Football's Magic Money Tree

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Chester Perry
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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Aug 25, 2020 7:32 pm

That is 5000 posts now - thank you everyone who has contributed, read and generally encouraged others to spend some time on this thread - many of you have said that you think this is a wonderful thread and is an example of what can be done on a message board - thanks for your support - lets see where the next 5000 posts take us
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Chester Perry
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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Aug 25, 2020 7:39 pm

A topic that has dominated this thread in recent months Investment/Private Equity - I usually start these kinds of posts with "the vultures are at the door"

There has been a lot of foreign investment into French Football in recent years - here Sportico looks at the reasons why (they do not seem to be as cautious about that Mediapro deal as I am, that is for certain)

Why Smart Money Is Pouring Into French Soccer
JOHNWALLSTREET
August 21, 2020 2:55AM PDT

On July 20, Sportico EIC Scott Soshnick broke the news that RedBird Capital Partners had acquired controlling interest (85%) in Toulouse Football Club. Just one week later (July 28), it was reported the Kingdom of Bahrain bought a 20% stake in Paris FC. The two deals are the latest in a series of transactions that have seen smart money buy up French soccer league teams over the last decade (see: Qatar Sports Investments and PSG; Kings Street Capital Management and Bordeaux; Ineos and Nice). Ligue de Football Professionnel Chief Executive Didier Quillot says it’s “easy to understand” why global investors have gravitated towards his league—one just needs to look at their existing media rights agreements, the country’s ability to develop talent, its existing stadium infrastructure and the cost of entry.

Our Take: RedBird and the Kingdom of Bahrain are entering French soccer at an ideal time. The league just began “a new cycle with increased [domestic] TV rights,” Quillot explained. Spanish broadcaster Mediapro is paying a record +/- $950 million to carry Ligue 1 and Ligue 2 championship games through the 2024 season—an annual increase of 60%.

“International rights remain the weak point of the French league,” Quillot said. BeIN is paying just $95 million per year through the 2024 season. But it is widely believed a material increase is on the horizon. As media rights consultant Dan Cohen explained, “[The] next comparison up—Serie A—is getting $330 million annually for their international rights, so there is a big disparity there and plenty of room for growth.” The Octagon executive said the French league will “undoubtedly” see a boost in the value of their next international media rights deal.

The global transfer market can be a “big piece of [the] revenue [pie]” for European soccer clubs, so France’s reputation for training, scouting and developing talent is also appealing to investors. Said Quillot: “Everybody knows it’s the number one country in the world—maybe with Brazil—in terms of detecting and developing talent. If [an investor] is able to own a club where there is a strong academy and strong talent detection, they can optimize player trading values [and profitability] for the [following] year.”

The existing stadium infrastructure in France is another reason investors are attracted to domestic soccer within the country. “Thanks to Euro 2016, [the league] has brand new stadiums in Nice, Bordeaux, Lyon and Lille and renovated stadiums in Paris and Toulouse,” Quillot noted. Obviously, eliminating the need for (and costs associated with) venue construction makes the prospects of team ownership more attractive.

The cost of French league teams, which “are much lower than their comparable set in other [European] countries,” are certainly playing into the investment interest as well. While an English club like Newcastle might sell for $380 million and Serie A’s A.S. Roma commanded $700 million, French clubs, in many cases, can go for “tens of millions.” Of course, Ligue 1 and Ligue 2 teams sell for less because they generate less revenue (and many—even within Ligue 1—are not profitable). “Historically, their domestic TV deal has lagged [in value] behind the EPL, La Liga, Bundesliga and Serie A,” Cohen explained.

PSG has long dominated the league. However, Cohen notes, “a new owner with deep pockets, proper roster management and good coaching can find the easiest path forward to clinching a highly profitable and coveted Champions League spot when compared to the Big 5—as Monaco and Marseille have proven.” He added that it would cost significantly more money to put a Champions League-caliber team together in one of the other big five leagues—and reap the riches that come along with that (see: $92 million windfall).

To be clear, Coronavirus has not been a factor in the recent French team sales. Both RedBird and Bahrain were in discussions to acquire stakes in their respective clubs prior to the March outbreak. But Cohen does believe that as the COVID-19 induced losses continue to pile up, we could see “more clubs [looking for money] and potentially investments at the governance level” (as Serie A has discussed).

Cohen attributes the rash of French league team sales to a “cultural shift in [ownership] ideology.” Historically, many of these organizations were run as “social clubs” (as opposed to for-profit businesses). But the new ownership groups coming into the league are realizing “if they can put a professional management team in place, capable of developing a commercial strategy and attracting the right fans, sponsors and media partners, [these teams] can deliver a pretty big return.” With the new crop of owners professionalizing organizations, some of the league’s older owners are realizing they’re not prepared to spend the capital needed to keep up and instead are taking lucrative exits.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Aug 25, 2020 7:57 pm

An alternative perspective on the role of gambling in the football industry from FCBusiness,com - note that since the article was published this morning Southampton have joined the ranks of Premier League clubs with a bettinging company on the front of their shirt (Sportbet.io)

The Relationship Between Football & Gambling: How The Industry Is Allowing Football To Thrive

There was an interesting conversation on Test Match Special on Friday afternoon. It discussed the release of a new book by Simon Hughes and Manoj Badale, the owner of the Rajasthan Royals. The book looks at how cricket will cope long term financially, particularly if the coronavirus crises continues to have an impact on the sport.

One of the key points within it was how cricket must embrace gambling companies in the same manner as football has in order to tap into the large sums of money. Which proves very interesting. While many are against the close connection between football and gambling, it’s clear that it is a way forward, and other sports are wanting a slice of the pie.

There has long been an association with gambling and football. It’s one of the most bet on sports, both online and offline and the Saturday afternoon acca is as part and parcel of the beautiful game as a pie at half time is. Over the years that relationship has developed to the point where it’s an industry worth billions and seven out of 20 Premier League clubs has a betting brand as their main shirt sponsor. The proportion is much higher in the Championship and it’d be rare to find a top club across Europe that doesn’t have an official betting partner.

Premier League Clubs With Gambling Shirt Sponsors:

Burnley
Crystal Palace
Fulham
Leeds United
Newcastle United
West Ham United
Wolverhampton Wanderers

It’s meaning billions is being pumped into the game, and allowing the likes of the Premier League to grow. But is it a good thing?

Well, the large sums of money entering the game is of course a good thing for the sport. It means Premier League sides can buy the very best talent, and makes it an even more appealing product to fans across the world.

What’s more, the money is trickling down into the lower leagues. The Premier League has put in well over £300million into grassroots football via the Football Foundation over the past two decades, while there’s plenty more individual clubs put into the likes of local communities and supporting non-league clubs.

That will inevitably rise, particularly as more money filters into the game, both in the men’s and women’s game. The rise of the women’s game could see a similar relationship blossom, allowing other gambling brands to attract new audiences.

While brands such as Moon Bingo and other major gambling brands aimed more towards the female market, the rise of the Women’s Super League could be ideal for these brands. As you can see if you click here, bingo brands are much more designed for female players, and with the rise of female’s watching women’s football, we could start to see exclusive deals between the likes of bingo brands, casino sites, and of course bookmakers, with major teams such as Arsenal, Manchester City and Manchester United.

It’s undoubted clubs will be considering this as they start to bring more money into the women’s game, and with gambling already tied so neatly with football, it perhaps is a matter of when rather than if.

Some WSL teams already do have gambling sponsors, and more would certainly strengthen the women’s game, and similar to cricket help it cope and strengthen in particularly uncertain times.

The knock on effect is now that other sports are looking to benefit from a relationship with gambling brands. The major US sports are a prime example of this. The NBA announced a new betting partner earlier this year, and the likes of the NHL and MLB have also struck similar deals over the last 12 months or so.

For football, they continue to be a trailblazer in working with the industries. The FA Cup’s deal with a bookmaker to live stream games is something that the likes of the Premier League might look to follow in some capacity, while we may see entire betting platforms starting to be integrated into a club’s website or stream.

Who knows where the relationship can go from here, but one thing is for sure, there are areas that the bond will be strengthened in the coming months and years, and it’ll only see clubs, whether womens or mens, more financially stable too. And in a time when more clubs are struggling than ever before, that can only be good news for them.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Aug 26, 2020 4:45 pm

the vultures are at the door

It feels like it has been a while since we heard anything about Serie A and the prospective Private Equity bidders seeking a slice of the commercial action - fortunately the FT have offered us an update

Buyout groups team up in €13bn battle for Italy’s Serie A
MURAD AHMED AUGUST 26, 2020

Private equity groups CVC Capital Partners and Advent International have teamed up for a €1.3bn bid to acquire a minority stake in Italy’s Serie A football competition, as clubs near a decision on whether to bring outside investors into one of Europe’s biggest leagues.

The two buyout groups, which previously made competing bids, are working with the Italian investment fund Fondo FSI on a fresh offer which would value the league at €13bn — considerably higher than the €11bn valuation of a previous offer by CVC earlier this year.

They are seeking a 10 per cent stake in a new company that would manage Serie A’s broadcasting rights, its international trademark and commercial development. Under the proposal, CVC would own half of the stake, Advent would own 40 per cent and FSI the remainder, according to people with knowledge of the bid.

The decision to join forces — a departure for CVC, which has a history of investing alone in sports tournaments such as Formula One and England’s Premiership Rugby — is a sign of the difficulties facing private equity groups in the hotly contested process.

To win, bidders must first secure support from 14 of the league’s 20 clubs to set up a new company with private equity involvement to oversee media rights. If successful, 15 clubs must then vote in favour of their offer over that of rivals. Private equity firm Bain Capital is bidding against Advent and CVC.

Several clubs are sceptical about handing over control to private equity groups, however, with some preferring instead to set up an alternative company funded through a debt deal that would allow them to remain in charge of commercial affairs.

That has left would-be investors scrambling to build a coalition that the remaining clubs can rally around. Several people involved in the process said it was far from clear that a deal could be agreed.

“The clubs will be nervous, very nervous [about selling a minority stake], because it means that whoever comes in will want to put proper governance structure around the league,” said a senior executive at a leading Italian side. “The ownership of Italian football clubs will not like that, because they want to have the say and have their way.”

Lega Calcio Serie A, the body that runs Italy’s top division, is expected to make a decision on the bids within the next fortnight, people involved in the negotiations said. If it does, a deal could be completed this autumn.

The offers reflect the rare opportunity to buy into one of football’s top leagues, under a belief that the value of international broadcasting rights for the world’s favourite sport can continue to rise.

Under CVC and Advent’s proposal, the private equity groups would control 50 per cent of a board overseeing day-to-day decisions, with the clubs controlling the remaining 50 per cent and the casting vote being held by an independent chair, one person close to the process said.

Decisions on financing and strategy would, however, be subject to a shareholder ballot in which the clubs could outvote the buyout groups.

Paolo Dal Pino, Serie A’s president, told the Financial Times last month that the league was “looking at how to create value in the long term. Do we do it alone or do we do it with a partnership?”

The finances of Italian clubs are more precarious than continental rivals. Serie A’s clubs made a collective loss of €318.3m in the 2018-19 season, according to KPMG, compared with a collective profit of €230.8m for Spain’s La Liga.

The private equity groups declined to comment.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Aug 26, 2020 8:12 pm

This could be significant, Rui Pinto of Football Leaks fame has officially admitted to hacking for the first time in papers submitted for his defence ahead of trial in Portugal next month - he appears to be hoping to be judged as a Whistle blower with the protections that that would offer him - from Sabado.pt

Rui Pinto admits to being a hacker...
18:11 by Nuno Tiago Pinto
... but he says that it was the victims who easily gave him access to his emails and that his guilt should be diminished because his motives were noble: revealing crimes.

Over the years, Rui Pinto has always denied being a hacker or having obtained illegally the information he published in Football Leaks and that he gave to the consortium of EIC journalists. He did so in interviews with several newspapers, but also in the first judicial interrogation to which he was subjected in March 2019, after being extradited from Hungary to Portugal. However, in the challenge he presented to the court where he will be tried for 90 crimes of illegitimate access, computer sabotage, violation of correspondence, undue access and extortion attempt, to which SÁBADO had access, Rui Pinto assumes for the first time to have entered illegally the emails of people and entities. However, he says that this intrusion did not require great technical knowledge - rather it was facilitated by the lack of care of the victims themselves or by the lack of computer security of the entities - and that their guilt should be considered small due to their altruistic motivations: the revelation of serious crimes of corruption.

Throughout the 130 pages of the document, his defense lawyers - Francisco and Luísa Teixeira da Mota - try to frame Rui Pinto's role in the right to information and freedom of expression and, above all, in what they argue is an increasingly broad concept of whistleblower. "The defendant does not argue that the ends justify the means and that, therefore, his activity as a whistleblower justifies the way the defendant and Football Leaks obtained some of his information. And he knows that the special protection of the state to whistleblowers is regulated assuming the existence of a relationship with the type of labor. But he also knows that wistleblower's status has been expanding...", they write.

In other words, they intend to bring to trial the debate about the confrontation between the benefits and the harms of their crimes to society at
large. That was the reason that led the hacker to roll personalities as witnesses without any knowledge of the facts that will be tried - such as Edward Snowden, Rafael Marques, Rui Santos, Miguel Poiares Maduro or Edwy Plenel, among others - but who can give their opinion on the importance of the revelations made by various journalistic investigations carried out based on documents provided by Rui Pinto.

In the challenge, the lawyers write that Rui Pinto is sorry to, "to obtain the data he was looking for, to have ended up committing criminal offences", but also that "the ease of entering the systems combined with access to information that, in part, reflected unlawful actions that the Defendant understood should be public knowledge gave the Defendant a conviction, on the one hand , of impunity and, on the other hand, gave him a sense of the 'justness' of his actions." And they conclude: "the defendant's conduct presents a diminished fault, aware of the reasons for the practice of the facts: seeking proof of the commission of serious crimes to publicly disclose them."

The admission by Rui Pinto that he practiced acts of computer piracy is even the main novelty of the challenge to the facts that will be judged from September 4. Most of the nullities listed by the defence – such as the illegality of the extension of the European arrest warrant, the wrong legal framework for various crimes, the invalidity of the evidence seized in Budapest (the hard drives) due to uncertainty about the manipulation or illegitimacy of Doyen Sports Investments being an assistant in the process (because the attack was on Doyen Capital's computer structure) – had already been invoked during the investigation and investigation phases. All of them were rejected by the public prosecutor and the Criminal Investigation Judge who evaluated them and who pronounced the founder of Football Leaks for 90 crimes: six of illegitimate access, one of computer sabotage, 14 of violation of correspondence, 68 of misinformation and one of attempted extortion.

In addition, Rui Pinto's defense also tries to discredit the main assistant in the process – Doyen – even writing to be "repugnant" that he intends to give "moral and ethical lessons to the accused, when he is a legal person with a heavy record" and that Nélio Lucas "has a criminal record that includes the commission of various crimes, which did not even allow him to be an intermediary in the transfer of players registered in the Portuguese Football Federation for lack of idoneity".

Hacker or whistleblower?
Since Football Leaks was created, Rui Pinto has always denied being a hacker. In December 2015, under the pseudonym John, he told the New York Times:"People may think we're hackers,but we're just normal computer users." In February 2016, as part of a report by German revista Der Spiegel, when asked about the origins of the documents he published, he mysteriously replied: "Some of our sources do not realize that they are our sources." In December of the same year, he returned to the German publication: "We have never pirated anyone and as we always say we are not hackers. All we have is a good network of sources." After being arrested in Budapest, he said in a joint interview with Der Spiegel, the German public television NDR and the French website Mediapart: "I do not consider myself a hacker but a citizen who acted in the public interest." In the same interview he said he had initiated a "spontaneous movement of revelations about football", which over time "more sources were added and shared the material" and that "never" thought to be doing something "illegal".

In Lisbon, questioned by the judge of criminal investigation, on May 22, 2019 assured that Football Leaks "was a collective of people, from sources", that he had not been the creator of the site, that "there was no unauthorized intrusion into computer systems" and that the information was obtained "through sources". In December last year, still in custody, he gave a new interview to Der Spiegel magazine in which, asked if he accessed plmj's servers, he replied: "it is debatable. I'm going to discuss this in court." And he said again, "I don't consider myself a hacker."

All these statements are in contradiction with what is now assumed by Rui Pinto, a few days from the beginning of his trial. If doyen Rui Pinto's relatively exfiltration of documents does not take any blame – he is accused of attacking Doyen Sports Investments and says that in London there was only Doyen Capital – the same is not true of the other entities.

About the intrusion into Sporting Rui Pinto's lawyers write that his interest in the club resulted from several controversies – such as the termination of the contract with Marco Silva, relationship with Doyen, hiring Jorge Jesus or the relationship with Álvaro Sobrinho. Without ever explicitly saying so, they assume that he was the author of the attack that left Sporting's servers inoperative. As? Writing that "on the part of the accused, not only did there be no intention to generate a breach of service but not even, in proceeding as it did, admitted such a possibility" since "any computer system updated and a large company" would never collapse with an attack like what he carried out: "a vulgar anti-DOS software blocks the IP address, if there is a large flow, and protects the stability of the server. However, surprisingly, Sporting Clube de Portugal had not installed this software."

Regarding the intrusion into the Portuguese Football Federation, Rui Pinto's debt explains that his interest was related to "impunity in matters of sports corruption". Examples: the case of vouchers; "schemes" in the control of arbitration structures; the intermediation of player transfers; or the weak scrutiny of the suitability of investors. "[These were] the reasons that led the defendant to become aware of information in the FPF," they write in the document.

On the attack on PLMJ, Rui Pinto denies that his interest has resulted from the office's links with Benfica. He explains that in 2017/18 he had had access to information related to Fidequity, a company linked to Isabel dos Santos, and realized that PLMJ lawyers – "like Inês Pinto da Costa" - were "key pieces in aiding and optimizing money laundering of the Angolan president's daughter." To learn more about these deals, they write, Rui Pinto "needed more concrete information" which he understood to be possible "using documents from the law firm." Something that he achieved, he admits, with the "documentation contained in the mailbox of lawyer Inês Pinto da Costa" and that "gave rise to the so-called Luanda Leaks". However, this explanation is in contradiction to what has been said by his French lawyer, William Bourdon, who assured the New York Times that Rui Pinto had stumbled upon Isabel dos Santos' documents while looking for documentation related to football business in plmj's office.

Continued crime.
One of the main evidence snared against Rui Pinto is the analysis of the hard drive that was seized from him and that was not encrypted. There, the Judicial Police and prosecutors found evidence that the hacker accessed the mailboxes of more than 500 people and entities between 2015 and 2019. In a chapter dedicated to the "defendant's performance as a continuing crime" the defense acknowledges most of the facts of which he is accused.

The lawyers write that Rui Pinto analyzed the documentation of an entity, found links to others and by finding email addresses of those involved proceeded to analyze the infrastructures and access bridges", identifying "their weaknesses and then creating a kind of form sent to the recipients who enter their credentials, passing the accused to have access to them and, consequently, their computer systems" – in the background, an action known as spearphishing.

In this performance, he denies ever having sent viruses, malware or malicious code and ensures that the recipient of the email installed nothing or kept the computer compromised. "But because he did not properly pay to the page presented to him – not realizing that it was not reliable – he introduced his credentials," the lawyers write. The targets were clubs, agents, intermediaries, lawyers and consultants who, by their relations understood to be able to "hide acts of corruption, tax fraud, money laundering, among other crimes".

For Rui Pinto's defense, "the successive unauthorized access to the systems was facilitated by the fact that the targets did not detect the non-reliability of the 'forms' presented to them and introduce their credentials, and the defendant immediately and 'easily' had access to their mailboxes." More: "In the background is the internet (...) the circumstance which allows the accused to re-commit new facts because there is a favourable opportunity for the commission of the crime"; the "ease of entering the systems combined with access to information that, in part, reflected unlawful actions which the defendant understood to be public knowledge gave the defendant a conviction, on the one hand, of impunity and on the other, gave him a sense of the 'justness' of his actions."

For this reason, they maintain, "the defendant's conduct presents a diminished fault, aware of the reasons for the practice of the facts: seeking practical evidence of serious crimes to publicly disclose them. Being certain that the defendant regrets that, to obtain the data he was looking for, he ended up committing criminal offences."

The trial is scheduled for September

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Aug 26, 2020 11:10 pm

It was inevitable, after the EFL failed to contest the value Sheffield Wednesday set for the selling of Hillsborough to themselves and Derby having their case thrown out, it was only a matter of time before the EFL and Premier League looked at the rules around the selling of grounds, not that all Premier League clubs own theirs - from the Mail

Premier League seek to BLOCK clubs selling their grounds and leasing them back to navigate spending rules
- The Premier League and EFL have entered talks to close ground sale loophole
- Reading and Aston Villa have both taken part in sale-and-leaseback schemes
- An independent panel ruled Derby didn't breach rules by selling Pride Park
- Another panel gave Wednesday a 12-point deduction after sale of Hillsborough
By MATT HUGHES FOR THE DAILY MAIL

PUBLISHED: 22:30, 26 August 2020 | UPDATED: 22:30, 26 August 2020

The Premier League have opened talks with the EFL about introducing a new regulation to prevent clubs from selling their stadiums and leasing them back to inject money into the business.

Derby, Sheffield Wednesday, Reading and Aston Villa have all taken advantage of sale-and-leaseback schemes to help them comply with the EFL's spending rules. The sale of Villa Park for £56million to a company controlled by co-owners Nassef Sawiris and Wes Edens created an issue for the Premier League after the club were promoted last year.

The transaction was eventually approved by the Premier League in March after a nine-month investigation but they are eager to close the loophole that made the sale possible.

No club have sold their stadium while in the top flight, although given the financial problems created by the pandemic several clubs are understood to be considering the merits of doing so.

The Premier League are eager to remove this temptation by outlawing sale-and-leaseback schemes as well as align with the EFL, who have concluded that their existing regulations need to be tightened.

The EFL suffered a major setback this week when an independent panel ruled that Derby's sale of Pride Park for £80m to a company controlled by owner Mel Morris did not constitute a breach of profit-and-sustainability rules.

A different panel gave Wednesday a 12-point penalty for backdating documents relating to the sale of Hillsborough last month, but did not dispute the club's valuation, while the EFL's investigation into Reading's sale of the Madejski Stadium remains ongoing.

Derby's dispute with the EFL continued on Wednesday with the club releasing a statement which claimed that the charges brought against them were 'unnecessary' and had cost the organisation 'hundreds of thousands of pounds' in legal fees.

However, in the 122-page written reasons for the judgment released on Wednesday, the panel made it clear that the EFL were entitled to bring the charges and that Derby had a case to answer. The panel also dismissed claims from Derby that the charges resulted from a deliberate agenda against the club led by former chief executive Shaun Harvey and head of legal affairs Nick Craig.

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Re: Football's Magic Money Tree

Post by Chester Perry » Thu Aug 27, 2020 2:07 pm

Part 3 of The Telegraph's future of Football - Mike McGrath examines debilitating effect proposed move to salary caps will have on League One and League Two players.

Future of football, part III: Players may not even be able to get a mortgage under salary cap
JOHN MEHRZAD AUGUST 27, 2020

For footballers in England’s lower leagues, the impact of the proposed salary cap is about to hit home – in some cases, literally. Should the Football League’s cost-control measures be enforced in League One and League Two, new contracts will have clauses inserted to reduce wages in the event of relegation. And it will be that drop in salary that will make it difficult for players when borrowing money for major loans such as mortgages.

“Any mortgage company is going to look at that and say, ‘Relegation could happen, we can’t give you the money,’ ” said one football agent with knowledge of lower-league deals. If this is bad news for estate agents, the ramifications for English football will be felt far more keenly.

