The Finances of Football

It's probably impossible for type (1) to work, thinking about it. The spending would have to be of a nature to lift the club permanently up a rung and I don't think you can do that by buying better players. It might be masked by the league getting richer as a whole - but that doesn't lift you a rung, it lifts the whole ladder and you have to spend even more to stay ahead of the pack. In any case, eventually the players get old or tired or have a bad day and incomes drop and the gap in spending becomes an unbridgeable chasm.

There's maybe not a great deal of difference between types (1) and (4) looking at it that way - they're both an attempt to expand the business, it's just that (4) is a sensible way to do it, while (1) is insane.

Type (3) I don't understand at all. I need to look these things up. I'd never've dreamed it up as a type of debt if it hadn't actually happened.

It seems to be nothing more than a case of identifying a business which has enough spare capacity that it can afford to throw off spare cash at the top - some goes to pay borrowings, the rest goes to the guy who's spotted the scheme in the first place and taken on the risk. On that view, United deserve to be in trouble more than Liverpool do. You can run a business conservatively if it's a private business because it's yours and you can do what you like - you can't really blame the Moores for cashing in when they got an offer too good to be true.

But to run a plc like that seems to me like pure complacency. The club was up for sale every day since it was first listed, it was only a matter of time before someone identified the opportunity to insert themselves and take a slice. The board must've been trying to take the advantages of being listed without ever being hard-nosed enough to protect their position.

1 also accounts for teams like Fulham going through the divisions imo. That worked out p well but then you also get the Derbys and Hulls.

oh i guess the fulham that went through the divisions are a mix of 1 & 2.

On that view, United deserve to be in trouble more than Liverpool do.

would argue that they are tbf, just that liverpool's deadlines are closer.

Seriously? Then I haven't got to grips with the scale of United's problems at all.

I'd say Rangers were a mixture of (1) and (2), btw. They started flinging money around like there was no tomorrow, assuming some magical reward would come from being the biggest fish in the tiny wee pond of Scottish football, and then started shuffling it around various arms of Murray International Holdings which control different parts of Rangers, so that basically David Murray owes money to himself (which he then owes to the bank).

There's a decent article about it here:
http://www.philmacgiollabhain.com/murray-international-holdings/

Dunno why Rangers would have to do that considering they were already the big dawg?

I'm presuming 750m >>> 250m no? Liverpool can make that up by say selling their whole squad - Utd can't. Also 250m debt + 250m stadium cost + 100m for new players >>> still cheaper to buy than Utd.

* what does 'turning debt into equity' even mean? If Abramovich already owned 100% of the club, how can he have got any more equity out of the swap? aiui equity is just what's left when liabilities are taken away from assets, so the only way it makes sense if he's basically written off the loan

But if the creditor company (or individual) doesn't own 100% of the shares of Calumerio FC Limited, then it gets a bit more complicated.

Dunno why Rangers would have to do that considering they were already the big dawg?

Assuming this isn't a "lol Celtic" attempt to get a rise out of me, Scottish football in the 80s saw Aberdeen and Dundee United get to European finals, and the title ending up in one side of Glasgow or the other was in no way the foregone conclusion it is now.

ok but at some point the past 20 years he could have thought - hmm, maybe we have spent enough and/or use it 'sensibly'

and no, it wasn't to get a rise. y'all the barca to their real - one couldn't work without the other anymore.

a hoy hoy, yes, you would think. It's just been teetering about precariously for some time now, and it's only over the last few years when things have gone badly wrong (recession hitting MIH hard, Rangers failing to qualify for the Champions League) that they've had to rein it in (see no new players for two whole years while getting rid of everything that moves and isn't Kenny Miller).

He bought over an ascendant Rangers (if history had panned out in an alternate universe, this could have been happening to Ayr United!) and flung money at them to make them enormous. It sort of worked for a bit, but bubbles have a habit of bursting.

He has been trying to get out, but it's not working. Mysterious buyers keep appearing then disappearing (Murray has claimed that potential buyers' visions for what they want to do with Rangers when they buy it off him doesn't square with his therefore Not For Sale signs go up even with offers apparently on the table).

