Football's Magic Money Tree

[Chester Perry]

Throughout the lockdown Simon Chadwick has been running a series of Webinars for his employer emLyon Business School - as you would imagine there is a lot of fascinating discussion and insight - they have all been made publicly available - they cover a broad range of issues, as you would expect. Watch, learn and enjoy.

https://emlyonx.em-lyon.com/courses/cou ... 0_S1/about

[Chester Perry]

Football Conference organiser World Football Summit have also got onto the webinar bandwagon - their first offering is Sport’s great comeback: Fighting back from COVID-19 - Interestingly (given they are the source of revenue for sports organisations in the behind closed doors environment) the panel is made up of broadcasters and sponsors, rather than sports people.

Sport’s great comeback: Fighting back from COVID-19

https://www.youtube.com/watch?v=hU24aWF644s

[Chester Perry]

take a look at the highly leveraged/venture capital funded OTT industry, that was struggling to get enough subscribers to cover costs before the pandemic. that include DAZN (whose balance sheet looks like pure folly to many observers) and Eleven sports. Recent seasons have seen both La Liga (overseas) and Serie A (domestically) have distribution deals collapse and be retendered as the rights holder found the economics didn't add up and walked away. Even the major media organisations like Comcast (Sky, NBC Sport) and Disney (ESPN) are haemorrhaging subscribers and recently reported major losses in revenue.

Then remember they are financed by discretionary spend - subscribers and advertisers, and the global economy is on a nosedive when it crawls out from lockdown. Failures are inevitable at some point.

DAZN owners looking for new funding/investors as the costs of lockdown bite, they are prepared to sell an equity stake for it, would even consider selling the whole shebang.

https://www.sportbusiness.com/news/dazn ... -downturn/

[Chester Perry]

It is not like we didn't know already - "Legal challenges inevitable whatever the final form of English football’s ‘Project Restart’ "

https://www.sportbusiness.com/2020/05/l ... t-restart/

[Chester Perry]

This is a truly illuminating account of how the Chinese have consistently failed to develop (and in reality gone backwards) as a football nation - from someone who has lived and breathed the game there for close to 60 years

https://wildeastfootball.net/2020/05/zh ... ree-years/

[Chester Perry]

This could be the most significant move yet in stalling the Saudi backed take over of Newcastle - The World Trade Organisation has ruled that pirate station BeoutQ is Saudi owned

https://www.theguardian.com/football/20 ... l-is-saudi

[Chester Perry]

Article in Forbes.com on what the return to live spectator attended sport could look like in America

https://www.forbes.com/sites/maurybrown ... to-return/

just cannot see how much of that could work in grounds like Turf Moor

[Chester Perry]

The point I was making was that Sky were prepared to do the deal even though they had the rights, I thought it was significant that it was done with the highlights broadcaster (who also happened to own a package for live Sunday matches).

Key elements for the Premier League and the domestic broadcasters are - Government Pressure for public access, no Saturday 3 pm block for "Ghost game" periods of operation (ratified by the Government and UEFA) though more particularly preservation of rights values and income streams.

The Austrian approach would allow for a national public service broadcaster to show a live game at 3pm on a Saturday, the match selection coming after both Sky and BT having made their match selections. That would allow them to maximise their revenues from their broadcasts. Payment could be made to Sky/BT or direct to the Premier League, the Premier League having already discounted to Sky and BT (Remember Amazon just have two complete rounds of mid week games).

I am pretty sure the government would want free to access football through the whole period fans are barred from attending

the key info in this article is that pressure from the government for some matches to be shown free to air has led to a change of heart over the 3pm blackout from the Premier League in a behind closed doors environment - from the Times

Rivals threaten BBC bid for Premier League matches
Martyn Ziegler, Chief Sports Reporter
Wednesday May 27 2020, 12.01am, The Times

Moves to allow the BBC to screen some of the behind-closed-doors Premier League matches have run into stiff opposition from at least one of the pay-TV broadcast partners.

The government is pushing strongly for a “decent number” of the 92 remaining matches this season to be free to air and a few of those to be given to the BBC, which usually has only highlights rights.

It is understood BT Sport has told the Premier League that it pays a premium price for access to live matches, and although it can understand why the BBC should be allowed extra highlights packages, games can still be made available free to air through other streaming platforms or Freeview.

Under the 2019-22 deal, Sky pays £1.14 billion per year for 128 games a season, BT Sport pays £295 million for one package of 32 games and about £60 million for another package of two rounds of ten matches. The BBC pays £133 million annually for the highlights, while Amazon pays about £30 million a year for two rounds of ten matches.

The government’s position is that matches need to be made more widely available given that fans will not be allowed in the stadiums, and ministers want to minimise the risk of people without pay-TV subscriptions going to friends’ homes to watch matches.

All of the remaining 92 top-flight matches will be played without fans and shown live on TV and Saturday afternoons have been identified as a window for free-to-air games after the usual TV blackout was lifted last month. The clubs will receive more details about the broadcast schedule at a meeting tomorrow but it has already been decided that the games will not be played simultaneously to maximise availability for TV audiences.

Sky and BT Sport already have the rights to 47 of the 92 games. As revealed by The Times previously, a draft plan would mean 32 of the remaining 45 games go to Sky, eight to BT and five to Amazon and/or the BBC.

Last week, Oliver Dowden, the culture secretary, stated the government’s desire to see some games made available to all. He said that “if we can do it safely”, the removal of the Saturday 3pm broadcasting blackout “creates an opportunity for us to be able to get some Premier League games free to air”.

“I hope we can sort this out and also hope we can get more money going into the sport of football,” he said. “I think we can find ourselves in a win-win situation.”

The Premier League shareholders’ meetings today and tomorrow will be led by the new independent chairman Gary Hoffman, after his tenure was brought forward from June 1.

Filings at Companies House show Hoffman was appointed as a director on May 15, and he has already been involved in planning for Project Restart to have matches resumed.

The 59-year-old investment banker was previously the chairman of the Football Foundation, which provides funding for grassroots facilities. He has been chairman of Visa Europe, a vice-chairman of Coventry City, the team he supports, and was appointed to lead Northern Rock through its government bailout. He began his career at Barclays, where he rose to positions including group vice-chairman and the chief executive of Barclaycard.

[Royboyclaret]

Chester.....Any sign of an amended version of Football Shorts part 2 ?

The original hardly shows Burnley in a good (or fair) light.

[Chester Perry]

Chester.....Any sign of an amended version of Football Shorts part 2 ?

The original hardly shows Burnley in a good (or fair) light.

I didn't think we did too badly even with those figures

There has been no change - and I suspect the revised figures will filter through to part three (not convinced there will be a republished part 2 (that would be a lot of work) - it shouldn't be too difficult for us to work out the figures for our club as the method used by Paul has been clearly stated. Or if you have time on your hands you could do it for the 17 clubs in the league that were there last season - Paul conveniently has a reference to all the Companies house addresses for the filing pages

https://theesk.org/premier-league-club- ... -accounts/

[Chester Perry]

This is hugely disappointing - the Man City CAS hearing will be in private not the public one many were hoping for

https://www.si.com/soccer/manchestercit ... cas-appeal

[Chester Perry]

Tranmere Rovers look like they are heading for relegation on a PPG basis - This is a club who have consistently followed a strategy under it's current ownership of spreading it's spend across the season and strengthening in the January window which has shown a distinct uptick in points return each season - they were on a 3 game winning run when the season paused.