Clubs have voted for a maximum of £2.5 million per season for League One clubs and £1.5 million in League Two, with the Professional Footballers’ Association union in negotiations and arbitration over the limits. For the squads of Charlton Athletic, Wigan Athletic and Hull City, falling into the third tier next season will not mean an automatic drop in wages. High-earning players will be treated like they are on the average – around £170,000 per year – rather than their actual amount.

But any new contracts are likely to include relegation clauses that will incorporate a reduction in wages to fall in line with new limits. That is when the problems will arise trying to finance a new house or car, as wages could fall by half or more.

Intermediaries are asking for new deals to have low buyout clauses in case of relegation. While a club like Wigan have sold their young talent to survive during administration – Antonee Robinson earned them £2 million when he went to Fulham – players will now demand a set price to leave when they sign new contracts.

EFL salary cap
It means the club will lose millions of pounds in their assets should they drop down a division. “Nobody has thought it through, as usual. It is just an advantage to smaller clubs on small money anyway,” added the intermediary.

Joining a struggling EFL club has never been less appealing. Come January, those fighting against relegation will struggle to buy players to save their season. They will be asking them to join a club where wages will be slashed if they fail to stay up. “Say your best player is doing really well and you want to extend his contract. You won’t be able to do that,” said an EFL chairman.

There will certainly be a case where players will wait until they are safe from relegation before committing to a fresh contract.

One EFL chairman believes the salary cap will be voted out within a year, with the proposals merely a sign that clubs needed to take a stand against the inflation of wages season on season. “I don’t think it will last. Come this time next year it will be voted out again,” he said.

“The clubs all did it as a necessary response to show solidarity and that things cannot go on. It was a vote for change. But it becomes too complex and will cause too many problems for clubs to retain players and try to sign players. I think it will become unworkable. I think they voted because we had to change and stop bankrupting English football, rather than the detail.”

The PFA is not opposed to controls but wants more time for proposals to be considered, while raising concerns to clubs before they voted the limits in. It took between 11 and 25 months for other sports to introduce new rules on spending. At the time of its introduction, they called it “unlawful and unenforceable”.

The union pointed out the huge disparity between the teams in the same division. Sunderland and Portsmouth get big gates, when fans are not shut out by the coronavirus pandemic, and have a high wage bill for League One. They are among those who would need to adapt most.

“Whilst sustainability is key, maintaining a certain quality of football will be vital to achieving future revenue growth, both centrally and for individual clubs,” the PFA added in a document seen by The Telegraph.

“It may now become more attractive for a player to compete in the National League than in EFL competitions, if these draft rules proceed.”

Interestingly, there have been murmurings around EFL clubs that there are ways around the salary cap, which would mean clubs flouting the rules they voted in themselves.

The prediction from boardrooms is that it will be temporary and that clubs will eventually start to think what is best for themselves rather than for the good of football. It could end up being one of the most short-lived measures the sport has seen.

Controls are needed because owners cannot be trusted to limit spending
by Andy Holt, chairman of Accrington Stanley

The EFL cannot make gloomy predictions about the existential threat facing dozens of clubs and then do nothing to mitigate that risk, which is why the introduction of the so-called salary cap is a positive development.

You only have to look 18 miles down the road from me to Bury - or Bolton, Wigan or Macclesfield, take your pick - to see that football as we know it cannot continue without serious regulation. I have been a long-term supporter of such measures, but the uncertainty caused by the coronavirus pandemic makes them all the more urgent.

The new rules are the result of months of debate followed by a vote, and were proposed by clubs for clubs. Though the annual limit on player expenses of £2.5 million for League One clubs and £1.5 million for League Two clubs has been called a salary cap, in reality it is a budget cap. Clubs are free to spend on wages as they see fit within that budget: if they want to fill their squad with youngsters but have two stars on £5,000 per week they can do.

Clubs such as Sunderland have spoken out, arguing their revenue allows them to service higher expenditure, principally due to the size of their attendances. But what attendances for the foreseeable future? We are very concerned about the lack of income from fans, and though there are hopes for reduced crowds to return in October who knows what could happen? We could be in another lockdown.

The bigger clubs with bigger stadiums earn a higher proportion of their income from gate receipts so they should be more worried than us. To gamble on future earnings would be irresponsible.

There are some big clubs in League One because of the lack of financial control in the leagues above. Owners have gambled with money they cannot afford to lose to reach the next level, but when they fail their clubs come a cropper. Owners cannot be trusted to limit spending given the incentives on offer for promotion, so the EFL has to. If not, the government will be the last port of call because we cannot keep letting so many clubs go to the wall.

I was not surprised to see the PFA's criticism of the new rules but I have very little time for their arguments. They are a players' union trying to do right by their members and I understand that, but a union also exists to protect jobs and put bluntly, there will not be enough teams to go around if spending continues the way it is and Covid-19 continues to shape the next few years. Players need clubs to be in healthy financial shape for their own benefit.

While I am pleased to see controls brought in, I am open seeing them relaxed if circumstances change. Once fans return and the worst of the pandemic is behind us, we can plan with greater clarity. If we have clubs running at a surplus, these caps can increase but for now they are needed.

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Re: Football's Magic Money Tree

Post by Chester Perry » Thu Aug 27, 2020 2:13 pm

Meanwhile the Guardian also has a feature on the Salary Cap

'A really bad thing for players': views on the Football League salary cap
After the League One and League Two vote to implement a cap we get thoughts from inside the game on its impact

Ben Fisher - Interviews by Ben Fisher - Thu 27 Aug 2020 09.04 BST Last modified on Thu 27 Aug 2020 09.28 BST

The players
Omar Beckles, 28, free agent, turned down two-year contract extension at Shrewsbury

I wrestled with the idea of saying no to something at a time when there is a crisis but I just felt it was time to move on. As much as the cap is a good thing for clubs, I think it’s a really bad thing for players. I think the Professional Footballers’ Association need to hammer home that they object to what’s been put in place, and I think they are. The idea of the cap is to save clubs but they have neglected players and the side-effect will be a lot of players potentially unemployed or dropping into non-league, mental health being affected, and it’s scary times because they have made a decision without really thinking about the consequences. It has been unsettling. If teams are going to cut squads and utilise loanees more, I think players around my age will potentially look into lower leagues. I would hate to think players would leave the game – I hate to think it would be that extreme – but it might force their hand. Will players pursue different options, going abroad, and so on? Most definitely.

Craig Mackail-Smith, 36, free agent, released by Wycombe

Teams are looking at the salary cap, when crowds can come back and how they are going to cope financially, and I think they are all just waiting to see where they stand and how they can build their squads. Everyone is umming and aahing. When clubs are limited with their budget, they are obviously going to cut their cloth accordingly. A club that might normally go out to get two or three players might only be able to get one. There might not be as many transfers and teams might just have to stick with the squads they’ve got. It’s also going to create a massive gap between the Championship and League One and League Two. I still feel I’ve got a lot to offer.

The agent
Phil Korklin, Momentum Sports Management

Now clubs are saying: ‘Look, we’ve only got this amount in the budget: like it or lump it.’ For most players out of contract, clubs have a lot more power to say: ‘We’re offering you this and if you don’t take it, we’ll just go and sign somebody else.’ I think it is definitely a power shift. We’ve had a lot of contact from agents in Europe who are looking at the English market and players potentially moving abroad. There is definitely a closer eye being kept on the lower divisions here and whether players would be up for moving across. We have moved Christian Burgess from Portsmouth to a great club in Belgium, Royale Union Saint-Gilloise, and there will be a few more like that, I think. It is making people realise there is a lot more football than just on these shores. Now players will look at leagues such as the Scottish Premier League as a very viable option; it doesn’t have a salary cap – some clubs can afford to pay a lot more than others – but it offers another avenue and if you’re good enough English teams will come and buy you again. It will be very interesting to see over three or four years if players do start to look to go abroad earlier, younger, or maybe go into non-league and then come back up.

The owner
Andy Holt, Accrington Stanley

There had to be some controls on this Wild West that has been football. A salary cap was absolutely essential. If we carried on with clubs going bust, there is no doubt the government would get involved and, before you know it, there would be regulation all over football because we can’t have a situation where clubs keeping getting into trouble and not paying wages. Something had to stop the madness because the regulation up until now has not been strong enough and it has been a disaster. You’ve seen Bury, Bolton – it’s everywhere you look, clubs are really struggling. It is affecting the transfer market. We make an offer and if we don’t get the player, we look elsewhere. But we have always operated like that because I wouldn’t operate any other way. John Coleman, our manager, has a fixed budget, he can spend it how he wants but when he has spent it, that’s that. But it is really difficult to keep the costs reined in when all around you aren’t, forever outbidding each other to increase costs. The Championship is like an arms race. Football will take every penny you can give it, no matter what your budget is. It can take another £2m off you if you’re prepared to let it. I get the PFA aren’t happy about wages being restricted but the truth is if clubs keep going bust and the EFL collapses, there will be no jobs for anybody.

The chief executive
Andrew Parkinson, Plymouth Argyle

We were one of seven League One clubs to vote against the salary cap proposal. We are not against the principle of there being controls on costs and – our wage bill is line with the cap – but more the one-size-fits-all approach. We believe that it should, as with any business, be based on what you are able to generate in terms of revenue and do your business accordingly. We are not disappointed that they are trying to address what is a pretty big issue: generally too much cost and not enough revenue in the lower leagues. This coming season is a transition year so it will be next year when it really starts to bite. That will be when the levels will all need to be adjusted, and the following year as well. The big issue will be the disparity between the finances in League One and the Championship, because clearly your best players and even fringe players, if they are able to be attracted elsewhere, maybe will make a decision to go to another club, sit on the sidelines a bit but get paid [more].

The manager
Darrell Clarke, Walsall

I think for the next 12-18 months the market is going to be very, very low. Players are going to have to take a lot, lot less in wages. I think it’s going to be a rude awakening for a lot of players. But I’m not sure if the salary cap will stick because the PFA are not happy with it, the League Managers Association are not happy with it and the agents aren’t happy with it. I think there will be a lot of challenges ahead. It is a bit of a touchy subject and I don’t believe people should be telling businesspeople how to run their football club, but obviously there has to be some sort of change. Portsmouth and Sunderland bring a lot more revenue compared with smaller clubs and some owners have more money than others. I think it a little bit messy – it has been a little bit rushed in – but looking at our own situation, it doesn’t affect us because we spend within our means. I’m fortunate Walsall is a very well-run club.

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Re: Football's Magic Money Tree

Post by Chester Perry » Thu Aug 27, 2020 10:02 pm

The Telegraph continue their painstaking and long running assessment of Barcelona's finances by looking at how the departure of Messi could save the club from serious financial problesm = much like the sale of Neymar did a few years back

The sale of Lionel Messi could be a necessary evil that saves Barcelona from a Covid-financial apocalypse
SAM WALLACE AUGUST 26, 2020

When Barcelona sold Neymar to Paris Saint-Germain in the summer of 2017, a transfer sensation by any measure, the board of the Catalan club made a very public show of their resistance to the €222 million sale that was paid in one instalment as per the league’s rules on buy-out clauses.

For the president, Josep Maria Bartomeu, the scion of a Catalan industrial family and faced with losing one of the playing and commercial assets integral to the modern vision of Barcelona, the sale had to be presented as a betrayal of his club. He suggested, not unreasonably, that it was about money for Neymar and that given the choice, the club would have kept him rather than take a world-record transfer fee paid up front. “No individual interests,” Bartomeu said, “can take precedence over the interests of the club.”

Yet, when the club’s accounts for that year, 2017-2018, were published in the October of the following year, the full impact of Neymar’s transfer was clear: rather than punish Barcelona it had saved them. Losing the burden of his salary kept the revenue-to-wages ratio below 70 per cent – it would have been 89.5 per cent otherwise – and kept the club in profit for that financial year. The following season the club needed to open a credit line with a US hedge fund, and although they have traded players since then, none have realised the value of their former Brazilian superstar.

Now, with a total wage-bill budget of €671m in the Covid era, the issue for Bartomeu and his fellow board members is their personal liability for the finances of the club under Spanish law that governs sports clubs owned by their membership. Since the Covid outbreak, the club, one of four along with Real Madrid, Athletic Bilbao and Osasuna released from the legal obligation to operate as PLCs, have lobbied government for a change to the rules on liability.

While the prospective departure of Lionel Messi might be a development disastrous for the club’s public face, behind the scenes at Barcelona it could be regarded as a necessary evil that saves the board in a potential Covid financial apocalypse. Like Neymar’s sale three years earlier, the club can argue it was against all their wishes. Yet even if Messi leaves for free, the lifting of his wage burden alone solves some of Barcelona’s pressing financial issues caused by the mistakes of Bartomeu and his board.

There has been no clear disclosure of Barcelona’s finances since the pre-Covid days of last October when the situation was precarious to say the least. The board has been bullish for a while about reaching a total annual revenue stream of €1 billion - “staggering financial growth” Bartomeu described it as in his preamble to the October results for the 2018-2019 season. Even then, on a revenue of €990m, the operating expenditure was €973m with just €4.5m in profits after tax. The half-year accounts for July to December of last year were due in March and are yet to see the light of day. Covid will undoubtedly have made the situation grave – and it was serious before then.

Those 2018-2019 results in October budgeted for a 2019-2020 wage bill of €671m across all sports, although it is the football club that drives the revenue for other loss-making operations including the professional basketball team. There has been no clear signal yet of how much Covid has cost Barcelona since. The Catalan newspaper La Vanguardia has estimated it at €154m. The loss of matchday revenue is clearly a major factor as well as that from the stadium’s non-matchday tourist attractions, and the haste with which the club approached their football and basketball stars for cuts in March suggested a serious problem.

What part of that wage bill is represented by Messi’s salary is not a matter of public record but suggestions that it is upwards of €90m gross would make it clear that his departure would be a critical saving for the club. So too Luis Suarez, Ivan Rakitic and many of the others said to be part of the Ronald Koeman purge which, combined, would have the necessary effect of reducing costs. Once again the club’s position is that it wishes to retain its captain and greatest-ever player but his departure would not be without its benefits.

The personal liability for the club’s board is a serious factor. Since the adoption of the law in 1992 that required all but the aforementioned quartet to reconstitute as PLCs, the membership-owned club status has been a benefit to Barcelona. It was never considered that those running the club might one day be faced with serious financial obligations. The choice between losing Messi or losing control of the club’s finances is unenviable either way, but his departure would pay for some of the transfer mistakes made by the board.

The vote of no confidence in Bartomeu, begun on Wednesday, would need 16,000 members’ signatures – an achievable total, but the process itself is likely to take up to three months, by which time Messi intends to have left. He has instructed the Spanish law firm Cuatrecasas to advise him on his contract freedom and he clearly means business. If, indeed, there is a destination for him at one of the Manchester clubs or PSG or Inter Milan then that deal would have to be completed before the transfer deadline on Oct 5.

The resignation of Bartomeu and also the board that he selected might change Messi’s perspective but it would not change the fundamental problem of the club. Bartomeu has chosen to focus on expanding the revenue and the race to reach €1 billion first without being able to cut the wage bill. He took the merchandising operation in house and away from Nike in order to do so but while that has increased turnover, it has not increased the profits in any meaningful way.

They have not signed Neymar or Paul Pogba or many of those with whom they have been reported to be interested in, because there is not the financial power to do those transfers. Those stars who have been signed - Philippe Coutinho, Ousmane Dembele, Antoine Griezmann, Frenkie de Jong - are yet to deliver the uplift required and so the wage bill has grown while the star man has become ever more dissatisfied.

If Bartomeu bows to pressure and resigns one year before the end of his term then perhaps Messi will stay and some kind of crisis will said to have been avoided. But in reality the next president will find himself with little room to manoeuvre and the obligation of his most famous player’s enormous salary still payable in an era in which revenues for clubs like Barcelona are shrinking.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 1:39 pm

Part 4 of the Telegraph's Future of Football series analysing the state of football in the post-Covid world, John Percy examines how the transfer market might never return to its lucrative ways.

Future of football, part IV: Big money Premier League headlines mask reality that transfers may never be the same
Lower league - and top flight - clubs simply cannot afford to buy players as they used to

By John Percy 27 August 2020 • 3:40pm

It might not feel like it, given the headlines generated by Manchester City's possible £500million move for Lionel Messi and Chelsea's £220million summer spending splurge, but Covid-19 is leaving a trail of destruction through the transfer market.

There are good reasons for City and Chelsea dodging the storm. City have Abu Dhabi’s huge wealth to bulwark them, and have long coveted Messi as the ultimate fantasy football signing. Roman Abramovich, meanwhile, has not spent a penny in two transfer windows due to Chelsea's Fifa ban, cash-rich from the sale of Eden Hazard to Real Madrid last summer.

Look further down the food chain, and you will find many even established top-flight clubs resistant to any notion of super-spending in the climate of uncertainty created by the pandemic. Instead, chief executives and prominent agents share the view that the market is now “completely decimated”, and will be for some time. Fees that clubs are now demanding for players have been almost halved. Swap deals - usually the last resort - are now being openly discussed, despite the various complexities. The structure of payments on transfers will now be staggered more than ever before.

Shrewd scouting, recruitment and data analysis is more important than ever in the pursuit of sensible spending.

The impact is being felt at the very top. Liverpool banked an estimated £175million from winning the title last season, with a further £70million from their Champions League campaign, yet Jurgen Klopp is fully aware of the shift in strategy.

“Now, in corona times, you have to think five times before making a transfer because nobody knows what will happen after corona,” he said. "We always have to pay attention to the financial aspect because we don't know exactly how much money we will have available. Others seem to deal with it a little more positively when you look at Chelsea.

"There are a lot of interesting players out there but if someone is interesting for us, I can't say right now.”

Liverpool are not alone in displaying such caution. Tottenham have borrowed £175million from the Bank of England to ease the financial burden, missing out on £200million in revenue up to June next year. Daniel Levy, the chairman, insists coronavirus has been the “most serious” threat of his 19 years in charge.

Even Manchester United’s protracted pursuit of Jadon Sancho appears to be on the backburner, with chief executive Ed Woodward claiming they are not immune from the implications of the pandemic.

Top agents predict many deals will be loans, and could happen towards the end of the window when the realities of this new financial world hit home.

It is not only coronavirus that will come into the thinking of boardrooms up and down the country. Aston Villa are likely to be one club looking to spend, after their narrow escape from relegation on the final day.

Their owners, Nassef Sawiris and Wes Edens, are billionaires and keen to make Villa a force in English football but, even then, are restricted by Financial Fair Play rules.

Those regulations prevent clubs from spending significant amounts, though Manchester City’s escape from a two-year ban in July has arguably enforced the view that FFP is dead.

Leicester are also a club facing difficulties. It is understood they missed out on around £40million by failing to qualify for the Champions League and Covid-19 has certainly affected King Power, the club’s owners.

They move into a new £100million training ground later this year and the £50million sale of Ben Chilwell to Chelsea was required to give manager Brendan Rodgers some scope to reshape his squad.

And what of the impact below the Premier League? Clubs are fighting for their very existence with revenue severely damaged and, in the Championship, the situation is further complicated by the Football League’s Profitability & Sustainability rules (previously FFP).

The P&S rules have created fear and loathing in the second tier, with clubs at each other’s throats pushing for punishment over the most innocuous of misdemeanours, and coronavirus has only served to increase the problems.

One senior official at a Championship club told Telegraph Sport: “It’s very quiet and I think clubs are using it [Covid-19] as an excuse not to spend. The money has genuinely gone out of the game.”

In Leagues One and Two, player trading will be minimal. Wages of £800-a-week at some clubs are now being seen as hugely attractive, when previously demands would have been far higher.

The return of fans to stadiums is eagerly awaited and should, in theory, start in October and it is only then that football’s economy will begin to repair itself.

But this will be a long road, and it is fair to say that football transfers may never be the same again.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 2:01 pm

Interesting article in the Mail looking at how La Liga will have lost all it's biggest stars over the last few years if Messi does leave. - I am pretty sure that Javier Tebas will be fielding a few calls from some concerned rights holders around the world if it does happen.

If Messi follows Ronaldo and Neymar by moving abroad, La Liga will have lost its three true megastars just as many clubs can't afford transfer fees and some can't even pay the wages
- Lionel Messi has informed Barcelona that he wishes to leave them this summer
- The Argentine would be following the likes of Cristiano Ronaldo out of Spain
- Even likes of Valencia are losing their top stars to Premier League newcomers
By PETE JENSON FOR MAILONLINE

PUBLISHED: 11:01, 28 August 2020 | UPDATED: 12:17, 28 August 2020

Spanish TV football pundit Alberto Edjogo-Owono tweeted on Thursday: ‘Rodrigo Moreno to Leeds. It’s like Harry Kane signing for Elche’.

He clarified his point in subsequent tweets. Leeds are obviously a bigger club than Elche, but all the same this was a newly-promoted Premier League team buying Spain’s centre-forward. In that sense it was not a million miles from newly promoted Elche snapping up the England captain.

If English football keeps on buying up the best of La Liga then it could leave the Spanish competition stripped somewhat bare.

Lionel Messi will of course be the biggest loss. If the 33-year-old, with the help of Manchester City can get himself out of his Barcelona contract and move to England, the Premier League will have deprived Spanish football of its greatest ever product.

In June the head of La Liga Javier Tebas said: ‘The departure of Cristiano [Ronaldo], although they were upset in Madrid, had an almost zero impact because in La Liga we have been preparing for years so that the brand transcends the players.

‘But the case of Messi is different. Messi is the best player in the history of football. We have been fortunate to have always had him in our league. I believe that Messi's departure would be noticeable. Of course, more if he left to play another League.’

The fact is those three were the only La Liga players threatening the top end of the Forbes sport rich list - if Messi goes the highest-ranked star from Spain would be Antoine Griezmann at No 60.

Barcelona and Real Madrid have both been hit hard by the pandemic. For smaller clubs in Spain, who have plenty of other problems, at least gate receipts are a small part of their revenue. For some of La Liga’s minnows the TV deal makes up over 80 percent of income. And all the time there are games on the box – albeit without fans – they get their cut of the TV deal.

But for Barcelona and Madrid the television money makes up less than 30 percent of revenue. The empty stadium is a far bigger burden to bear and the ravaged football tourism industry is another huge loss of earnings.

As Tebas never tires of reminding everyone there are also no nation state clubs in Spain. Paris Saint-Germain were able to buy Neymar because they had the wealth of Qatar behind them. He will make the same argument if Abu Dhabi helps make the Messi move happen.

The whispers around La Liga are that only a handful of clubs in the 20 ready to go into this season are currently in a position where they can buy players. The majority have to sell first. And talent is not moving between Spanish clubs but out of La Liga.

Rodrigo’s departure from Valencia has been coming for some time but it was anticipated, at the start of last season and in January, that he might go to Atletico Madrid. At least that would mean one of Spain’s finest staying in the country. Instead Atletico have their hands tied and Leeds swoop with cash to spend.

Valencia recently admitted they were unable to pay their players in June. The club, who started last season flying high as cup winners and in the Champions League, finished the last campaign outside of Europe. They pay their players in two lump sums in January and June and the squad was told this summer that there was a cash-flow problem holding up the June payment.

A LaLiga talent drain to other leagues has happened before. In some ways it helped bring forth the greatest period in the national team’s history. Those three tournament wins from 2008 to 2012 was built on the young players that thrived at clubs such as Barcelona and Athletic Bilbao, Valencia, Villarreal and Sevilla; players that might not have broken through had clubs not been forced to rely on their youth systems.

The Spain team also benefited from the likes of Cesc Fabregas, Xabi Alonso and Fernando Torres playing in England.

