an autonomous region. The Chinese Government says that it faces a d

The conflict between Catalonia and Spain has spilled over on to the football pitch. Last Sunday’s game against Las Palmas was played behind closed doors at the Nou Camp. Even so, two members of the Barcelona board quit in protest, saying that the game should not have been played at all as violence raged outside. Barcelona is an important symbol of Catalan identity and their rivalry with Real Madrid is legendary. Real had historical associations with the Franco regime and the Spanish royal family. The Spanish king Felipe took a hard line in his address to the nation this week. I was quite surprised by this as he struck me as moderate and well-informed when I met him as Crown Prince in 2012, but I suppose that Spanish unity is his priority. Catalonia’s sports minister has said that Barcelona may apply to join the Premier League if his country becomes independent, along with other Catalan teams in La Liga such as Espanyol and Girona. Alternatively, they might apply to join the Fr

The Premier League clubs remain divided over TV rights after the big six failed in an attempt to claim a greater share of overseas broadcasting money. They argue that viewers overseas tune in to watch the matches between the leading clubs. They say that the current method of allocating money is outdated as when the Premier League was formed overseas rights were virtually worthless. The clubs pushing for the change were the two Manchester clubs plus Arsenal, Liverpool, Chelsea and Spurs. The original proposal was for 35 per cent of the overseas TV money to be split according to where clubs finish in the table instead of split equally, as is now the case. Such a move would have meant a potential £40m difference between the income of the top and bottom clubs in the division. There is a concern that giving more money to the bigger clubs would upset the competitive balance of the Premier League. It would make it less likely that a club like Leicester City could win the title and

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