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 » Sun Sep 20, 2020 2:27 pm

AndyClaret wrote:
Sun Sep 20, 2020 5:57 am
Why are they including amortization in it though ?
It was part of the fee paid by Wolves - they have no control over who the money is then distributed to by the selling club. The really interesting thing here is we do not know from this story if Wolves also paid Gestifute fees for these transactions also

claretandy
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Re: Football's Magic Money Tree

Post by claretandy » Sun Sep 20, 2020 2:35 pm

Chester Perry wrote:
Sun Sep 20, 2020 2:27 pm
It was part of the fee paid by Wolves - they have no control over who the money is then distributed to by the selling club. The really interesting thing here is we do not know from this story if Wolves also paid Gestifute fees for these transactions also
Yes, but they are including it in with the "dodgy payment" money, when it's quite clearly standard practice.

Chester Perry
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Re: Football's Magic Money Tree

Post by Chester Perry » Sun Sep 20, 2020 2:57 pm

claretandy wrote:
Sun Sep 20, 2020 2:35 pm
Yes, but they are including it in with the "dodgy payment" money, when it's quite clearly standard practice.
just re-read that section - they are illustrating (rather clumsily) that Benfica's recording of a book profit of Euro 23m (It should have been over Euro 30m because so much of the deal they had paid for the player had been amortised) confirms that Benfica did not have full ownership of the player (there was a third party involved), when they brought him to the club.

That fact, and also that so much of the profit went out the door shows much of the problems in Portuguese football and why Football Leaks happened - Rui Pinto was a fan frustrated at the amount of money being sucked out of clubs so decided to investigate.

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 1:32 pm

I have posted a number of times over the summer that the reward for Burnley's finances being managed correctly and being the only club in the League not to borrow from it's owners or financial institutions would be a weaker position in the marketplace. For those of us who hoped that the market would adjust, there are few signs of that, all our rivals have just gone out and spent (or tried to spend - West Ham) money anyhow - current net spending is just short of last summer and I fully expect that it may go on to challenge the record net spend of 2018 9though it might fail in that) which quite frankly is astonishing.

https://twitter.com/vysyble/status/1307989816387272705

I suspect for us it will all be down to cash flow projections, having eaten up so much of the cash pile that we had built up. Our central payments come in 3 instalments, we know we got one in February - we should have got the merit and additional facilities fees at the end of the season and should also have received the largest portion of the current season monies - there is no confirmation has paid the last 2 - the Premier League haven't even confirmed what the 2019/20 final distributions were.

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Re: Football's Magic Money Tree

Post by Royboyclaret » Mon Sep 21, 2020 3:55 pm

Chester Perry wrote:
Mon Sep 21, 2020 1:32 pm
I have posted a number of times over the summer that the reward for Burnley's finances being managed correctly and being the only club in the League not to borrow from it's owners or financial institutions would be a weaker position in the marketplace. For those of us who hoped that the market would adjust, there are few signs of that, all our rivals have just gone out and spent (or tried to spend - West Ham) money anyhow - current net spending is just short of last summer and I fully expect that it may go on to challenge the record net spend of 2018 9though it might fail in that) which quite frankly is astonishing.

https://twitter.com/vysyble/status/1307989816387272705

I suspect for us it will all be down to cash flow projections, having eaten up so much of the cash pile that we had built up. Our central payments come in 3 instalments, we know we got one in February - we should have got the merit and additional facilities fees at the end of the season and should also have received the largest portion of the current season monies - there is no confirmation has paid the last 2 - the Premier League haven't even confirmed what the 2019/20 final distributions were.
The big difference in the summer of 2020 is that only the big six have continued to spend as in previous years, in a way that suggests they consider they are immune to the current situation. The remaining 14 have seen net expenditure cut in half :-
2018.....Big six, £364.0m, rest £511.0m
2019.....Big six, £198.2m, rest £416.6m
2020.....Big six, £361.5m, rest £245.3m to date.

From a Burnley perspective the 13 month financial year to July'20 will probably indicate that Cash In Hand of £41.6m from June'19 will have completely disappeared, with further severe revenue hits for broadcast rebates to look forward to in this new season. All of which will result in any incoming transfers in this window (and the next) requiring to be funded by the sale of one of our crown jewels. Meanwhile, for the big six, it's buy as usual.
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Re: Football's Magic Money Tree

Post by randomclaret2 » Mon Sep 21, 2020 4:00 pm

Hi Roy, Im not doubting your figures in any way, but could you detail how all of the £41.6m will have disappeared?

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 4:34 pm

Royboyclaret wrote:
Mon Sep 21, 2020 3:55 pm
The big difference in the summer of 2020 is that only the big six have continued to spend as in previous years, in a way that suggests they consider they are immune to the current situation. The remaining 14 have seen net expenditure cut in half :-
2018.....Big six, £364.0m, rest £511.0m
2019.....Big six, £198.2m, rest £416.6m
2020.....Big six, £361.5m, rest £245.3m to date.

From a Burnley perspective the 13 month financial year to July'20 will probably indicate that Cash In Hand of £41.6m from June'19 will have completely disappeared, with further severe revenue hits for broadcast rebates to look forward to in this new season. All of which will result in any incoming transfers in this window (and the next) requiring to be funded by the sale of one of our crown jewels. Meanwhile, for the big six, it's buy as usual.
those 2019 and 2020 window numbers are heavily influenced by Chelsea - What we are seeing is the big clubs going into the marketplace prior to selling their cast-offs, but relatively confident they will do. That said Man Utd, Man City could still spend big , Spurs and Arsenal want to spend but will need to do some trading - I think Liverpool are done apart from outgoings

As for the rest West Ham are looking to spend, Aston Villa and Leeds could well spend another £50m each, Wolves are being linked with more players over £30m, Crystal Palace are spending, either in anticipation of Zaha leaving or to encourage him to stay. I expect Leicester, Sheffield Utd, Fulham. West Brom to spend. Newcastle and Everton have spent and will be looking to offload a few - particularly Everton. Brighton. Southampton have been cautious, but are bearing the fruits of previous spending.

As for us, we will bring bodies in, but Sean is deluded if he thinks we are going to buy young first team ready players who will improve us from the off, we just don't have that kind of money - I fully expect last season will see wages around £100m+ with bonuses (13 months - but still a year on year increase again).
randomclaret2 wrote:
Mon Sep 21, 2020 4:00 pm
Hi Roy, Im not doubting your figures in any way, but could you detail how all of the £41.6m will have disappeared?
For now we will have monthly outgoings of £7m or so (Wages and running costs - bonuses (probably £20m+) and and staged (£14m)/conditional transfer payments (between £1 and £3m) were paid/put to one side in the summer) reduced central distribution payments (which could be reduced further during the season) no matchday income, challenges on the commercial and catering side side could see income drop between £20m - £30m mean we have to be careful when thinking of additional outgoings particularly fees and wages
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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 4:42 pm

A article from TwoHundredPercent.com that looks like it was written specifically for this thread

Wigan Athletic & Football’s Addiction to ‘Investment’
by Ian | Sep 17, 2020

“Investment” is a very 21st century word, isn’t it? There’s a hint of the warm and fuzzy about it, calling to mind such phrases as “investing in the future.” Investment offers a sense of security and support, of care and attention. It’s the sort of word that you hear on TV adverts during daytime these days, as snake oil salesmen seek to liberate the elderly from any equity in their houses.

Football has become addicted to investment. Below the Premier League, football clubs routinely spend more than they can raise through ordinary commercial channels alone, meaning that regular injections of money are required to keep a lot of clubs solvent. Investment, however, comes in different forms and businesses, on the whole, aren’t charities. Some make their investment in loans, and some charge interest on those loans or secure them against a club’s assets. Investment in itself is only a good thing if the money is spent wisely and the small print doesn’t add too many onerous clauses attached to it.

In recent years, there has been no shortage of individuals and companies prepared to invest in football. Even clubs with a proven track record of throwing good money after bad have been able to attract interest from those who believe that they can turn a club’s fortunes around. But what happens to football clubs when investment money dries up? What happens when the speculative calls from people prepared to sink a few million pounds into a football club in the hope of reviving it start to tail off? Football clubs might be about to find out the answer to that question, and as with the end of any addiction, the answers might not be terribly pretty to watch.

The collapse into administration of Wigan Athletic during the summer was a story that could only have been considered ‘just another news story’ in this particular hellscape of a year. At any other point in recent times, a football club that won the FA Cup just eight years ago being bought, sold, and then pushed into insolvency would have been a story that would have occupied the media for weeks, but 2020 isn’t like other years.

Such has been the surfeit of stories that read like a series of headlines from a dystopian near-future novel that the extraordinary events that took place at the club earlier this summer have slipped under the radar a little. They started the new season in League One last weekend. Those who don’t pay particularly close attention to this sort of thing could be forgiven for believing that everything in Wigan is something approaching normal.

Except, of course, everything isn’t something approaching normal in Wigan at the moment. The administrators of Bgebies Traynor are continuing to run the club on a day to day basis, and this week they have been explaining that the club’s route out of administration is far from guaranteed, at the moment. In an interview with the Guardian, administrator Paul Stanley laid out the problems that the administrators are facing in terms of securing the new investment required to save the club, and that at present there is a very real risk that Wigan might yet go the way of Macclesfield Town or Bury.

The problem, as Stanley explains, is a lack of interest during these pandemic-infected times. Wigan Athletic are up for sale for £3.3m, a price which includes the stadium, team and training ground. In an era when Premier League club supporters on social media routinely insist on their clubs spending ten or twenty times that amount on a player they’ve only seen on a YouTube highlights clip that seems like a relatively small amount of money. The problem, however, is that ultimately £3.3m isn’t that small an amount of money at all, it’s more that the finances of the game have become so distorted that comparing like with like has become effectively meaningless.

This distortion leads to dichotomous interpretations of events. The whole of Wigan Athletic, stadium and team included, is on offer for roughly the annual salary of one average Premier League footballer, but the £3.3m for which the club can be bought remains such a vast amount of money that the chances of any grassroots organisation (such as a supporters trust) being able to raise it in the required time-frame are next to zero. Both of these statements are equally true, and between them they sum up football in this country’s key inequality.