That’s the bright side. The negative take is that if Messi goes things will never be the same. As someone once said: for a good while it will be like watching games in black and white again – the amazing Technicolor, on display elsewhere.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 2:56 pm

Going to focus a bit more on Private Equity and (the new term we have come across) SPAC's that is Special Purpose Acquisition Companies otherwise known as Blank Cheque Companies - First-up is this Bloomberg.com article from yesterday on SPAC's

27 August 2020, 09:00 BST

Blank Check IPOs, the Status Symbol of 2020, Have Raised $32 Billion This Year
The boom in SPACs—special purpose acquisition companies—reflects investors’ search for better returns in a low-rate world.
By Crystal Tse

The new big-money status symbol of 2020 is running your own blank check company. Hedge fund billionaire Bill Ackman has a new one. Oakland A’s executive Billy Beane, who was played by Brad Pitt in the film Moneyball, got into the game with an initial public offering in August. Even former U.S. Speaker of the House Paul Ryan is getting one going.

So what’s a blank check? Formally known as a special purpose acquisition company, or SPAC, it’s an investment vehicle that goes public despite having no real business. The plan is to raise money from investors and use it to buy into another company, typically a private one that’s yet to be chosen. More than 40% of 2020’s IPOs by volume have been SPACs, raising $31.6 billion, more than double all of last year’s volume of $12.4 billion. And last year was a record breaker, too. “Three to four years ago, SPACs were just a curiosity,” says Niccolo de Masi, chief executive officer of two blank checks, DMY Technology Group Inc. and DMY Technology Group Inc. II, that together raised more than $500 million. “Now it’s an option for everybody.”

The blank check boom—or maybe fad—stems from the collision of two big trends. The first is historically low interest rates. With safe bonds paying less than 1% and stocks trading at high valuations, more investors are willing to park their money with a SPAC in hopes of getting lucky with an acquisition that pays off big. Second is the long-running boom in private equity and venture capital. Investors who poured money into buying companies over the past decade want to cash in by selling them. So there are plenty of companies for SPACs to buy. Add to these an old constant: financiers looking for new ways to earn a fee from a transaction.

The pandemic-induced market volatility in March, which made it difficult for conventional companies to go public, helped bring SPACs into the spotlight. Being bought by a SPAC can be an easier way for a private company to go public: It can skip the usual roadshow for pitching investors and avoid some of the scrutiny that goes with an IPO. Online sports betting company DraftKings Inc. became a public stock in April after completing a merger with Diamond Eagle Acquisition Corp. in a $3.3 billion deal. As is customary in such “reverse mergers,” the SPAC took the name of the business it bought. When the stock price popped from around $10 a share for Diamond Eagle before it announced the deal in December to a peak of $43 in June as DraftKings, it helped add to the buzz around blank check deals.

You may not be surprised to learn that there’s a Reddit board devoted to SPACs. The boom has at least one veteran of the industry concerned. “We’re in silly season in SPAC-land,” says Martin Franklin, who’s raised six SPACs in the U.S. and the U.K. since 2006 and has another in the works. “This is going to end badly.”

Investors seem particularly fascinated with the latest blank checks because they’re getting into futuristic businesses. Luminar Technologies Inc., a Peter Thiel-backed company that develops the sensor technology behind driverless cars, announced plans to merge with a SPAC on Aug. 24. The Richard Branson-founded space tourism company Virgin Galactic Holdings Inc. went public via a blank check in 2019.

But the investors who fund SPACs when they first go public aren’t necessarily counting on moonshots. They’re typically institutions such as hedge funds, and the companies offer them the combination of a relatively small downside with a chance to make a tidy profit down the road. Blank checks typically go public at $10 a share and have 24 months to find a target. If the company fails to identify one, it liquidates, and investors get their money back. Investors also get to vote on a deal and have a chance to redeem their shares whatever the result. For that reason, SPACs tend to trade around their $10 price until a deal is announced (or sometimes rumored). In addition, the initial investors in a SPAC get warrants, which entitle them to buy more shares at a set price after the company makes an acquisition.

SPACs aren’t riskless, though—particularly if you buy after a deal is announced and the stock has soared above $10. And once a deal is finalized, the shares can fall below that price as easily as any other stock’s. Of the 18 companies that went public via SPAC mergers in the past year, 11 are trading for less than $10 a share. SPACs are partly a bet on the skills of the sponsors who lead the companies while hunting for a target—often money managers or well-known executives.

Even the most prominent sponsors can have flops. As with private equity and hedge funds, one of the best ways to make money on a SPAC is to start one. As part of their compensation for finding a company, sponsors are generally able to purchase 20% of the SPAC’s stock for a very small amount, typically $25,000. They are also offered warrants. That means they end up getting a chunk of the shares of the company the SPAC acquires for very little money. Because their compensation dilutes the value of shares, it’s part of the cost to a company of going public through a SPAC deal, offsetting some of the fees it saves by not doing a conventional IPO.

Ackman is taking a different route with his newest SPAC, Pershing Square Tontine Holdings Ltd. In essence, his compensation will kick in only when the merged company trades 20% above the offer price. Pershing Square Tontine is the biggest SPAC to date, having raised about $4 billion. Ackman says he wants to buy a minority stake in a “mature unicorn”—a private company with a valuation of $10 billion or more.

Currently there are 120 SPACs with $40 billion to spend, according to data from SPAC Research. DMY Technology’s de Masi predicts that the market will soon split into two categories: a few top sponsors able to make attractive mergers and everyone else.

That doesn’t mean the stars won’t have competition. On Aug. 24 four software companies announced plans for traditional IPOs, and another, Asana Inc., said it would do a direct listing—that is, go public by making existing private shares available to trade on exchanges rather than selling new shares. Thiel’s Palantir Technologies Inc. filed for a direct listing the next day. Investors may soon find out whether SPACs are a new way of doing business or just the latest shiny object in a bull market.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:03 pm

Next up - this from SportsProMedia.com - part of a week long series they ran back in January titled SportsPro Creative Capital -

Skin in the game: What can be learned from private equity’s surging interest in sport?
Venture capital has the power to transform the fortunes of leagues and teams and even reshape the landscape of entire sports. But as recent events have shown, the balance between courting capital and keeping control is a delicate one for those who govern.

Posted: January 29 2020By: Michael Long

There are several clear reasons why sport appeals to investors. Though highly fragmented, with a large number of small players, and skewed by hugely varying market conditions, there is perhaps no other business sector that promises such an inviting mix of cash and cachet.

According to a recent report by ResearchAndMarkets.com, the global sports market is expected to grow at a compound annual growth rate (CAGR) of 5.9 per cent to reach an overall valuation of just over US$614 billion by 2022. That rate of growth is significantly higher than in many other industries, while sport also offers a diversified risk profile, with restrictions like collective bargaining, salary caps and spending limits offering a degree of financial certainty. What’s more, new opportunities in areas like content streaming, data analytics, sports betting, gaming and ecommerce are naturally piquing the interest of investors.

“Sport has traditionally just been spectators going and watching, whereas now the sector has diversified,” explains Lydia Zakrzewski, an associate in the private equity group at law firm Stephenson Harwood LLP. “The introduction of disruptive technology and the development of innovations like esports and online betting have allowed a variety of sports to become more accessible to a larger audience. In turn, investment into sports has demanded a larger focus on the commercial and audience interaction side of sports, which makes it an even more attractive proposition.”

It is no secret that private financing, in whatever form it takes, has its benefits. Besides providing essential capital, it can help organisations of any size or stature achieve strategic objectives, helping to pay down debts and scale up businesses through internal expansion, mergers and acquisitions. Private financiers often actively bring operational expertise, valuable connections and knowhow, and a level of fiscal discipline that sports organisations may not possess in-house.

On the flip side, however, it is fair to say corporate benefactors almost never invest for the love of the game, an affinity with the local community, or indeed their own vanity. After injecting capital, the hard-headed prerogative of the institutional investor is to sweat acquired assets before flipping them for a profit. Or, to put it another way, their sole intention is to extract the greatest returns in the shortest time possible.

Take the case of Formula One under CVC Capital Partners, which controlled the sport for a decade before selling it to Liberty Media in late 2016. During those years, Formula One’s management mindset was unapologetically profit-driven, to the extent that it informed virtually every key business decision made by its former supremo, Bernie Ecclestone (pictured above). The series’ abrupt switch from sponsor-friendly free-to-air to pay-TV, for example, clearly signified a strategy that put revenue before reach, while the size of the cheque was almost always the determining factor when it came to awarding race hosting contracts, particularly to state-backed venues in markets governed by regimes with dubious ethics standards.

In CVC’s eyes - and indeed in the mind of Ecclestone - just about any asset could be bought and sold for the right price; it was merely a matter of negotiation. But the same cannot be said for every rights holder in sport. Unlike for-profit commercial entities like Formula One, which sits separately from motorsport’s global governing body, the FIA, a great number of governing bodies are deemed sacrosanct. International federations, for example, are themselves governed by charters and statutes designed to develop and safeguard all levels of their sport, so the prospect of surrendering any kind of operational or regulatory control is a non-starter.

Simply put, the vast majority of sports governing bodies are not up for sale, and never will be. The commercial rights tied to their properties and assets, on the other hand, are generally seen as fair game.

Governing finance
International federations have long viewed private investment as a useful means of supporting their development goals, yet striking a balance between investor interests and broader sporting interests is a complex challenge. A common mechanism employed by governing bodies is to separate commercial rights from governance structures - Formula One being a case in point - thereby enabling the former to be exploited without directly impacting the latter.

Partnerships, rather than buyouts, are also seen as a viable way of securing outside investment without ceding operational control outright. In early 2018, the International Tennis Federation (ITF) took this particular approach when it teamed up with Kosmos, an investment group founded by Spanish soccer star Gerard Piqué and backed by Hiroshi Mikitani, the chairman and chief executive of Japanese ecommerce firm Rakuten, to overhaul the Davis Cup, the flagship international team competition in men’s tennis. Though viewed unfavourably by staunch supporters of sporting tradition, the partnership was forged on the promise that Kosmos would invest some US$3 billion over the coming 25 years to turn the 119-year-old competition into a ‘World Cup of Tennis’.

According to the ITF, the Kosmos investment would lead to significant increases in prize money for players and the federation’s member nations, as well as extra funding for grassroots projects and other development programmes. But the governing body was careful not to relinquish control altogether; decisions regarding the Davis Cup are now made by a newly created steering committee comprised of two ITF officials, one Kosmos representative, and a former player.

For independent governing bodies, then, the rewards derived from outside investment must be weighed against the degree to which such investment risks inhibiting their autonomy. Ultimately, though, the issue of control is never easy to reconcile in a multi-stakeholder environment like international sport.

“The balance that needs to be struck between the regulatory side of the sport and then the commercial aspects is really key, especially for the governance of the sport and its legacy,” says Zakrzewski. “Governing bodies need to remain in control.”

For a timely case study of this tension in action, one need look no further than the planet’s most popular sport.

In the spring of 2018, reports emerged that Gianni Infantino, the president of soccer’s global governing body Fifa, was secretly entertaining a big-money offer from an international consortium of investors to overhaul and expand the Club World Cup, an annual seven-team event for the club champions of each continent, and to create a new tournament involving international teams. It was later revealed that Japan’s SoftBank Group was the lead investor in the consortium, which also included backers from China, Saudi Arabia, the United States and the United Arab Emirates.

Reports at the time indicated that the consortium had been assembled by Centricus, a UK-based asset management firm that had helped SoftBank raise capital for its US$100 billion Vision Fund. As part of the radical proposal, Fifa would have held a 51 per cent controlling stake in a new joint venture, Fifa Digital Corporation, which would be set up to run the tournaments, with the investors reportedly guaranteeing at least US$25 billion over 12 years on account of increased revenue from sponsorship, broadcast rights and match-day income. According to the New York Times, the consortium was also seeking to gain control of Fifa’s highly lucrative gaming and merchandise businesses.

Not surprisingly, though, the plan faced stern opposition from stakeholders across world soccer. Some clubs were said to have voiced concerns over the amount of profit SoftBank stood to make from the enterprise, while Uefa, the governing body of the European game, quickly voted down the proposal amid fears an expanded Club World Cup could pose a threat to its own, highly lucrative Champions League competition.

“I cannot accept that some people, some of our colleagues who are blinded by the pursuit of profit, are considering to sell the soul of football tournaments to nebulous private funds,” Uefa president Aleksander Ceferin said at the time. “We are not the owners of football. We are not allowed to sell it.”

Faced by such opposition, Fifa was forced to abandon talks but, as it transpired, the federation would later announce that the Club World Cup would be expanded to 24 teams for the first time. Beginning in June 2021, the tournament would shift to a four-year cycle, with China staging the first edition. Yet reports of continued interest among private investors soon resurfaced. This time round the rumoured suitors were said to be a diverse mix of Chinese conglomerates, international broadcasters, and at least one private equity firm that is by now well-known in sporting circles.

Conflicted interest
With 24 offices around the globe and US$82.5 billion worth of assets under management, CVC Capital Partners is one of the world’s largest private equity firms. Having previously owned significant stakes in MotoGP and the aforementioned Formula One, it boasts a long track record of investing in sport, so its reported interest in acquiring the commercial rights to Fifa’s expanded Club World Cup came as little surprise. What has perhaps stirred more intrigue is CVC’s recent attempts to build influence in rugby union.

In September 2018, reports surfaced in the British press that the company was in talks over a potentially groundbreaking investment in Premiership Rugby, the top flight of the English club game. Worth a reported UK£275 million, the deal being discussed would see CVC acquire 51 per cent of the league, and would have represented the biggest financial agreement of its kind in the history of club rugby worldwide.

News of CVC’s interest emerged at a pivotal time both in the history of rugby, which has grown steadily both from a commercial and participation perspective since being professionalised as recently as 1995, and Premiership Rugby itself. While the league’s commercial revenues had grown by more than 80 per cent over the preceding five years, the majority of its 12 clubs were struggling to make ends meet, reporting combined losses of UK£28.5 million in 2017. Those conditions - overarching commercial growth combined with ostensibly distressed businesses - made Premiership Rugby ripe for private investment.

The deal on the table valued the competition at around UK£550 million and would have seen each member receive a UK£17 million overnight payment, yet the clubs subsequently voted unanimously to reject the CVC proposal. Confirming the decision, then-Premiership Rugby chairman Ian Ritchie said that “selling a majority stake was not the preferred option” but indicated that the league would continue to seek outside investment. Talks with CVC then turned to a minority shareholding, and by December of 2018 a UK£200 million (US$253.6 million) deal had been struck that would see the company, through its Fund VII, acquire a reported 27 per cent stake in Premier Rugby Limited, the league’s commercial arm.

Suggestions for how CVC might generate a return on that investment were swiftly leaked to the British press. They included an end to promotion and relegation - a move that would bring about greater financial certainty for participating clubs - a more aggressive schedule of overseas games, and a new approach to packaging and selling media rights. A breakaway was also mooted as a possibility if those moves were thwarted by the Rugby Football Union (RFU), the national governing body of the sport in England.

But it soon transpired that CVC had far greater ambitions. In early 2019, the company’s attentions had turned to the international game and, specifically, Europe’s Six Nations, rugby union’s oldest championship. By March, a UK£500 million (US$657.9 million) bid for a 30 per cent share in the tournament had purportedly been tabled, prompting the IMG agency to throw its hat into the ring with an offer worth a reported UK£1.75 billion (US$2.32 billion).

Later reports suggested that CVC’s offer in fact amounted to UK£300 million (US$372 million) in return for a 15 per cent stake in the competition’s commercial arm as well as rights to summer tours and autumn internationals, with both sides entering exclusive negotiations in September.

Meanwhile CVC was also busy working on another deal, reportedly worth UK£120 million, to acquire 27 per cent of the Pro14, a top-tier league contested by teams in Wales, Ireland, Scotland, Italy and South Africa. That deal once again focused on the competition’s commercial rights, with the Pro14 - which is owned by its member unions, not individual clubs - retaining full control of sporting matters.

“It’s an interesting departure and development,” Gareth Davies, the chairman of the Welsh Rugby Union (WRU), said at the time. “Rugby isn’t always good at working together, in terms of the best results, because there are lots of areas of self-interest. So it probably needs an external partner to come in and knock heads together, in many respects, and to more commercialise what is probably regarded as an under-exploited sport.”

For Richard Coleman, a colleague of Zakrzewski’s at Stephenson Harwood, CVC’s bid to stockpile equity stakes in multiple rugby properties is validation of the sport’s current commercial trajectory.

“I think what they see is a global sport, in the same way football or F1 is, and a sport that has been a little bit sleepy at club level in terms of its commercialisation,” he says. “I think they see a lot of upside potential in rugby. What they are thinking is that they have longstanding experience of bringing a product to a global market, and they’ll have a range of experience in doing that across different sectors, different companies and different countries, in a way that the English Premiership, for example, does not.”

Inevitably, though, CVC’s advances on rugby union have served to exacerbate existing tensions within the sport. As well as making inroads into the European game, the company has simultaneously held talks with World Rugby, the international governing body, over investing in a proposed Nations Championship, which would have unified the Six Nations with the southern hemisphere’s Rugby Championship as part of an expanded global Test calendar from 2022.

Much like the ITF, World Rugby believed its new competition, which also included promotion and relegation within a revamped World League structure, would generate vital development funds, supporting cash-strapped nations in the southern hemisphere and helping to grow the game in emerging markets such as Japan. But after the wealthy Six Nations unions of England, Ireland, Scotland, Wales, Italy and France elected to pool their commercial rights and sell them to CVC, the federation’s plan was effectively rendered dead in the water.

“Someone who is as big an investor in the sport as a private equity firm like CVC will create influence - that is something that in some areas could concern us,” Brett Gosper, World Rugby’s chief executive, told the Guardian in September. “When you have a high-funding commercial owner of the sport that isn’t the governing body then certain calls can be made which we might think aren’t in the interests of the sport’s growth, player welfare or other areas.

“We would want to make sure things are being done for the right reasons and that our influence wasn’t usurped. Given the recent positions CVC have taken in the game it would be madness for us not to be in some sort of communication with them. We all want a healthy, growing sport.”

Gosper, of course, is not alone in feeling a sense of trepidation. Indeed, such reservations are completely understandable. As the ongoing power struggles in soccer, tennis and rugby demonstrate, private investment can be as divisive as it can be transformative.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:14 pm

The single biggest example of Private Equity in club football is City Football group - no longer just a state project - Private Equity shareholders from China and USA are now involved (I would not be in the least bit surprised if India's Reliance invests at some point). In many ways they have re-invented what it is to be a club owner. This from that SportPro Creative Capital series in January gives an overview (note that since this was published City have bought a club in Belgium and they are in advanced stages of buying one in France)

‘It’s thoroughly complex’: How City Football Group is redefining soccer club ownership
Now valued at US$4.8 billion, City Football Group and its global network of eight clubs has no direct comparison in the world of soccer. Omar Berrada, CFG’s chief operating officer, explains how a commitment to doing things differently has seen the company come to represent a sports organisation of the future.

Posted: January 27 2020By: Sam Carp

City Football Group (CFG) is no ordinary soccer club owner, but that is because it never set out to be one in the traditional sense. The aim from the outset was to do things differently.

“Innovation has always been a key component of our strategy, whether it’s innovating in terms of the business model, or even on the pitch,” notes Omar Berrada (below, right), chief operating officer at CFG. “It’s always something that we’ve tried to do as we’ve grown over the last years.”

To say that such an approach is paying off would be an understatement. Established in 2013, CFG now boasts a valuation of US$4.8 billion – the biggest for an organisation of its kind – after Silicon Valley-based technology investment firm Silver Lake bought a ten per cent stake in the company late last year. For those at CFG, Silver Lake did more than hand over a US$500 million cheque; it also provided the biggest endorsement to date that the various pieces of the organisation’s global puzzle are falling into place.

“They’ve decided to invest in us because they see the CFG model as a platform that in football is different,” Berrada declares. “[It’s] unique, innovative and has generated an enormous amount of value for our club shareholders, and will continue to generate that value over the coming years.

“Their background is mostly in technology, but in general as a firm they’ve been very successful. So for somebody with those credentials to come in and invest in City Football Group is a testament to the work that has been done over the years.”

When Berrada speaks of that progress, he rattles off accomplishments that would suggest CFG’s rise has been decades in the making. But while its ubiquity and swift success might give the impression of a company that has been part of soccer’s furniture for some time, the truth is that – in sporting terms – much of that growth has been achieved overnight.

But with that in mind, it is worth considering what, exactly, convinced a company like Silver Lake – the self-described global leader in technology investing that counts Chinese ecommerce giant Alibaba and agency behemoth Endeavor among US$43 billion worth of combined assets – to make CFG its first investment in soccer.

To think of CFG is of course to think of Manchester City, a once modest English soccer club who blended into the crowd, but who have morphed into a finely-tuned, title-winning machine since being taken over by Abu Dhabi in 2008. The reigning Premier League champions remain CFG’s crown jewel, but the organisation has grown its portfolio to include eight teams, most recently planting flags in China and India to add to clubs in the United States, Australia, Japan, Uruguay and Spain. It is an acquisition strategy that knows no equal in the world of soccer, and one more closely aligned to the art of multiple franchise ownership seen commonly in North America.

When CFG announced its investments in third-tier Chinese outfit Sichuan Jiuniu FC – a deal that was aided by CFG’s minority shareholder China Media Capital - and Indian Super League (ISL) side Mumbai City FC, it completed an important triangle. In the world’s most populous countries – ones with gargantuan economies and burgeoning tech markets - CFG now considers itself precisely where it needs to be.

“When we set out as City Football Group, the three big markets we always had in mind were the US, China and India, right from the beginning,” Berrada reveals. “For the most part we were able to go to the US very quickly. We then thought about China and India, but ultimately we didn’t want to go to those markets without having the right partner.

“We’ve got into a position now where we’re very comfortable with the people that we’re working with in such key markets, markets that have grown so quickly over the last years from an economic perspective and have interesting socio-demographics. The interest in football is also growing very fast, so if you look at the combination, we think the idiosyncrasies are very interesting, and now being able to have a physical presence there, to be able to help and continue to develop football in those territories, is fascinating.

“It will also continue to help us to grow our partnerships. A lot of departments that we have been speaking to for, I would say the last six years, have been asking: ‘what are you doing in the US? What are you doing in China? What are you doing in India? How does that look for the future?’. And now we have a clear vision in those territories.

“So I think we’ve created a network of clubs that gives us an ability to develop our commercial presence, our fan engagement ability, as well as our football platform.”

To think of CFG, then, is also to think of a business that leans on technology more than most – with over 2,000 employees and 1,500 players around the world, it would be fair to say that it has to. And given the rate at which the organisation has spread its tentacles since being established, it is unsurprising that technology has come to underpin an intricate global network whose influence now spans various continents and time zones.

“It’s absolutely critical,” Berrada says of technology’s role from an operational standpoint. “We have eight clubs, so we are a thoroughly complex football organisation – I would say more complex than most. We approach our businesses in terms of what kinds of technology can help us manage this business where we have eight clubs, multiple offices around the world, a large network of scouts and consultants, and commercial and marketing team members based all over the world serving these different clubs.

“So the usage of technology helps us to stay connected to our staff, to our partners, to our fans, and we really have made an effort to find the right partners that can help us develop those tools to be able to do everything.”

As the 2020s dawn, it is hardly groundbreaking for a high-ranking executive working in top-level sport to highlight the mounting significance of technology, but in this case Berrada is able to point to several examples of that in action. A far-reaching deal signed in October with Cisco was completed with the intention of enhancing connectivity at five of CFG’s clubs. Prior to that, at the end of 2018, Manchester City penned a multi-year partnership with cloud software company Acronis that is designed to better manage and protect the performance and operational data collected by the club. Every deal, it seems, is signed to improve performance on and off the pitch.

“Given our strategic positioning and our focus on innovation and technology, I think we’ve created a platform that is very attractive for top brands to be able to roll out their technologies and work with us to continue developing them,” Berrada declares. “At the same time, primarily it is about using those technologies to create the best experiences for our fans, to be as efficient as we can in terms of managing our systems internally.