Some fans have done an analysis of PPG for every season with the same pause point of March 13th - the difference in actual outcome and those that PPG offer are stark.

https://www.roversrearguard.com/news/pp ... king-ball/

It is the kind of stuff the lawyers love.

Tranmere have put forward a plan for a more statistically correct approach to PPG - which should help them - anyone think this will go through

https://www.tranmererovers.co.uk/news/2 ... gM.twitter

I must say I do have some sympathy for them

[Chester Perry]

I am sure that this is interesting reading for those of you with subscriptions - The Athletic looks at how the finances have changes at Brighton in the last decade, particularly (the one I keep talking about) cash flow, and how the club is currently being forced to plan in the scenario of relegation of remaining in the Premier League and how different that is likely to be

https://theathletic.com/1828569/2020/05 ... ed_article

[Chester Perry]

The point I was making was that Sky were prepared to do the deal even though they had the rights, I thought it was significant that it was done with the highlights broadcaster (who also happened to own a package for live Sunday matches).

Key elements for the Premier League and the domestic broadcasters are - Government Pressure for public access, no Saturday 3 pm block for "Ghost game" periods of operation (ratified by the Government and UEFA) though more particularly preservation of rights values and income streams.

The Austrian approach would allow for a national public service broadcaster to show a live game at 3pm on a Saturday, the match selection coming after both Sky and BT having made their match selections. That would allow them to maximise their revenues from their broadcasts. Payment could be made to Sky/BT or direct to the Premier League, the Premier League having already discounted to Sky and BT (Remember Amazon just have two complete rounds of mid week games).

I am pretty sure the government would want free to access football through the whole period fans are barred from attending

So yesterday the chaps at Vysyble retweeted a blog piece they did on the Comcast purchase of Sky, it made clear that at the price of the bid at the time, £14.75 a share, that there would be significant challenges for them to recoup their (highly leveraged) investment given Sky's decreasing returns over the previous 6 years. (highly technical but the basic message is how I have presented)

https://vysyble.com/blog-9th-august-2018

of course the bidding carried on after this was written - the final price £17.28 a share - close to £5 billion more than that the vysyble boys did their analysis against

https://www.ft.com/content/b402969a-cbd ... 069bde0956

as @vysyble said yesterday - Given what we know now, it all looks rather....ambitious.

[Royboyclaret]

I didn't think we did too badly even with those figures

There has been no change - and I suspect the revised figures will filter through to part three (not convinced there will be a republished part 2 (that would be a lot of work) - it shouldn't be too difficult for us to work out the figures for our club as the method used by Paul has been clearly stated. Or if you have time on your hands you could do it for the 17 clubs in the league that were there last season - Paul conveniently has a reference to all the Companies house addresses for the filing pages

https://theesk.org/premier-league-club- ... -accounts/

Looking again it appears the figures are changing, literally as we speak. The EBITDA for Liverpool which showed as £10.86m last evening is now £122m, very close now to the Swiss Ramble figure. The original Wages figure for Burnley was £103m but now shows as £87m, but the first three charts/graphs, I think, are still based on £103m which tends to skew the percentages quite significantly.

[The esk]

Looking again it appears the figures are changing, literally as we speak. The EBITDA for Liverpool which showed as £10.86m last evening is now £122m, very close now to the Swiss Ramble figure. The original Wages figure for Burnley was £103m but now shows as £87m, but the first three charts/graphs, I think, are still based on £103m which tends to skew the percentages quite significantly.

I will change the charts today - I was given a data set by someone in the industry which unfortunately had some errors in it. I have cross checked most now with my own data. Apologies to all

[Chester Perry]

Looking again it appears the figures are changing, literally as we speak. The EBITDA for Liverpool which showed as £10.86m last evening is now £122m, very close now to the Swiss Ramble figure. The original Wages figure for Burnley was £103m but now shows as £87m, but the first three charts/graphs, I think, are still based on £103m which tends to skew the percentages quite significantly.

If Paul is to redo - then I think it will require a full republish with an accompanying note as it will be quite different to the original that a lot have b people have read and taken as a de facto statement - It is only because we have developed an (worrying level?) of interest in these numbers that we noticed discrepancies beyond our own club.

[Chester Perry]

I will change the charts today - I was given a data set by someone in the industry which unfortunately had some errors in it. I have cross checked most now with my own data. Apologies to all

It is a great thing you are doing Paul

[Chester Perry]

Tom Reed on Football365.com is scathing about the way football has handled itself during the pause - and probably has every right to be

https://www.football365.com/news/footba ... rus-crisis

[The esk]

Charts changed too - I have re-written the relevant words also - thanks for pointing out the errors and your patience

[Chester Perry]

Charts changed too - I have re-written the relevant words also - thanks for pointing out the errors and your patience

Cheers Paul

link to the article - https://theesk.org/2020/05/25/football-shorts-part-ii/

[Royboyclaret]

Charts changed too - I have re-written the relevant words also - thanks for pointing out the errors and your patience

Many thanks, Paul. No-one is more aware of the complexities of football finance than we are on here, it can be a minefield at times. Thanks again.

[Royboyclaret]

If Paul is to redo - then I think it will require a full republish with an accompanying note as it will be quite different to the original that a lot have b people have read and taken as a de facto statement - It is only because we have developed an (worrying level?) of interest in these numbers that we noticed discrepancies beyond our own club.

Worrying level?....Seriously?....perhaps better back off for a while then.

[Chester Perry]

Worrying level?....Seriously?....perhaps better back off for a while then.

It was a question - we are somewhat geeky about it in the minds of many I would think - even though it has become intrinsic to the way the game operates

[Chester Perry]

Serie A take Sky to court to preserve it's rights income - this could be a distinct marker for what it s to come between rights distributors and leagues

https://www.sportbusiness.com/news/lega ... njunction/

[Chester Perry]

Rory Smith in the New York Times takes a look at why - Over the last 20 years, football has quietly gone through a sort of great replacement: famous old names falling and smart, young clubs replacing them. It happened to Leeds and Aston Villa and Deportivo, and it happened a LOT in Germany.

Soccer’s Landscape Was Already Shifting. Then an Earthquake Struck.
Over the last 20 years, some once-grand clubs have been left behind by insurgents with new money and big ideas. In Germany, their fate may be a harbinger of what is to come after the shutdown.

By Rory Smith - May 27, 2020, 1:00 a.m. ET

DÜSSELDORF, Germany — The German language, as should be expected, has a term for it: Grössenwahn. There is not a direct, precise English translation. Megalomania, maybe, though perhaps hubris is better. Grössenwahn implies overestimating your abilities, possessing delusions of grandeur.

It is the word Oliver Voigt reaches for as he tries to describe the fate and fall of Kaiserslautern, the German third-division club he has been tasked with restoring to something resembling its former self, now, in a precarious moment for the sport, with even less margin for error.