But Stanley’s comments on the matter make for grim reading for the supporters of all football clubs below the top six of the Premier League. All levels of the game below this rarefied air are completely reliant on “investment”, whether it’s Championship clubs selling their grounds to themselves, Newcastle supporters throwing their moral compasses in the Tyne in the pursuit of Saudi money, or non-league clubs requiring a constant drip-feeding of water by directors and sponsors just to keep their heads above water. Investment is critical to all levels of football, and this need becomes more critical the further away you get from that top six.

This time last year, it was Bury. Yesterday, it was Macclesfield Town. Will it be Wigan Athletic next? That may depend on Southend United. The one thing that all four of these clubs have in common is that their problems were not caused by Covid-19. Three of the four – Bury, Macclesfield and Southend – have lengthy histories of financial mismanagement. For two, this has ended up catching up with them, and the other is hanging by a thread, unless another large debt is repaid to the court in just under six weeks time.

Perhaps this is a consolation, of sorts. These clubs and others, such as Hull City and Charlton Athletic, could put into a pot marked ‘chronically mismanaged.’ Should anything happen to any of these clubs, it is unlikely that Covid-19 could be considered as anything more than a mildly exacerbating factor. Bury were expelled from the League before it started. Both Southend United and Macclesfield Town have been repeatedly hauled in front of the High Court over an inability or lack of will to pay their bills on time.

The other, however, is Wigan Athletic, who have been both an established Premier League and FA Cup winners within the last decade. The circumstances surrounding their collapse are unique, the result of a pair of business decisions about which we may never even find out the complete truth. But again, Covid-19 was not a direct impact upon the club’s day-to-day operations in a conventional sense, any more than it has been for any other club. Au Yeung decided to buy Wigan Athletic in partnership with Stanley Choi. He paid £17.5m, and also ensured that a £24m loan was repaid. But then, on the day he took ownership after this £41m purchase, Yeung decided not to fund it and to put the club into administration, so losing control, the £17.5m, and probably the £24m too. There are several different interpretations of what was actually going on here, but none of them are particularly dependent on the ongoing global pandemic.

Wigan Athletic, however, are paying the price of the professional game’s hopeless addiction to investment. Dave Whelan’s took the club to a new world, one to which the old Wigan Athletic was not invited. Reborn with a new stadium and awash with cash, they got into the Premier League and stayed there, lifted a major trophy, and played European football. But when Whelan finally retired, the club needed investment. And that murky world of companies who trade billions of pounds without often seem to impact upon the public’s consciousness became a part of Wigan’s world.

This summer, their supporters have had to become investigative financial journalists and accountants at the same time, trying to understand the counter-intuitive sequence of events that took them into administration and to a point at which no-one will pay £3.3m for the entire football club, including its stadium and training ground. Many are unhappy at the cost of this insolvency event, and at the fact that more than a team’s worth players have departed the club, some at prices that have made it look like a fire sale, after assurances were made that no such sale would take place. Their tetchiness is understandable, though, considering the speed with which their club has unravelled.

These are, however, amongst the fundamental problems with insolvency. Insolvency Practitioners are expensive, for one thing. We don’t have a full breakdown of their costs yet, but as a general rule Insolvency Practitioners have a legal obligation to be transparent over remuneration. And it is a fundamental misunderstanding that they are appointed in the best interests of supporters. From a business perspective, the administrators’ role is to represent the best interests of creditors whilst realising as much money as possible for them and maintaining it as a going concern.

And let’s be absolutely clear, here. Whilst what has happened to Wigan Athletic has a very specific story arc and there is still little indication that Covid-19 has directly led to the collapse of any clubs with no extraneous intervention, but their story remains part of a significant trend – a trend which has been for football clubs to need investment in order to either keep pace with or overtake others. Covid-19 may not directly kill a single football club, but it may well endanger many if the investment money that they are dependent upon completely dries up. It’s a potential crisis for which few within the game are prepared. Dark clouds may be starting to circle, such is the depth of football’s addiction to outside investment.
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Re: Football's Magic Money Tree

Post by randomclaret2 » Mon Sep 21, 2020 4:43 pm

Im still not clear how £41.6m has disappeared between June 19 and July 20 ?

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 4:44 pm

TwoHundredPercent.com also have produced this on the Macclesfield demise


Macclesfield Town: Thirteenth Time Unlucky
by Ian | Sep 16, 2020

When the axe finally fell at the High Court in London this morning, it was over an amount of money that represented two things at the same time. The half million pounds that finally did for Macclesfield Town were, in the broader context of football’s finances, a drop in the ocean. A little less than one week’s worth of Gareth Bale’s weekly salary, which was gleefully being reported by the press at the same time as part of his possible loan from Real Madrid to Tottenham Hotspur.

But at the same time, it was clearly and obviously not an amount of money that Macclesfield were going to be able to pay. The club had been in and out of the court for months, obtaining deferrals against their own demise with promises of an imminent sale that never came. They’d had so many opportunities to resolve the matters at hand, twelve adjournments since the petition was first raised in January 2019, that the latest request from owner Amar Alkadhi to adjourn the hearing for yet another eight weeks in order to secure a new buyer for the club, seemed to have been requested more out of desperation than reasonable expectancy of a sale going through. There was to be no lucky thirteenth adjournment for the Silkmen.

Shocked but not surprised is an emotion that many of us have been through quite a lot during this wretched year, at some point or other, and Macclesfield’s collapse fits this bill very neatly. The club’s financial affairs have been farcical for longer than most care to remember. The players went on strike in November after failing to be paid, which resulted in the club fielding youth players for an FA Cup match against Isthmian League Kingstonian which ended in a humiliating home defeat, while they were deducted points on three separate occasions for issues relating to payment of salaries and failure to fulfil League Two fixtures against Plymouth Argyle and Crewe Alexandra.

While the Covid-19 pandemic has been ruinous for the finances of football clubs across much of the game, then, we can say with a degree of certainty that was almost certainly not a significant in Macclesfield Town finding themselves where they ended up. That’s an important point to remember, because it would be easy to gloss over the fact that this club has been an accident waiting to happen for several years and ascribe their collapse to this particular force majeure, but to do that would be to let those responsible off the hook.

The improper running of Macclesfield Town has been an issue for more than a decade and a half, now. The club was already in hot water when Amar and Bashar Alkadhi became involved in the club in 2003. At the start of 2006, an FA disciplinary commission found the club guilty of improper conduct relating to a 2001 Football Stadia Improvement fund grant towards the costs of a new £1.5m stand at their Moss Rose stadium, resulting in fines and compensation approaching £300,000 that they were initially told would have to be repaid within weeks. The FA later extended the payment deadline to December 2008.

By June 2013, the club was reportedly half a million pounds in debt, having been relegated from the EFL a year earlier. East Cheshire Council acquired the Moss Rose freehold for £285,000, but £90,000 more was needed by 30th June. Plans were afoot to make the club a “Community Interest-Company”, with directors writing off all their loans. Amar would be one CIC director (Bashar resigned in October), alongside ex-club chair Mike Rance and ex-vice-chair Andy Scott. With the club still needing occasional injections of cash, though, the CIC plan fell through at the end of the year, with the debts being the key reason.

In 2018 the club returned to the EFL as champions of the National League, but it soon became apparent that the problems behind the scenes were so severe that there were questions to be asked over whether they should even have been admitted in the first place. The club had problems paying its wages throughout the entire second half of the 2018/19 season, and whilst manager Sol Campbell managed to steer them to one of the most unlikely League Two survivals of all on the pitch – Macclesfield were in the bottom two from the second game of the season until the 41st – it was evident that matters off the pitch hadn’t been resolved.

Frustrated at the club’s failure to perform its most basic responsibility as a business and pay its staff on time, a group of players took over the winding up petition against the club in July 2019. The matter was settled the following month, but even then Alkadhi sought to blame everybody but himself for the ongoing issues, including a statement which claimed that the players who’d been trying to recoup what they were owed “decided to close down our 145-year-old club.” One of those players, Elliott Durrell, had scored the goal against Cambridge United the previous May which had saved the club from relegation. David Seligman, the players’ lawyer, was scathing in his reply to this horrible accusation:

At no point did they want Macclesfield Town go out of existence, they just wanted what they were owed. They aren’t Premier League footballers, they are earning very modest salaries, living month-to-month, paying rent, for food, for their children, and they couldn’t afford it. I’m sure fans can sympathise. They probably can’t go three months without pay.

So, to last season. The Kingstonian travesty, more unpaid wages, the feeling that whatever financial projection the club submitted to the EFL during the summer probably wasn’t worth the paper it was written on. Ironically, supporters may have had reason to feel relieved when the season was curtailed in March. Bury’s collapse at the start of the season had meant that there would only be one relegation place, and Stevenage’s abject performance meant that even 23rd place would be enough to preserve EFL football at Moss Rose for another season.

It turned out, however, to be a long, hard summer for the club. On the 19th of June, an EFL Independent Disciplinary Commission (IDC) issued a convoluted ruling, finding Macc in multiple breach of EFL rules, mostly involving late salary payments, applying a two point deduction suspended by a previous commission and suspending a further four-point deduction until 2020/21. This application and suspension of points deductions saved the club from relegation. They were also ordered to “deliver to the EFL a professionally prepared business plan seeking to demonstrate sustainable financial resources and management to be put in place for next season and beyond” by the end of July and fined £20,000, “subject to the EFL considering whether to waive, defer or repay the same” if the business plan was delivered to its satisfaction.”

The EFL, however, were unhappy with the conclusion reached by the IDC and appealed, and in the second week of August their appeal was successful. The arbitration panel confirmed not only that the two point deduction would stay in place, but also that, in addition, Macclesfield would be deducted the four further suspended points, changing their Points Per-Game total for the season to 23.62, adrift of Stevenage’s end of season PPG of 28.11 and therefore in bottom place in the entire EFL. The club was, without having even kicked a ball, relegated from the League. Some might say, such was the vehemence with which the EFL pursued the case, that they were effectively expelled from the competition.