“What we want is genuine integration with our partners, so that when they’re out there talking about the benefits of working with us, it’s based on real case studies both on and off the pitch, so I think that’s been a key component of our commercial success. And also, through the fact that we’re finding these top brands and top partners are working with us, it’s also helping us a little bit on the pitch, because they’re able in some cases to create that added benefit and incremental improvement in our performances.”

With that last point in mind, Berrada is particularly keen to draw attention to a sponsorship deal with German software specialist SAP, whose equipment is regularly used by City manager Pep Guardiola, his coaching staff and players.

“If we talk about SAP, there are three areas of the relationship, so we say from the boardroom to the pitch,” he explains. “On the one hand we’re using their business systems, their ERP systems, for our finance partners, for our business management tools, etc, to help us become a lot more effective and efficient.

“The second element of the partnership is around football. There has been a lot of focus on using data to maximise the performance of our players, so we work with SAP to generate the best insights from the data that has been generated to help find the incremental upside in the performance of our players and coaches.

“Then, finally, the third element of the SAP relationship is a fan component, so how we can use the data that has been generated – whether it’s around what’s happening on the pitch or outside the pitch – to improve the experience for our fans either using digital platforms such as our app, or in-bowl.”

For CFG, though, its interest now extends far beyond simply taking advantage of the technologies that are already out there. At the start of 2019, the group was named as the anchor investor in Sapphire Sport, a new US$115 million venture capital fund launched by Sapphire Ventures. Focused on technology and digital sports, the fund plans to make between five and six startup investments of between US$3 million and US$7 million each year.

The fund launched with an existing portfolio including live streaming platform Mycujoo, digital sports network Overtime, and gaming studio Phoenix Labs. Berrada notes that it has already allowed CFG to explore “very interesting areas” such as esports, digital health and fitness, and next-generation media.

It’s giving us a really first-hand insight and the ability to be first movers in the world of tech and entertainment. We want to be part of that, we want to be at the forefront of that.

“It’s definitely helped us open our minds up to the different ideas, technologies around,” he adds. “Say, ticketing solutions that actually make sense. Things like data analytics clearly are things we’ve been looking at for a few years now, but that doesn’t mean there aren’t new services and new approaches that are different to what we’ve already adopted. So I would say it’s a mixture of areas that we had already been looking at, but looking for new ideas in those sectors, and at the same time opening our minds up to new technologies that we hadn’t considered initially.”

As Berrada talks SportsPro through CFG’s various technology interests, it becomes easier to connect the dots. At the very top level, CFG will now benefit from the entrepreneurial expertise of Silver Lake, whose managing director Egon Durban has become the organisation’s ninth board member. Berrada points out that while the relationship with Silver Lake “is still very young”, the partnership will allow CFG “to tap into their knowhow of the tech industry” and “also into their contacts”, noting that its new investor will “be able to suggest and put us in touch with people that fit in well with what we’re trying to do”.

Then, at the other end of the scale, are initiatives like Sapphire Sports, allowing CFG to “actively participate as investors”, Berrada says, and potentially take ownership of what he describes as “hopefully the next big idea in the world of sports and entertainment”. Then there remains everything in between.

“It’s giving us a really first-hand insight and the ability to be first movers in the world of tech and entertainment,” Berrada explains. “If you think about how that’s starting to merge and the experience it’s creating for fans all over the world, it’s absolutely fascinating, and we want to be part of that, we want to be at the forefront of that.

“The combination of having the likes of China Media Capital, Silver Lake, as well as our investments in Sapphire, puts us in a really good position to be able to tap into their knowhow network, and really get a close insight on those technologies, services and tools that will help us on and off the pitch over the coming years.”

As has already been well documented elsewhere, CFG’s path to this point was mapped out some time ago in a 2009 book by Ferran Soriano, then fresh from a stint as vice president of Spanish soccer giants FC Barcelona. In it Soriano, who is now CFG’s chief executive, prophesised the transformation of soccer clubs into global entertainment businesses more akin to Disney or Warner Bros., money-making vehicles that could convert success into merchandise sales and their stadiums into theme park equivalents. And, as Soriano was seemingly all too aware, Disney is nothing without its content – that is, after all, the root from which all other branches of the media giant’s business have grown.

It is therefore unsurprising to find that Manchester City in particular have drastically evolved their content offering under CFG’s watch. They were the first soccer club to feature in an Amazon ‘All or Nothing’ docuseries, a move Berrada describes as “bold and brave”, and one he says “probably set the bar in terms of what football clubs will be doing for the next years”. The past year has also seen the club launch its own over-the-top (OTT) streaming subscription service and partner with Intel to trial the company’s True View immersive viewing technology, while they most recently became the first team to create their own channel on YouTube Kids.


“We want to make football more accessible for more people around the world, and that goes beyond just what happens on the pitch,” says Berrada. “We want to ensure that our clubs are able to compete and win as many trophies as possible, playing a specific style of football, beautiful football that is attractive for our fans around the world.

“We’ll continue making sure that we use all the different digital platforms available to us - whether it’s the club app, whether it’s launching the recent OTT service, we want to make sure that we are as ubiquitous as possible in terms of reaching out to our fans.

“We have millions and millions of followers around the world, and most of them will never have a chance to come to the Etihad Stadium, or to watch a game in New York or in Yokohama, but they’re still very much engaged with us, so we spend a lot of time thinking about how we can provide that content that creates that emotional connection, that creates that conversation, that dialogue, both between our clubs and our fans, but also between our fans, so that’s what we try to do – we try to create content that’s good for them, that is meaningful.”

There is little doubt, then, that CFG sees itself as a soccer organisation of the future. At a time when many sports team owners may wish to avoid referring to their clubs as money-making, global entertainment businesses, those at CFG are under no illusion as to what the end goal is.

“I think we’re definitely getting there,” Berrada observes, when asked whether CFG is close to achieving Soriano’s target of operating more like a company in the mould of Disney.

“If you think about the global nature of football, the number of people that watch the game, that participate in the game, that play it, it’s the number one sport in the world. The beauty of the City Football Group model or organisation is that we are present in so many different territories and so many different platforms that, really, football is happening in one shape or another every single day of the year - whether it’s the game, whether it’s a trophy tour, a fan viewing session, an activation with some of our partners, there’s something going on everyday within City Football Group and across the world.

“So I think in that sense, yes, we are maybe becoming more similar to Disney than to traditional football clubs – we are an entertainment group in that sense because we are able to provide entertainment on and off the pitch across the globe.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:21 pm

This, again from SportsPro's Creative Capital series explains a number of the attractions that sport and football (at the highest levels) in particalar has for Private Equity.

23 Capital | Barca’s growth points to future off-field rivalries played out far away from home
Jason Traub, chief executive and co-founder of 23 Capital, on the impact of globalisation in club soccer and why commercial growth has piqued the interest of investors.

Posted: January 28 2020 By: Jason Traub

Soccer has always been linked to local rivalries. La Liga, the Premier League, Serie A and the other big European leagues have been populated with supporters from their hometowns or cities going to watch their team when they played, whether that be at home or a couple hours’ drive to the next club.

Even within a city you may have to choose between two or three clubs: Liverpool or Everton? AC Milan or Internazionale? Real Madrid or Atletico Madrid?

As the sport has become more and more globalised, and broadcasting rights and widespread ease of access to media has meant that new opportunities and markets have opened up, there has been a broadening of the appeal of the sport to the masses and the growth of the game in countries like the USA, China and Saudi Arabia.

In January, Real Madrid, Barcelona, Atletico Madrid and Valencia journeyed to compete in the revamped Spanish Super Cup in Riyadh, with the Kingdom reportedly having paid the Spanish Football Federation (RFEF) €120 million for the privilege of having some of the world’s finest players competing on their doorstep. Amidst some wider criticism, the RFEF added in a statement that 'the internationalisation of the competition will increase its value and contribute to raising our visibility and improving our image ahead of our bid to host the 2030 World Cup'.

The broadening commercial appeal of football is already starting to impact heavily at the top and the intangible asset classes and intellectual property that exist now within the sport will only grow exponentially.

The wealth at the top of the Spanish game is skyrocketing. In Deloitte’s recently published annual Football Money League report, the findings show that Barcelona have become the first club to break the €800 million barrier. Overall, the 20 highest-earning clubs in the world generated a record €9.3 billion (2018: €8.3 billion) of combined revenue in 2018/19, an increase of 11 per cent on the previous year.

Barcelona have been able to reach such commercial growth and records due to the diversification and internationalisation of the revenue streams. Anywhere you go in the world you will see fans and supporters of Barca who have probably never set foot in the Nou Camp but will proudly be one of Lionel Messi’s 141 million Instagram followers and buy one of his shirts every season.

Barca’s commercial operation generated €383.5 million, an increase of €60.9 million (19 per cent), which is more than the total revenue of the 12th placed club in Deloitte’s ranking. Broadcast revenue increased €75.1 million (34 per cent) as the club benefitted from Uefa’s new, and more lucrative, broadcast deals, which commenced in 2018/19. There is now a €83.5 million gap to their next biggest rival in La Liga, Real Madrid. Elsewhere, Manchester United are now third, with Bayern Munich and Paris Saint-Germain in fourth and fifth respectively.

These clubs' deep understanding of their intangible assets has elevated them to the pinnacle of financial success that spans across different markets from South East Asia to South America and at home in Europe.

Spain is one of the largest soccer markets in the world and so the export of one of their greatest brands across the globe will only broaden the appeal of the game in new markets. According to Mailman’s 2020 Red Card report, Barcelona have just overtaken Real Madrid to become China’s most popular club online. The club’s followers on Weibo grew 104 per cent year-on-year and if the club can continue to capitalise on those potential massive new revenue streams commercially, they will stay on top of the world in a financial sense for many more years to come.

The growth of the club game internationally has also drawn the attention of investors with growing corporate interest. Manchester City have already seen growing interest in this sector, and this will only become more prevalent in the coming years in Europe. Ultimately there is very little deep sector expertise at play across the debt, equity and funding space. As the commercial interest at clubs becomes more complicated across sectors, specialist knowledge will become increasingly valuable.

Over the next decade the finance world will probably stop talking about transfer valuations, stadium deals and broadcast rights in British pounds or euro, but instead the currencies that will speak volumes will be US dollars or Chinese yuan. The local competition between clubs will still be played in their original cities but those fierce rivalries will be increasingly played out in different markets like China, the Middle East and the US.

More eyes on the game can only be beneficial in the long run and should be embraced wholeheartedly.

Chester Perry
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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:34 pm

Again, this time from 23 Capital's on website www/23-cap.com tells of their focus and belief in football

How football clubs can cash in on the game’s changing investment landscape
PRESS - Author: Jonathan Dyson, Sports Business

Posted: 09.07.19

According to KPMG’s ‘The European Elite 2019’ report, published in May, the combined enterprise value of the 32 most prominent European football clubs increased nine per cent in 2018, and has grown 35 per cent over the past three years.

This growth rate contrasts with the fortunes of European stocks in the same period – notably the STOXX Europe 50 Index, whose value fell 13 per cent in 2018, the report notes. It says this demonstrates “the different pace at which the football industry is evolving.

Charles Baker, co-chair of New York-based O’Melveny’s sports industry group, which advises on a broad array of transactions, including M&A, tells SportBusiness that “an investment into a football club currently offers investors the potential for significant return on their initial investment, as the CAGR for sports team ownership is better than almost every other asset class over the last five, 10 and 20 years”.

He adds: “Given the current levels of growth in the sports market, an investment in a football club may be a smart portfolio choice. A lot of investors see this asset class as the new frontier for sports investment, especially when compared to the NFL and MLB, which are seen as more mature properties.”

Baker also notes that due to financial fair play regulations and other factors such as stable sponsorship revenues driven by global appeal, the profitability of European clubs is growing.

Stephen Duval, co-founder of London-based 23 Capital, which provides finance to the sports and entertainment sectors, tells SportBusiness that a new wave of investors has entered football and is changing the landscape.

“Football clubs are definitely being seen far less as trophy assets for rich people,” he says.

“They are now run like proper businesses. Even Manchester City – you may say Abu Dhabi are throwing money at it, but they’ve turned it into a business.”

His co-founder at 23 Capital, Jason Traub adds: “We are seeing more institutional financial interest in football now.”

Examples of US private equity investors buying into European clubs include Jason Levien and Steve Kaplan (Swansea City), John Henry (Liverpool), Harris Blitzer Sports & Entertainment (Crystal Palace), The Tornante Company (Portsmouth), Joe DaGrosa (Bordeaux), and James Pallotta (AS Roma).

Challenges for clubs

Baker says that the influx of private equity “cannot be understated because it significantly increases competition for clubs, driving up prices”.

He adds: “I think we will also see more clubs changing hands, due to the focus on short-term returns and exits, which could create instability at certain clubs. These short-term turnarounds could lead clubs to take actions that are riskier from a regulation or operational perspective, and that a long-term investor would not otherwise take.”

However, he adds: “Private equity firms can be savvy financial investors focused on buying underappreciated assets and making certain operational and financial changes to unlock value.”

Duval notes that “there are a lot of principles to private equity, so the rules about getting out in a managed timeframe are less relevant”. Such principles include alignment of interest, governance and transparency. “Particularly in the Premier League a lot of these principles of private equity are getting involved.”

Comparing the influx of private equity to previous waves of owners, Traub adds: “I think the financial community coming in is potentially a healthier one. Most private equity investors come with a challenging mindset, a smart mindset.

“A lot of them will have a financial driver but what is clear from the Premier League, for example, is that an individual investor will learn quickly how to balance financial performance with stakeholder interest – and by that I mean the fans and the local community.”

Attracting PE investment

Baker stresses that a club “must be appropriately priced to provide an acceptable risk/return from a capital cost perspective. Without that, all of the operational changes will not provide much upside”.

He explains that investors are more wary of buying stakes in European clubs, especially in the Premier League, because of the risk of relegation and its effect on club value.

“There is definitely an increased sense of caution when buying a Premier League club,” he says.

To overcome some of that risk his group recommends structured deals with a contingency, with a certain portion of the purchase price – typically 20-to-30 per cent – held back and provided only if the club meets certain “relegation/promotion metrics”.

Last year’s sale of Aston Villa was an example of such a deal. The NSWE group purchased a controlling 55-per-cent stake in the club, which won promotion back to the Premier League in May, triggering the remainder of the purchase price to be paid. “This type of structure in a deal is becoming increasingly common,” says Baker.

Challenges for investors

At the FT Business of Football Summit, held in London on May 31, Goldman Sachs managing director Gregory Carey said it is still extremely challenging for investors in English clubs outside of the elite to grow the value of their investments.
“There is a lot of competition for very few spots,” he said. “Some teams that you think should be playing in the Premier League have been relegated, so it’s very tough. People think they understand the space, but they are realising how hard it is.”

Carey pointed to the example of Swansea City, who were relegated from the Premier League in 2017-18 after seven consecutive seasons in the top flight. A consortium of American businessmen had acquired a controlling 68-per-cent stake in the club in July 2016.

“It’s a lot easier to buy a mid-level club in Italy than an English Championship club because you have a much better chance of staying up,” Carey said.

However, Traub observes that other challenges exist in Italy and elsewhere in Europe, and points to the chronic delays in the building of AS Roma’s new stadium as a prime example.

James Pallotta, Roma’s American owner and president, presented plans for the new ground in March 2014 and targeted the 2016-17 season for its opening. Construction has still not started, with the project suffering a number of setbacks including the arrest of nine people linked to the building of the stadium.

Traub said that owners of Premier League clubs are likely to find fewer obstacles to driving growth and will “feel like the destiny is in their own hands”.

Leveraging investment

Traub adds that multiple ownership of clubs is a way for additional value can be unlocked, with the City Football Group, which along with Manchester City owns parts of clubs in the US, Australia, Japan, Spain, Uruguay and China, leading the way.

Traub notes that City are formalising the multiple ownership of clubs done already elsewhere, for instance by the Pozzo family. “Manchester City have a thesis to institutionalise football ownership under one umbrella,” he explains.

Other similar developments are likely to emerge soon. “We are seeing a much healthier want by new investors to look at consolidating a number of clubs,” Traub reveals. “We know of three or four parties that are looking to drive that same thesis.”

Ebru Köksal, senior advisor at investment management firm J. Stern & Co. and former chief executive at the Galatasaray Group, says that women’s football also represents a valuable opportunity for clubs, pointing to Lyon, whose women’s side has won six Uefa Women’s Champions League titles, including the last four in a row. Lyon is owned by French businessman Jean-Michel Aulas, and Köksal says the club’s women’s side “has been one of the best investments of his life”.

Köksal adds: “If I had €10m I would definitely go for a women’s club because the growth potential there is tremendous. Also, there is less competition and it’s easier as you are starting with a blank page.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:43 pm

The Bloomberg article that kicked off this little sequence mentioned that SPAC's have grown in part because consultancies and brokers needed new ways to generate fees. This the final article I am posting in this sequence shows just how nimble advisory companies have had to be whilst also indirectly highlighting the opportunities that can exist for Private Equity in the immediate economic climate. from SportsBusiness.com

“Over time we plan to make acquisitions” | Simon Bazalgette on his new advisory firm
Ben Cronin, Europe Editor - August 28, 2020

- Advisory service originally planned to help rights-holders consolidate back-of-house operations
- But pandemic has caused pivot to investment and fundraising advisory services
- Bazalgette wants to persuade sports to pool their commercial rights

When Simon Bazalgette and his partners first conceived of a new consultancy firm for the sports business, the industry was in a completely different position to the one where it finds itself today.

The former chairman of the Jockey Club and his co-founder Paul Fisher, his erstwhile chief executive at the organisation, had originally planned to focus the new firm’s advisory efforts on venue operations, having established their credentials in this field when they launched the racecourse operator’s own consultancy venture, Jockey Club Services, in 2014.

That enterprise drew on the pair’s experiences consolidating back-of-house operations for the 15 racecourses managed by the Jockey Club, and the name and the publicity materials for their new business, Global Venues Services, suggested it would operate along similar lines.

“Our original thinking was that there was a lot of opportunity to develop and consolidate services that are provided to venues and events – security, cleaning, traffic management, car parking, catering, all that kind of stuff.” Bazalgette tells SportBusiness. “From the Jockey Club point of view, Paul Fisher and I had probably as good a level of experience, probably better, than most in that area, because we were running 15 venues, and most sports businesses only have one.”

That was before Covid-19 struck and the new firm – together with its clients – were forced to consider more immediate challenges.

Investment
“Clearly, when lockdown came and there were suddenly no events, everybody had to focus on survival,” he says. “What we’ve really become is more of a kind of fundraising and investment advisory business. If you’d asked me six months ago, that’s not what I would have expected, but there seems to be a demand in the market for that.”

Happily, Bazalgette and Fisher could also point to some experience in these areas. The pair famously created the sports industry’s first retail bond when they were at the Jockey Club to raise nearly £25m ($33m/€28m) towards the £45m cost of a new grandstand development for the Cheltenham racecourse in 2013. The creative fundraising instrument, which Bazalgette describes as a “cross between a debenture and crowdfunding”, was subsequently adopted by other rights-holders, like Lancashire Cricket Club, to raise money for large infrastructure projects on the advice of Jockey Club Services.

The bond effectively borrowed the money from racing fans and paid them a return partly in cash and partly in Cheltenham loyalty points. When the fans subsequently cashed in their loyalty points and inevitably made additional spending at the racecourse, it helped to offset the cost of the borrowing.

Bazalgette concedes that there is likely to be less appetite among rights-holders for this type of financial instrument – at least for now – given the uncertainty about when spectators will be allowed back into venues. In his experience, the current economic climate is prompting rights-holders to search for debt-financing through loans or overdrafts to overcome short-term financial hurdles. An increasing number are also looking to raise capital by selling stakes to venture capitalists.

“We’ve seen those organisations getting more involved in sport and they may see an opportunity,” he says. “Rather than just to lend money at an interest rate, I think there are definitely a number of people who we’re talking to who are interested in taking equity stakes.”

GVS formalised the pivot towards more of a fundraising and investment advisory role when it launched its first operating business: Global Venue Finance, in mid-August. The new division will help companies operating in the sports industry and equine business to access finance for the capital costs of infrastructure projects, including training facilities and new gallops for racehorse trainers.

Andrews Bowen installed the base layer for the pitch at Tottenham Hotspur’s new stadium. (Tottenham Hotspur FC via Getty Images).
As part of the new service, GVS has partnered with specialist equine and sports surfaces company Andrews Bowen, which developed and installed the competition surface for the London 2012 equestrian arena and the base layers for new pitches at Liverpool FC and Tottenham Hotspur FC. Bazalgette says advances in sports surface technology, which increase their lifespans and make them reusable, have given them ongoing value and created new lease financing options.

“With rights-holders coming out of lockdown, they need those facilities but equally where they’re cash-strapped, this gives them an opportunity to effectively make sure they can still invest in their facilities but spread the cost over five years,” he says.

Advisory board
Bazalgette describes the launch of the new service as a “first step” in providing a much wider array of structured finance options. He says the change of strategy has been helped by having Bernard Kantor, one of the founders of Investec Bank, and Trevor Watkins, global head of sports practice at legal firm Pinsent Masons, as shareholders in the new firm and members of GVS’ advisory board.

His association with Kantor goes back to a time when he was chief executive of digital music company Music Choice Europe and Investec acted as brokers in the company’s IPO. Kantor would later help establish Racing UK [now Racecourse Media Group], the management company that looks after the media rights of 34 of Britain’s racecourses, as well as RMG’s international distribution business. He also drove the building of the Investec brand through extensive sponsorship activities in horse racing, football and cricket.

Watkins has direct experience of the industry as a former chairman of AFC Bournemouth and former non-executive director of the EFL. When he subsequently started to specialize in sports law and was appointed head of Pinsent Mason’s sports practice, the Jockey Club appointed the company as its main commercial legal advisors, while the firm also went on to sponsor some of its races.

“Bernard Kantor started Investec Bank 40 years ago and built it up into a global financial institution, so he’s very well connected in terms of the investments and finance world,” explains Bazalgette. “He’s seen just about everything over the years and can advise us and make connections for us in that area. And it’s less that Trevor is a lawyer, but as a lawyer he’s effectively one of the first ports of call for anybody coming to invest in the UK in sport.”

Consolidation of costs
At the point where spectators are eventually allowed back into venues and rights-holders have more workaday problems to contend with, Bazalgette fully expects GVS to return some of its focus to advising clients on matchday operations. At that stage, he believes there will be an even greater need for organisations to control costs.

A hallmark of his and Fisher’s work at the Jockey Club was to centralise ‘back-of-house’ functions such as ticketing, accountancy and loyalty schemes across its 15 racecourses to create efficiencies and economies of scale. They then offered to provide these internal services to third-party clients in football, rugby and cricket, but also leveraged the buying power they had established for their racecourses to help these clients procure outside services more cost-effectively.

The question is, how will GVS be able to provide the same procurement savings without yet having an established services operation and without the purchasing clout of the Jockey Club behind it?

“In the short term we can act as the operational coordinator to bring in services as needed by any particular event or venue,” says Bazalgette. “This means that the venue gets the benefit of our operational experience of running major operations, plus we probably have the best insight into pricing of various services via our Jockey Club experience and should be able to negotiate the best rates.

“Over time we also plan to make acquisitions to bring these services in-house, allowing us to further improve pricing and allowing us to guarantee the quality of operational management.”

GVS has already taken a 50 per cent share of GV Finance and Bazalgette expects the firm will be able to quickly acquire additional service providers and build scale rapidly.

“Between the four partners in GVS, we have a great network of people who have expressed interest in investing in projects that we develop, so we believe we will be able to move quickly as the market comes back and potential service companies look for greater security for the future,” he says. “We are also having early discussions about creating our own investment fund which would speed up the process of making acquisitions even further.

“We would generally expect GVS to be taking investment stakes alongside partners and investors that we bring in, but there is a lot of flexibility to tailor each individual project.”