It's also because throughout the nineties it wasn't inevitable that we were going to end up with the structure we've got now. It's only in retrospect that it looks laughable - the incredible wealth of the Premiership, the dominance in the CL of the big leagues, gargantuan wages, etc all might've panned out differently. Remember that Red Star, Ajax, Steaua, Benfica, Marseille were big, big fish in one way or another over the period. In that context, a side from Glasgow spending big just looked ambitious, rather than insane.

(have an article in gestation about this right now btw, this stuff is manna for me)

would read this article

^^^^^^

Me too. Get writing!

if you have any questions about sheffield united finances then feel free to post them to ☰☰☭☰☰ SHEFFIELD UNITED ☰☰☭☰☰ THE OFFICIAL THREAD ☰☰☭☰☰

new board not as yet proving a boon to productivity tbh

I've done work experience and some temp work at a football club. I did a degree in International Business, and was all geared up for pursuing a career in the football industry. After recent events at Liverpool and a conversation with someone in the know, I no longer want anything to do with football. I'll stick to being a fan.

Crikey. Without saying too much, what in particular puts you off?

Oh nothing sinister, I've not been told anything groundbreaking or anything. The people I've worked with were amazing. I just came to the conclusion that I don't think I want to get that close after all.

the same thing happened to me, but with socks instead of football

also thks for running with thread, hope to be able to contribute more to it than sad sock stories (lol ilx)

Multiple xp to Ismael (re: 'type 3 debt'):

The thing is if you load ALL the debt onto the club then you have ZERO personal exposure, so it's a risk-free venture. It doesn't matter if the business "has enough spare capacity that it can afford to throw off spare cash at the top" - maybe it can't. Maybe it can't meet the interest payments. But you still lose nothing, because you've put nothing in. The club can go bust, but you're not hurt, you just shrug and say "Maybe next time it'll work out better" then move onto the next club.

essentially the club income is paying off your own personal debt, like, say, yr typical small business startup loan?

It's more like 'here's a business that can afford a parasite, come and join me in the endeavour'. I'd be surprised it's legal if it didn't actually happen, seeing as the whole scheme is essentially irrelevant to the business and interests of the company. I can only assume the principle is that you can do what you like with it once it's yours, but it's just surprising that you can act that way in capacity as an office-holder of it.

I can't think of a business better-suited to harbouring such a parasite than Man Utd btw - generating huge amounts of cash in a conservative business, with a massively-protected competitive position, against a background of industry-wide growth.

Schumpeterian Creative Destruction going on imo, these yanks are tearing up the old game and bringing something new and fresh to the market.

http://blog.emiratesstadium.info/archives/8072 a quick and easy guide to the figures arsenal released. its quite different to the situations of our immediate rivals.

This book's released on 9th November. Looks like it'll be a good'un.
http://www.amazon.co.uk/dp/0955925339

Synopsis

As billionaire ‘super-benefactors’ fight for the right to own English football clubs, Pay As You Play takes a detailed look at the correlation between success and transfer spending.

Tactics, motivation, fitness and luck play a part; but is an expensive squad increasingly essential for success?

Which managers have excelled in the transfer market? And who blew their budgets on bad buys? Which clubs punched above their financial weight, and which ones punched well below theirs? What players proved to be great value for their price tag, and who ended up as a shocking waste of money?

By converting all Premier League transfer fees since 1992 to current-day prices – using our specially devised Transfer Price Index (TPI) system to give precise ‘football inflation’ figures – teams could be accurately assessed against one another, whether from 1993 or 2010. How would the prices paid for Dean Saunders, Roy Keane or Frank Lampard compare with Thierry Henry, Wayne Rooney or Robinho?

All 43 clubs to have played in the Premier League up to May 2010 are analysed, with noted writers and journalists – including Jonathan Wilson, Gabriele Marcotti and Oliver Kay – also providing their views on the club they support or report on.