This is, after all, not a team accustomed to such reduced circumstances. Traditionally, Kaiserslautern is one of Germany’s grandest clubs. As recently as 1998, it was the Bundesliga champion, and a year later it made the quarterfinals of the Champions League. Its stadium was a venue for the 2006 World Cup. It holds 50,000 people, and is named after Fritz Walter, the captain of the West Germany side that won the 1954 World Cup.

Kaiserslautern had five players on that team, more than any other club. “That victory gave the whole nation its dignity back after the war,” Voigt said. “Winning the World Cup built German identity, and five of the team were from this club. Kaiserslautern was a club in the center of German emotion.”

Generations of Germans, he said, saw the club as a peer of Bayern Munich, Borussia Dortmund and the rest of the country’s great powers. Now, though, Kaiserslautern is “on its knees.” It has spent most of the last decade in Germany’s second division. In 2018, for the first time in its history, it sank into the third. (Before the current season was suspended, it was midtable.)

“There is an easy answer to what happened,” said Voigt, who was recruited late last year to be the chief executive. “If you spend more than you earn, if you act like you are bigger than you are, you will end up like F.C.K.”

Kaiserslautern might be an extreme example, but it is far from alone. Over the last two decades, a current has swept through European soccer, drastically shifting the game’s landscape. An array of traditional, big-city powerhouses has slipped from its perch, caught and overtaken by a class of insurgent teams, fueled by cash and ambition, unencumbered by history.

It has happened in England, to Leeds United, Nottingham Forest and Aston Villa. It has happened in Spain, to Deportivo de La Coruña, Racing de Santander and Real Zaragoza. It has happened in Italy, to Torino, Sampdoria and Genoa, and in France, to Marseille and Bordeaux.

There were others, too, teams that seemed on the verge of slipping into the abyss, great names that had been treading water for just a little too long: West Ham and Newcastle, perhaps, or Fiorentina, or even A.C. Milan.

All found themselves in the same trap: first left behind financially by the game’s superpowers, then caught in the slipstream of the young, smart and nimble — not just teams like RB Leipzig, Manchester City and, at a European level, Paris St.-Germain, products of, and ambassadors for, either corporate conglomerates or nation states, but also the likes of Wolves, Atalanta, Sassuolo and Eibar.

It was in Germany, though, that the pattern held most clearly. Kaiserslautern has been joined in the third division by 1860 Munich; next season, Karlsruhe might be there, too. The second Bundesliga currently contains both Stuttgart and Hamburg, emissaries of two of Germany’s biggest cities and former champions. Werder Bremen, the German champion in 2004, could drop into the division next season.

Each of these case studies can trace its demise to a different set of circumstances, of course. Some teams can point to financial mismanagement, others to chaotic ownership. Some have just made poor decisions, and then made more in trying to fix them.

But there are common threads that bind the clubs, and as soccer begins to come to terms with the greatest crisis it has faced in a lifetime, it is possible to discern in them a warning for what may come next.

The coronavirus pandemic represents an existential threat even to the biggest teams in Europe, the ones that regard themselves as too big to fail. As Karl-Heinz Rummenigge, the chairman of Bayern Munich, said, it is already a crisis. Failing to play out the season, which resumed May 16, and thus being forced to hand money back to broadcasters, would make it a disaster.

The prospect of playing games behind closed doors for the rest of the year, Rummenigge said, would “have a huge impact” on everyone: The loss of revenue from ticketing, corporate entertainment and merchandise is “something everyone has to care about, and maybe the big clubs even more.”

The risk, of course, is that clubs will not adapt as they should to that new reality, that they will continue to spend more than they earn, to think they are bigger than they have become, to succumb to the temptation of Grössenwahn. As the fallen giants can attest, after all, when circumstances diminish, the pressure to succeed does not always follow suit. Not straightaway, sometimes not at all.

“If we win one game, the assumption is that we will be promoted,” Kaiserslautern’s Voigt said. “If we win a few, people talk about the Bundesliga. There is immense pressure on the club. It is natural: Apart from our youngest fans, everyone in the stadium saw this team win a title. For them, where we are now feels unreal.”

That pressure leads to a spiral of quick fixes and kneejerk reactions. Managers, directors and ideas come and go, none of them seen through to their conclusion, none given a real chance to succeed.

“The staff here have seen so much change,” said Thomas Hitzlsperger, once a player for Stuttgart, and now, at 38, the club’s chief executive. “There has been no consistency. It is the only club in a big city. The fans get frustrated quickly. We have Bosch and Porsche and Daimler here. They expect to see the best. The club has lacked patience to have a plan and execute it.”

At the same time, there is a built-in resistance to new ways of thinking, a tendency to rest on the laurels of tradition. Hitzlsperger noted, even before he became chief executive, how “slow-moving” Stuttgart was; he persuaded the club’s board to hand him control by vowing to help the club become more modern. He talked, at his interview, of how Stuttgart could still be “proud of its history,” but needed to learn to be a “21st century club.”

The obvious contrast here, of course, is with Leipzig and Hoffenheim — two clubs effectively founded in the last two decades, teams whose whole identity is tied up in modernity. But those are not the only reference points for Germany’s faded upper middle class.

“Mainz and Freiburg are not big-status clubs, but they are regulars in the Bundesliga,” said Jonas Boldt, sporting director of perhaps the biggest example of a fallen power in European soccer, Hamburg.

The fabled Dino of German soccer — so-called because it had never been relegated — and a one-time champion of Europe, Hamburg finally slipped out of Germany’s top flight in 2018. Its demotion could serve as the moment that the new order finally toppled the old, when European soccer’s traditional middle class gave way to a younger generation of not just teams but ideas.

Its demise, in Boldt’s eyes, was the conclusion not just of a “vicious circle” of bad decisions, but a sign that the club had become too comfortable in itself, too content to stare misty-eyed at what it used to be. “Tradition and romance are important,” he said. “But you have to work professionally to try to develop something.”

Boldt joined Hamburg last summer, after it had spent a full season in the second division. Like Voigt and Hitzlsperger, he was chosen to take his club back to where it used to be.

All three men are ambitious, optimistic, energetic. All three are, for their posts, relatively young. Boldt, having built his reputation at Bayer Leverkusen, was lured to Hamburg by the “challenge” of building something lasting.

That challenge was fearsome before the pandemic. In the age of coronavirus, it is more daunting still. Kaiserslautern, Stuttgart and Hamburg must learn to function on reduced budgets, in an alien, sterile environment, in an atmosphere of deep uncertainty.

But those three, at least, had already identified the need for change, realizing that instead of resisting the tide, they needed to turn it. There will be many others, though, in this bleak new reality, for whom that realization has not yet dawned.

Some may look at Kaiserslautern, Stuttgart, Hamburg and the rest and learn the lessons of their travails. Others, believing themselves insulated by history, may stumble into precisely the same traps, fall into the fissures, swallowed up by this fractured, shifting landscape.
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It is nothing that new of course - as this twitter thread shows - but it is feeling more definitive

https://twitter.com/RorySmith/status/12 ... 1570274307

and yes I do feel that - “If you spend more than you earn, if you act like you are bigger than you are, you will end up like F.C.K.” is a definitive statement of our times

[Chester Perry]

This is so surprising that it is almost shocking - The Spanish government is considering the return of fans from the beginning on the Spanish 2020/21 season (currently forecast to begin September)

https://apnews.com/b71d27fd4b940f404e7ab7294a3e15e4

[Chester Perry]

Can you imagine this in the English or European game - from SportsBusiness.com as a result of financial mismanagement -

Chinese Football Association disqualifies 11 teams
Tom King, Asia Office - May 27, 2020

The Chinese Football Association has disqualified 11 teams from professional competition this year as part of its ongoing crackdown on financial mismanagement.