The gap in the market, as far as Bazalgette is concerned, is to consolidate even more back-of-house operations beyond the “very narrow range” currently provided by the Jockey Club.

“There are a lot of other services which are not carried out internally by the Jockey Club, but outsourced to other providers, such as security, car parking, stewarding, traffic management and cleaning,” he says. “But the same opportunity exists to bring these together to create more of a one-stop shop, creating economies of scale with a high-quality service at lower unit cost.”

Collective rights management
The thread running through all of Bazalgette’s thinking is the power of the collective, so it’s no surprise to hear one of the founding figures behind the Racecourse Media Group arguing that the current crisis will only create more of an impetus for sports to pool their commercial rights. He says he would like GVS to encourage rights-holders to embrace group thinking not only to keep costs down, but also to secure a greater return for these rights.

Even without Covid-19, he believes media rights have plateaued, while National Lottery revenue is drying up for many UK sports. Asked how he thinks the pandemic will reshape sport and where the real investment opportunities might be, he suggests the crisis might actually help to refine parts of the industry.

“It’s been tough for people to survive, but I think a lot of businesses will actually come out a bit stronger. I think some areas will be slightly less competitive because some companies will have gone out of business.

“We think there might be some real opportunities in areas like ticketing, for example, with good businesses that have managed to find the niche markets but perhaps need some help.

“When the market’s down is the time to get in and work out who the survivors are and who’s going to come out stronger.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 3:51 pm

Chester Perry wrote:
Thu Jul 09, 2020 5:17 pm
Betting company shirt sponsorship for La Liga is banned from next season, also betting companies will face restrictions on stadium sponsorships

https://www.football-espana.net/2020/07 ... ponsorship
It has not become law yet, but if it does become law in October (as looks likely) then some clubs are going to find themselves at a significant loss (it already straightened financial times) by Spain's ban on visible betting sponsorship in sport, particularly football. - From SportsProMedia

La Liga clubs face sponsorship scramble with betting ban set for October
New royal decree could wipe out €80m in commercial revenue.

Posted: August 28 2020 By: Tom Bassam

- Shirt sponsorship, stadia branding and almost all marketing set to be outlawed
- Spain’s minister for consumer affairs says it is "reckless" that clubs have signed new betting deals

Clubs in Spanish top-flight soccer’s La Liga could be facing a scramble to comply with new legislation on gambling sponsorship after the minister for consumer affairs said new regulations will be introduced in October.

Whilst Alberto Garzón’s planned new royal decree was previously thought to be phased in over the next few years, the minister has now given clubs less than two months to address the imbalance of their partnership portfolios.

Professional clubs stand to lose as much as €80 million (US$94.5 million) from altering their deals with bookmakers, according to La Liga. While they will be able to maintain some type of relationship, contracts could be worth just 30 per cent of their current value.

“In the decree that will be approved in October we are going to prohibit that football clubs carry bookmakers on their shirts; it is reckless the clubs that are signing deals for two or three years and will have to correct it. They are making mistakes and they will have to correct it,” Garzón told Spanish free-to-air (FTA) network La Sexta.

In the leaked proposal that emerged in July, gambling advertising across TV, radio and other video media outlets is to be limited to one hour per day between 1am and 5am. In addition to shirt sponsorships, Garzón also wants a blanket ban on branding in stadiums. Those measures were reportedly sent to the European Commission on 9th July and approved.

Garzón’s proposal also reportedly extends to the prohibition of using the ‘name brand or trade name of a betting operator to identify a sports facility or entertainment facility’. In addition, according to official documents seen by El Confidencial, ‘no sponsorship activities may be carried out that involve substituting or adding to the name of a team or sports competition or of any other entity outside the sector of gambling and betting, the name or commercial name of an operator’. Such a move would prohibit gambling firms taking up naming rights partnerships.

The crackdown will be a cause for concern for La Liga, Spanish soccer’s top flight, considering that all its clubs, with the exception of Real Sociedad, Real Valladolid and Villareal, have commercial ties with a gambling firm.

La Liga also has its own tie-up with Sportium, which serves as the league’s official sportsbook.

In recent months, numerous La Liga teams have renewed their sponsorship agreements with gambling firms. While Osasuna have changed shirt sponsor by dropping their deal with Kirolbet, others have retained contracts with betting partners. Real Betis recently signed a one-year deal with Betway, while Granada penned a two-year deal with Winamax earlier this month. Furthermore, Valencia, Sevilla, Levante, Leganés, Alavés and Mallorca all have betting brands as shirt sponsors.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 4:18 pm

MrTopTier wrote:
Tue Aug 25, 2020 6:35 pm
Derby found not guilty of dubious activity around the sale of the ground.

https://www.dailymail.co.uk/sport/footb ... arges.html
If you are struggling to get off to sleep at anytime this weekend - you can read the full 123 page report on the EFL v Derby case that saw Derby once again triumph on FFP

https://www.efl.com/siteassets/efl-docu ... cision.pdf

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 4:37 pm

The EFL are apparently considering a commercial bank loan to fund their members through the current financial turmoil. That could prove expensive, when opportunities such as factoring (TV income and solidarity rights) and even Private Equity involvement such as that being considered by Serie A could also be a solution (though I must admit to not being a fan of the idea no matter how much it would drive an improved governance structure). From the Mail

EXCLUSIVE: EFL considering bank loan to help clubs survive with at least SIX teams struggling to see out the new season... and the Premier League are failing to provide a bailout
- Sportsmail has learned that EFL executives have spoken to lenders about a loan
- EFL are understood to be seeking a £250m package from the Premier League
- Yet no agreement between the two leagues has so far been forthcoming
- Wigan, Oldham, Charlton and Southend among those thought to be in danger
By MATT HUGHES FOR THE DAILY MAIL

PUBLISHED: 22:30, 27 August 2020 | UPDATED: 09:12, 28 August 2020

he Football League are considering taking out a commercial loan to help some of their clubs survive the season due to doubts over whether the Premier League will provide the financial bailout that has been demanded by the Government.

Sportsmail has learned that EFL executives have spoken to several commercial lenders about a loan, including hedge fund MSD UK Holdings, who have already lent money to several clubs over the last 12 months, including Derby County and Sunderland.

The EFL are understood to be seeking a £250million aid package from the Premier League payable over the next four years. But no agreement has been forthcoming, so they have been forced to pursue other options. The talks with potential lenders are believed to have centred on a phased loan for a smaller amount, to be reviewed monthly.

The clubs lost a combined £50m through missing gate receipts after lockdown at the end of last season. A further loss of £200m is expected if crowds are not permitted in the new campaign, which is due to start two weeks on Friday.

The involvement of private equity would represent a major change for football, although the EFL have had little choice but to examine other sources of funding for struggling clubs.

Culture secretary Oliver Dowden made it clear in May that financial support from the Premier League for the rest of the pyramid was a prerequisite for Government endorsement of Project Restart. But almost three months later, the top-flight clubs have yet to make an offer to lower-league sides and detailed negotiations have yet to take place.

The only assistance provided by the Premier League to date has been to advance the EFL this month’s £55m solidarity money that was paid earlier this summer and half of the next £55m payment due next January, which has been passed on the clubs, along with three months’ worth of Sky Sports TV rights fees to help the clubs start the season.

As a result, the EFL are confident all 72 clubs have enough money to survive until the end of October but, if crowds remain prohibited or severely limited at that stage, further funding will be needed.

Sportsmail has been told at least six clubs have serious concerns about whether they will be able to get through the season, with Wigan, Oldham, Charlton and Southend among those thought to be in danger.

Given the uncertainty over crowds, a phased loan is likely to be more preferable to the EFL than a single lump sum, as they are hopeful that the clubs’ eventual losses will be significantly lower than their worst-case projection of £200m, a figure which will ultimately be determined by the percentage of fans that can attend matches in the upcoming season.

Meanwhile, Sportsmail can also reveal that Championship clubs have abandoned plans to introduce a salary cap next season, which remains an aspiration in League One and League Two.

The controversial issue is to be revisited in the autumn.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 6:03 pm

The 5th and final part of The Telegraph's future of football looks at the women's game and particularly at this weekend's women's community shield - part of a double header with the men's version

Future of football, part V: Community Shield marks start of huge new rebuild for women's game
KATIE WHYATT AUGUST 28, 2020

To understand the significance of the first Women’s Community Shield match since 2008, let’s take a look at the crowd sizes since the Women’s FA Cup final was moved to Wembley in 2015.

Just over 30,000 turned out that day, more than double the attendance of the previous season’s Women's FA Cup final in Milton Keynes. The next year it was 32,912; then 35,271, before the high-water mark, in 2018, when Chelsea vs Arsenal attracted 45,423.

There will be no fans, needless to say, on Saturday. The current Women’s FA Cup holders Manchester City will face the Women’s Super League winners Chelsea behind closed doors, hours before Liverpool and Arsenal kick off in the men’s equivalent, with the former to be broadcast live on BBC One ahead of the new WSL and Championship season next week. Telegraph Sport also understands that the BBC are planning a joint men's and women’s highlights programme from the game — a further profile boost for women’s sport.

The Football Association, which oversees the women’s game, has responded to the void of women’s sport with a plan to give the sport as many flagship moments as possible. There will be two FA Cup finals - one a continuation of last season’s - in the next few months, both of which will be at Wembley.

Games behind closed doors means that the biggest challenge facing the game — converting record-breaking World Cup viewing figures to match-going crowds where WSL attendances still often fall below four-figures — is now suspended. In the meantime, the BBC and BT Sport will hope to rival a fraction of the total audience of 28.1 million for the BBC’s coverage of France 2019.

The broader context for this, of course, is that this country has been without elite domestic women’s football since the Continental Cup final on February 29. The last round of WSL games took place on February 23: the weekend Manchester City held Chelsea to the 3-3 draw that left the title race wide open.

There was time for England’s lacklustre SheBelives Cup showing the following month, but then the world plunged into lockdown, and women’s sport was hit particularly hard. Across the world, leagues were largely voided or curtailed, and major tournaments — including the Olympics, Euros and Women’s Champions League — were postponed. Industry experts warned of the long-term impact of the looming ‘invisibile summer’, where men’s sport was able to return but women’s could not.

The Women’s Bundesliga became the first women’s football league to pull off a restart, and there was much about its approach to admire. Working with the German FA, the country’s biggest clubs were convened to provide solidarity payments to cover testing: for the English FA to exhort the equivalent from the Premier League, amid the million-pound white noise of Project Restart, felt unlikely.

That other countries managed to do it — particularly when Championship club Lewes proposed that it would take a total of just £3 million to finish the remaining 82 WSL and Championship matches — frustrated supporters, many of whom felt the whole thing was a missed opportunity that would immediately reroute the sport’s growth trajectory. The cost of Covid-19 testing, for instance, was never a concern for men’s Premier League clubs, and it was unfair that it was for top-tier women’s sides. Couldn’t there have been some sort of broadcast deal — those, after all, held so much sway in the discussions around Project Restart — to help the WSL on its way?

Maybe, and perhaps we all should have been more ambitious, but the state of the women’s game now, owing to the FA ban on women’s football in December 1921, poses an entirely different set of concerns to those faced by the Premier League, whose biggest issue was how to avoid paying out £762 million in broadcast money rebates.

Most WSL clubs are losing between £500,000 and £1 million a year, with the Brighton manager, Hope Powell, describing “the cost to get the testing equipment, the PPE equipment, the medical staff in place” as a “huge cost that nobody could have ever foreseen”. She concluded: “We're not in a position where we can test players every two days.” It is a damning statement, but true, and is a historical inequity that will take years to rectify. Which does not mean that we should become complacent, or, worse, grateful for any advance in women’s football. But this, sadly, is the reality for players, clubs and the governing body.

There were other areas of concern unique to the women’s game. The WSL is a full-time league but the Championship, the second tier, is part-time and dominated by key workers, many of whom worked on the Covid frontline. The words of West Ham captain Gilly Flaherty, one of the game’s longest-serving current players, also ring true. Players feared injury, she said, due to cramming in the remaining games after training at home.

She told Sky Sports: “We said: ‘If it [returning to play] was maybe a month after lockdown had happened and we were back, you could probably get players back.’ But there were a lot of players out of contract. There were a lot of players who weren’t comfortable, after having three months off, to then go back and play two games a week. We’re in a different position to the men financially where if one of us got a serious injury and was at the end of our contract, where do we go then? The FA listened to the players, when they could have just said: ‘No. Girls, you’re going back.’”

It is, again, another historical issue, enveloped in what-ifs. What if the game hadn’t been banned in 1921? You’d see longer-term contracts everywhere, most likely, instead of the few handed out like goldust to the division’s biggest stars. Putting the psychological impact of a career-ending injury to one side, players leaving the game would at last be comfortable financially. Do you see the pattern? Coming up to 100 years since the ban, the women’s game is still fighting to undo those years of damage. Continuing to do so, and sculpting the sport a little bit further in the direction it wishes, is the challenge for the FA as sports restart again.

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Re: Football's Magic Money Tree

Post by Chester Perry » Fri Aug 28, 2020 11:43 pm

Interesting negotiating tactic (but not unusual) from the Premier League (if it is to be believed) = From the Mail

Premier League demand EFL backing on homegrown player quotas after Brexit before they will agree to offer financial support for struggling clubs
- The EFL are seeking funding sources after talks with the Premier League stalled
- The Premier League said they will consider a EFL bailout who need £250m
- Gaining EFL support for their Brexit stance is Premier League's main priority
By MATT HUGHES FOR THE DAILY MAIL

PUBLISHED: 22:32, 28 August 2020 | UPDATED: 23:11, 28 August 2020

The Premier League will insist that the Football League (EFL) back their opposition to an increase in homegrown player quotas after Brexit before they agree to financial support for struggling clubs.

Sportsmail revealed on Friday that the EFL are seeking alternative sources of emergency funding, including a commercial loan, as negotiations with the Premier League over a rescue package have stalled with just two weeks until the start of the season.

The Premier League have said they will consider a bailout for the EFL, who are seeking £250million over four years, but have yet to give a firm commitment almost three months after their financial support for the rest of the football pyramid was demanded by the Government.

In a briefing note sent to top-flight clubs earlier this month, which has been seen by Sportsmail, chief executive Richard Masters made it clear that any aid would be contingent on furthering what he described as the Premier League’s strategic objectives.

It is understood that gaining EFL support for their Brexit stance is the Premier League’s No 1 priority, as agreeing new immigration rules for foreign players is the next big challenge facing the clubs alongside mitigating the impact of the coronavirus pandemic.

The Premier League have been in a stand-off with the FA over the issue since the 2016 referendum, with no sign of a resolution just four months before the Brexit transition period ends.

The FA have proposed increasing the quota of homegrown players that must be in each 25-man match-day squad from eight to 12, in return for relaxing work permit requirements for foreign players.

However, the Premier League are refusing to accept further restrictions, as well as demanding the right to sign players from all over the world.

The Government have told the FA, the Premier League and the EFL to reach an agreement by October as the new regulations will come into force when the mid-season transfer window opens in January 2021.

The EFL currently stipulate that there must be seven homegrown players in each match-day squad, which is broadly in line with the Premier League’s regulations, although in reality most clubs generally field far more.

As a result, the quota for homegrown players is less of an issue for EFL chairman Rick Parry (right), so they could back the Premier League without negatively impacting on the clubs, although taking on the FA could cause them political problems.

The FA’s support was vital to the EFL during the delicate negotiations which facilitated Project Restart, with the governing body’s refusal to countenance abandoning relegation if the top-flight season had been curtailed particularly important.

They also worked together to ensure the FA Cup and League Cup would take place as normal next season despite the contracted campaign.

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:42 am

Der Spiegel reports on Rui Pinto (of Football Leaks notoriety), who is now in witness protection as a whistle blower gollowing his confession to being a hacker

End Game
Football Leaks Source Prepares for His Day in Court
The trial in Portugal against Rui Pinto is scheduled to begin next week. The man behind the Football Leaks revelations is now in a witness protection program after reaching a deal to cooperate with legal authorities.
Von Rafael Buschmann, Nicola Naber und Christoph Winterbach - 28.08.2020, 14.44 Uhr

Rui Pinto is wandering past cows and pigs at an isolated spot not far from Lisbon. Two police officers are following the 31-year-old as he walks with two reporters from DER SPIEGEL. The man behind the whistleblower platform Football Leaks is currently in a witness-protection program, which is why there are strict rules regarding what can be written about his current location. "My life is still at risk," Pinto says.

Yet he still appears to be in good spirits. For the first time in a year and a half, he is a free man. And his chances of getting acquitted in his upcoming trial in Lisbon have recently risen.

Our walk together with Pinto outside of Lisbon took place on the day before last Sunday's Champions League final between Bayern Munich and Paris Saint-Germain, which was played in the Portuguese capital. It was to be the first of two interviews. Like no one else before him, Pinto was responsible for shining a spotlight on the dark side of professional football. Even as the football industry celebrates the pinnacle of the club season in Benfica Lisbon’s stadium, Pinto is living just a few kilometers away under police protection in a safe house.

Pinto has made numerous influential enemies in recent years. He shared more than 70 million confidential documents - a total of 3.4 terabytes of data – with DER SPIEGEL and its partners in the journalism consortium European Investigative Collaborations (EIC). Since 2016, more than a thousand articles have been written based on that data, some of which had serious legal implications. Cristiano Ronaldo was handed a suspended sentence for tax evasion and had to pay around 20 million euros. Some of the most important sports agents in the world are still being investigated for tax violations and money laundering. The Football Leaks documents have even created problems for FIFA President Gianni Infantino, and Swiss public prosecutors are investigating him.

Thus far, though, only a single person has landed in prison as a result of Football Leaks. Rui Pinto himself.

He has been accused of hacking and of attempted extortion, with his trial slated to begin next Friday. Back in December, Pinto discussed his rather bleak prospects in an interview with DER SPIEGEL, including a possible prison sentence of up to 25 years. But one reason for his improved confidence is a deal he has reached with the Portuguese judiciary. Pinto has granted access to his greatest treasure: He opened up eight encrypted hard drives containing 17.5 terabytes of information.

Strict Security Measures
It's not easy to meet up with Pinto these days. DER SPIEGEL sent him repeated requests for an interview over the past several months, but Pinto declined them all without offering an explanation. He was in house arrest and was not allowed to tell anyone that he was engaged in negotiations with the judiciary. He may now officially be free, but he must consult the police each time he wants to go outside so that the potential risks can be discussed. For his meeting with DER SPIEGEL, Pinto's guardians have imposed strict security measures. They provided the address of a holiday apartment, where the meeting on the day of the Champions League final can take place.

Late in the evening on the day prior to our first meeting, Pinto sends an address via an encrypted messenger service. It leads to the parking lot of a supermarket located far away from Lisbon. "Send me the license plate number of your rental car," he asks, and names a time for the meeting.

The next day, a car appears at the parking lot just a few minutes after the agreed to time. Two men wearing masks roll down their windows, nod briefly indicating they should be followed. On the drive, they make several sudden turns, apparently to shake off any potential tails. When the car finally comes to a stop at a remote rest stop, Pinto opens the door and jumps out of the back seat. He is wearing a baseball cap, sunglasses and, of course, a mask.

A former history student who emigrated to Budapest in 2015, Pinto has been accused by Portuguese prosecutors of hacking into servers and stealing sensitive data from football clubs, law firms, investigators and sports agencies.

Since the very beginning of the Football Leaks project, Pinto has insisted that he doesn't see himself as a hacker. Last December, though, he told DER SPIEGEL, "I fully accept that, from the standpoint of Portuguese law, some of my acts may be considered illegal." In his statement of defense submitted to the court at the beginning of this week, he elaborated on what that might have meant. Pinto regrets having violated the law in order to access data. He said he was convinced that the data would help him uncover serious crimes and that he didn't adequately reflect on the consequences of his activities. "You can ask me all the questions you want," Pinto says. "But before the trial, I won't be able to answer everything. The court is the right place to explain my position."

"Psychological Torture"
The next day, Pinto shows up at a secret apartment several hours before the start of the Champions League final. It is a sparsely furnished room with a double bed, two recliners and a small television in the basement of a holiday home. Pinto sits down in one of the easy chairs and looks back on the last year and a half. He speaks of harassment and "psychological torture" in a Budapest prison, where he was locked away following his arrest in January 2019. Hungary extradited him two months later to Portugal, where he was put in solitary confinement for over half a year.

Pinto is proud of the fact that he managed to get through that time. "After leaving isolation, I sometimes had problems concentrating," he says. It felt like a huge door had opened in front of him, he says, and he had trouble interacting with groups of people. In April, Pinto was released into house arrest and has officially been a free man since August 7. A commission made up of judges, state prosecutors and Justice Ministry officials continue to believe that he is in danger. Pinto didn't just ruffle the feathers of football stars and clubs, but also those of state leaders in Qatar, Abu Dhabi and Angola. Still, he says, "I can sleep pretty well at night." He can live with the risk, he says, since his main goal was uncovering transgressions.

Pinto skirts around questions about how he accessed the data. He says his role was merely that of searching for, collecting and analyzing information pertaining to violations before passing them along to journalists or criminal investigators. He doesn't view himself as a hacker, but as a whistleblower.

There is also another way of looking at it. Pinto’s greatest weakness in court is the accusation of attempted extortion. It calls into question Pinto’s supposedly lofty intentions. "I regret specifically one thing: having this contact with Nélio Lucas," says Pinto. Indeed, it was a legal complaint filed by sports marketing agency Doyen and its manager Lucas that led to the current trial. Pinto allegedly hacked the company’s IT systems in 2015. In an email, he demanded a sum of "between 500,000 euros and 1 million” in exchange for not publishing the documents. He also contacted a lawyer who then met with Lucas and his legal adviser at a gas station in Lisbon to discuss the deal. Police secretly recorded the conversations. DER SPIEGEL and the EIC reported on these allegations back in 2016.

"I was naive back then," says Pinto. He says he wanted to test how far Lucas and Doyen would go to prevent the publication of compromising documents.

"I Did Everything for the Public"
A few days ago, the Portuguese daily Público published an article quoting from an email that could challenge Pinto’s portrayal. The article claims that in the mail, he suggested to his former lawyer, who is also now facing legal proceedings himself, that the money being demanded from Doyen could be funneled through tax havens like Malta or Cyprus. Was Pinto really considering making use of such opaque channels? This is exactly the same accusation he himself has been making all this time against the football industry.

"I will explain in court when deemed necessary," Pinto says. He says he broke off the negotiations before any money changed hands. As such, Pinto claims he didn’t commit a crime.

Within the industry, Doyen had a reputation for being a particularly dubious company. The sports marketing firm purchased shares in transfer rights from professional football players and then profited significantly from the later sales of players. At some point, the setup, known as Third-Party Ownership (TPO) went too far even for FIFA, and the global football governing body banned the model.

In Malta, where Doyen Sports is registered, the Financial Services Authority fined the company for illegal lending. Spanish authorities are investigating Doyen Sports and Lucas on suspicions of tax evasion based on the publication of Football Leaks documents. Two other managers have also been accused of money laundering. Portuguese authorities froze 8 million euros in a Doyen account in spring 2019 because they were concerned about a planned transfer of millions of euros to the tax haven St. Lucia. An investigation is still ongoing. Lucas and Doyen are not making any public statements about the allegations.

Officials have questions about the origins of the billions Doyen has invested in the football industry. Pinto’s documents suggest that the Doyen network’s capital came from Kazakh oligarchs who raked in millions in the raw materials sector after the collapse of the Soviet Union. Tevfik Arif, the father of one of the former Doyen bosses, engaged in real estate business with Donald Trump. The U.S. Senate Select Committee on Intelligence even highlighted Arif’s contacts with Russia and Turkey in a report last week, stating: "Information obtained by the committee suggests he was involved in Russian organized crime, money laundering and human trafficking dating back to at least 2000.” In response to a request for comment, a spokeswoman for Arif denied all the allegations.