Against this background, the news from the High Court doesn’t come as much of a surprise at all. After twelve deferrals going back twenty months… eight weeks? Perhaps there had simply been so many beforehand that Alkadhi merely assumed that another would be granted. He had, the previous week, claimed that a sale of the club to Robert Benwell – who, having been involved with a similarly empty attempt to buy Bury, is developing quite a reputation for himself – was at an “advanced stage”, but Benwell’s name didn’t even come up in court this morning.

Instead, the court was told that Alkadhi understood the amount due to creditors to only be £4,000, that he’d made a late offer to pay an initial £20,000 of the debt owed to HMRC, and that he’d produced a screenshot of a bank statement with £1.1m of available funds to to repay creditors. The judge later confirmed that Alkadhi hadn’t told him where the £1.1m had come from or why the club’s debts had not already been paid with this money. In the end, Judge Prentice granted a compulsory order, stating that “nothing gives me comfort that the club can pay its debts in a reasonable period” and that there had been “ample opportunity” for Alkadhi to pay off the club’s creditors.

This isn’t quite the end, but there will now be no survival for the club in this form unless its debts are paid in full, and quickly. The directors’ powers will cease in every respect, the company’s assets will be liquidated, and it will cease to exist as a legal entity, after being struck off the register at Companies House. Can this be averted? Yes it can. Will it? There’s little evidence from the previous couple of years to suggest that it will.

And then there’s the small threshold of the National League to consider. They haven’t commented on this yet, but the season is due to start on the 3rd of October, and that’s only just over two weeks away. At the time of writing, they haven’t issued a statement on the matter, but without this matter having been comprehensively set to one side it’s difficult to see how they could allow them to start the season. An October start date tells its own story of how tightly packed this season is going to be, and in the current financial climate clubs are not going to be wanting to waste travel expenses on matches that are as likely as not to be expunged from the record at some point throughout the course of this season. At the time of writing, the National League’s website has Macclesfield’s first match of the season against Bromley listed as on, but Bromley could be forgiven holding fire on booking that team coach, for now.

It can feel a little at times as though leagues relegate financial basket cases in no small part so they’re not their problem any more. The EFL seem to have been determined to hit Macclesfield hard, and as a result of this Macclesfield will end their time as a non-league club. But they’re a distinguished non-league club, winners of the first two iterations of the Northern Premier League in 1969 and 1970, and the first FA Trophy, in 1970. With three titles, they are the joint record holders for the most National League titles alongside Barnet. This is a club with a distinguished history, going back to 1874. That’s 146 years of history, and you can’t just make that go away. Macclesfield Town will rise again. The town will have a football club, and supporters will go to watch it. It might not be called Macclesfield Town. It might not play at Moss Rose. But it will be there, for those who want it.

But this certainty shouldn’t dissipate our anger at those who let this happen. When writing about their demotion just five weeks ago, I described the EFL as “a regulator that doesn’t want to regulate, overseeing 72 clubs that don’t want to be regulated.” To extend that criticism to the National League would be a little unfair. The EFL have dumped a problem upon them. The failure falls primarily with the EFL, for allowing somebody who was manifestly unfit to run a football club – the club’s current position as it presents itself confirms this – to retain ownership of that club, and it falls with Amar and Bashar Alkadhi. Football will be a little bit more competently run for their absence from it. And if or when Macclesfield Town slide from view, we should all pause to consider who may be next, where it will all end, and if anybody is going to actually do something about it. Because at the moment, it rather feels as though the game’s governing bodies’ laissez-faire attitudes towards regulation may be about to reach crisis point.

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 4:49 pm

Both of those previous posts made references to the expectations of monies spent on signings in the elite clubs - John Nicholson takes up the theme and believes that big signings are set-up to fall

https://www.football365.com/news/idea-b ... -nicholson

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Re: Football's Magic Money Tree

Post by Royboyclaret » Mon Sep 21, 2020 4:57 pm

randomclaret2 wrote:
Mon Sep 21, 2020 4:43 pm
Im still not clear how £41.6m has disappeared between June 19 and July 20 ?
Apols for the delay in replying, random. In addition to Chester's first class analysis of our current costs (compared to the considerable drop in Income), two additional items are worthy of mention. I understand that the final cost of the new corner stands was significantly more than anticipated and a large chunk of the outstanding payment was still to be settled after the June'19 accounts were prepared. Also a significant initial payment to Boro for Ben Gibson came within this latest financial year.

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Re: Football's Magic Money Tree

Post by randomclaret2 » Mon Sep 21, 2020 5:13 pm

Thanks Roy, Im just trying, as a layman , to get my head around our current financial plight and all the information you provide is very much appreciated

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 5:17 pm

Seemingly 2 minutes after arriving into the Premier League (and after a few years squabbling with the EFL over the same kind of issue) Leeds Chairman Andrea Radrizzani is arguing that top level sports rights owners need to change the way they are sold and suggests that taking on Private Equity partners (such as the model being considered by Serie A) could help with that - from SportsProMedia

Andrea Radrizzani: ‘Sports need to change how they market rights’
Private equity could help customise market strategies, says Eleven Sports chairman.

Posted: September 17 2020 By: Steven Impey

- Sports media entrepreneur calls on leagues to “customise the way they market rights” globally
- Italian says traditional distribution model is outdated and unfit for modern consumers
- Private equity could have role to play in setting strategy and navigating market conditions

Eleven Sports chairman and founder Andrea Radrizzani has called on top-tier sports properties to rethink the way in which they sell media rights in order to engage more fans and grow revenues in international markets.

The Italian businessman, whose global pay-TV and over-the-top (OTT) media company holds premium sports rights in multiple territories, believes that leagues and federations could generate much-needed income by unlocking marginalised audiences.

However, to create more value, Radrizzani insists that the traditional rights distribution model needs to diversify to include more innovative ways of monetising content, including direct-to-consumer (DTC) solutions and pay-per-view (PPV) offerings.

“The media landscape has changed dramatically over the last ten years but the distribution system, and the way the rights holder markets the rights, is pretty much the same as ten or 15 years ago,” Radrizzani said, speaking during the second day of SportsPro Live 2020.

“Normally, they tend to sell exclusive rights in every single market in the world. What I think is it’s time to change the strategy and tailor-make the solution in each individual country or market.”

Jamie Gardner | Capital and control will be critical for club soccer’s long-term survival
Radrizzani, whose Aser Ventures investment group owns Eleven and recently launched LiveNow, a new service offering PPV access to live music and entertainment events, added that sports properties should strive for “much more flexibility” in their rights distribution strategy.

“In some cases, a different and more agnostic approach, and a more non-exclusive consumer approach, can generate more value for the rights holder itself,” he continued. “Nowadays, the technology and digitalisation enables the rights holder to initiate a one-to-one relationship with fans everywhere in the world.

“This opens up much more opportunities to create income and value and additional service as well. I also think it’s a great opportunity for investors to help the rights holder to build a structure that can operate in a global market which is very fragmented.”

As it stands, the Eleven business operates channels is seven different territories including Belgium, Luxembourg, Italy, Myanmar, Portugal, Taiwan, and Poland, which collectively hold rights to several elite sports leagues and properties, including top-flight European soccer.

Outside the US, Radrizzani estimates that only “20 to 25 percent of the population” in major markets currently has access to pay-TV, and that, in emerging markets, the figure is “probably seven to nine per cent of the population”. For that reason, he said, rights holders should embrace other means of monetising content.

“I don’t think this number reflects the real number of people who are interested in football or the best live sports events,” he said. “In my opinion, there is much more value to create in a democratised distribution [model] and solutions customised for each individual market.

“In some markets, maybe it’s a good idea to keep an exclusive relationship with one broadcaster. In some other markets, maybe it’s better to build the market and operate in a pay-per-view microsystem and use the social media platform, influencer, and digital publisher and telco.

“That obviously requires more jobs, and [is something] an agency cannot do. The only way to do it is to create a specific company in partnership with an investor and rights holder, and dedicate this company to the market and development of the rights holder.”

While the coronavirus pandemic has evaporated matchday revenues and forced rights holders to reimburse broadcasters for curtailed seasons, Radrizzani believes investment from private equity – and the strategic expertise that comes with it – could help stabilise the marketplace and bring valuable knowhow for navigating global market conditions.

He specifically cited the example of Italian soccer’s Serie A, which is currently in negotiations with investors including CVC Capital and Bain Capital over selling a ten per cent stake in a new company that will handle the league’s international media rights.

Radrizzani said this type of equity partnership could present an attractive model for rights holders, affording them a degree of financial certainty whilst also enabling them to assume more risk as they seek new means of monetising content in specific territories where they might have traditionally sold media rights to distributors on an exclusive basis for a fixed term.

“At this moment, new technologies bring many new opportunities to different services,” he added. “However, few rights holders have the technology to respond to the market needs and requirements at this moment.

“Normally, the rights holder – in the case of football, the clubs that belong to the league on the sports side of the business - they need the guarantee to plan and budget the season they invest in. This guaranteed revenue, in some case, maybe conflicts with the best opportunity in the market.”

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 6:01 pm

This could cause quite a stir - from the BBC - Roman Abramovich had stakes in players not at his club - Third Party ownership (now banned of course)

https://www.bbc.co.uk/news/uk-54229269

I suspect that this will form part of tonight's Panorama from 7pm on BBC1

@TariqPanja with some additional background

https://twitter.com/tariqpanja/status/1 ... 4732577796

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Re: Football's Magic Money Tree

Post by Paul Waine » Mon Sep 21, 2020 6:20 pm

Chester Perry wrote:
Mon Sep 21, 2020 4:42 pm
A article from TwoHundredPercent.com that looks like it was written specifically for this thread

Wigan Athletic & Football’s Addiction to ‘Investment’
by Ian | Sep 17, 2020

“Investment” is a very 21st century word, isn’t it? There’s a hint of the warm and fuzzy about it, calling to mind such phrases as “investing in the future.” Investment offers a sense of security and support, of care and attention. It’s the sort of word that you hear on TV adverts during daytime these days, as snake oil salesmen seek to liberate the elderly from any equity in their houses.