Another five clubs, including former Chinese Super League outfit Tianjin Tianhai, have withdrawn from professional football this year of their own accord due to financial problems.

The 11 disqualified clubs include four who competed in the second tier China League One last year and seven from the third division, China League Two.

The Xinhua news agency reported that the clubs were disqualified due to wage arrears. The CFA has been requiring clubs to submit documentary proof that they have paid players and staff on time.

The CFA has since last year introduced a range of measures aimed at improving the finances of Chinese clubs, including forming a club finance task force and introducing salary caps. Earlier this year, CFA president Chen Xuyuan said: “Our clubs can barely achieve sustainable development. The owners have invested a lot but earn little back, and this could be detrimental to Chinese football.”

The Covid-19 pandemic has exacerbated the financial problems. The CFA proposed clubs reduce wages of players and coaches by at least 30 per cent, in an official but non-binding proposal published earlier this month.

This season’s Chinese Super League was scheduled to start on February 22 but was delayed due to the pandemic. The CFA is now eyeing late June or early July to start the season.

[Chester Perry]

With the current plight of football finances, the potential prospect of a global recession if not depression, some observers believe the next cycle of TV deals are heading in a downward direction - others retain the hope that Google (YouTube), Amazon, Apple and Facebook will additional revenues through innovations such as discussed here - from Soccerex.com

Will You Join Football’s Watch Along Party?
25 May 2020

The digital landscape of football is one that is always evolving. From terrestrial television to satellite and the migration to streaming services, there is always another platform ready and willing to beam the beautiful game into millions of homes.

With services such as Amazon Prime dipping their toes into football’s televisual waters, many believe that the likes of Facebook, Google and Apple will not be far behind and when the next Premier League rights tender goes out, these media giants will want a sizeable share of what is on offer.
However, with the way the world has been shaped over the past few months, the way in which football is consumed and the platforms that are utilised, may have a far different look to them in the near distant future.

As supporters are unfortunately locked out of their usual fortnightly cathedrals, the race for innovation has begun and with Zoom meetings or Skype calls being all the more prevalent, this shared digital space is one that could soon synchronise with all forms of sport.

Whether you are 18 or 80, it seems that a new trend of ‘Watch Parties’ are in vogue and although it is a situation that has been enforced on so many, it is also one that people seem to be taking into their newfound stride.

As social interaction takes on less of a physical form and more of a technological one, it has opened the ability to collectively live in the moment and this enables football supporters to no longer watch a televised game in isolation.

At present ‘Watch Parties’ tend to have an air of illicitly about them, usually a third-party stream of a major league and one that if, word of mouth and viewer count gets too high, is usually closed down before the final whistle.

However, if leagues and rights holders can combine and offer a legal service instead, this could be the evolution of football viewing across the world and one that no one would have envisaged, even six months ago.

The MLS have already mooted plans for their official social channels to host “innovative technologies” and although there is no suggestion that these will be a cast iron replacement of over the top or terrestrial signals, this digital transformation will certainly compliment them.

Of course, this internet based boom will also open Pandora’s box to the multitude of YouTubers that currently host their own content and with the newfound ability to now serve as the commentator in real time, the next Martin Tyler or Peter Drury could be cutting his teeth to a worldwide audience.

With this development, it suggests an interesting question and one that asks, whether this means watching football in the 21st century will become more democratic and open to all, or will it simply find another paywall to hide behind?

Although the hopes of media altruism are anticipated by many, one must remember that the further technology advances within sport, the more opportunity there is to maximise any subscription revenues.

If anything these new platforms and the opportunities that they may provide, will almost be mana from heaven to entities such as the Premier League and with the likelihood that television rights values will now plateau at best, this gives them ability to reinforce any incoming financial bonanza.

With attendances unlikely to creep into the hundreds, let alone thousands anytime soon, now is the time to try something new and whether that be digital season tickets, or mass cup final viewings via a single clicked link, football is certainly going to be moving upstream within the next year.
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I am sceptical of this myself, though I am still somewhat baffled by the sheer volume of rights deals being signed at the moment and the sheer size of something like that £2 billion 6 year deal that the Premier League has agreed with Nent for the 4 Scandinavian countries - you have to hope the ink has dried on the deal if you are the Premier League - though you wonder in the current situation as to how posterity will view such a deal

[Chester Perry]

@Marcotti tells us why a US style salary cap would fail in Europe - from ESPN.com - I think he is right too

https://www.espn.com/soccer/english-pre ... -heres-why

[Chester Perry]

Bloomberg are reporting that English football has found an EU loophole so it can keep accessing young talent - unfortunately it is the multi-club model - the last line of this article is totally numbing

U.K. Soccer Finds EU Loophole to Keep Access to Young Talent

(Bloomberg) — Britain is out of the European Union but, through a series of seemingly unfashionable deals, its soccer teams may have found a way to keep one foot in the bloc as they search for the next Cristiano Ronaldo.

Pacific Media Group, which controls the U.K.’s Barnsley Football Club, is in talks to buy a lower-division team in France, co-founder Paul Conway said in an interview. The entertainment group also just completed last week its purchase of a majority stake in Belgium’s KV Oostende.

The negotiations follow a slew of similar moves by owners of teams including Manchester City FC and Leicester City FC. A benefit of these investments is that they offer U.K. clubs a way of retaining access to Europe’s youngest talent when the post-Brexit transition period runs out at the end of the year.

“Brexit will only accelerate M&A deals in Belgium and France,” Conway said by phone this month. “English clubs will want a presence in Europe, where they traditionally have picked up so many promising young players.”

Talent Pool
U.K. clubs have for decades been able to convince soccer stars from the continent to nurture their careers in England. Players from Belgium, France, Germany, Italy and Spain make up almost a fifth of those in the U.K.’s top division, according to Premier League figures.
“The Premier League’s success is partially due to its ability to attract global talent,” said Kieran Maguire, a lecturer on football finance at the University of Liverpool.

When the U.K. was an EU member state, FIFA transfer rules allowed its clubs to offer contracts to players in Europe from the age of 16, meaning they could secure future stars early without having to part with hefty transfer fees. This enabled Arsenal FC to lure Spanish players Cesc Fabregas and Hector Bellerin from FC Barcelona.

Manchester United Plc did the same with midfielder Paul Pogba, who arrived for his first spell in England from French team Le Havre. Starting January next year, in the absence of an extension to the Brexit transition period, FIFA rules mean the age at which U.K. clubs can contract European players will rise to 18. By that time, clubs from rival leagues could have already swooped in.

Deal Flurry
The sky-high amounts now being paid for the most skillful teenagers has been evidenced in recent years by the signings of French World Cup winner Kylian Mbappe by Paris St-Germain for 180 million euros ($197 million) and Portugal’s Joao Felix by Atletico Madrid for 126 million euros, according to BBC reports at the time of the deals.