All in all, it makes for an entertaining and revealing read on the world’s most popular game, and its most appealing league.

yes!

ooooh would read. and then act even more smug.

^ cosign

United still trying to flog season tickets to all and sundry, now on a pro rata basis two months into the season:
Dear Supporter

The 2010/11 season is well and truly underway and the Theatre of Dreams has already seen some great football with plenty of goals and moments to remember. We have just released some fantastic seats in the South Stand at pro-rata pricesand we also have limited numbers of seats available in alternative areas within the stadium. Don't miss this opportunity to secure your own seat for the remainder of the season and support the Reds in their campaign to reclaim the Barclays Premier League.

All Season Tickets sold over the next 2 weeks will be effective from (and including) our home game vs.Tottenham Hotspur on Saturday 30 October. Please see below for a list of areas where we have seats available, complete with re-calculated prices. Don't forget that we have Season Tickets available for juniors in North Stand tier 3 for just £150.

New pro-rata (adult) prices as follows:

North Stand Tier 3 - £495.00 (Over 65s - £247.50) (Juniors - £150.00)
East Stand Tier 2 - £540.00 (Over 65s - £270)
North East / North West Quad T1 - £555.00 (Over 65s - £277.50)
North East / North West Quad T2 - £615.00 (Over 65s - £300)
South Stand Lower - £645.00 (Over 65s - £300)
North / South Wings - £690.00 (Over 65s - £300)
North/ South Stands Centre - £735.00 (Over 65s - £300)

If you're interested in purchasing a Season Ticket, call 0161 868 8000(Option 1)from 8am to 8pm weekdays, or 9am to 5pm on Saturdays and Sundays.

This won't stop know-nothing journalists still referring to the fabled 'waiting list' tens of thousands long.

Meanwhile they've decided to close two sections of the ground for the Carling Cup match against Wolves due to low ticket sales.

That sounds worryingly like Celtic who have been half-season tickets and five-game packages and the like for a couple of years now, and closed the top tier of all stands for the recent cup game against SPL opposition (OK, only Caley Thistle, but the game was only £10 for season ticket holders, and was still pretty empty).

The Celtic website has been showing photos taken from various parts of the season and going "Seat of the Day! This could be your view!"

Various parts of the season?

stadium. it's late.

Why are attendances at United down? Beyond just Ronaldo being gone? I can see that financially things may not be rosy but the on-field product is still really pretty good?

Ailsa, just out of interest:
1) Do Celtic fill the ground for most/all home league games?
2) What proportion of the crowd are season ticket holders?

Is it? 10 years ago they were undoubtably watching the best team in the world, now they are watching Owen and Macheda up front not being able to break down a defence with Titus Bramble in it.

xpost

Like no offense to the Utd fans here but we can establish many are glory hunters, right? And the only way for Utd is seemingly down for the near future. That and protesting by not spending money to pay off the debts of people they don't want owning the club.

Also if you gave up yr season ticket its not like you are going to be struggling for decades to get one back atm or post-glazer mess.

1) not any more, but they used to. Last season was the first time in a very VERY long time that there was a public sale of tickets for the Rangers game
2) no idea off the top of my head, tbh. Don't think there's a huge walk-up crowd, hence empty seats all over the place.

I'll see if I can google up some stats for you.

some xposts

Why are attendances at United down? Beyond just Ronaldo being gone? I can see that financially things may not be rosy but the on-field product is still really pretty good?

I don't think attendances are substantially down, but demand is substantially down. If you go back maybe seven or eight years, there really was excess demand for season tickets and significant excess demand for members' tickets for individual matches. That has largely evaporated: partly due to the huge price hikes inflicted post-takeover (on top of the huge inflation-busting price rises at *all* football grounds from the late-80s onwards), and partly due to two waves of boycotting. They're now reduced to putting season tickets and matchday tickets on general sale and hawking them wherever they can, but there's still just about enough interest to more or less fill the ground for league matches.