Football Leaks exposed how professional football doesn’t care one iota about the sources of money for salaries, commissions and transfer fees.

A Deal with the Authorities
Pinto has now handed this data over to the Portuguese judicial system. The fact that he is cooperating so extensively with investigators will likely also strengthen his position in court. But how did a deal take shape?

Pinto says he has always wanted to work with the Portuguese, but only on the condition that the documents contained on his hard drives not be used against him. For a long time, the Public Prosecutor’s Office didn’t want to agree to the deal. But pressure grew on the investigators. In January, the International Consortium of Investigative Journalists (ICIJ), whose members include Germany’s Süddeutsche Zeitung newspaper, published the findings of its research into Isabel dos Santos, the Angolan who is Africa’s richest woman. The "Luanda Leaks” reporting traced a kleptocratic system of corruption and money laundering in Angola. The documents came from Rui Pinto. "It's disgusting that Portugal became the laundromat for Angolan elites,” Pinto says. He claims the rulers enriched themselves even as the country suffered under extreme poverty.

Dos Santos denies the allegations. But her system collapsed nonetheless. After previously calling him a hacker, a pirate or a spy, the Portuguese media suddenly came to view Pinto as a valuable whistleblower. It also forced the Portuguese authorities to admit that the data he is holding can be used to uncover misconduct in many different areas.

The problem they had was that they couldn’t get to the documents without his help. The hard drives have passwords that are more than 40 characters long, and each drive had been encrypted individually. Pinto threatened that dos Santos was only the tip of the iceberg and that there were still many more irregularities that could be exposed through his data – also in Portugal.

It appears to be better for investigators to be working together with Pinto. The director of the law enforcement agency has even praised Pinto for his help. When asked if he thinks it is likely he will be sent to jail again, Pinto says, "I don’t think so.” His defense team is comprised of three lawyers: Portuguese attorney Francisco Teixeira da Mota and his daughter Luísa and French lawyer and whistleblower expert William Bourdon. They want to call 45 witnesses, including American whistleblower Edward Snowden. And they have already had success with petitions claiming possible bias on the part of two out of three judges who had been assigned by lottery to the trial. After showing on Facebook that he’s an avid Benfica Lisbon fan and clicking the "like” button beneath an article critical of Pinto, the presiding judge who had been selected for the trial got dismissed from the proceedings as well as the second judge, who had been represented by one of the current plaintiffs’ lawyers in another case.

The interview has already gone on for several hours by the time the Champions League final begins. Pinto wants to step out and get some fresh air as the players with Bayern Munich and Paris Saint-Germain walk out onto the pitch. After he returns, he follows the final pitting the two Qatar-sponsored clubs against each other with one eye, while at the same time chatting with his girlfriend. "Football is about the fans, the real atmosphere,” says Pinto, "not this plastic event atmosphere where money dominates everything.”

He is slowly turning away from football, the sport for which he took all these risks. These days, he’s more passionate about issues like investigating corruption, fraud and tax evasion. Pinto says he used his time in jail to read numerous investigative exposé books, including ones about the abuse of power by states.

After the match, Pinto drives off into the darkness with his bodyguards to an undisclosed location, where he plans to prepare for his trial. He says he’s not concerned yet with what comes next. "I want to solve my legal situation first,” Pinto says. "I want to get acquitted.”


A Football Links Chronology

In September 2015, Rui Pinto, a Portuguese national, launched the anonymous Football Leaks whistleblower platform on the internet.

In spring of 2016, the platform provided DER SPIEGEL with the first set of documents. It was then shared with the European Investigative Collaborations (EIC) reporting network.

Starting in December 2016, DER SPIEGEL and its EIC partners began publishing the revelations. They include:
- tax evasion by professional football players like Cristiano Ronaldo;
- side agreements for player transfers;
- the handling of young players;
- racist scouting practices;
- skirting of Financial Foul Play rules;
- and secret plans for a Super League that would not answer to UEFA.

By November 2018, the Football Leaks platform had provided DER SPIEGEL and EIC with more than 70 million documents (3.4 terabytes of data).

Allegations against FIFA President Gianni Infantino, including that he wanted to alter the FIFA Code of Ethics with the aim of making preliminary investigations more difficult.

In December 2018, Rui Pinto, who was living anonymously in Budapest, decided to enter a French witness protection program. France wanted to review the data.

In January 2019, Portuguese authorities issued an arrest warrant for Pinto based on alleged criminal offences in six cases. He was arrested in Hungaryshortly before his planned move to France.

On March 21, 2019, Pinto is extradited to Portugal, where he is placed inpretrial detention in Lisbon.

On April 16, 2019, the far left GUE/NGL faction in the European Parliament announced Rui Pinto as the winner of its Whistleblower Award.

On Sept. 20, 2019, the attorney general in Lisbon charged Rui Pinto.

On February 19, 2019, public prosecutors in nine countries expressed interest in reviewing the data at a Eurojust meeting.

On Jan. 19, 2020, ICIJ published "Luanda Leaks." A few day later, Pinto revealed that he had provided the network of journalists with the data.

On April 8, 2020, Pinto was released from prison into house arrest.

On May 20, 2020, it was revealed that Pinto is cooperating with the Portuguese authorities. Thus far he has provided them with 17.5 terabytes of data.

On August 7, 2020, Pinto was placed in a witness protection program.

Sept. 4, 2020 is when Pinto's trial is set to begin. He has been accused of committing 90 crimes. They include charges of attempted extortion, illegally accessing secret data and violations of correspondence secrecy laws

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 12:44 pm

An interesting pair of articles from the Mail on the dichotomy of Finance in English football - first up the perils in the EFL highlighting the serious circumstances at 5 clubs

Reckless owners, extravagant spending, doomed takeovers... with the EFL in CRISIS, Sportsmail runs the rule over five struggling clubs who are in GRAVE danger of going bust
- Some EFL clubs are at huge risk amid financial chaos triggered by the pandemic
- There are serious fears that not all 72 teams will survive the next campaign
- Poor decisions from owners and failed takeovers could put clubs in huge trouble
- Sportsmail looks at five clubs who face uncertain futures in the coming months
By MATT HUGHES and MIKE KEEGAN FOR THE DAILY MAIL

PUBLISHED: 22:30, 28 August 2020 | UPDATED: 22:30, 28 August 2020

With five clubs reprimanded by the EFL for failing to pay players’ wages last season — even before football was dramatically halted by lockdown — the danger of bankruptcy is almost ever-present across the lower divisions, a problem that has been exacerbated by the coronavirus pandemic.

With 72 Football League clubs forecast to lose a total of up to £250million by the end of next season, there are fears not all of them will survive the campaign, although early predictions that dozens could go bust appear far-fetched given the bridging finance and cost-cutting measures that have been put in place.

The EFL are confident they will eventually secure funding to tide struggling clubs over if necessary, whether from the Premier League or via a commercial loan, but they cannot save reckless owners from themselves.

Extravagant spending and doomed takeovers are the common denominators as Sportsmail looks at some of the clubs in gravest danger.

CHARLTON

The chaos and power vacuum at the top of Charlton was illustrated last weekend, when a group of supporters occupied the boardroom at The Valley, enjoying cheese and wine as part of a protest over what they regard as the club’s ‘insulting sham’ of an ownership.

Brighton and Wigan fans joined the demonstration, sparked by growing fears that the League One club could be the next EFL team to fall. Nearly nine months have passed since Roland Duchatelet, who faced regular protests and boycotts, sold the club to East Street Investments for £1. That was supposed to mark a new dawn but only more strife has followed.

Lee Bowyer’s side were relegated from the Championship and now the club are battling to ensure they can pay wages for September and October. All while the third supposed takeover of 2020 edges closer.

Charlton still owe millions to Duchatelet, who maintains ownership of The Valley and the training ground too. But their problems spiralled after ESI took control.

New majority shareholder Tahnoon Nimer had a messy dispute with executive chairman Matt Southall, with police called, legal threats issued and mud slung relentlessly on social media.

Then in June, businessman Paul Elliott bought ESI, but his consortium’s attempts to take control of Charlton were derailed last month, when three individuals failed the EFL’s owners and directors test.

Now Thomas Sandgaard — a US-based Dane who reportedly spoke to supporters during their occupation — is hopeful of taking the helm. He chose Charlton over Wigan, Swansea, QPR and Sunderland but now Elliott is seeking an injunction that would prevent any sale.

Meanwhile, Bowyer is trying to run a football team. With the EFL still yet to approve ESI’s takeover due to a failure to provide a proof of funds, Charlton have been under a transfer embargo for months.

The club also want the EFL to appeal the decision to defer Sheffield Wednesday’s 12-point penalty until next season. Had it been applied to the last campaign, Charlton would have stayed up.

For now, expect more unrest. After a group of fans went to Cheshire last week to confront lawyer Chris Farnell, who was part of Elliott’s consortium, they are now calling on supporters everywhere to head to the EFL’s headquarters and take ‘direct action’.

WIGAN

With the clock ticking towards the new season, the search for new owners continues, with administrators having set a deadline of Monday for a takeover to be completed.

But there is hope in the shape of Randy Frankel, the co-owner of Major League Baseball side Tampa Bay Rays, who alongside former Rays vice-president Michael Kalt, is ready to shake hands on a £4m deal over the coming days that would give the Latics a fighting chance in League One.

Wigan appear to be a prime example of what happens when a club is reliant upon the financial support of one person. They had budgeted to lose substantial sums and when the tap from their Hong Kong owners was turned off there could only be one result.

The subsequent administration has been painful, with the points deduction relegating a club that had performed well in the second tier. It has also had the knock-on effect of seeing many of their better players leave for fees which were far less than they could have normally expected.

Such is the state of modern-day football that many of the interested parties prefer the club to be in League One rather than the Championship, given the lower overheads involved.

Wigan should not have any trouble finding a new owner as the Tampa Bay interest shows. They are an attractive proposition, with a stadium, decent support and training ground. But there was hope that a deal would have been sorted long before now and the current situation cannot continue for much longer.

OLDHAM

The Premier League founder members have endured a turbulent time under the ownership of Dubai-based Moroccan Abdallah Lemsagam, a former football agent.

Since Lemsagam took over officially in January 2018 there have been no fewer than seven managerial appointments.

Since his initial involvement, in the summer of 2017, around 70 players have been signed. The club was relegated from League One in 2018 and finished a lowly 19th in last season’s League Two.

Off the field it has been just as bad. On a number of occasions players have not been paid on time. Two winding-up petitions were faced within the space of four months.

In March, Oldham came close to going into administration before an agreement was reached to repay a debt to a former owner following the initiation of court proceedings.

A number of players say they have not been paid their salaries, aside from furlough money, for four months. They have instructed the Professional Footballers’ Association, whose lawyers are in talks with the club. Should no resolution be reached, the EFL will intervene and dock points if they find any rules have been broken.

Currently, the club are only permitted to open three of their four stands, with the newest off-limits amid a dispute with the landlords. A protest group has been formed by a section of the club’s supporters, and season-ticket sales are rumoured to be at their lowest for decades. New manager Harry Kewell has some job on his hands.

SOUTHEND

In December, players were not paid on time. In March, the Shrimpers were placed under a transfer embargo thanks to an unpaid tax bill of £668,000.

They could have done with some players. Relegated to League Two in spectacular fashion, 16 points adrift of safety, last season was one to forget.

Manager Sol Campbell has left and the long-running saga of a move away from Roots Hall continues to drag on.

However, there are chinks of light. Owner Ron Martin has been here before and, to his credit, often puts his hand in his pocket to cover shortfall. There is hope that the new stadium at Fossetts Farm will get off the ground. Should that happen, the redevelopment of Roots Hall — which would see 504 residential units built — would be a huge help.

On the field, things would also appear to be picking up. New manager Mark Molseley seems to be switched on and fans have high hopes of what looks like being a youthful, talented squad. The winding-up petition, however, will not go away and — after being adjourned three times – is pencilled in for September 16.

READING

The Championship club remain under investigation by the EFL related to potential breaches of spending rules following their sale of the Madejski Stadium to a company controlled by owner Dai Yongge, although it is unclear whether Reading will face charges.

The club’s financing and accounting practices remain a major issue however, and are understood to have played a role in the removal of chief executive Nigel Howe this week following an internal dispute, although he is staying on as vice-chairman.

Even if they escape a charge over selling the Madejski, other charges of breaching spending limits appear inevitable without significant player sales, which may be difficult to achieve given the collapse of the transfer market in the wake of the pandemic.

Reading recorded a loss of £40.6m in the financial year ending 2018-19 despite having also sold their training ground, and are running out of assets to cash in as they risk exceeding the league’s £39m three-year loss limit.

At the heart of their problems is a spiralling wage bill which has been funded by Yongge since the Chinese businessman bought Reading in 2017. Their most recent accounts show that player wages are an extraordinary 225 per cent of turnover, a level of spending that is clearly unsustainable.

Given Yongge is experiencing difficulties taking money out of China to fund the club, something has to give sooner rather than later.

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 12:49 pm

The Mail believes that even in the Premier League there are very different financial outlooks - This second article looks at the spending patterns in the Premier League

Football's coronavirus credit crunch: Chelsea and Man City are spending a staggering £316m between them on pre-season signings… but the rest have spent just £198m combined, with promoted Leeds forking out £53m and champions Liverpool just £11.8m
- Chelsea have spent £140million in total so far this summer across five signings
- That is likely to rise to £230m once they buy Kai Havertz from Bayer Leverkusen
- Manchester City have splashed £86m on three new signings so far this window
- Newly-promoted Leeds United have spent £53m as they look to avoid relegation
- The other 17 clubs have spent £145m combined - meaning an average of £8.5m
By LUKE AUGUSTUS FOR MAILONLINE

PUBLISHED: 18:11, 28 August 2020 | UPDATED: 20:13, 28 August 2020

The transfer window may have opened more than a month ago but only two established Premier League clubs have really flexed their financial muscle so far.

Chelsea and Manchester City lead the way in money spent among the English top-flight clubs during this delayed summer window.

As of Friday, Chelsea have splashed £140million on signings - this figure will rise to £230m with Kai Havertz's arrival from Bayer Leverkusen - while Manchester City have spent £86m.

In comparison, the rest of the 18 Premier League clubs have spent £198m in total (although it must be noted that Burnley's figures are unknown due to undisclosed fees).

Only newly-promoted Leeds United are within the realms of both club's outlays to date. The Elland Road outfit have spent £18m but that will increase to £53m when the signing of Valencia striker Rodrigo goes through.

So why are Chelsea and Manchester City, with the exception of Leeds, so far ahead of the rest?

First of all, the predominant reason is the coronavirus pandemic and its financial implications.

Like all businesses across the world, this has had a detrimental effect on football clubs too.

With no fans in attendance for matches, those profit margins have been hit. A knock-on effect of that too is the extra matchday revenue that is incurred through supporters buying items at matches such as food and drink, merchandise and programmes, for example.

At present these aforementioned income revenue streams are all at £0 meaning adjustments have to be made to budgets across all levels at clubs - including transfer ones.

Chelsea and Manchester City have more leeway to overcome this due to their wealthy owners. The former are owned by Russian oligarch Roman Abramovich, while the latter are owned by Emirates billionaire Sheikh Mansour.

Chelsea's lavish investment this summer is akin to their 2003 spending spree when Abramovich first bought the club.

So far the Blues have made five signings already with Hakim Ziyech (£37m), Timo Werner (£53m), Ben Chilwell (£50m), Malang Sarr and Thiago Silva (both free transfers) all new recruits. The latter trio have all arrived this week with Chilwell the first on Wednesday and Sarr and Silva arriving the subsequent following days.

But Chelsea's spending hasn't stopped there. The Blues are still pressing ahead with a £90m move for Havertz and manager Frank Lampard is believed to be on the lookout for a goalkeeper.

Meanwhile, Manchester City have made three signings to date with Nathan Ake the most expensive of them at £40m from Bournemouth. Ferran Torres cost £37m from Valencia, while Pablo Moreno was considerably cheaper at £9m from Juventus.

City's spending could exponentially increase too if wantaway Barcelona talisman Lionel Messi decides to seek a reunion with manager Pep Guardiola by coming to the Etihad Stadium.

This isn't to say other clubs don't have financial clout, but perhaps they are warier of not overspending. The perfect example of this is Manchester United. Despite sneaking into the top four on the final day of the season and being knocked out of all three cups at the semi-final stage, the club are yet to improve a squad that is in desperate need for depth.

Borussia Dortmund star Jadon Sancho is the club's primary target but they remain at loggerheads over their £108m asking price.

Dortmund's valuation of the England winger continues to be a stumbling block along with the players' wages and his agent's fees. United are determined not to repeat the mistakes of the past few years which has seen them make some costly errors in the transfer market. And this has been heightened by the pandemic.

Speaking about the club's financial situation in April, United's executive vice-chairman Ed Woodward warned that big-money transfers 'ignore the realities that face the sport'.

'We have always believed that our commercial model gives us greater resilience than most clubs and we are grateful for the enduring support of our commercial partners in helping us achieve that,' he said.

'However, nobody should be under any illusions about the scale of challenge facing everyone in football and it may not be 'business as usual' for any clubs, including ourselves, in the transfer market this summer.

'As ever, our priority is the success of team, but we need visibility of the impact across the whole industry, including timings of the transfer window, and the wider financial picture, before we can talk about a return to normality.

'On this basis, I cannot help feeling that speculation around transfers of individual players for hundreds of millions of pounds this summer seems to ignore the realities that face the sport.'

And this in essence is a microcosm for the majority of the Premier League clubs - who are spending less than within their means.

If you take away Leeds' £53m purchases then that means so far £145m has been spent across the remaining 17 teams. Divide £145m by 17 and you get an average spend of £8.5m across those clubs.

However, if you delve deeper into the window you will see that six clubs are yet to spend a penny (Aston Villa, Everton, Leicester City, Manchester United, Newcastle and Wolves). Once more of those six - three are yet to make any signings at all (Aston Villa, Leicester and Manchester United).

Clubs are looking to free agent signings or transfers that initially start out as loans at first with the view to a permanent deal to offset any long-lasting potential outlays. This is pertinent with Newcastle so far, who have made three signings - all as free transfers. Wolves and Everton have one new recruit each too and again those were as free agents.

You can look at it the other way as well. The fact that Manchester United let Alexis Sanchez join Inter Milan on a free transfer was so his £500,000-a-week wages were no longer crippling their financial books. The Chilean still had another two years to run and in theory should've had commanded a fee.

In addition, it must be noted that while Chelsea and Manchester City have spent heavily there are still five weeks left of the transfer window and therefore plenty of time for teams to do business - although the Premier League starts on September 12.

Some may be waiting until the last minute to buy in the hope to haggle a for a lower fee, while others are still yet to begin pre-season due to European club commitments. For the former point, Premier League champions Liverpool remain in the hunt for Bayern Munich midfielder Thiago Alcantara but the £23m reported asking price could prove an issue.

Chelsea and City are undoubtedly ahead of the rest in terms of their recruitment for next season, while Leeds are preparing well for their first return to the Premier League since 2004.

The effects of the coronavirus pandemic will be felt across many transfer windows, but it appears that Chelsea and City may look back on this one in particular and be pleased with their business. And scarily both are not done shopping.

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:19 pm

For the first time in months @AndyhHolt has stuck his head above the twitter parapet promising to reveal not only the reasoning for his voting (to end the League 1 season and the points decisions) in EFL decisions, but also the finances for Accrington last season and forecasts for the coming season. He starts with the at voting decision, in fukk knowledge that he will be pelted by Tranmere and Peterborough fans in particular.

https://twitter.com/AndyhHolt/status/12 ... 9755658240

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:31 pm

Article in the Financial Times looking at the financial challenges for the Premier League and highlighting the issues around the domestic broadcast deals when fans cannot attend games

Premier League plots stadium reopenings to avoid lossmaking season
SAMUEL AGINI AUGUST 28, 2020

The traditional kick-off to the English football season is set to take place on Saturday with the Community Shield match between Premier League champions Liverpool and FA Cup winners Arsenal.

Yet the vast, empty stands at London’s Wembley Stadium will symbolise how the sport continues to disrupted by the Covid-19 pandemic.

The Premier League — the world’s most valuable domestic football competition — has endured a difficult year so far. Coronavirus-related losses at English football’s top tier clubs are projected to be £850m for last season, mainly due to lost matchday income with supporters unable to attend games since February. The Premier League also agreed a £330m rebate with broadcasters to compensate for the lack of action during lockdown.

It is plotting a financial recovery. Talks are under way for the partial reopening of stadiums and a deal has been reached with broadcasters to prevent further rebates. Meanwhile, teams are seeking to spend less cash in the multibillion pound transfer market.

But interviews with club and league executives, broadcasting and government officials, football industry analysts and investors reveal how these efforts are fraught with difficulty.

There is frustration among some club executives that the UK government is imposing strict requirements before reopening stadiums while other sectors, such as travel and hospitality, adhere to less stringent demands.

Supporters’ groups have attacked broadcasting agreements that may mean thousands of fans will not be able to watch their teams play live — either in person or on television.

There is also the risk of further lockdowns, which would force the postponement of matches and leave plans in tatters. But unless fans return to stadiums soon, Premier League teams warn they face another lossmaking season.

“I think it’s going to be very difficult for any football club . . . to operate without fans for any period of time,” said Paul Barber, chief executive of Brighton and Hove Albion. “Our whole business model is built around having people in the stadium.”

Matches will continue to take place “behind closed doors” through September, but Premier League and government officials are in discussions to begin reopening stadiums from October in plans that will allow grounds to be up to a third full.

Premier League chief executive Richard Masters has proposed technological solutions to allow bigger numbers, such as introducing “clinical passports” so spectators are sold tickets only after passing Covid-19 tests.

Clubs are undertaking complex scenario modelling to work out how to stick to strict government protocols, such as maintaining social distancing between supporters and avoiding over-reliance on public transport.

Smaller clubs with older stadiums with tight concourses and a lack of car parking facilities may be forced to restrict admission to far less than 33 per cent.

Premier League club executive
Executives at Manchester City, which plays in the modern 55,000-seat Etihad stadium, are drawing up plans to allow 13,500 spectators into its stands — around a quarter of normal capacity.

Season ticket holders will need to enter a ballot to gain entry to individual matches, while the club is working on solutions to avoid fans mixing, such as allowing supporters to order food and drinks from their seats.

“Football in general has been somewhat frustrated by the pace of things,” said one executive at a leading Premier League club. “There are double standards. Look at other parts of society that are opening. People are sitting next to each other on planes, but sitting next to each other in open air stadiums has to be socially distanced.”

According to consultancy Deloitte, in the 2018/19 season — the latest period for which comprehensive figures are available — matchday income across all 20 Premier League clubs was worth £683m.

This represents just 13 per cent of the £5.1bn total turnover, with the vast majority of revenue made through broadcasting and sponsorship deals.

But teams are run on slender operating margins, so ticketing income is often the difference between making a profit and not. Club revenue is mostly swallowed up by player wages, which cost a combined €3.6bn in the 2018/19 season.

Clubs in Germany’s Bundesliga had agreed plans for a partial reopening of stadiums to fans for the start of its season next month, only for health officials to block the proposals for the time being. Other competitions, such as Spain’s La Liga and Italy’s Serie A, are also developing protocols to welcome some supporters back at grounds.

When Premier League matches resumed in June, a deal was reached to allow the remaining 92 games of the season — including 45 that were not due to be televised — to be shown live in the UK by the competition’s broadcast partners: Sky, BT, Amazon and the BBC.

The measure had been demanded by the government, which wanted to provide morale-boosting entertainment to the public following weeks of lockdown.

For the upcoming season, the Premier League is providing 20 extra matches for its UK broadcast partners to screen live. This concession is designed to compensate TV companies for a disrupted fixture calendar that will require more matches to be played on weekday evenings rather than the more valuable weekend slots. It is hoped the agreement will avoid broadcasters demanding further rebates.