“If an English club has a feeder club relationship with a club in the EU, they can still have access to European players at 16 years,” said Andrew Osborne, head of the immigration practice at law firm Lewis Silkin. “The feeder club will sign players and develop them for the English club, who will probably have right of first refusal to sign players.”

There has been no shortage of such deals. City Football Group Ltd., which owns Premier League champions Manchester City, said this month it agreed to acquire Belgian team Lommel SK. Talent development was among the reasons it gave for the purchase.

Owners of Leicester City and Sheffield United FC have also bought into Belgian teams in recent years. The acquisition costs make long-term financial sense, according to Pacific Media’s Conway.

“The values of some of these clubs compare to the value of a single player,” he said.

At Barnsley, Pacific Media assembled a squad of hungry young players, following a similar recruitment blueprint to that used by former U.S. baseball player Billy Beane when he was general manager of the Oakland Athletics. Beane, whose tactics featured in Michael Lewis’s 2003 book “Moneyball,” is a shareholder in Barnsley. The club gained promotion to the U.K.’s Championship division in 2019 but it has struggled in the higher league.

Higher Returns
The rationale for ownership of multiple teams goes beyond talent recruitment. It can be a way for owners to capitalize on the global reach of soccer and maximize lucrative sponsorship revenues, as well as help smaller clubs grow and become more competitive.

Controlling several clubs can bring higher returns, particularly if a company’s portfolio is anchored by the visibility of a renowned Premier League team, said Michael Broughton, a sports business consultant and former senior FIFA adviser.

That idea was validated when U.S. private equity firm Silver Lake agreed last year to pay $500 million to buy just over 10% of City Football Group. The Abu Dhabi-backed company owns teams in the U.S. and Australia in addition to its European investments.

Conway said club owners will increasingly look to follow the successful model of Red Bull GmbH, the energy drinks company that’s a backer of soccer teams in Austria, Germany, the U.S. and Brazil, and implement synergies across their organizations.

“You’re seeing the end of the independent football club,” he said.n the higher league.

[Chester Perry]

Macclesfield Town, as we know, have had financial issues for quite some time and been deducted points twice already this season for charges that included failing to pay players wages on time - recently the owner told an EFL disciplinary panel that he has £3m to cover the clubs expenses - so why have the clubs fans had to find money to keep them ticking over? - surely it is they rather than Stevenage who are more deserving of relegation to the National League

https://twitter.com/mjshrimper/status/1 ... 8497509376

[Paul Waine]

It was a question - we are somewhat geeky about it in the minds of many I would think - even though it has become intrinsic to the way the game operates

Hi Chester, keep doing the great work. I often look at your posts on this thread. Certainly helps me keep in touch with all the financial developments.

Here's to independent football clubs - though can the Clarets buy a couple of European feeder clubs?

UTC

[Chester Perry]

Hi Chester, keep doing the great work. I often look at your posts on this thread. Certainly helps me keep in touch with all the financial developments.

Here's to independent football clubs - though can the Clarets buy a couple of European feeder clubs?

UTC

Cheers Paul

at the current prices we probably could - but you have to ask if we would actually bring any players over

[Chester Perry]

Is this a sign of just which Premier League clubs are feeling the pinch most in the pause, or just another case of FSG not getting it - from the Guardian


Liverpool among clubs to argue against paying £330m rebate to broadcasters
Broadcasters argue closed-doors games devalue product
Premier League clubs will meet on Thursday

Jamie Jackson and Paul MacInnes - Wed 27 May 2020 17.47 BST

A group of clubs, led by Liverpool, will argue against paying a £330m rebate to Sky and other broadcasters at a meeting to discuss the matter on Thursday, despite the Premier League’s recommendation that it should be accepted.

The finance directors of all 20 clubs were informed on Wednesday of the sum by the Premier League, whose head of broadcasting, Paul Molnar, is leading negotiations. Sky is the prime broadcaster with rights to show 128 live matches a season, followed by BT Sport with 52, and Amazon with 20.

Because of the rights terms, 50% of money is divided equally with 25% awarded for live appearances and the other 25% dependent on league finishing position. This means the top six Premier League clubs will have to pay more back – around £30m each – compared to the approximate £10.75m by the other 14. Broadcasters have suggested staggering payments of the rebate over the next two seasons to help clubs hit financially by the pandemic.

Liverpool’s chairman, Tom Werner, questioned the rebate at a previous conference with the Premier League executive and he will do so again when the meeting commences on Thursday at 11am, with growing dismay at the size of sums involved.

A rebate is being sought because of contractual obligations going unfulfilled following the suspension of football in England in mid-March. The broadcasters also argue that given the remainder of the season will be behind closed doors should it, as hoped, be played out next month, the value of the product they have paid many millions for will be devalued.

Liverpool, along with a number of other clubs – Tottenham and West Ham among them – dispute this idea. They believe fans not being able to attend games will increase the premium on live televised matches, with interest in any game shown heightened by the paucity of other live sports. The temporary lifting of the 3pm blackout on matches in the UK means the broadcasters will be able to show more live and clubs believe the value of their investment will increase.

As things stand, Sky and BT have rights to 47 remaining games – the other 45 will be shared, with Sky wanting to broadcast 32, BT Sport wanting to show eight and the remaining five being split between Amazon and the BBC.
The desire of broadcasters to leverage dressing-room and technical-area cameras will also receive pushback from the clubs, with the stance being that if agreed now it will be difficult to deny similar access when the next rights sales occur.
Advertisement

Despite opposition from some clubs to paying the £330m rebate, David Kogan, who was the Premier League’s chief media rights adviser from 1998 to 2015 and a key architect of its global financial success, insists the full amount will have to be met. He told the Guardian: “The clubs are going to have to pay it whatever it is and there will be a formula that will be followed. Sooner or later they’re just going to have to pay the money out. They’ll have insurance, I imagine, to do that.”

Clubs will already be more concerned, Kogan believes, over whether or not the next round of TV rights, due to be negotiated this year, will match the £9bn generated for the three-year period up until 2022 given the fallout from the current crisis. “What is the Premier League’s capacity to earn another £9bn-£10bn over a three-year period?” he said.

“First of all, there’s the UK broadcasters: why would Sky, now owned by Comcast, or BT, necessarily want to spend £5bn on these rights when there’s very little competition? Secondly, there’s 200 other overseas broadcasters. If they’ve been affected by the pandemic, which they will have been, why are they going to go on bidding 20% more they’ve been doing up until now?

“If the Premier League isn’t going to bring in that money, where is the flexibility to find new cash? Ticket sales? Clubs are already costing their fans a fortune. Hospitality? It’s already been priced to the max. So the only way that clubs can then survive is by looking at costs. And the massive costs are agents’ fees and players, and at that point you’re affecting the product.”

New ideas may have to be considered, Kogan believes, to keep broadcasting deals on a par with what preceded the pandemic. “Saturday 3pm has been the holy grail of football rights selling for 50 years – [showing games now] might set a precedent,” he said. “Whatever the history used to be, money is a huge incentive for change and it’s not just the PL [that’s] going to lose money because of the pandemic, the FA will, too. I wouldn’t count it out at all.”