I was a waiting list for a year before I got my first season ticket in 1998 - was sharing one with my brother before that. Waiting list would have got longer after Martin O'Neill showed up. Can't find figures, but I reckon it's dropped from about 45k season ticket holders to around 30k (home support capacity in the region of 57k, I think). There's always been a large allocation to supporters clubs so the season ticket thing isn't necessarily an indication of regular attendance.

I've seen a definite decline in the people who go anyway, from being able to sell out almost every game in the league. I've toyed with the idea of not renewing the last couple of years, but from a personal financial point of view rather than a lack of support for the club. Any evidence that others are doing the same would be purely anecdotal.

Just saying, though. Celtic were full to capacity a few years ago, it was difficult to imagine that they'd still be hawking decent seats on the halfway line seven games into the season to anyone that wanted them.

was *ON* a waiting list. fucking hell, I can't type, so don't expect any coherent points. I suspect darragh has a point about the glory hunters all fucking off again though, which can happen to just about anyone. Even Man Utd.

1) Do Celtic fill the ground for most/all home league games?
2) What proportion of the crowd are season ticket holders?

(sorry to Ailsa if she's typing something up - ah xpost she already did)

1) No, average attendances are down to something around 47000 from 58000 a couple of years back
2) Vast majority I reckon. When we were selling out 60000 we had 53000 season ticket holders.

I get season tickets for my sons for £50 each - five years ago it would have cost hundreds extra to upgrade to a parent and child seat.

It'll be interesting to see if we sell out the Rangers game at the end of the month...

lol I was about to say onimo would probably have the stats to hand, so good to see they don't vary massively from my estimates, apart from number of season tickets sold, I was reckoning on the supporters bus allocation as still being a thing separate from season tickets, but I haven't been on a supporters bus since 1992, so I have no idea if that's actually true really, I'm just going on stuff people say on the internets.

...and people coming in to pick up bundles of actual paper tickets every time I've had occasion to be in the ticket office.

http://www.bbc.co.uk/sport/0/football/17197269

Villa lost 53m (pre-selling Young and Downing) last year. It is amounts like this which make me assume the league is fucked, long term. Lerner is not going to want to pay that off.

Swiss Ramble does Arsenal

That's a great piece. It'll be really interesting to see what happens in the battle between Stan Kroenke and Alisher Usmanov over the next few years as well. The latter's possibly the most transparently crooked man with a stake in a major European club (with the possible exception of Akhmetov at Shakhtar) but he has the resources to put a pretty attractive bid together.

Berlisconi surely

From the link that IK provided

There are clearly issues with Arsenal’s equitable wage structure, which means that the best players like Robin Van Persie are not particularly well remunerated (by modern standards), while fringe players like Abou Diaby, Marouane Chamakh and Manuel Almunia are handsomely rewarded for their efforts. This was epitomised recently by Johan Djourou’s new £50,000 a week contract, which seemed more in recognition of his frequent interviews with Arsenal.com than his defensive ability.

#shotsfired

xp, as bad as Berlusconi might be, i think the worst allegation i've heard against him is that he got started by taking money from the mafia to build a business empire and might have done favours for them along the way.

Usmanov is the mafia.

'fringe' is a hell of a euphemism for 'utter shite' imo

Djourou could get a massive contract hosting the National Lottery and game shows for the BBC, no wonder Arsenal are throwing money at him.

Arsenal’s expertise can be evidenced by two great statistics: (a) the last time that they reported a loss was way back in 2002; (b) in the last four years alone, they have accumulated staggering profits of £153 million.

Only another 120m to go and we pay off the stadium. I'm convinced they are trying to pay it off early. I just wish that were this the strategy, they'd fucking say so. Otherwise that 153 fucking million, could help us ummm, maybe improve a little.

I thought it the article that the board specifically said they weren't going to pay it off early because it was 'good debt'

here it is

Many ask whether it would be possible for Arsenal to pay off the outstanding debt early in order to reduce the interest charges, but Gazidis has previously implied that this is unlikely, arguing that not all debt is bad, “The debt that we’re left with is what I would call ‘healthy debt’ – it’s long term, low rates and very affordable for the club.”