But as only 220 of the 380 matches will be shown live in the UK, many ardent fans will be unable to watch their favourite teams with the restrictions on the numbers that can attend stadiums.

Tim Payton, from the Arsenal Supporters’ Trust, called for all games to be shown on television until grounds are fully reopened or to allow season ticket holders to watch matches online — a solution being deployed in the Scottish Premiership and English Football League, the professional divisions below the Premier League.

“They are the only sport in the world in the world that holds back premium content in its home market,” he said.

Premier League executives and member clubs are reluctant to unpick broadcast contracts, worth £3.7bn this season, fearing that screening more matches may devalue existing deals. These concerns have been heightened by fears that pay-TV providers will seek to recoup coronavirus-related losses by paying less for sports rights in future.

In June the Bundesliga announced Sky and online service DAZN will pay €4.4bn to show matches in its home market between 2021 and 2025 — a fall of €200m from its previous domestic TV rights deal.

“We’ll see the impact of Covid for years to come with regards to sports broadcasting generally and football broadcasting in particular,” said Rob Wilson, a football finance academic at Sheffield Hallam University.

These pressures have resulted in clubs seeking to cut costs. Consultancy KPMG has predicted that €10bn has been wiped off the value of football players in Europe’s biggest leagues due to the pandemic, as plummeting revenues means less cash will be spent on star signings. With the exceptions of big spenders such as Chelsea and Manchester City, most clubs are seeking cheaper ways to replenish their squads.

“These constraints drive creativity,” said Alistair Mackintosh, chief executive of Fulham, newly promoted into the Premier League. “Some clubs are prepared to sell their players at lower values. There are lots of talks of creative deals and swaps . . . there will be last-minute bargains as people look to shed wage bills late on.”

Many say they are resisting the route taken by Arsenal, which became the first top tier club to announce widespread redundancies by cutting 10 per cent of its non-playing workforce. The move prompted a backlash from fans and media commentators who regard football clubs as institutions rooted in their local communities, rather than global profit-seeking enterprises.

Mr Barber said his club had not needed to make redundancies thanks to the financial backing of its owner, gambling industry entrepreneur Tony Bloom.

But investment from a wealthy owner “can’t go on forever” and be a stopgap for a return to stadiums, he warned. “We do need to get our business back on track, as soon as we possibly can.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:40 pm

Interesting article pushing the case for football to adopt technology at a faster pace - comes in the week that Messi told Barcelona that he wanted to leave by burofax (find out what that is and why it is still used here https://ftw.usatoday.com/2020/08/what-i ... ofax-messi)

Opinion piece from SportBusiness.com

Alan Pace | Football must address its technology problem
Alan Pace, managing partner at sports investment firm ALK Capital and former chief executive of Real Salt Lake, explains why disruptive technology is making the current transfer window the most digitally-connected ever.

August 28, 2020

At a time when you can be approved for a bank loan online, filling in every form and scanning all documentation via a mobile phone, it may surprise people from outside the football industry to learn that multi-million-dollar football transfer deals are still being struck this month using fax machines and paper deal sheets.

When the transfer window proverbially slams shut at 11pm on Monday, October 5, there will be big-money moves falling at the final hurdle because the paperwork hasn’t been filed in time, or because clubs, players and agents haven’t been able to connect.

You’d think that in 2020, a year that has forced all businesses and industries to embrace connected working, there must be a better way. And there is.

But as we’ve seen with the reluctant, then controversial, introduction of the Video Assistant Referee (VAR), football has long had a problem with technology.

Covid-19 has changed that virtually overnight. Just as the global pandemic has accelerated technological advancements in all our daily lives, it is now breaking into football’s most mysterious of corridors, the player transfer market.

With face-to-face negotiations challenging, this summer’s transfer window is proving to be the most digitally connected ever, with high-tech solutions being embraced across all levels of the game.

As an investor in transfer market platform Player Lens, I’ve seen first-hand the surge in interest from leading clubs, players and agents, who are now heading online to finalise their next move.

From players and agents creating digital CVs with instantly updated stats and video highlights to directors of football searching the market for transfer targets within their budget range, stakeholders throughout the sport are now maximising the powerful technology and data at their fingertips.

The same technological revolution is also disrupting the worlds of scouting and recruitment.

With the grassroots game still largely suspended, football scouts are needing to hang up their training coats and open laptops to uncover the next generation of star players.

Platforms such as artificial intelligence app AiScout allow scouts to find, analyse, score, rate, benchmark and identify players’ technical, athletic, cognitive and psychometric ability – all using just a mobile phone.

A recent random test of the app with 50 youth players led to six being offered trials at Premier League clubs. One has since signed for AFC Bournemouth and moved on to represent the Republic of Ireland at U19 level, demonstrating the huge potential of AI technology within scouting.

As someone who worked for 20 years on Wall Street before entering the world of sport, the positive impact that technology and data can have on a vertical as big as football’s transfer market comes as no surprise.

I’ve long believed that talent identification, player development and performance in sport can be aided and enhanced by state-of-the-art technology and predictive analytics used throughout other industries.

Why, for example, would a club take a chance on signing a big-money player or adopt a specific training method without concrete data that the actions can have a positive impact on performance and development of the team?

Let me be clear, this isn’t about playing ‘Moneyball’ or using data to identify low-cost, high-return solutions, but being insight-led and using the technology at our disposal to make smarter decisions that will carry long-term benefits.

We have already seen in recent years the positive role that data can play in areas like injury prevention, and there is much more that can be done within the sports science discipline, as we increase data sources and learn how to further interrogate it.

Of course, during a global recession there is also a clear cost benefit here, too. At a time when football clubs must get every penny out of their investments, technology can leverage their spending power, help to drive efficiencies and increase ROI.

As Covid-19 moves football into the ‘Insight Era’, even the staunchest critics of technology within the game are going to need to embrace it.

It’s time to get comfortable with feeling uncomfortable.

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:45 pm

You will no doubt have read about the latest series of All or Nothing on Amazon Prime featuring Tottenham Hotspur - what we witnessing this season is something new a convergence of retail, marketing and programming - in effect the future and likely to be a feature of matchday programming soon. SportsProMedia.com has the detail

Tottenham and Amazon seek to monetise Prime series with dedicated club store
Platform to use digital tools to bring All or Nothing viewers on to merchandise platform.

Posted: August 28 2020 By: Steven Impey

- Ecommerce addition would add value to eight-figure content deal
- Spurs' All or Nothing series to launch on Prime Video 31st August

Tottenham Hotspur are finalising a partnership with Amazon that will see the English top-flight soccer club launch their own branded store on the ecommerce giant’s platform, according to Sportico.

Amazon has previously launched similar portals for other soccer clubs such as Bayern Munich and Inter Milan but is breaking new ground by doing so alongside the team featuring in the latest instalment of Prime Video's high-profile All or Nothing fly-on-the-wall docuseries.

According to Sportico, the tie-up represents a new ‘playbook' for Amazon in aligning its core retail business and sports media content.

An email sent to Spurs' licensing partners, and reported by Sportico, details 'powerful tools' to entice viewers of the new series on to the retail platform. Linking ecommerce to the series would add potentially significant value to the original content deal, which was worth an estimated eight figures.

News of the deal emerges following a surge in spending on Amazon, which chief financial officer Brian Olsavsky recently said "was driven by increased consumer demand, led by Prime members”.

In Q2, Amazon saw 40.2 per cent year-on-year revenue increases, with income hitting US$88.9 billion in that period.

The new series of All or Nothing is set for release globally on 31st August, so to take best advantage of the retail opportunity the new portal would have to be in place by then.

The apparent new deal is the latest link between Spurs and Amazon since they agreed to film the docuseries. Earlier this year, Amazon was reportedly discussing a UK£250 million (US$333 million) naming rights deal for Tottenham's new stadium. Jeff Bezos' company later ended up taking on title sponsorship of the new venue for National Hockey League (NHL) expansion franchise the Seattle Kraken. The Climate Pledge Arena contract is reportedly worth as much as US$400 million.

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 1:54 pm

SportsProMedia looks at the sponsorship picture in the Premier League post Covid - (it is changing rapidly as are the strategies being employed by clubs, which I may look at later - the differences in approach between the Manchester clubs approaches is in itself very interesting)

Assessing the Premier League sponsorship picture in the wake of Covid-19
English club soccer’s top flight has had a turbulent time during the pandemic, but the last five months could only be the start of its commercial challenges. Spencer Nolan, Nielsen Sports’ general manager for UK and Ireland, details the partnership strategies clubs must stick to ahead of the new season.

Posted: August 28 2020 By: Ed Dixon

If Covid-19 has torn up the sponsorship deal playbook, Premier League clubs find themselves in the unenviable position of trying to decipher and apply a new set of rules just weeks before English soccer’s top flight returns for the 2020/21 campaign.

Several studies made for grim reading during the league’s three month suspension from March to June. Deloitte predicted teams were set for a permanent revenue loss of UK£500 million (US$661 million) in their 2019/20 accounts due to the pandemic, made up of rebates to broadcasters and the loss of matchday revenue.

The financial services firm added clubs are forecast to earn around half of what they normally would in matchday revenue in 2020/21, with that estimate of UK£350 million (US$463 million) set to be lost if supporters cannot return to stadiums during the season.

Sports marketing agency Two Circles also rubbed salt into the wounds, stating that overall global sponsorship spend this year could suffer a US$17.2 billion hit. That represents a 37 per cent year-on-year decrease, dropping from US$46.1 billion in 2019 to US$28.9 billion in 2020.

During the height of lockdown, Premier League clubs moved to take stock of their three core earners – commercial deals, broadcasting contracts and matchday income – and reassess fiscal projections for the financial year. Maintaining and brokering partnerships in an effort to offset losses were also top of the to-do list.

A shred of comfort for the league has come through new Covid-enforced branding opportunities on netting in the lower tiers of closed stadia. As the 2019/20 campaign resumed on 17th June, commercial partners of clubs were expected to receive global value between UK£700,000 (US$926,000) and UK£2 million (US$2.6 million) for each game played behind closed doors, according to research and consulting company Nielsen Sports.

Adding to the cautious optimism was a survey by the European Sponsorship Association (ESA), which found that 72 per cent of brands are looking to extend their sponsorship rights despite the ongoing anxiety. A later ESA survey also showed that 23 per cent of European sponsorship industry executives estimated an increase in revenue in 2020.

The power of the brand will usually win out and the Premier League’s status as the most-watched soccer league in the world cannot be underestimated. But amid a stack of varying studies, uncertainty, as overused a word it has been, continues to stand out.

Like it or not, clubs will be living with Covid’s commercial consequences for the foreseeable future. Perhaps indefinitely. Focus on the solution, not the problem, as the old business cliché goes. Certainly no small task.

To shed some light on Premier League teams’ next steps, Spencer Nolan (pictured), Nielsen Sports’ managing director for UK and Ireland, breaks down his key pointers to SportsPro for sponsorship success.

1. Rethink the model
“To start with, we know that teams have to enhance the behind closed doors environment and recognise that there are going to be remote fans,” says Nolan. “Clubs need to know how they are experiencing the game now, whether that’s through, for example, augmented reality (AR) or virtual reality (VR).

“You're looking at exclusive remote tickets, and, if you like, digital tailgating which is a preshow from former players, musicians and other influencers. How are they going to tie in with other physical venues?”

A return date allowing fans back into stadia remains unclear after the UK government scrapped further pilot sport events with spectators for the first two weeks of August. According to the PA news agency, Premier League clubs had been hoping to admit supporters at pre-season friendlies on a socially-distanced basis.

Regardless of when, or if, fans come back, Nolan adds that teams must prepare their grounds to improve both the viewing experience and commercial offering.

“Every club will have to rethink their stadia and attendee design – optimising the footprint of stadia, a contactless environment, how food and beverage is delivered. Can they have gatherings in certain areas, do they partner with other venues?

“There needs to be more of an understanding of fan behaviours. It's not just about the direct fan attending the event. It's very much about that wider fanbase and how to continue that engagement and how to understand the behaviours of the non-direct fan.”

For ventures such as advertising across seating, Nolan states those have had “mixed results” due to teams having to give some of that income to existing partners. This has made it even harder to recoup matchday revenues, though it has helped “to ease some of those difficulties”.

“I think the other element is how clubs have been able to engage with their fanbase during these games,” he continues. “Whether it's through the broadcast, and with what Sky, BT, and Amazon have done so that the viewing experience is good, there's certainly been different attempts to try and engage their fanbase, which leads to that monetisation of sponsorship and media rights for the Premier League.

“Revenues are reducing for matchdays and there's going to be an expected reduction in media rights revenue next season. Sponsorship, licensing and merchandising are now more important than ever, so clubs understanding how they can go to market effectively, how to put a proper value on what they are contributing to a partnership is crucial.

“Teams have to focus and double down on their efforts around sponsorship. Retention of partners is going to be key in the ‘new normal’.”

2. Collaborate more closely with partners
For Nolan, point two applies to both existing long-term commercial deals and new ones.

“It makes it more complicated, but more integrated,” he explains. “We're seeing the more successful collaborations between sponsor and property being based around really working together for a win-win. That creates more assets, more flexibility, and also the rights holder being a platform for that brand to engage with the audience base in a more meaningful way.

“It’s about innovating or developing new assets. That could be for online fan parties, Q&A events, working more with athletes and influencers, or cause related market – of course, we've seen more of that in the last few months. Other content types will become more prevalent.”

At the start of lockdown, a number of grounds were made available to support the National Health Service (NHS), followed by fresh activations from clubs and their partners.

“Manchester City did a nice bit with Puma where kids were able to design their own football kit,” continues Nolan. “That interactive element of getting closer to the fan had some really nice examples outside of just quizzes and competitions.

“Online fan parties were another area. There was more of an interactive element because that's all that they had to go on, so more resources and effort were put towards that because games were being played behind closed doors. I expect to see more of that.”

Closer collaboration may well extend to the boardroom when it comes to formulating deals. The flat fee with performance bonuses is nothing new for partnerships. However, Nolan believes flexible incentive-based payments could be more widespread and intricate as brands seek to strike a balance between risk and reward.

“We've seen it in the US more than in the UK, but that’s something which could play out a little bit more.

“As it's not as standard as previous contracts, then you could argue that it might take a bit longer. But I think there's been more collaboration over the last few years. You're seeing more flexibility in and around the asset base between partner and property.

“By nature, that's already happening. Clubs are having to be more flexible and potentially adding in more assets for the same value. You'll see more flexibility from clubs but that's not to say it will take longer to renew.

“To look at the other side, brands will certainly be discerning about the value that they're getting from a partnership, so will need to be more convinced than ever about parting with their money.”

3. Accelerate digital
The lack of action during sport’s shutdown saw more clubs turn to social media to appease fans eager for their content fix. That reliance on digital could only be the start for teams in a bid to monetise more effectively.

“Continue with digital engagement, customer relationship management (CRM) and have a more personalised experience for those not able to attend games,” says Nolan. “Develop new growth areas such as esports. They will be the focus for all Premier League clubs and indeed all rights holders.”

Speaking during a SportsPro Insider Series session last month, Jim Lucas, the Football Association’s (FA) managing editor, affirmed that lockdown had proved that creating effective content was still possible, highlighting the ability to move away from mirroring television without skipping on quality. Remote, streamlined production now looks set to be the norm, enabling clubs to provide partners with more bang for their buck.

“There's been an acceleration of digital to some extent,” agrees Nolan. “Clubs are being smart about how to push that content and engagement in a more constrained calendar.

“CRM and digital customer experience will be important. Developing new assets, whether that’s through gaming, which we know had a boom during lockdown, or more music, fashion, and food tie-ins that aren't just related to the live content and the shoulder programming around it.

“We’re going to see more collaboration working with brand partners where, in some cases, they've had the media exposure that they've always had, and they've maybe got a good return on exposure. But, actually, it's more about how they are engaging effectively, how they are really driving brand impact and business impact, so proving that is as important as ever.”

In keeping with that theme, another study released by Nielsen this month revealed that nearly half of the UK population have an increased interest in brands who have been socially responsible during Covid-19, suggesting there are increasing opportunities for those companies to reach engaged and appreciative audiences.

Of those asked in July if they had a greater interest in brands who have been socially responsible and ‘do good’ more than before, 45 per cent of respondents agreed they did, an increase on the 41 per cent who said so in June.

Young people in particular appear to be the drivers of this new way of appraising companies, with slightly under half (48 per cent) of those aged 16 to 29 claiming to have an increased interest in socially responsible brands. That compared to 46 per cent of 30 to 49-year-olds and 34 per cent of those aged between 50 and 69.

With the new season kicking off on 12th September, the pressure on brands and clubs to be more astute with their partnerships will be greater than ever. Nolan feels companies have been “sympathetic” to teams’ current plight but warns that can’t last forever in the search for value.

Deal structures could be about to shift. Clauses covering unforeseen events such as global pandemics, resulting in contracts being devalued, will surely become universal. The length of agreements, too, may alter.

Teams have to focus and double down on their efforts around sponsorship. Retention of partners is going to be key in the ‘new normal’.

“In the UK, the average duration of deals has gone down significantly,” notes Nolan. “Back in 2010, it was just over three years in length whereas in 2019 that was less than one-and-a-half years.

“More brands are testing or swapping platforms to some extent. Betting has had an influence with their short-term deals, but if we see the average of one-and-a-half years it can't go too much lower.

“There might be ‘one plus one’ options in there, which is common place, but that goes against empirical evidence that says longer-term partnerships generate higher value for a brand. But with the competition and different assets available, then there's a belief for brands to test a little bit more.”

The number of commercial deals in UK Sport has jumped from 600 in 2010 to nearly 2,000 this year

A compressed middle for mid-range tie-ups could also be forecast, thanks to a bifurcation of mammoth and more modest contracts. The five-year plus kit deals, for example, should be here to stay, but lesser, short-term agreements have caused the split.

“The long tail of less than UK£1 million is growing, so there are more at that lower level,” continues Nolan. “The UK£1 million to UK£8 million sponsorships are becoming more difficult to sign because it's a bit more squeezed at both those other ends.”

Nolan adds that the number of new deals per year in UK Sport has shot up from 600 in 2010 to nearly 2,000 this year, forcing clubs to find unique ways to stand out given the choice companies now have. Digital, again, seems to be the centre piece for teams’ new commercial tactics.

“They need to show that they have an innovative platform, have an engaged audience, and how they impact the brand's business,” concludes Nolan. “Assessing that value between parties is more important than ever and being able to break that down in the contract is therefore going to be vital.

“We’ll see a digital content element of these contracts, rather than it just being put in without a value. It's going to be more and more prevalent as it becomes a bigger part of the overall packaged value, as well as some of those more innovative assets.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Sat Aug 29, 2020 2:34 pm

Following that Amazon/Spurs article earlier (and it's additional monetising of media via a retail/streaming convergence) SportsPro look at what (if anything) a very cash rich Apple could do in the Sports marketplace given some of their recent activities.

What would an Apple sports strategy look like?
After explosive stock market growth during a Covid-affected 2020, Apple is currently the world’s only US$2 trillion company – but its activities in sport are relatively limited. If that changes, what kind of an impact could it make?

Posted: August 26 2020By: Eoin Connolly

Not sure if you were following the news much over the last little while but it turns out Apple is a pretty big company.

The biggest, in fact. After 20 years of anticipating and shaping the effects of technology on consumer demand, and 20 weeks of investors looking for safe places to put their money in the middle of a global pandemic, Apple last week became the first American company to attain a US$2 trillion valuation. Currently, it is the only company anywhere in the world beyond that barrier.

Another thing about Apple: at this point, despite being one of the most culturally significant organisations of this century, it also has very little direct contact with the sports business.

The first of those facts is unlikely to change very soon. The second is open to speculation.

You all know the story: since a reboot after the late Steve Jobs’ return at the end of the 1990s, Apple has built a strategy on premium products, intuitive design, and a sealed ecosystem that keeps consumers upgrading for years at a time. The owner of one Apple device is often the owner of several, with people more or less running their lives within that universe.

It has also developed a telling knack, albeit not a perfect track record, for understanding when technological advance and behavioural change are about to converge. So it is tempting to look across the sports industry and wonder whether, after Apple rode disrupted currents to success through personal computing, communications, and the consumption of music and mass entertainment, it might be interested in repeating the trick in sport.

There are reasons to suspect it would not be. One is scale. That valuation, at a conservative estimate, makes Apple worth three or four times as much as the entire global sports industry. Its market share and control of its environment, despite a recent challenge from Fortnite publisher Epic Games, makes it a powerful audience gatekeeper anyway.

But the stirrings are there. In June it hired former Amazon Prime Video sports lead James DeLorenzo, with a brief, according to Recode Media, to build out its own sports offering. The Wall Street Journal reported talks with the Pac-12 college sports conference last December over becoming its primary rights holder. According to Pocket Lint, the live and library sport available through Apple TV is now curated by a small, dedicated team.

The companies with which Apple is so often bracketed have either shown their hand or have sports strategies that are easily divined from their activities elsewhere. Amazon is buying live sports rights to add value to its Amazon Prime membership scheme, enrich its datasets, and create new points of contact with consumers in its efforts to sell everything to everyone all the time.

Netflix is an entertainment media provider, less interested in live action and building the complex legal and technical infrastructure to sustain it, but very taken with the potential of original content. Facebook and Google make most of their money selling advertising. Both have flirted with live partnerships, especially in amplification via Facebook Live and YouTube, but any and every form of engagement has some value.

Apple can be an awkward fit with these four, and not just because of how awkwardly it elongates that FANG acronym. It is a pre-internet company, straddling the eras of ‘think hard and make things’ and ‘move fast and break things’.

There is a long list of technologies it did not invent, but popularised: the graphical user interface, the MP3 player, the touchscreen, the tablet computer and, latterly, wireless headphones and the mobile-connected watch. This is often a creative company, but it is rarely a first-moving innovator.

Nevertheless, the challenges it faces in the next decade are not those of the last two. The global smartphone market is saturating and the rate at which users are willing to upgrade has slowed. Many of Apple’s product lines compete with each other in terms of market share and user attention – think laptops and iPads, iPhones and Apple Watches. Now, more than ever, it is thinking about its role at the centre of its consumers’ lives.

The focus has moved from shifting units to running services. Apple wants to provide recurring value through media platforms that are exclusive to its products, run seamlessly across them, and are either better than competitors or good enough alternatives within its whole package. Apple TV+, Apple Music, mobile gaming platform Apple Arcade, and Apple News all fit that description.

Each of those makes a similar promise, aggregating content at a low-ish monthly cost, but each also exists in industries with very different models. Any version of Apple Sports would be playing off another set of dynamics altogether, where the cost of differentiating through live rights acquisitions is high and fans are unused to paying for anything else.

One approach would be to create a place for smaller rights holders and media companies to shelter alongside limited offerings from the elite. A bigger impact would need a bolder approach.

Per its latest filings, Apple is sitting on somewhere over US$200 billion in cash. Not all of that is readily available – they may believe in a user journey over in Cupertino, but that simplicity does not extend to the company’s accounts. Still, even allowing for monies squirrelled away in securities, committed to future stock buybacks or passed overseas to reduce tax liabilities, there is probably something left in the coffers.

Moving into the live rights business, then, is financially plausible, but Apple is some way behind – as far as we know – in terms of relationships and expertise. Catching up could mean finding a shortcut. While it may not have a reputation for big-money purchases, Apple will spend to bring in new technologies or open routes to new markets. The US$3 billion takeover of headphone brand Beats in 2014 is the highest-profile case in a recurring trend.

If it is serious about live sport, Apple might be interested in a company with a broad, global set of live rights that has gone some way towards solving the problems of international, digital-first distribution. To pick a provocative and strictly hypothetical example, how much more than US$3 billion would it cost to land DAZN? The over-the-top (OTT) pioneer is on the hunt for funding after a difficult few months. It also believes it has broken new ground in a Spotify-style, profit-share restructuring of its long-term rights partnership with Japanese soccer’s J-League.