[Chester Perry]

It appears that SkySports have turned the subscriber tap back on as new live actual sport content begins to appear -

https://twitter.com/marcwebber/status/1 ... 1093246977

[Paul Waine]

Is this a sign of just which Premier League clubs are feeling the pinch most in the pause, or just another case of FSG not getting it - from the Guardian


Picking out a few sections of Guardian article:

A group of clubs, led by Liverpool, will argue against paying a £330m rebate to Sky and other broadcasters at a meeting to discuss the matter on Thursday, despite the Premier League’s recommendation that it should be accepted.

The finance directors of all 20 clubs were informed on Wednesday of the sum by the Premier League, whose head of broadcasting, Paul Molnar, is leading negotiations.

A rebate is being sought because of contractual obligations going unfulfilled following the suspension of football in England in mid-March. The broadcasters also argue that given the remainder of the season will be behind closed doors should it, as hoped, be played out next month, the value of the product they have paid many millions for will be devalued.

Liverpool, along with a number of other clubs – Tottenham and West Ham among them – dispute this idea. They believe fans not being able to attend games will increase the premium on live televised matches, with interest in any game shown heightened by the paucity of other live sports. The temporary lifting of the 3pm blackout on matches in the UK means the broadcasters will be able to show more live and clubs believe the value of their investment will increase.

Despite opposition from some clubs to paying the £330m rebate, David Kogan, who was the Premier League’s chief media rights adviser from 1998 to 2015 and a key architect of its global financial success, insists the full amount will have to be met. He told the Guardian: “The clubs are going to have to pay it whatever it is and there will be a formula that will be followed. Sooner or later they’re just going to have to pay the money out. They’ll have insurance, I imagine, to do that.”

Clubs will already be more concerned, Kogan believes, over whether or not the next round of TV rights, due to be negotiated this year, will match the £9bn generated for the three-year period up until 2022 given the fallout from the current crisis. “What is the Premier League’s capacity to earn another £9bn-£10bn over a three-year period?” he said.

“First of all, there’s the UK broadcasters: why would Sky, now owned by Comcast, or BT, necessarily want to spend £5bn on these rights when there’s very little competition? Secondly, there’s 200 other overseas broadcasters. If they’ve been affected by the pandemic, which they will have been, why are they going to go on bidding 20% more they’ve been doing up until now?

“If the Premier League isn’t going to bring in that money, where is the flexibility to find new cash? Ticket sales? Clubs are already costing their fans a fortune. Hospitality? It’s already been priced to the max. So the only way that clubs can then survive is by looking at costs. And the massive costs are agents’ fees and players, and at that point you’re affecting the product.”

Some thoughts:

• I've no idea how much Premier League budget for lawyers to advise on their broadcasting deals. Whatever they've spent in the past, I'm sure they will be bringing in some of the top legal firms and paying "superstar" fees for the legal advice they need;

The tv games have been devalued, every club trying to squeeze 9+ games over a limited period is a devalued product on it's own, add in that there are no crowds, add in that we've all been in lockdown for over 2 months and football will be restarting when we are allowed out again - though still socially distancing, add in that it's summer and the days are longer and football is better when the nights are darker, add in that Liverpool need to win 2 games, so there's not much to get excited about at the very top - though Liverpool could make it more exciting by losing their next 5/6 games. It should be exciting for some of us watching the scramble to avoid being one of the 3 clubs to get relegated, especially when almost all of them have been campaigning for a "no relegation" end to the season.
By rights, broadcast deals going forward should be lower value, they may well have peaked even before covid-19 threw a big spanner in the season. There may well be new entrants competing for rights, but on the other hand they will be selling their tv subscriptions to economies that have lost a lot through the lockdown periods. There will be a lot fewer potential subscribers with the discretionary spend to happy spend it on higher sports tv fees.

[Chester Perry]

TIFO Football asks - are Manchester Utd too big to sell

https://www.youtube.com/watch?v=qG6_3Em3MCA

[The esk]

I am sure that this is interesting reading for those of you with subscriptions - The Athletic looks at how the finances have changes at Brighton in the last decade, particularly (the one I keep talking about) cash flow, and how the club is currently being forced to plan in the scenario of relegation of remaining in the Premier League and how different that is likely to be

https://theathletic.com/1828569/2020/05 ... ed_article

Tony Bloom is the third largest benefactor in English football - never gets the recognition he deserves

[The esk]

Some thoughts:

• I've no idea how much Premier League budget for lawyers to advise on their broadcasting deals. Whatever they've spent in the past, I'm sure they will be bringing in some of the top legal firms and paying "superstar" fees for the legal advice they need;

The tv games have been devalued, every club trying to squeeze 9+ games over a limited period is a devalued product on it's own, add in that there are no crowds, add in that we've all been in lockdown for over 2 months and football will be restarting when we are allowed out again - though still socially distancing, add in that it's summer and the days are longer and football is better when the nights are darker, add in that Liverpool need to win 2 games, so there's not much to get excited about at the very top - though Liverpool could make it more exciting by losing their next 5/6 games. It should be exciting for some of us watching the scramble to avoid being one of the 3 clubs to get relegated, especially when almost all of them have been campaigning for a "no relegation" end to the season.
By rights, broadcast deals going forward should be lower value, they may well have peaked even before covid-19 threw a big spanner in the season. There may well be new entrants competing for rights, but on the other hand they will be selling their tv subscriptions to economies that have lost a lot through the lockdown periods. There will be a lot fewer potential subscribers with the discretionary spend to happy spend it on higher sports tv fees.

Entirely consistent with the arguments I present in my series "Football Shorts"

[Chester Perry]

Tony Bloom is the third largest benefactor in English football - never gets the recognition he deserves

Depends on what you think of benefactors really Paul - our club has never had one really - though Barry Kilby and a mate or 2 saved us from administration following the itv digital collapse. We make the proud claim that all our trophies were won the right way, using self generated monies. Our frenemies down the road won all theirs (going back to the 1880's) via the contributions of benefactors - so it is not a popular notion in these parts.

Then you see what the generosity of Eddie Davies did to Bolton another frenemy - they still haven't recovered from the spending excess or the expectation it set. Steve Day (a Blackburn lad) at Bury thought he was a benefactor too. All within 15 miles or so of us as the crow flies.

It is no surprise that the much lauded Accrington Chairman Andy Holt is a Burnley lad - we tend to think a bit differently to most Lancastrians

I would also question whether an owner that separates the stadium and training ground from the club, to protect his investment, and then charges rent on them, like Tony Bloom has, actually deserves the recognition I think you are talking about. I will add by saying there has been quite a bit of history between Burnley and Brighton in the last 20 years or so, and while a fair number here remember chucking money into buckets for them as the Goldstone disappeared, we have not taken well to the self-entitlement and loadsamoney attitude, their new generation of fans like to exhibit

[Paul Waine]

Entirely consistent with the arguments I present in my series "Football Shorts"

Thanks, Paul - if reading Chester and Roy using your name means it's ok for me to use it also. We haven't otherwise been introduced.

I've not yet seen your "Football Shorts." I'll put that on my list for the next few days.

[The esk]

Depends on what you think of benefactors really Paul - our club has never had one really - though Barry Kilby and a mate or 2 saved us from administration following the itv digital collapse. We make the proud claim that all our trophies were won the right way, using self generated monies. Our frenemies down the road won all theirs (going back to the 1880's) via the contributions of benefactors - so it is not a popular notion in these parts.