Football has become addicted to investment. Below the Premier League, football clubs routinely spend more than they can raise through ordinary commercial channels alone, meaning that regular injections of money are required to keep a lot of clubs solvent. Investment, however, comes in different forms and businesses, on the whole, aren’t charities. Some make their investment in loans, and some charge interest on those loans or secure them against a club’s assets. Investment in itself is only a good thing if the money is spent wisely and the small print doesn’t add too many onerous clauses attached to it.

Edited the quote to save a little space. The full article is above.
This is one of those posts that should be repeated on (1) all the "MG should support SD" transfer threads and (2) the "Investor" thread.

UTC

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 6:40 pm

Paul Waine wrote:
Mon Sep 21, 2020 6:20 pm
This is one of those posts that should be repeated on (1) all the "MG should support SD" transfer threads and (2) the "Investor" thread.

UTC
The thing is Paul - those who don't want to won't pay any attention to the message - John Nicholson is right in what he wrote today - most are more interested in stories about spending not stories about surviving - that is not glamourous enough for them
This user liked this post: Paul Waine

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 6:56 pm

Getting ready to settle down to an evening of Podcasts - this has just moved up to the Prime Slot - the excellent Unofficial Partner Podcast talks to Claire Enders

https://www.unofficialpartner.com/podca ... ire-enders

This is the blub they have around it

Today’s guest is Claire Enders, who has been the UK’s pre-eminent media and technology analyst, strategist and forecaster for over thirty years. After working across cable, satellite, and commercial Public Sector Broadcasting she set up Enders Analysis in 1997, to build comprehensive models for all parts of the UK media, telecoms and technology sectors and provides its research and expertise to over 140 organisations. During this time Claire Enders has built a reputation for outspoken and contrarian analysis of the prospects for technology, telecoms and media across Europe. She famously predicted first Dotcom crash, the advertising collapse of 2009 and has analysed every major sports rights deal of the last three decades. Someone once said of her that clients credit her with the ability to "see through the walls of boardrooms, and intuit the decisions they will make”.
So, of course, we talked about the market for sports media rights generally, and the Premier League specifically, Amazon and the FAANGs, DAZN, the Netflix for Sport hype, the lessons of Disney+, audience behaviours for sport, the implications of private equity bidding for sports rights and the Premier League’s China problem.

As ever, Claire Enders did not pull her punches.

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Re: Football's Magic Money Tree

Post by Paul Waine » Mon Sep 21, 2020 7:06 pm

Chester Perry wrote:
Mon Sep 21, 2020 6:40 pm
The thing is Paul - those who don't want to won't pay any attention to the message - John Nicholson is right in what he wrote today - most are more interested in stories about spending not stories about surviving - that is not glamourous enough for them
Agree, Chester. It is more exciting to write about "how much" rather than "not a lot." It's also "exciting" to write about "crashes and fails." It's not so exciting to write about the guy who "keeps his speed down and sticks by the rules and who's journey is completed uneventfully and safely."

It's funny though, isn't it: everyone loves the "plucky overachiever."

UTC

PS: Sounds like Chelsea's owner has been "playing fast" with the rules. Interesting to hear that someone made a SAR on Abromovich. (BBC)

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 7:27 pm

Chester Perry wrote:
Sat Sep 12, 2020 3:40 pm
It was always likely once someone got a proper grip on the club with a proper strategy - clubs like ours rely on others being in a mess to eat at the top table - for months I have been saying we are being squeezed out by finances with a large and distinct 2nd tier emerging om the Premier League

Big 6 - Man Utd, Man City, Liverpool, Chelsea, Spurs, Arsenal (now they seem to be getting their act together)

Tier 2 - Everton, West Ham, Leeds, Wolves, Leicester, Newcastle, Aston Villa

Currently leaving Sheffield United, Southampton, Crystal Palace (whose potential I have mentioned already today), Brighton, Burnley, West Brom, Fulham - the last 3 being the smallest by some margin.

Look outside the Premier League and you would say Sunderland and Sheffield Wednesday could join tier 2 if they ever got their acts together and Notts Forest, Derby, Middlesbrough Birmingham City and Norwich City are clubs that are capable of being much larger than us financially I would put Hull City Ipswich, Portsmouth, Bristol City, Cardiff and Plymouth Argyle in that category too.

Somewhere in this is what the big 6 see as the ideal Premier League from a commercial perspective and we do not figure - of that I am sure, even from a useful plucky underdog with a long history perspective.
The above is not the first time I have posted those thoughts - seems that @SportingIntel has similar thoughts

https://twitter.com/sportingintel/statu ... 0130148352

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 7:29 pm

Chester Perry wrote:
Mon Sep 21, 2020 6:56 pm
Getting ready to settle down to an evening of Podcasts - this has just moved up to the Prime Slot - the excellent Unofficial Partner Podcast talks to Claire Enders

https://www.unofficialpartner.com/podca ... ire-enders
This is absolutely brilliant - such clear and precise analysis actually no punches pulled and some fantastic points of view - it doesn't look too good for the Premier League in the next cycle - certainly on the domestic front

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Re: Football's Magic Money Tree

Post by Spiral » Mon Sep 21, 2020 8:21 pm

Chester Perry wrote:
Mon Sep 21, 2020 7:29 pm
This is absolutely brilliant - such clear and precise analysis actually no punches pulled and some fantastic points of view - it doesn't look too good for the Premier League in the next cycle - certainly on the domestic front
Quote from Claire Enders on BT over-paying for PL and UEFA competition: "...they really broke the bank and it broke them, something which I actually predicted on the day they announced their move by saying 'Hubris will be followed by Nemesis'; well Nemesis has been with them now for three years and the shadows are very long on BT."

Just yesterday I posted on the voicing frustrations thread 'remember Icarus'.

Erm..it's nothing of not worrying that folks are independently invoking tragedies when talking about football!!!

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Re: Football's Magic Money Tree

Post by Spiral » Mon Sep 21, 2020 8:25 pm

Oh, and happy third birthday to this thread!

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 8:31 pm

Spiral wrote:
Mon Sep 21, 2020 8:25 pm
Oh, and happy third birthday to this thread!
I hadn't noticed that, Wow! - it was a slow starter but then went into overdrive and hasn't really slowed down since, it has been a crazy ride and I feel that the subject is only going to get more prominent, which is a bit depressing really

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Re: Football's Magic Money Tree

Post by levraiclaret » Mon Sep 21, 2020 8:33 pm

It is an excellent thread, one of the jewels of the site.

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Re: Football's Magic Money Tree

Post by Spiral » Mon Sep 21, 2020 8:37 pm

Not to sound too overblown or anything but the way the past three years in the world of football finance and football governance has been catalogued on this thread actually makes this historically valuable, I think. Well done on some good work, CP. I hope if anything is backed up for posterity from this site it's this thread.

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 8:45 pm

Chester Perry wrote:
Thu Sep 17, 2020 1:05 pm
the Premier League's official statement on that China TV deal - it is likely to be on significantly reduced terms which will be used by PPTV/Suning to support their case in their rumoured legal proceedings

Premier League agrees partnership in China with Tencent Sports
17 Sep 2020

Premier League Shareholders have today unanimously agreed a partnership with China’s leading digital sports media platform Tencent Sports, which will bring Premier League action to fans in China for the remainder of the 2020/21 season.

From Saturday 19 September, supporters in China will be able to watch all 372 remaining Premier League matches live and follow the latest updates and news about their favourite clubs and players via Tencent’s digital platforms, including WeChat, QQ.com, Tencent Video, Penguin Live App, Tencent News App, Tencent Sports App and Kan Dian.

Tencent will make more than half of all matches available for free to the millions of Premier League fans in China, with the remaining fixtures available on Tencent Sports' membership service.

Clubs to share in-match clips
Through the partnership, the Premier League will launch an official Penguin Channel across Tencent's content platforms, where fans will enjoy a daily content mix of videos and features about the Premier League competition, its clubs and players.

In addition, for the first time globally, Premier League clubs will be able to share short clips during matches to engage directly with their supporters in China and enhance the Tencent partnership.

Passionate fans in China
Premier League Chief Executive Richard Masters said: "We are excited to have agreed this partnership with Tencent ensuring our supporters in China can enjoy following Premier League action throughout this season.

"We and our clubs have an extremely passionate fanbase in China and are looking forward to working with the team at Tencent to engage with fans in new ways over the coming season."

'Bringing the drama'
Tencent Sports General Manager Ewell Zhao said: "The Premier League is one of the world's most popular sports competitions and has many fans in China.

"In collaboration with the Premier League, Tencent Sports hopes to leverage its platforms and technology to bring the drama of Premier League matches to fans and share with them the passion and excitement of football."

The Premier League will continue to explore opportunities for free-to-air broadcast coverage in China for the 2020/21 season.
Today's Price of Football Podcast suggest that the new 1 year Chinese TV deal is worth only £25m to the Premier League, a huge reduction in income (remember the PPTV was about £565m over 3 years) especially when you consider that the Premier League are still chasing down £160m from last season. I am making that a £320m or so loss on that one deal so far this will be on top of overseas rebates last season of around £170m - those merit payments are ebbing away rapidly

https://podcasts.apple.com/gb/podcast/f ... 0491924901

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 8:57 pm

Chester Perry wrote:
Mon Sep 21, 2020 8:45 pm
Today's Price of Football Podcast suggest that the new 1 year Chinese TV deal is worth only £25m to the Premier League, a huge reduction in income (remember the PPTV was about £565m over 3 years) especially when you consider that the Premier League are still chasing down £160m from last season. I am making that a £320m or so loss on that one deal so far this will be on top of overseas rebates last season of around £170m - those merit payments are ebbing away rapidly

https://podcasts.apple.com/gb/podcast/f ... 0491924901
There is more discussion on how the Premier League has reacted to the PPTV situation in Episode 6 of the Bundle Podcast - recorded prior to the Ten Cent announcement

https://www.unofficialpartner.com/podca ... e-bundle-6

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 9:49 pm

levraiclaret wrote:
Mon Sep 21, 2020 8:33 pm
It is an excellent thread, one of the jewels of the site.
Spiral wrote:
Mon Sep 21, 2020 8:37 pm
Not to sound too overblown or anything but the way the past three years in the world of football finance and football governance has been catalogued on this thread actually makes this historically valuable, I think. Well done on some good work, CP. I hope if anything is backed up for posterity from this site it's this thread.
It has certainly benefitted from it not becoming a place for a slanging match - in part because:
- a lot of people appear to treasure it and want to protect it (this never ceases to surprise me)
- only a small proportion of board members appear to read it regularly and are very loyal to it
- many who don't read it (regularly) start threads on topics that first appeared on here and those threads often fall into the stand-offs
- loyal readers will also start discussion threads on topics that first appeared here so that discussion does not detract from the whole

The one thing about it that concerns me is that this "jewels of the site" idea, flattering as it is, actually prohibits people from making their own contributions to it. I have no desire to be an oracle on the subject, I just share what I have learned because I prefer debate with people who are informed on the subject in hand, and in this case one that increasingly is part of our everyday discussion of the game and the club we love, and if I am already reading/listening to it, it is not difficult to share what I have found.