Yeah sorry, long article, should have read the whole thing before commenting etc.

So basically it is 2014 or bust? hmmm.

So hang on, the owner's plan is to get Arsenal debt-free, then flog it for substantially more than they paid for it, leaving the owners filthy rich and Arsenal FC and the fans with a team fully capable of mounting a serious challenge for a Europa League spot? Is that right?

Owners already did that/died and now Kroenke is hoping to do that again, I think.

Swiss Ramble on Villa
http://swissramble.blogspot.com/2012/03/aston-villa-prophets-and-losses.html

P fucking bleak. Wages-to-turnover ratio of 91%! just for starters.

I don't know what Lerner wants out of this tbh

To lose £100m+ it seemingly

Should be no 'it' there.

It's hard think of a way to blow £100m without having some kind of fun, but that might be it.

Thing is from the outside looking in you would think it would have been possible to spend £100m less and still be in roughly the same position they are in now.

Manchester United Ltd, the world's best-supported soccer club, filed with U.S. regulators on Tuesday to raise up to $100 million in an initial public offering of its Class A common stock.

The company told the U.S. Securities and Exchange Commission in a preliminary prospectus that Jefferies, Credit Suisse, J.P. Morgan, BofA Merrill Lynch and Deutsche Bank Securities are underwriting the IPO.

I'm still amazed by people trying to make money long-term from football. It's football! All you need is a couple of season of bad injuries and your'e fucked! This financial asset-stripping is only good for people who don't like football.

If anyone fancies part owning Panathinaikos :

http://soccernet.espn.go.com/feature/_/id/1126919/paraskevas:-panathinaikos-reborn-under-fan-ownership?cc=5739#

http://bundesligafanatic.com/financial-fair-play-the-implications-for-the-teams-in-the-bundesliga/

Great article on how things are working out in the Bundesliga

That's excellent.

What I'm having trouble with is how the new, enormous EPL television deal is going to feed in to conditions elsewhere on the continent. Are English clubs going to sweep the board for the next five years?

Not too sure. If we pretend that wages in the Prem stay exactly the same as they are now and then add in the new TV money how many clubs in the league would still fall foul of ffp?

Are the majority of clubs here living so far beyond their soon to be increased revenue that they wouldn't be able to increase salary anyway?

the Glazer family have taken the unusual step of buying out DHL, so certain are they of negotiating even greater revenue

I'm giving up trying to understand this stuff

surely it's pretty simple, they want a new and bigger deal immediately so they end the dhl deal now?

tbf I did get that bit, it's why anyone would pay even more that is the mystery

Bolton in £163.8m of debt. Turnover £25.8m. I don't see how they can ever hope to pay that back.

Barcelona cannot register any new signings, not Memphis Depay, Sergio Agüero, Eric García or Emerson Royal, after exceeding the La Liga salary limit.

Despite selling Konrad de la Fuente, Jean-Clair Todibo, and Junior Firpo, Barcelona need to reduce their wage bill by €200,000.

— Zach Lowy (@ZachLowy) July 5, 2021

Extraordinary

Lmao. They are supposedly even going to pay some players to leave on a free, like Pjanic

hmmm, that may account for Trincão coming to us

lol yeah next tweet mentions that

€200,000 can't be the right figure there?

Saw a clarification that its about the weight of pesos in kilos or some similar slang!

Also just presumed it was per week, and with messi not yet signed i figured that was..... serious

Oh haha yes I suppose it could be a week. Though even that is probably only a mid-range player or three for them.

i assumed that was a weekly figure i guess, Football Manager not always the best metric for understanding this stuff

Pjanic is on about €300k a week so no major surprise he didn’t volunteer to cancel his contract.

Also Messi apparently earns 100 times more than Junior Firpo.

I am keen that Pjanic doesn't come to the Premier League because of the temptation his name would cause to every my-age, indie-arsed, Egg-from-This-Life football journalist with an untreated Smiths obsession.

Do ittttt