Then you see what the generosity of Eddie Davies did to Bolton another frenemy - they still haven't recovered from the spending excess or the expectation it set. Steve Day (a Blackburn lad) at Bury thought he was a benefactor too. All within 15 miles or so of us as the crow flies.

It is no surprise that the much lauded Accrington Chairman Andy Holt is a Burnley lad - we tend to think a bit differently to most Lancastrians

I would also question whether an owner that separates the stadium and training ground from the club, to protect his investment, and then charges rent on them, like Tony Bloom has, actually deserves the recognition I think you are talking about. I will add by saying there has been quite a bit of history between Burnley and Brighton in the last 20 years or so, and while a fair number here remember chucking money into buckets for them as the Goldstone disappeared, we have not taken well to the self-entitlement and loadsamoney attitude, their new generation of fans like to exhibit

As much as I would like to think that all owners act as custodians of the clubs many of us have multi-generational relationships with, I don't think (personally) it is unreasonable to protect investment in inherently risky assets.

I am a romantic with regards to the shirt and badge. My Great Grandfather played and scored in the first game at Goodison in 1892 and I'm sure many of you on this board have similar family allegiances with your club, but unless you are incredibly lucky I think you should have zero expectations from your owners (talking generally, not specifically) to perform and act in any way other than in their own interests.

I think Andy Holt is a beacon of common sense, like Mark Palios at Tranmere, but they're the exception rather than the rule.

Thanks for allowing me to comment on your platform

[Chester Perry]

KPMG have released their European Elite 2020 Valuation report - the media reports will give you the impression that these are the biggest clubs in Europe - but the criteria is slightly different as they want more countries involved - even then it show s the concentration of wealth is growing at the top though we know Italy and France are trying hard - It will be interesting to see how next seasons huge new TV deal in France affects things going forward for instance

press release here https://footballbenchmark.com/library/f ... elite_2020

full report here https://footballbenchmark.com/documents ... rsion_.pdf

[Chester Perry]

The vultures are at the door - from SportBusiness,com

US investors ‘seeking preferred equity positions’ in Premier League clubs before market rebound
Ben Cronin, Europe Editor - May 27, 2020

Major investors are showing an increased appetite to secure preferred shareholdings in Premier League clubs and as many as nine EFL Championship teams could be available for sale as a consequence of the Covid-19 pandemic, according to a sports investment specialist at an international capital raising firm.

Adam Sommerfeld, head of sports investments at Certus Capital Partners, who describes his client base as a ‘who’s who’ of private equity players, NBA and MLS owners, ultra-high-net worth individuals and media firms, said experienced investors are looking for bargains during the crisis in anticipation of a rebound when top-flight leagues return to action.

He told SportBusiness: “We’re currently seeing significant interest in preferred equity deals across the top European leagues, mainly from our US investment groups.

“These are seasoned sports investors who are looking for positions in football which they can grow as the market returns, without engaging in full buy outs.

“Yes, they’re kind of sceptical on revenue hits with Covid, but they also see it as a kind of [Warren] Buffet or [George] Soros-type approach where you need to almost bet against the market – just as things are going down, that’s the best time to come in.”

Sommerfeld said his firm was in “advanced processes” to finalise a mixture of equity and debt deals with teams in the English Premier League, Serie A and La Liga that had become more compelling with the likely return of top-flight European football. Two weeks ago Germany’s Bundesliga returned to action and the English Premier League is in advanced talks to do likewise.

He suggested major clubs are more receptive than usual to selling minority stakes to shore up their financial positions and help them see out the crisis.

“It’s probably a risk adjustment for them; they want more capital, deeper pockets or just a partner to come in so they’re not taking the brunt.

“The main thing to remember is a lot of these owners will have been hit in their other businesses. Take the Newcastle United situation, where the owner [Mike Ashley] has multiple business lines. With Covid, it’s not just Newcastle that takes a hit but also [Ashley’s] Sports Direct retail group. The same goes for the stock market. When that tanks, most owners will be adversely affected.”

Sommerfeld said he expected Saudi Arabia’s Public Investment Fund would conclude its proposed takeover deal of Newcastle United in spite of the crisis, although he wondered whether there was much appetite for deals of a similar scale elsewhere.

He said: “When it comes to writing the three, four or $500m cheque (£407m/€454m) then we’ll see if that happens in this environment.

“We deal with a lot of very well-versed US groups that own a lot of franchises already in the MLS, MLB or NHL. They understand that they are not going to get a massive discount on price at the moment – be it on a minority or majority stake – because owners are just going to rebuild value over the next 18 to 24 months.

“I’ve had some investors saying they’d expect at least a 30-40-per-cent discount and, again, no owner in the Premier League is going to say: ‘we’ve been worth £300m for two or three years, now you are offering us £200m’, it’s just not going to happen and I think they lose credibility.”

Sommerfeld believed clubs further down the football pyramid will have a weaker hand to play and that as many as nine EFL Championship teams could be available as distressed assets.

“In the EFL, the capital requirement is more imminent and clubs are essentially really struggling. [There are] owners that have been putting money in for a while and have never really seen anyone turn a profit. There are exceptions to this. Brentford FC recently turned a profit and is a very well-run club. That strong financial management will stand them in good stead for the post Covid environment.

“The guys that we know are available – and that’s not including the bottom three clubs which will likely need financing – you could be talking about pretty much 50 per cent of clubs that could be talking about majority deals.”

Sommerfeld said he knew of one deal to acquire a well-known Championship club that had already faced challenges because of the pandemic.

“We did a lot of work with a major team and there have been a lot of issues with that deal because of Covid, so we’ll see what happens there. That one was obviously pretty disappointing because that was very advanced. Those clubs are really going to struggle because TV money doesn’t really exist for them. It’s very much bums on seats and ticket sales. As I say, most will be available at the right price.”

However Sommerfeld believed sport should be heartened by the continued appetite among private equity firms for sports assets.

Private equity firm CVC recently tabled an offer to acquire 20 per cent of a new company to manages the Serie A broadcast rights, its international trademark and commercial development, while KKR and Apollo Global Management are said to have initiated talks over a potential nine-figure bridging loan to the German Football League (DFL).

“It’s no secret that private equity firms were looking at some of the topco opportunities with the leagues and these are encouraging statements,” Sommerfeld said.

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

which kind of makes you question this even further

There are some truly strange sounding stories going round about Premier League football finance at the moment - following news that Man United have accessed £140m of their £150m credit facility to add to their remaining £90m of cash (as of end of March - remember they spend £30m+ a month on wages and other costs) to see them through the next few months - there is suggestion that the vultures are offering only extortionate rates of interest to a small group of Premier League clubs who are desperate for cash.

https://www.dailymail.co.uk/sport/footb ... -BUST.html

Has it really come to this? - Bury style finances in the Premier League - I have my doubts at those rates even for the likes of Norwich, Watford and Bournemouth who are threatened with relegation.

[The esk]

Interesting article. The problem with minority investors shovelling capital into struggling clubs is how do you spend that capital under FFP and profit and sustainability rules (assuming those rules are not relaxed). The ability to spend relates to the state of the P&L account, not the balance sheet,income is the critical issue for compliance.