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Re: Football's Magic Money Tree

Post by aggi » Mon Sep 21, 2020 10:56 pm

Out of curiosity Chester, what's your reason that has you so interested in this area? I think I'm right in saying that you're not an accountant unlike quite a few regulars on this thread.

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Re: Football's Magic Money Tree

Post by Chester Perry » Mon Sep 21, 2020 11:12 pm

aggi wrote:
Mon Sep 21, 2020 10:56 pm
Out of curiosity Chester, what's your reason that has you so interested in this area? I think I'm right in saying that you're not an accountant unlike quite a few regulars on this thread.
Definitely not an accountant

just wanted to understand the issues around the finances - I wanted to understand our club's approach when our competitor's seemed to be so much wealthier than us, especially when people were loudly proclaiming that we were not investing/spending enough (nothing ever changes on that front) and at the same time arguing that we should be redeveloping the ground, or whatever. It comes from a simple life lesson that there are always other ways of seeing things - I started by trying to understand the range of perspectives and I hope that I still do - though it does not feel that way some times.

From there it just seemed that so much else was connected and so I carried on reading around it.

I will add that there was a point when I realised that I had fallen down a rabbit hole, though that was probably a bit late in the day to realise what had taken hold on me
Chester Perry wrote:
Sat Mar 23, 2019 4:05 pm
Begin to get the feeling that this thread has become one hell of a rabbit hole

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Re: Football's Magic Money Tree

Post by aggi » Tue Sep 22, 2020 12:01 am

Cheers. It's strange in some ways how football finances have become such an important part of football.

10-15 years ago I used to do an analysis of our accounts each year on Clarets Mad and although there was brief interest it wasn't the year-round topic it is now. I remember being one of the first to flag up that the ground had been sold to some anonymous overseas company and even that didn't generate a huge deal of interest. I think that would be very different nowadays.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 12:40 am

aggi wrote:
Tue Sep 22, 2020 12:01 am
Cheers. It's strange in some ways how football finances have become such an important part of football.

10-15 years ago I used to do an analysis of our accounts each year on Clarets Mad and although there was brief interest it wasn't the year-round topic it is now. I remember being one of the first to flag up that the ground had been sold to some anonymous overseas company and even that didn't generate a huge deal of interest. I think that would be very different nowadays.
That is a major flag for problems these days

It would be good if someone did that kind of analysis on accounts as articles now - I think that kind of feature is one of the major weaknesses of our supporter sites - no one is analysing/criticising, in a structured, knowledgeable and informed way. It is one of the things that interests me about the Esk - interestingly he got into it because he thought that Bill Kenwright was running his club poorly and actually preventing new investment and the club from reaching it's potential.

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Re: Football's Magic Money Tree

Post by Spiral » Tue Sep 22, 2020 12:50 am

aggi wrote:
Tue Sep 22, 2020 12:01 am
Cheers. It's strange in some ways how football finances have become such an important part of football.

10-15 years ago I used to do an analysis of our accounts each year on Clarets Mad and although there was brief interest it wasn't the year-round topic it is now. I remember being one of the first to flag up that the ground had been sold to some anonymous overseas company and even that didn't generate a huge deal of interest. I think that would be very different nowadays.
I've a vague memory of that. Was it something to do with a shell company in Accrington or something?

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 1:03 am

UK sports bodies with football at the forefront is getting louder in it's message that it needs spectators back at it's events - from the Telegraph - for some reason I have an image of Nero fiddling while Rome burns

Sport on brink of financial collapse: Covid second wave raises fears clubs and competitions could fold within weeks
TOM MORGAN SEPTEMBER 21, 2020

British sport was on the brink of financial implosion on Monday night after government forecasts of a devastating Covid-19 second wave raised fears that competitions and clubs would be folding within weeks.

The Premier League, Rugby Football Union and England and Wales Cricket Board are among more than 100 national and grass-roots governing bodies to sign a letter pleading with the Prime Minister for a major new bail-out as the pandemic tightens its grip again.

Cash-strapped lower league football clubs, meanwhile, told The Daily Telegraph they were running out of time in their bid for support from the top tier while Whitehall edges closer to introducing tough new curbs.

On another day of sporting setbacks, it also emerged that:

- Leyton Orient’s televised Carabao Cup tie against Tottenham was called off on Monday night after a Covid outbreak involving seven players. There were fears that other matches could follow suit as infection rates increase.
- The return of fans to all venues from Oct 1 looks doomed, with sports braced for six months behind closed doors or with minuscule crowds. Whitehall sources told The Telegraph the situation for the sector was “increasingly concerning”.
- Girls’ and women’s football is at risk of being set back a decade, according to UK Coaching chief executive Mark Gannon, who insists action must be taken to ensure the number of coaches is not allowed to dwindle as clubs and facilities count the cost of lockdown.
- Fears are mounting that competitive grass-roots sports could eventually be scaled back after Boris Johnson announces new lockdown rules on Tuesday.

Planned spectator pilots – including racing at Newmarket and the non-League finals at Wembley – appeared in most doubt on Monday night after senior government advisers Prof Chris Whitty and Sir Patrick Vallance laid the groundwork for a second lockdown. After warnings the UK could see 50,000 cases a day by mid-October, the Prime Minister is expected to set out new restrictions, which will impact upon sport, on Tuesday.

Ministers are already under mounting pressure from sport to match the support packages, totalling £1.57 billion, that have been received by the arts and restaurant sectors. The sporting sector, facing losses running into billions of pounds, has a workforce of more than 600,000. Many of the nation’s governing bodies signed a joint letter on Monday urging Johnson “to ring-fence funding for the recovery of the sports and activity sector – or risk fuelling physical inactivity and related illnesses for a generation”.

As infection rates surge to their highest rates since the first peak in the spring, Leyton Orient became the first club affected to have their playing plans severely disrupted by the second wave. Seven players initially tested positive, with other staff members awaiting results of tests. The club were forced to close their stadium and training ground amid fears infections could run into double figures. Mansfield, Orient’s opponents at the weekend, were also being tested.

UK Covid-19 projections (If current growth rates continue 20,000 daily cases could be detected in the UK by mid-October)
Whitehall sources told The Telegraph that elite competition behind closed doors was set to continue regardless of Johnson’s announcement on Tuesday, with athletes maintaining their bubble arrangements. However, the Oct 1 return of crowds is highly unlikely, and one senior figure in British sport said he feared new limits for the public playing sport again. “It’s undoubtedly a possibility,” the figure said, adding that “grass-roots sport was facing considerable difficulty”.

Leading figures in lower league football and across rugby said clubs were already on the verge of going out of business. The diminishing likelihood of getting crowds back was described as a “nightmare” by Andy Holt, the Accrington Stanley chairman. He said that League One and League Two were in “limbo” as the Premier League had provided no guarantees that it would provide a £200 million bail-out, which had been first mooted weeks ago.

“Every time it’s been ‘it’s coming, it’s coming’ – we’re just being dangled along,” he said. “What you don’t want to do is to make savage cuts and potentially damage your club over the long run if there is something around the corner. Managing a club now is impossible without key bits of information. It’s like managing any business where you just can’t make any plans.”

Holt’s concerns over delays in getting crowds back next month were mirrored by teams in rugby’s Gallagher Premiership. “We need to put some bums on seats,” Tony Rowe, chairman at Exeter Chiefs, said. “We were all thinking about getting the trial games out of the way and then, come November, a lot of the information coming down was that we might be allowed up to about 30 per cent capacity and that pays some of the bills. The problem is that most clubs – and we’re no different with a capacity just under 14,000 – our ‘break even’ is about 10,000. We will still all be losing money, just not as much and it will help us hang on a little bit longer. That is the problem – when will we run out of money? I am surprised in the Premiership that we have not had the demise of any clubs so far.”

Seven English Football League clubs held crowd pilots over the weekend for 1,000 spectators, and there were about 400 for the racing at Warwick on Monday. Newmarket was understood to be in regular contact with the Department for Digital, Culture, Media and Sport about plans to open their gates on Thursday.

In other developments, UK Coaching became the latest organisation to warn of the long-term impacts on sport. Gannon, whose organisation is working closely with the FA to encourage more women and girls to get involved in the game, said: “The biggest fear is that this pushes us back 10 years. We had such momentum in the girls’ and women’s game leading into the pandemic, and I’m not sure we had enough coaches and volunteers in the first place.”

The letter from sport to government, meanwhile, cites the need for support programmes and facilities that address the health inequalities suffered among women, lower socio-economic groups, minority ethnic groups and people with disabilities. Huw Edwards, chief executive of UKActive said: “This is a health crisis and our sector can play a vital role in supporting our NHS by restoring the nation’s physical and mental resilience in the face of this terrible virus.”

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Re: Football's Magic Money Tree

Post by aggi » Tue Sep 22, 2020 9:41 am

Spiral wrote:
Tue Sep 22, 2020 12:50 am
I've a vague memory of that. Was it something to do with a shell company in Accrington or something?
From what I remember there was a company called Longside Properties that bought the ground that was owned by Kilby and maybe a few others.