There is every chance, though, that Apple will approach its relationship with sport from another angle. It now has a huge lead in the wearables market through Apple Watch and, especially, its AirPod headphones. That could drive changes in consumption, while it has only begun to explore the ground around physical activity and digital health monitoring - a huge, competitive growth area, for better or worse.

In May, meanwhile, it bought virtual reality streaming specialist and NBA partner NextVR for a reported US$100 million. Apple is in a race towards a future where another generation of interfaces has the same impact that touchscreens had a little over a decade ago. In that context, even if it does not have a formal relationship with sports organisations, it could have a massive influence on the industry all the same.

The old ‘think different’ mantra may not mean what it used to but this is still a company that goes its own way – one that is as much about alternative routes to profit as alternative products. The way it goes in sport could yet tell us plenty about the years ahead.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 2:09 pm

Chester Perry wrote:
Sat Aug 29, 2020 1:19 pm
For the first time in months @AndyhHolt has stuck his head above the twitter parapet promising to reveal not only the reasoning for his voting (to end the League 1 season and the points decisions) in EFL decisions, but also the finances for Accrington last season and forecasts for the coming season. He starts with the at voting decision, in fukk knowledge that he will be pelted by Tranmere and Peterborough fans in particular.

https://twitter.com/AndyhHolt/status/12 ... 9755658240
Since this post @AndyhHolt has posted his views on Salary caps

https://twitter.com/AndyhHolt/status/12 ... 0101620738

Premier League bail out's and the potential for another Covid shutdown

https://twitter.com/AndyhHolt/status/13 ... 4404244480

and finally he turns to the finances of Accy themselves and a promise to keep off twitter until next summer (unless their are EFL votes that he needs to share his thoughts on (to his club's fans - everyone else is just a voyeur on that one)

https://twitter.com/AndyhHolt/status/13 ... 0621515778

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 2:15 pm

How's about this to show the distorted economics in the English game and also the distortions that the Parachute Payments make (especially if a club quickly falls to League 1 (though Sunderland still failed to achieve promotion)

https://twitter.com/vysyble/status/1300048135776018432

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 2:23 pm

You will have see me post about Private Equity firm 23 Capital a few times in recent months - they have been making a big play about factoring to save sport and entertainment and have been a significant player in football finance. So this news is particularly foreboding for the immediate future of finances in the game. From the Financial Times

Soros-backed football finance lender 23 Capital winds down
OWEN WALKER SEPTEMBER 01, 2020

23 Capital, a prominent lender to the football and entertainment industries backed by billionaire George Soros, is winding down its $1bn loan book with its co-founders parting ways amid rising uncertainty for lenders to those sectors.

The London-based firm has outsourced the administration of its existing loan book and corporate entities to Intertrust, the Amsterdam-based corporate services provider, and cut staff numbers from around 70 to roughly 15.

Jason Traub, the former Investec banker who co-founded 23 Capital in 2014, is looking to create a new corporate entity under the 23 name, re-establishing a sports lending business with a focus on providing finance to European football clubs.

The decision to concentrate on the world’s most popular sport has led to Mr Traub and co-founder Stephen Duval, who had specialised in lending to the music and entertainment sectors, going their separate ways.

The restructuring of 23 Capital, which has helped to finance some of the biggest transfers in football, including Barcelona’s €120m signing of French World Cup winner Antoine Griezmann and Atletico Madrid’s €126m purchase of Joao Felix, comes as the pandemic has smashed ticket sales and forced clubs to pay rebates to broadcasters.

The pandemic forced 23 to restructure some loans to clubs, said Mr Traub, with the company needing to “realign” a financing facility provided by Credit Suisse that backs loans. “It’s not rocket science,” said Mr Traub. “They [clubs] had their revenue taps turned off four months ago and clubs need a transfer window to manage their liquidity. Not all of them have spare resources — cash — lying around.”

Mr Traub is in discussions with existing 23 Capital shareholders, which include Soros Fund Management’s Quantum Partners, about backing the new entity, as well as with Credit Suisse, the Zurich-based bank which has been providing funding before the restructuring.

Typically, such lenders provide credit facilities to clubs secured against future revenues on top of assets. This allows clubs to draw down funds, offering them crucial liquidity ahead of receiving future revenues.

Such revenues — especially the billions of pounds in broadcast revenues commanded by Premier League clubs — were previously considered to be virtually guaranteed.

But the pandemic forced the Premier League to delay the conclusion of the 2019-20 season, resulting in a £330m rebate to broadcasters, and fans have yet to return to stadiums, hitting revenues. The loss of income raised the possibility that lenders may have extended finance against revenue that would have failed to materialise.

Mr Traub said he remains confident in the “fundamentals” of top leagues and clubs, particularly at the upper echelons of the game, even as they try to recover from the revenue losses owing to the pandemic.

Nevertheless, the pandemic could signal an end to low risk lending on the back of the clubs’ stable cash flows.

More than 40 per cent of Premier League clubs surveyed by auditor BDO last year had raised funds against future broadcast revenues, while a fifth had obtained funding on future transfer income, but it is relatively rare for elite clubs to take advances on ticket revenue.

Against a backdrop of record-low interest rates set by central banks, lending to football clubs offered an opportunity to the lenders to generate a higher yield. However, high-street banks have tended to steer clear because of the risk of stirring anger among fans in the event of a default or debt restructuring.

Technology billionaire Michael Dell’s personal investment vehicle has entered the market, providing secured financing facilities to Southampton and Derby County. Australian lender Macquarie has provided loan facilities to Leicester City, Sheffield United and Wolverhampton Wanderers in the past two months.

Mr Duval and Quantum Partners did not respond to requests for comment.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 2:32 pm

There was a tweet doing the rounds this morning that the Chinese broadcaster partner for the Premier League, PPTV owned by Suning Holdings, have started termination proceedings on their existing contract (worth £550m over 3 years 2019-22). Remember PPTV reportedly also withheld a £160m payment due in March 2020. It sparked off a lot of chatter but has since been deleted

This was Simon Chadwick's take at the time

https://twitter.com/Prof_Chadwick/statu ... 6397819904

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 2:51 pm

This is a good thread on perhaps the most intriguing transfer of the summer so far (particularly the price) Matt Doherty - Wolves to Tottenham

https://twitter.com/tariqpanja/status/1 ... 8315169792

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 3:19 pm

We tend to think that match-fixing (for betting purposes) is a minor/lower league issue, it now seems that international fixtures are a growing area for the criminal activity - from the Times

Criminal fixers targeted 36 international matches last year
Martyn Ziegler
Monday August 31 2020, 6.00pm, The Times

The number of international football matches suspected of being targeted by match-fixers more than doubled last year, a new report has revealed.

Investigators found suspicious betting patterns involving 36 matches between national teams, up from 16 in 2018, with the games having been flagged up as likely to have been targeted by criminals who have bribed players or referees to either fix the result or, more commonly, spot-fixing related to the number of goals conceded and yellow cards received.

The results are revealed in the Suspicious Betting Trends in Global Football Report, which says there were 456 suspicious matches in total in 2019, up from 377 the previous year. More than half of these matches were in Europe, and 183 were viewed as being extremely likely to have fallen victim to fixing.

One men’s national side, understood to be from outside Europe, were involved in four suspicious matches out of the 13 matches they played during 2019.

The report also warns that the pandemic is expected to make players and clubs even more vulnerable to accepting approaches from fixers. The clubs and countries most susceptible to approaches are those where player wages are comparatively low but where there are still betting markets for their matches.

The report has been published by the British firms Stats Perform Integrity and Starlizard Integrity Services, which monitor betting markets throughout the year. Suspicious betting patterns are passed on to Uefa, Fifa or local football associations and sometimes to law enforcement authorities.

Information received by Fifa led to four players from Kenya’s Premier League being banned in February for manipulating matches in 2019.

In July, information passed from Uefa to the Armenian FA led to five clubs in the country’s second-tier league being banned for two years, and 45 players and club officials being banned for life.

The report also found “a clear trend of higher proportions of suspicious matches taking place on weekdays”, with three times the number of suspicious games on Wednesdays compared with Sundays.

It added: “We expect the effects of Covid-19 to influence the findings of next year’s report. The finances of many clubs and national teams will be tested in ways that they have not experienced before. This is likely to particularly affect clubs that rely heavily on the income from gate receipts.

“Clubs and players experiencing financial hardships have frequently been a factor in previous match-fixing cases. The greater number of friendly matches organised when lockdown eased and ahead of leagues restarting presented additional opportunities for corruptors.”

Jake Marsh, head of integrity at Stats Perform, said: “This report is intended to provide football and integrity stakeholders with a meaningful insight into matches with suspicious betting markets on a global scale.”

Affy Sheikh, head of Starlizard Integrity Services, said: “It is important that the football world remains diligent and alert to integrity threats at all levels of the game. In producing this report, a huge effort has been made and a vast amount of data analysed to provide sports and integrity stakeholders with detailed intelligence on suspicious betting patterns across many different competitions and countries.”

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Re: Football's Magic Money Tree

Post by Royboyclaret » Tue Sep 01, 2020 6:35 pm

Chester Perry wrote:
Tue Sep 01, 2020 2:09 pm
Since this post @AndyhHolt has posted his views on Salary caps

https://twitter.com/AndyhHolt/status/12 ... 0101620738

Premier League bail out's and the potential for another Covid shutdown

https://twitter.com/AndyhHolt/status/13 ... 4404244480

and finally he turns to the finances of Accy themselves and a promise to keep off twitter until next summer (unless their are EFL votes that he needs to share his thoughts on (to his club's fans - everyone else is just a voyeur on that one)

https://twitter.com/AndyhHolt/status/13 ... 0621515778
Good to see Andy Holt return to the twitter table, albeit perhaps on a temporary basis. Don't always agree with his views but nevertheless he speaks passionately about football matters and it's always refreshing to read his views.

A salary cap for League's One and Two seems an inevitability now as still far too many clubs push the boundaries of Income against Expenditure. Always fancied the position of the "access to all areas" financial accountant to all EFL clubs employed by the football authorities tasked with highlighting the levels of creative accounting which is still far too prevalent in lots of clubs.

Anyway, all the best to Holt and Accrington who continue to operate in a realistic manner, very much like our own club Burnley.

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Re: Football's Magic Money Tree

Post by Royboyclaret » Tue Sep 01, 2020 6:58 pm

Chester Perry wrote:
Tue Sep 01, 2020 2:32 pm
There was a tweet doing the rounds this morning that the Chinese broadcaster partner for the Premier League, PPTV owned by Suning Holdings, have started termination proceedings on their existing contract (worth £550m over 3 years 2019-22). Remember PPTV reportedly also withheld a £160m payment due in March 2020. It sparked off a lot of chatter but has since been deleted

This was Simon Chadwick's take at the time

https://twitter.com/Prof_Chadwick/statu ... 6397819904
Highly unlikely that Suning will be the last overseas broadcaster to experience difficulty in these uncertain times, in fact I believe The esk, some time ago, suggested that many of the weaker Overseas rights-holders might even go to the wall. I tend to agree with that prophecy.

We already know that a £17m rebate per PL club has been agreed by the clubs and an additional £8m per club based on the situation at Suning is a prospect clubs like ours at Burnley will now have to face. Both liablilites relate to last season and need to be provided for in the financial accounts to Jun.'20.

£25m represents a significant amount to a club like Burnley, with the potential next season of even more rebates to account for. Many threads currently on here show frustration at our Clubs' lack of activity in the transfer market but I've been of the opinion for some time the transfer budget for this window is zero. Not saying there won't be any incomings, in fact there surely will be, but any such purchases will have to be funded by the sale value of a departing player. Such is the situation that Mike Garlick and John B find themselves in, and we, as fans, will probably have to accept the departure of one of our favourite players in order to strengthen what currently looks to be a very weak PL squad.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 01, 2020 7:37 pm

Royboyclaret wrote:
Tue Sep 01, 2020 6:58 pm
Highly unlikely that Suning will be the last overseas broadcaster to experience difficulty in these uncertain times, in fact I believe The esk, some time ago, suggested that many of the weaker Overseas rights-holders might even go to the wall. I tend to agree with that prophecy.

We already know that a £17m rebate per PL club has been agreed by the clubs and an additional £8m per club based on the situation at Suning is a prospect clubs like ours at Burnley will now have to face. Both liablilites relate to last season and need to be provided for in the financial accounts to Jun.'20.

£25m represents a significant amount to a club like Burnley, with the potential next season of even more rebates to account for. Many threads currently on here show frustration at our Clubs' lack of activity in the transfer market but I've been of the opinion for some time the transfer budget for this window is zero. Not saying there won't be any incomings, in fact there surely will be, but any such purchases will have to be funded by the sale value of a departing player. Such is the situation that Mike Garlick and John B find themselves in, and we, as fans, will probably have to accept the departure of one of our favourite players in order to strengthen what currently looks to be a very weak PL squad.
Roy, that is a pretty downbeat view, and while I can understand where it comes from my own isn't quite so pessimistic

I think the Sunning/PPTV is more political than anything - there has been growing speculation that China is restricting funds leaving the country at the moment and particularly to countries deemed unfriendly like ours - that would surely explain the lack of activity by Wolves/Southampton.

As for ourselves - there is a chance that last season actually saw record revenues for our club and I suspect that we have our usual £10m or so net spend available - I think the issue is much more around wages, with so many renewals due this season and so much uncertainty going forward as to what our revenues will be - we will be looking to keep control of that and maybe seeking to make a few tweeks to the bonus model that has helped elevate those costs

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 11:21 am

Chester Perry wrote:
Thu Jun 11, 2020 1:34 pm
Many of you will have no doubt read today about the state of football's finances based on a new report from Deloitte

Here is the actual report - Deloitte Annual review of Football Finance 2020: Home Truths

https://www2.deloitte.com/content/dam/D ... e-2020.pdf

This years musical theme comes courtesy of the Queen back catalogue though the report itself is noticeably more downbeat than last years offering
Whilst twiddling his thumbs waiting for some new financial information to play with - come on Premier League announce those full distribution/merit payments for last season already - @SwissRamble has decided to add some meat to the bones of the Money League report from his mates at Deloitte (the source of all his data).

https://twitter.com/SwissRamble/status/ ... 1057143808

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 11:55 am

Chester Perry wrote:
Tue Sep 01, 2020 7:37 pm
Roy, that is a pretty downbeat view, and while I can understand where it comes from my own isn't quite so pessimistic

I think the Sunning/PPTV is more political than anything - there has been growing speculation that China is restricting funds leaving the country at the moment and particularly to countries deemed unfriendly like ours - that would surely explain the lack of activity by Wolves/Southampton.

As for ourselves - there is a chance that last season actually saw record revenues for our club and I suspect that we have our usual £10m or so net spend available - I think the issue is much more around wages, with so many renewals due this season and so much uncertainty going forward as to what our revenues will be - we will be looking to keep control of that and maybe seeking to make a few tweeks to the bonus model that has helped elevate those costs
Another example of how the Chinese government are using politics to determine who can spend what where - Slavia Prague feel the pain of a speech given by the President of the Czech President

https://twitter.com/Prof_Chadwick/statu ... 3076300802

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Re: Football's Magic Money Tree

Post by Royboyclaret » Wed Sep 02, 2020 12:00 pm

Chester Perry wrote:
Wed Sep 02, 2020 11:21 am
Whilst twiddling his thumbs waiting for some new financial information to play with - come on Premier League announce those full distribution/merit payments for last season already - @SwissRamble has decided to add some meat to the bones of the Money League report from his mates at Deloitte (the source of all his data).

https://twitter.com/SwissRamble/status/ ... 1057143808
So, a total Debt now at Everton of a staggering £537million, whilst Burnley do not owe a penny.

Be good to hear the views of The esk on the current comparable financial situation at our respective club's.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 12:06 pm

Just look at what this thread has done to me - I read a report like this on Britain considering opening up to 10 freeports to keep trade with Europe flowing (https://theconversation.com/free-ports- ... -eu-131854) and automatically think about teams being bought.

We know that Southampton's Chinese owners (possibly the Chinese State in reality) are interested in that there, we also know that it was part of the attraction of Newcastle in the Saudi bid. It could yet help Liverpool in their search for a minor shareholder. In terms of availability (and relatively low cost of entry though I would put Hull City (newly of League 1 and officially up for sale) as a prime candidate for anyone wanting to exercise such a plan

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 12:22 pm

Royboyclaret wrote:
Wed Sep 02, 2020 12:00 pm
So, a total Debt now at Everton of a staggering £537million, whilst Burnley do not owe a penny.

Be good to hear the views of The esk on the current comparable financial situation at our respective club's.
Paul has been a busy chap of late. with a couple of good articles on their financial situation and how it will affect them as well as some very good podcasts around the subject too - if you care to read the articles they are here, I will stress that they are completely blues focussed\

first up a piece on the financing and accounting of transfers - which is hugely informative for those who are unfamiliar with the details

https://theesk.org/2020/08/04/the-finan ... is-window/

which was followed recently by this on how they could fund transfers this window

https://theesk.org/2020/08/30/how-do-we ... is-summer/

the podcasts I mentioned - are here https://theesk.org/podcast-specials/

Going back to your point Roy, I agree it would be fascinating to compare, but what is there to compare in reality?

They have an owner with deep pockets and a club of a size and potential to see an eventual return on the spend - perhaps their single biggest issue is that elsewhere in the world the average person may find it difficult to place them in Liverpool and perceive them to be the upstart because they do not use the name of the city, when the opposite is true.

We on the other hand live within our means and may be the only club in the country that gets through to the other side of the pandemic without any financial aid from Owner or Lender, but will likely suffer in the marketplace as a consequence when it should be rewarded and cheered from the rafters.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 12:35 pm

The long running saga of attempts to get no American League games played on American soil has taken another twist - from SportsBusiness.com

Fifa warned banning international league games on US soil may breach antitrust laws
Bob Williams, US office - September 2, 2020

United States-based international soccer promoters Relevent Sports has been given a rare boost in its repeated attempts to stage official international league matches on US soil.

It has emerged that the US Justice Department warned global governing body Fifa that banning the se competitive regular-season games could violate American antitrust laws.

“Market allocation is a per se violation of the US antitrust laws,” wrote Makan Delrahim, the assistant attorney general who heads the Justice Department’s antitrust division, in a letter to Fifa president Gianni Infantino and United States Soccer Federation president Cindy Parlow Cone in March.

“Sports organizations are not categorically immune from liability under the rules. In particular, they apply to Fifa and its affiliates, including the United States Soccer Federation, in the same manner that they apply to any other organization whose activities substantially affect the United States. We specifically are concerned that Fifa could violate US antitrust laws by restricting the territory in which teams can play league games,” Delrahim wrote.

Relevent is looking to put on official LaLiga matches in the US following a long-term partnership with the Spanish soccer league. A planned match between FC Barcelona and Girona at Miami’s Hard Rock Stadium in January 2019 was cancelled after widespread opposition from various stakeholders.

In April 2019, US Soccer also denied Relevent’s application to host a match between two Ecuadorian clubs.

In September 2019, Relevent filed an antitrust lawsuit against US Soccer in the Southern District of New York, alleging that the federation had conspired with Fifa and Soccer United Marketing – the commercial arm of Major League Soccer – to block official matches from foreign clubs being held in the States.

However, in July US District Judge Valerie Caproni dismissed the antitrust claim.

Relevent was given until September 1 to amend its complaint, which it has done so in a new lawsuit in the Southern District of New York. Relevent included Delrahim’s letter in the amended complaint, in which Fifa has been added as a defendant.

“Now that the government has weighed in, we call upon Fifa and USSF to join us in opening up our borders to the world’s game,” Relevent chief executive Daniel Sillman told the Associated Press in a statement.

Relevent has faced a series of setbacks to get this initiative off the ground. Last November, a Madrid court opted not to grant permission for a match between Villarreal and Atlético Madrid to be held in Miami.

In February, Fifa’s Stakeholders Committee recommended that soccer’s world governing body should formally ban teams from playing official league matches outside of their home territories.

In March, meanwhile, a Madrid court dismissed an appeal from LaLiga against the Spanish Football Federation’s (RFEF) decision not to authorize the Girona-FC Barcelona game in Miami. The Magistrate of Madrid’s Commercial Court No.12 ruled that the RFEF did not engage in unlawful conduct by not facilitating the match.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 12:56 pm

Crystal Palace join the blockchain fan engagement train sealing a partnership with Iqoniq (whatever happened to spelling?) - at lest they are getting some definite income as the firm is the clubs new sleeve sponsor

https://www.sportbusiness.com/news/crys ... e-sponsor/

more on Iqoniq here https://iqoniq.io/#

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 1:05 pm

SportsProMedia Podcast looking at the future of sports rights featuring @YannickRamcke

https://www.sportspromedia.com/analysis ... niel-Cohen

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Re: Football's Magic Money Tree

Post by Royboyclaret » Wed Sep 02, 2020 1:24 pm

Chester Perry wrote:
Wed Sep 02, 2020 12:22 pm
Paul has been a busy chap of late. with a couple of good articles on their financial situation and how it will affect them as well as some very good podcasts around the subject too - if you care to read the articles they are here, I will stress that they are completely blues focussed\

first up a piece on the financing and accounting of transfers - which is hugely informative for those who are unfamiliar with the details

https://theesk.org/2020/08/04/the-finan ... is-window/

which was followed recently by this on how they could fund transfers this window

https://theesk.org/2020/08/30/how-do-we ... is-summer/

the podcasts I mentioned - are here https://theesk.org/podcast-specials/

Going back to your point Roy, I agree it would be fascinating to compare, but what is there to compare in reality?

They have an owner with deep pockets and a club of a size and potential to see an eventual return on the spend - perhaps their single biggest issue is that elsewhere in the world the average person may find it difficult to place them in Liverpool and perceive them to be the upstart because they do not use the name of the city, when the opposite is true.

We on the other hand live within our means and may be the only club in the country that gets through to the other side of the pandemic without any financial aid from Owner or Lender, but will likely suffer in the marketplace as a consequence when it should be rewarded and cheered from the rafters.
No, I fully understand we operate on a different financial planet to Everton, but it was more an opinion from Paul as to the manner in which our respective Clubs are run. We, on the one hand, had closed our bank overdraft facility as it has not been touched for four years, whilst Everton have a Debt of £537m, unveiling updated plans for a new ground at Bramley Dock at a cost of £550m and happily going ahead finalising the incoming transfer of James Rodriguez for a further £30m. It just doesn't sit right with me and I much prefer our approach.

Meanwhile, for all that, we just finished the season in 10th whilst they were two places below us in 12th.

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Re: Football's Magic Money Tree

Post by Chester Perry » Wed Sep 02, 2020 1:58 pm

Royboyclaret wrote:
Wed Sep 02, 2020 1:24 pm
No, I fully understand we operate on a different financial planet to Everton, but it was more an opinion from Paul as to the manner in which our respective Clubs are run. We, on the one hand, had closed our bank overdraft facility as it has not been touched for four years, whilst Everton have a Debt of £537m, unveiling updated plans for a new ground at Bramley Dock at a cost of £550m and happily going ahead finalising the incoming transfer of James Rodriguez for a further £30m. It just doesn't sit right with me and I much prefer our approach.

Meanwhile, for all that, we just finished the season in 10th whilst they were two places below us in 12th.
I know he has a lot of respect for our approach, and especially our firm grasp on what we are trying to achieve, commitment to that approach and the fact that everyone is on message and aligned with the thinking - I suspect he favours a more self funded approach (or at least one where the investment is likely to see a return) but does not really have much of an issue with the benefactor approach - he also has fond (understandably) memories of the Mersey millionaires when the club's owner could/would dip into his pocket if he saw fit.

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