I can't see many investors buying into clubs just to prop up their balance sheets, especially if as the article suggests the clubs are not offered at significant discounts to previous valuations.

[Chester Perry]

Interesting article. The problem with minority investors shovelling capital into struggling clubs is how do you spend that capital under FFP and profit and sustainability rules (assuming those rules are not relaxed). The ability to spend relates to the state of the P&L account, not the balance sheet,income is the critical issue for compliance.

I can't see many investors buying into clubs just to prop up their balance sheets, especially if as the article suggests the clubs are not offered at significant discounts to previous valuations.

I am still wondering how Roman Abramovich was able to loan £248m last year (I believe holding company rules helps in this) , then look at the huge amounts that Aston Villa's owners have put in - fair play to them it that has largely been equity based (over £200m now I believe in 2 years) - which going back to last nights discussion is the best way for a club to receive such funding (no debt) but still creates the issue of spending above natural revenues and the expectations it creates.

The article also ties in with this I posted last month

Be warned the vultures are at the door - from Fobes.com

Apr 30, 2020,07:35am EDT
U.S. Investor Plans Premier League Club Takeover To ‘Recreate City Football Group’

Robert KiddSenior Contributor - SportsMoney

American investor Joseph DaGrosa and business partner Hugo Varela have revealed ambitious plans to create a global group of soccer clubs and academies, starting with an English Premier League team.

With the coronavirus pandemic hitting the finances of all soccer clubs, DaGrosa sees an opportunity to snap up teams at a discount of between 50%-70%.

DaGrosa is Chairman of Florida-based GACP Sports, which sold out of French Ligue 1 club FC Girondins de Bordeaux in December, 13 months after leading a takeover. The company also owns Soccerex, the world’s largest organizer of soccer business conferences.

“From a macro point of view, we believe football over the long term is a great investment,” DaGrosa told me in an interview.

“It’s a particularly opportune time, given what's happened due to the coronavirus and its effects on the global football industry. We think that clubs are going to be hard pressed to survive in many cases and there'll be some opportune possibilities to acquire some really strong clubs in terms of on-field performance, but that are financially distressed.

“Similarly, you've got an opportunity to acquire some world class players at a fraction of what they would otherwise cost. So anyone who comes in with dry powder in this environment with the view to the medium to long term is going to be well rewarded.”

DaGrosa and Varela, a former professional player and agent, plan to “recreate the best aspects of City Football Group” in their platform, Kapital Football Group.

Beginning with an “anchor club”, ideally in the English Premier League, Kapital Football Group intends to add three to five satellite clubs and up to 10 academies in Asia, Africa and South America.

City Football Group, which has eight clubs including the flagship Manchester City, was valued at $4.8 billion in November.

However, while Manchester City account for more than 80% of City Football Group’s revenue, Varela told me Kapital Football Group’s satellite clubs would not be set up to “feed” the anchor club.

“Each club will grow and have individual success on their own … and we can take advantage of sharing information, like scouting and commercial,” he said.

The investors said they are eyeing clubs in Spain’s La Liga, Portugal, Brazil and the U.S. as possible satellites.

The anchor club is unlikely to be one of the Premier League’s ‘top six’ of Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham.

“Because of the situation there’ll be clubs in the second tier of the table (below the top six) that are more open to sell than before,” Varela said.
“The idea would be to go to a mid-table club and grow from there.”

DaGrosa, who was in discussions to take over Newcastle United last year, said GACP Sports was talking to “large institutional investors” and wants to move “fairly quickly”. He sees a window of opportunity of 24 months to recreate the City Football Group model “at a fraction of the cost”.
“Ultimately, we want to build a platform that will lend itself to going public at some point,” he said.

“But the idea is to have all the capital in place, allocate approximately two thirds of our capital for acquisitions, and leave a third or more of our capital as dry powder.

“The whole key here is to have dry powder after those initial acquisitions are done to build world class teams at a time when not a lot of other people are investing. Thematically, it's all about playing offense when the rest of the world is playing defense.”

It is a strategy that has previously worked well for DaGrosa, who has built a reputation for turning around distressed businesses. While with private equity business 1848 Capital Partners, for example, he bought 248 Burger King Franchises out of bankruptcy.

But while the burger business may be all about how many Whoppers you can sell, DaGrosa learnt from his time in Bordeaux that there is emotion involved in running a soccer club.

“First and foremost, we're fiduciaries for other people's money. And so regardless of our personal feelings, we have a responsibility to protect the capital we've been entrusted with and that's our primary focus,” he said.

“Having said that, we both love the sport and we would both like to have a legacy. But I don't think it's inconsistent to have a legacy of winning on the field and winning financially as well.

“That's why we think this is a particularly good, opportune time to move, because we think we can accomplish both.”

and this

If Parry gets his way it seems that there are a new bunch "investors" ready to take over Championship clubs

"Our view is that the EFL will change its governance and tighten its financial procedures and oversights. That will lead to an increase in attraction for new owners to move into the EFL.

'We have a big pool of owners who are looking into buying into EFL clubs right now. We are doing analysis on 14 clubs. The second thing is with the Premier League we have a significant number of interested parties.

'What we have seen in the Premier League and sport in general is a shift from private individuals to companies who want to invest in football clubs. An example of a company is City Football Group or Fenway Sports.

'But we are CVC’s advisor in rugby and institutional investment is now looking at football clubs right across the board in Europe, including the Premier League.'

It might be a crisis, and the game might be looking on with fear. But take a closer look and opportunities abound."

that was Andrew Umbers of Oakwell Sports Advisory (https://oakwellsports.com/) speaking to the Mail in this article

https://www.dailymail.co.uk/sport/footb ... tball.html

I said the Vultures were lurking.

[Chester Perry]

It appears MP's are pushing for that Damian Collins/Charlie Methven Football Finances Authority initiative I posted previously

https://www.dailymail.co.uk/sport/footb ... A-EFL.html

[Chester Perry]

@SwissRamble has a look at Crystal Palace's 2018/19 financial results - the last minute sale of Wan-Bissaka allowed them to show a similar profit to us - take note of Player wages - which they breakout for us to see - I wish that became a rule - their players get paid more than everyone at our club does.

https://twitter.com/SwissRamble/status/ ... 8356856834

I am not sure how he got hold of them as they are not yet at companies house - they took the Chancellors invitation to delay publishing them like Newcastle did - There is nothing on the Clubs website either

This article shows that they have had to borrow money already to help with cashflow though

https://www.standard.co.uk/sport/footba ... 53096.html

[Chester Perry]

Football Conference organiser World Football Summit have also got onto the webinar bandwagon - their first offering is Sport’s great comeback: Fighting back from COVID-19 - Interestingly (given they are the source of revenue for sports organisations in the behind closed doors environment) the panel is made up of broadcasters and sponsors, rather than sports people.

Sport’s great comeback: Fighting back from COVID-19

https://www.youtube.com/watch?v=hU24aWF644s

there was some interesting comments in this discussion

https://elevensports.com/sports-indsutr ... ing-sport/

then we have this from one of the panel - CEO of Eleven Sports Luis Vicente

https://twitter.com/theesk/status/1265939085543301120

If that doesn't make people sit up and begin a rethink I am not sure what will