At some point though the ownership of Longside was transferred to a company called Lionbridge which was registered in BVI or Jersey or something (there was a company in the UK with the same name but that was just a coincidence, they had nothing to do with anything). Being registered overseas no-one ever knew who owned it.

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Re: Football's Magic Money Tree

Post by Royboyclaret » Tue Sep 22, 2020 10:32 am

aggi wrote:
Tue Sep 22, 2020 9:41 am
From what I remember there was a company called Longside Properties that bought the ground that was owned by Kilby and maybe a few others.

At some point though the ownership of Longside was transferred to a company called Lionbridge which was registered in BVI or Jersey or something (there was a company in the UK with the same name but that was just a coincidence, they had nothing to do with anything). Being registered overseas no-one ever knew who owned it.
All began in 2006 with Burnley struggling to compete in the Championship and desperately needing money again. Barry Kilby along with another director at the time, John Sullivan, bought Turf Moor and Gawthorpe, via a company Longside Properties, for £3.2million.

The club became tenants, paying around £330k annually in rent, always with an option to buy the ground back. However, the story goes that Kilby was never comfortable being both landlord and tenant, and given Burnley's continuing stretched financial state and Flood's inability to input more funds, in March 2009 Kilby and Sullivan sold the company to Lionbridge, an offshore company registered in BVI.

When the club's fortunes eventually improved Turf Moor was returned to it's rightful ownership in 2013, although the transaction did not go without a major hitch. But that's another story for another day.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 12:03 pm

Royboyclaret wrote:
Tue Sep 22, 2020 10:32 am
All began in 2006 with Burnley struggling to compete in the Championship and desperately needing money again. Barry Kilby along with another director at the time, John Sullivan, bought Turf Moor and Gawthorpe, via a company Longside Properties, for £3.2million.

The club became tenants, paying around £330k annually in rent, always with an option to buy the ground back. However, the story goes that Kilby was never comfortable being both landlord and tenant, and given Burnley's continuing stretched financial state and Flood's inability to input more funds, in March 2009 Kilby and Sullivan sold the company to Lionbridge, an offshore company registered in BVI.

When the club's fortunes eventually improved Turf Moor was returned to it's rightful ownership in 2013, although the transaction did not go without a major hitch. But that's another story for another day.
Roy you can't keep leaving it hanging like that

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 12:34 pm

This is a quite interesting Simon Chadwick interview - translated from the original Mandarin so some intriguing phrasing - new crown virus for instance is the resurgent corona virus that we are currently seeing

Perspectives of international commissioners . . . The European sports industry under the epidemic.
Original. Tsinghua Sports Industry Center. Tsinghua Sports Industry Research Center. Today.

Lead.
With the spread of the new crown epidemic around the world, the European sports industry has also been greatly affected. This issue of The International Commissioner's Perspective invites Simon Chadwick, Professor of Sport and Director of the Sports Business Centre at the University of Salford in Manchester, UK, to discuss the impact of the outbreak on the european and world sports industry and future trends in Eurasian sports cooperation.

A total of 6 columns on the theme of "International Commissioner's Perspective - Development of International Sports Industry After the Outbreak" have been published, and 1 article has been published: "International Commissioner's Perspectives " - Swedish Sports Industry in Crisis, with the remaining 4 to be pushed on Tuesday.


01- Would you like to talk about the current situation of the European sports industry under the shadow of the global new crown epidemic from the perspective of professional sports and mass sports?

Simon:First of all, the biggest challenge facing professional sport right now is the inability to predict when sporting events will get back on track. In british professional sports, for example, major football clubs have previously begun to allow spectators to watch the game, but the recent outbreak of the new crown has led the British government to issue another "empty field order", which is scheduled to be extended until October 5. Combined with the current outbreak across Europe, I think the plan to allow fans to watch the game for the second time is difficult to implement on schedule. Even if the UK government withdraws the empty-field order as scheduled in October, that doesn't mean sporting events are completely open, given the safe social distance, the number of spectators attending the games is much smaller than the capacity of the venues, so we may not have a full stadium for a long time to come. The absence of fans has led to serious financial losses for professional sports in Europe, such as the Premier League, which is expected to lose more than 700 million pounds this season.

On the other hand, the new crown outbreak also seriously affects the physical and mental health of ordinary people. Sport is an important part of Europe's entertainment and leisure culture, and European governments have tried to allow people to exercise on the basis of safe social distances during the outbreak, including limiting the number of group sports and gym operating requirements. During the outbreak, the vast majority of the population was forced to stay at home and lack physical activity and necessary social activities, which further led to public health problems such as increased obesity rates, related cardiovascular diseases and psychological problems.

As far as I've seen, many people in the UK do simple workouts at home or in their own backyards and opt for online fitness, which has unexpectedly led to the popularity of online fitness instructors, such as Joe Wicks. These fitness instructors online in the form of live or recorded to lead everyone to exercise, really to a certain extent to promote the public's enthusiasm for exercise.


02 - What measures have European governments taken to support the European sports industry, which has been severely affected by the outbreak?

Simon: Unlike the free-market sports industry system in the United States, sports in Europe are closer to the social democratic model, so governments will intervene in the sports industry to some extent. But the sudden drop in the new crown has caught European governments off guard, and frankly the government is focusing on other major livelihood issues, such as controlling unemployment and ensuring normal income.

As far as I know, most sports clubs in Europe have applied to the government for financial assistance, which is used to pay their core players, and sports clubs can apply to the government for an extension of taxes. But this government assistance does not fundamentally alleviate the financial plight of professional sports. Many predicted that some sports organizations would eventually go bankrupt in the outbreak, and we have seen some professional footballers declare bankruptcy. I don't think the new crown outbreak is the only factor that led to the bankruptcy of these organizations or athletes, but there is no denying that the outbreak is definitely a trigger and catalyst.


03 - You retweeted an article on Twitter titled "If 2008 is the year of sports adjustment, then 2020 will be the year of sports elimination." What do you think of the impact of the global new crown outbreak on the global sports industry?

Simon: First of all, many people at the beginning of this year's outbreak had judged that the pattern of impact of the outbreak on the sports industry would be the same as in the 2008 financial crisis, and I don't agree with that. The topic is a good distinction between 2008 and 2020. The financial crisis of 2008 led to a break in the global financial chain, forcing capitalists to think about how capital flows into sport can yield maximum output, the most typical of which is sports sponsorship: before 2008, the massive flow of global capital into the sports industry led to outrageously high levels of sports sponsorship contracts, but at the same time few were able to clearly state the ratio of inputs to output. The 2008 financial crisis made capitalists aware of the absurdity behind sports sponsorship and began to assess its earnings.

The sports industry crisis caused by the global outbreak in 2020 is different, and this one is more like "elimination" and "reorganization". "Elimination" means that the crisis of the epidemic will eliminate those financially weak sports organizations or individuals, and well-funded sports organizations and individuals will survive the outbreak and therefore become stronger, the process is like the survival of the fittest in nature. "Reorganization" means that the outbreak will change the sports map, some sports will gradually end, while new sports will emerge, such as e-sports, artificial intelligence involved in sports and so on. For the first time, the 2022 Asian Games will include eSports in the sport and the International Olympic Organizing Committee is considering eSports as an Olympic sport, and these innovations foreshadow a major restructuring of the future sports map.


04- There is no doubt that the global sports industry has been hit hard by thisoutbreak, what do you think is the trend of the global sports industry in the next five years?

I think in the next five years, the athletes in the sports industry need to adapt to the changing environment and learn to make choices in a highly uncertain situation. The uncertainty over when the outbreak will end, whether the new crown will return, when the vaccine will be developed successfully and made widely available around the world requires sports practitioners to be able to judge in an uncertain and changing environment. This is a serious challenge for the sports industry, which is accustomed to a highly processed sports event. Previous sporting events were strictly scheduled for the season, but planning events in unknown circumstances required a new set of event strategies and scenarios.

Secondly, the global sports industry will enter a "new normal", under the new normal of the national sports industry will face the challenge of shrinking sponsorship contracts, financial constraints, only to adapt to the new normal of sports organizations and individuals can survive. The new normal is also a new opportunity, such as the City Football Group, which bought two clubs during the outbreak, in Belgium and France, as other football clubs struggled with the reality of not being able to pay players' wages, suspensions, bankruptcies and sales. City Football Group is able to become a difficult situation in the new normal because it not only develops the football industry but also dabbles in the entertainment lifestyle industry, realizing multi-sphere capital operation and financial income. As a result, sports organizations under the new normal need to learn from giants such as Disney, Amazon and Alibaba to broaden their business areas and categories to cope with a complex and unpredictable future.


05- There is a basic consensus on sports: sports can have a positive impact on human society under the premise of scientific design and application. How do you think sport can alleviate social problems during the new crown outbreak?

The outbreak's new crown has cut off highly connected human societies, forced people to stay at home to reduce cross-infections, severely affected their work and lives, and significantly reduced social activity. This physical isolation exacerbates interpersonal gaps and leads to a series of psychological problems, so sports practitioners can think about how physical education can alleviate bad psychological emotions and meet social needs at the individual level. At the same time, the outbreak has exacerbated social tensions, such as the "Black Lives Matter" movement, triggered by Freud's death, in American society, which made people aware of the deep inequalities that exist in American society, so it is worth exploring how sport can play an active role in promoting the well-being of all human society.


06- As a professor in the field of Eurasian sports, how do you think the future Eurasian relations will affect the cooperation between Eurasian sports industry?

For the past 20 to 25 years, European countries have regarded the Asian market as a blue sea of economic development and have cooperated with Asia in a one-way economic model of "European one-way export of technology/products/services to Asian markets". However, in recent years, the rapid rise of Asian countries, economic development and the narrowing of the power gap have increased the confidence of Asian countries, represented by China, by exporting technology/products/services to Europe to challenge the Eurasian uneassociable single economic model, replaced by a two-way economic model, that is, the Eurasian sides in economic cooperation to help each other, mutual benefit. China's "Belt and Road" foreign policy has further promoted the Eurasian link, thus promoting exchanges and cooperation in other fields, including the sports industry.

In the UK, for example, the Premier League is popular with Chinese fans, while the Premier League is actively seeking sponsorship deals with Chinese companies. I believe that Eurasian cooperation at the sports level will become closer with the deepening of China-EU economic cooperation.

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Re: Football's Magic Money Tree

Post by aggi » Tue Sep 22, 2020 12:37 pm

Royboyclaret wrote:
Tue Sep 22, 2020 10:32 am
All began in 2006 with Burnley struggling to compete in the Championship and desperately needing money again. Barry Kilby along with another director at the time, John Sullivan, bought Turf Moor and Gawthorpe, via a company Longside Properties, for £3.2million.

The club became tenants, paying around £330k annually in rent, always with an option to buy the ground back. However, the story goes that Kilby was never comfortable being both landlord and tenant, and given Burnley's continuing stretched financial state and Flood's inability to input more funds, in March 2009 Kilby and Sullivan sold the company to Lionbridge, an offshore company registered in BVI.

When the club's fortunes eventually improved Turf Moor was returned to it's rightful ownership in 2013, although the transaction did not go without a major hitch. But that's another story for another day.
It was a funny one. As you say it happened in March but it was 6 months or so until it got into the public domain following me posting about it on a few messageboards and the Burnley Express then picking up on it (including a few of my inaccuracies). I can't imagine that being the case nowadays.

I never did find out who owned Lionbridge. I should probably have a look at my copies of the Paradise and Panama papers to see if it's in there.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 12:50 pm

It is Tuesday and already there seems to be a consensus that the theme this week should be that social media has helped generate unrealistic expectations in football fans - take this from the Telegraph

Are football fans starting to lose all sense of reality and common sense on social media?
LUKE EDWARDS JANUARY 22, 2018

Welcome to modern football fandom, where every defeat is a disgrace, every poor performance a disaster and every game, good or bad, sparks a wild, frenzied reaction on social media bordering, in some cases, on the hysterical.

Quite what has happened to football fans in this country is a mystery, but a disease is running through the ranks of supporters. Many of the symptoms are getting worse and the long-term side effects are increasingly problematic.

They include Transfer Market Fever. New signings are lauded, often beyond all recognition of their achievements and accompanied by all the pomp and fanfare of a Royal wedding.

Premier League clubs are currently locked in battle, not so much on the pitch, but on their social media feeds, battling to outdo themselves with their unveiling videos, which exercise the same hype as a trailer for a Hollywood blockbuster, often with the same number of rotten tomatoes.

Remember Alexis Sanchez playing the piano on the pitch at Old Trafford? That short video got more social media interaction than any transfer in the world and was boasted about in the boardroom and held up as a sign of brand strength by chief executive Ed Woodward.

Sanchez turned out to be a terrible signing, a monumental waste of money and left for Inter Milan saying he had wanted to return to Arsenal after just one training session. That comment did not come with a slickly edited video and quirky camera angles of him staring at or stroking the club badge.

Hell hath no fury like a football fan who is frustrated by a lack of new signings. Take some of Liverpool’s global fanbase, for example, who bombarded some of my colleagues on Merseyside with abuse and grave warnings about the champions impending collapse in form if they did not jolly well hurry up and open the cheque book to sign someone or other.

Forget winning the title for the first time in 30 years, the year after winning the Champions League, if Jurgen Klopp could not see that the team needed new players he was an idiot and would drag the team down. As for owners FSG, what have they ever done for Liverpool, what do they know about football? Nothing compared to James76868 from Sidcup on Twitter. And anyone who argued differently with these furious keyboard warriors was a clown, clueless or another word beginning with C.

Liverpool have since signed Spain international Thiago from Champions League winners Bayern Munich and versatile forward Diogo Jota from Wolves and all is calm. Oh, they have also won their first two Premier League games, including a chastising 2-0 defeat for Chelsea who have spent upwards of £200 million this summer trying to close the gap.

Which brings us on to the abuse fired at a manager who has the misfortune to lose a game. Gone are the days when you judged a manager at the start of a new season, while bedding in new signings or trying to change the style of play, after a few games. Two is long enough apparently.

This is called Frothing at the Mouth while Typing Syndrome. Frank Lampard, if you listened to one radio phone-in show, is under pressure after that Liverpool defeat because the club have backed him in the transfer market, and he has to deliver. Yes, he does, but that does not mean he has to win every game and it is OK to lose to the champions with 10 men, if you take a moment to reflect. A silly idea I know...

Or take a look at Manchester United and Ole Gunnar Solskjaer, whose team went on a tremendous run at the end of last season to qualify for the Champions League.

United were awful last weekend and lost at home to Crystal Palace [who did not win a single game when football resumed after lockdown but have won two out of two in this campaign].

Having reached the semi-finals of the Europa League, United’s players had the shortest break of any club and were playing their first game of the season. Palace were playing their second. United really were bad, but afterwards you would have thought they had just lost their third game in a row and Solskjaer was fighting for his job after a miserable end to last season.

The reactions could be loosely split into two camps. Solskjaer was never up to the job. should never have been given it and this one defeat and shoddy performance proves it unequivocally. Or, United should have signed more players, the people running the club do not know what they are doing and, if new signings are not made, this season is going to be an unmitigated disaster.

I mean, it was United first’s Premier League defeat since January 22, but yeah OK, sack the manager, the board and for goodness sake sign a new centre-back.

The debate over Woodward and Solskjaer’s suitability is not a new one and there are long-standing causes for concern with the former, but this was the opening weekend of a new season and, well, was it not all a bit over the top?

As for Jose Mourinho at Tottenham, a friend sent a message to a WhatsApp group I am a member of after Southampton took the lead on Sunday saying the Portuguese wouldn’t make Christmas as Spurs manager. Tottenham won 5-2.

It is a similar situation at West Ham and Newcastle United where every defeat leads to rabid responses labelling both managers dinosaurs, tactically inept and in need of their P45s.

Of all the managers in the Premier League, those two walk around with a constant target because huge swathes buy into the idea they are out of touch and out of date, regardless of whether they win or lose. Every defeat brings the same abuse and dire assessments.

When Newcastle were thrashed by Brighton 3-0 on Sunday, Tyneside, on the back of some good recruitment and an impressive opening weekend victory away at West Ham, went into meltdown. Some called for Bruce to be sacked, pointing to a poor run of form at the end of last season, even though Newcastle were safe from relegation far earlier under him than they had been in each of the two seasons before he arrived.

One Twitter expert offered the view that Bruce’s record of 16 wins in 48 games as Newcastle manager really was not good enough, while others waxed lyrical about Brighton boss Graham Potter’s ideas and Brighton’s clear identity under him. It is worth pointing out, not that anyone was in the mood to listen, that Brighton have won just 12 out of the 44 games Potter has been manager.

Nuance, though, is lost. Potter is doing a fine job on the south coast and his team played superbly at the weekend. Yet, strip it back, and Bruce has done marginally better at Newcastle than Potter has at Brighton.

Not according to the Twitter mob, hammering angrily on their phone keyboards because nobody wants to listen to reason in the rush to condemn and be harsher than the next armchair expert spitting venom at a flickering screen.

Perhaps it is football in lockdown that has done it. No longer able to attend the games or meet with friends and family before or after to discuss and dissect, people are venting even more on social media platforms.

We have all said stupid things about football managers and players in the heat of the moment. My brother, for example, has labelled more players unfit to wear the shirt at Leyton Orient than I’ve been to games in the last 10 years.

Yet, two weeks into the season, there does seem to be a collective losing of the plot. Forget judging managers, teams and players over a sensible period of time – 10 games used to be a common sense view - judge them now, immediately and make sure you take as an extreme or melodramatic view as possible because on social media, the more angry and furious the more attention you receive.

We used to walk away from people like that in the pub... it is all just noise, but it is getting louder and louder and is becoming excruciating to listen to.
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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 12:54 pm

Those expectations can turn quite nasty too - and it is not just happening in this country - what about this from Arabnews.com

Sport rivalry and abuse on social media
Author
DR. RAZAN BAKER
September 22, 2020 - 00:26

When people talk about fanaticism and abuse in sports, it is most often football and its fans that come to mind.

It is the fans that sports authorities target in awareness-raising campaigns.

As the UK Parliament culture, media, and sport select committee said in a report in 2012, “the atmosphere experienced by those attending football matches has changed hugely since the 70s and 80s, when racial and other forms of abuse were common.”

The situation was similar in Saudi Arabia, but strict controls on social media have prevented abusive fans from expressing their anger freely.

A few days ago, however, the Saudi Swimming Federation (SSF) came under fire on social media because of a water polo finals match between Al-Ahli and Al-Ittihad.

The final was won by Al-Ittihad when Al-Ahli forfeited the match. Everything was done by the book, according to the rules and regulations of the SSF. However, some fans came across an official tweet by the federation and overreacted by accusing the federation and the ministry of bias.

How did it get to that point? The matter was cleared up with both teams prior to the finals, but some angry fans waded in, treating it like a football match, and added their share of abuse on social media.

Why do some fans jump to conclusions without looking more carefully into the story? I had to look it up myself to understand it better.

When I contacted SSF President Ahmad Al-Kudmani, he said that during the semifinal, Al-Ahli played Al-Safa and won, despite an incomplete lineup after eight players tested positive for COVID-19 (water polo requires six players plus a goalkeeper on each side).

In the final against Al-Ittihad, it was confirmed that more players had tested positive and Al-Ahli could only field four players including the goalkeeper against their opponents’ full team of seven.

Under the extreme circumstances the federation’s water polo committee conferred with Nasser Al-Deghaither, water polo technical committee member at FINA, the International Swimming Federation, who confirmed that the Saudi federation is authorized to act on games if there is an issue.

The water polo committee also consulted international referees who confirmed that similar cases of lack of players had occurred where teams suffer from depleted lineups.

The matter was discussed with the managing directors of both clubs, the referees, and the water polo committee at the federation in advance of the game. They all agreed that the final should go ahead. Al-Ittihad was declared the winner by forfeiture against an Al-Ahli side that had only four players, and was for that reason deemed unable to play.

The option of delaying was seen as untenable due to the uncertainty of the situation recurring with other clubs in the future.

The delay would need to be at least a month (to account for 10 to 14 days isolation, then a period to regain strength) and the start of the next season is near, while there is still another competition remaining in this season’s schedule.

This decision also provided a way for Al-Ahli not to have to forfeit both games and with that have their ranking drop to the bottom with all points taken away. The other option was to cancel the tournament, but that would deprive clubs the financial support of the Ministry of Sport’s Clubs Support Program for Various Sports.

The federation also offered Al-Ahli the option of filling their first team with members from their junior team, but the club decided against it. Al-Ahli stuck by their four players to forfeit and finish the tournament as runners-up.

Al-Ahli formally requested the postponement before the match when two of their players tested positive for COVID-19. This request was rejected for the reasons mentioned above. Then, following the first semifinal match between Al-Qadisiyya and Al-Ittihad, the federation received another request for postponement from Al-Ahli after the detection of more positive cases. Again the request was also rejected.

This issue raises several questions: What to do about the intense club loyalty of fans when it gets out of hand? How can the media play a more positive role in understanding before stoking the flames of fan loyalty? How can clubs capitalize on the tremendous support provided by the Ministry of Sports support program, by boosting the number of players in sports like water polo?

I truly believe all three questions are crucial and require new strategies to answer.

• Dr. Razan Baker is a director of international communication at the Saudi Olympic Committee, member board of directors, Saudi Bowling Federation; media and marketing committee member, Saudi Arabia Olympic Committee; specialist in corporate social responsibility in sports, and a sports columnist/journalist.

Twitter: @RazanBaker

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 1:07 pm

aggi wrote:
Tue Sep 22, 2020 12:37 pm
It was a funny one. As you say it happened in March but it was 6 months or so until it got into the public domain following me posting about it on a few messageboards and the Burnley Express then picking up on it (including a few of my inaccuracies). I can't imagine that being the case nowadays.

I never did find out who owned Lionbridge. I should probably have a look at my copies of the Paradise and Panama papers to see if it's in there.
The Paradise Papers is the most likely source of who the real owners of LoveBet are too from what I seen of the trail from Malta to Isle of Man then... "nothing"

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Re: Football's Magic Money Tree

Post by aggi » Tue Sep 22, 2020 1:09 pm

Chester Perry wrote:
Tue Sep 22, 2020 12:03 pm
Roy you can't keep leaving it hanging like that
I remember some kind of rumour that there was an error in the initial buy back clause which meant that the club ended up paying a million or two more to buy back than had originally been planned. The club in turn sued their legal advisers and recovered most of the money from them. No idea whether that was true or not though.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 1:12 pm

aggi wrote:
Tue Sep 22, 2020 1:09 pm
I remember some kind of rumour that there was an error in the initial buy back clause which meant that the club ended up paying a million or two more to buy back than had originally been planned. The club in turn sued their legal advisers and recovered most of the money from them. No idea whether that was true or not though.
Ah - at least we didn't loose out too much then

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 1:28 pm

A piece from SportsBusiness.com looking at how Norwich try to maintain financial stability (while yo-yoing between the Championship and the Premier League) by maximising the revenues that the club can have direct control over and not having owners that can freely dip into their pockets - I think we do a lot that is similar to this (Norwich have regularly referenced our approach ias the one they want n the last few years) and are actually trying to grow that side of the business.

Norwich City’s financial model provides stability despite Premier League relegation
Adam Nelson, Europe office - September 21, 2020

- Commercial structure ‘insulates’ against frequent relegations and promotions providing off-pitch stability
- Club coping with Covid-19 thanks to strong relationships with commercial partners and robust business planning
- Despite relegation to the Championship and the pandemic, Norwich has added 12 new commercial partners and 15 renewals during 2020

Over the past decade, Norwich City has become England’s ultimate yo-yo club.

Since the turn of the millennium, the Canaries have been through eight promotions or relegations, and in the past decade the club has split its time equally between the top two divisions, completing five campaigns in each. The 2019-20 season ultimately ended in demotion back to the Championship after a year at the top table.

From a commercial perspective, this poses challenge and opportunity. The club is frequently rewarded by the higher visibility of the Premier League, but has been clear in its intentions to not overspend and risk its financial stability to stay there.

It also must balance those boom seasons in the spotlight against the relative paucity of the Championship, where revenues drop significantly. For the eight seasons between 2011-12 and 18-19, Norwich posted a profit in every top-tier season, and a loss in all but one of the campaigns spent in the second-tier.

This culminated in a record £39m deficit in 2019 – a year in which it once again achieved promotion to the Premier League, and says that it expects to return to profitability for 2020 when it announces its results later this year.

The club’s chief operating officer, Ben Kensell, arrived at Norwich as commercial director in 2014 and says that a major component of the structure he has put in place in his six years is precisely geared around insulating financial performance from the on-pitch fluctuations, particularly as a self-sufficient club which receives no external investment from its owners – an increasing rarity among Premier League or Championship regulars.

“When I came in nearly six years ago, this club operated very differently, it operated a very hand-to-mouth existence financially with no commercial growth plan,” Kensell tells SportBusiness.

“There wasn’t really a business plan in place across the club throughout the different income streams and no real KPI’s, so what we did is set out on a three-to-five-year plan that would ensure that, as a wholly self-financed club, we could be exactly that, and not be solely reliant on the yo-yo nature of going up into the Premier League and down again. We needed a stable base to build from”

Maximising club-controlled income
“When we talk about being self-financed, it’s not a throwaway line. We really do live within our means and therefore everything we generate goes back into the business to improve us, or help us grow, so everything matters whether its growing income or being more efficient,” says Kensell. “We have a clear business plan and excellent staff that understand the Norwich way. Our staff and fans know we focus meticulously on our club-controlled income and grow it appropriately, so that that’s then one of our four major pillars of how we fund the football club.”

Kensell defines those four pillars as: club-controlled revenue – which includes all ticketing, commercial, hospitality and retail income; broadcast and prize monies through cup competitions; player trading; and owner-led investment.

“We don’t have that fourth one now regarding owner-led investment, which the majority of other clubs do, especially those in a similar position to us,” Kensell says. “We firmly believe that we’ve got the best owners in football, but not the richest, and as a result of that, when I arrived here I started to embark on a project that was around how do we drive, first and foremost, the income that we can control? And the main driver there was commercial partnerships and that club-controlled income.”

At the time Kensell joined in November 2014, Norwich had just been relegated from the Premier League after a three-year spell in the division, and overall turnover had been severely impacted, falling from £94m for the 2013-14 season to £52m in the following campaign. Regaining promotion via the play-offs at the first attempt made Kensell’s job a little easier, but the challenge remained to sustain commercial income and keep the club competitive without owner investment.

Consequently Kensell, initially as commercial director, began a revamp of the club’s partnership and commercial strategy. “When I arrived, we didn’t even have a partnership structure or tiers. We didn’t have ‘principal’, ‘primary’ and ‘regional’ partners, there was just a shirt sponsor and six partners all grouped and managed as one. There was no plan across all commercial areas and there wasn’t a staffing structure to support and grow.”

The club now divides its sponsors among those three brackets, offering clear tiering to brands interested in working with Norwich City, a structure that can be tailored for brands with budgets and ambitions at various scales. “There needs to be a framework for local businesses, national businesses and international business to buy into at the levels that suit them, but equally we then need to be agile enough to offer the inventory and the opportunities that will deliver against the objectives and KPIs they have.”

Spreading the value across a portfolio which now encompasses over 40 different partners takes the pressure off any one individual deal. “We haven’t just focused on the top end, putting all of our eggs in the shirt sponsorship basket, we believe in driving value throughout all tiers of the portfolio.”

Norwich’s front-of-shirt sponsor Dafabet signed up in summer 2019 on a deal which SportBusiness Soccer estimates to be worth an annual £2m in the Premier League – a club record deal – and £750,000 in the Championship. By focusing on giving greater exposure to its primary partners, international brands like kit supplier Errea and carmaker Lotus, the club has been able to drive maximum value out of its whole portfolio.

“For me, the sum of the parts is greater than the whole, and that’s why regional and primary partnerships that sit in the middle are just as important as the principal deals. We’re talking multiple six-figure numbers and that’s a considerable investment for the businesses we’re working with, but they understand the value we can help them drive out of that. Investment from the £25,000 entry level is vital all the way up to our main shirt sponsor.”

SportBusiness Soccer believes that Norwich’s 24 regional partners are paying an average of around £60,000 per year – a significant proportion of the club’s total commercial income.

As the below shows, Norwich’s commercial income has remained largely stable. With the addition of the Dafabet partnership and some other key acquisitions, the 2020 figure is expected to leap to around £12.5m.

Division - Year - Income(£)
Prem. - 2012 - 6.7m
Prem. - 2013 - 7.5m
Prem. - 2014 - 9.1m
Champ. - 2015 - 7.3m
Prem. - 2016 - 10m
Champ. - 2017 - 8.7m
Champ. - 2018 - 7.2m
Champ. - 2019 - 8.5m

Partner retention aids stability
A second major step, which Kensell says is relatively unique for a club of Norwich’s size, is the way he divided the club’s commercial team into two teams, one focused on securing new partners and another on working with existing partners on meeting their targets and then renewing their deals. As he puts it: “It’s my true belief that this is how clubs can extract the maximum value not just from its partners but from its club-controlled income in general, including conferences, events, marketing and retail.”

While long-term contracts with partners would always be a goal, the nature of Norwich’s up-and-down existence means that it has to remain flexible, and Kensell says that his ideal contract “has a long-term structure to it but will also have breaks in it that suit both parties.”

“We have to be agile and it’s got to be appropriate to the partner and what their objectives are. If we sign a one-year deal, the KPI is going to be around turning that into a three, four, five-year deal because we delivered so successfully for the brand in year one. If we’re signing a five-year deal and we know we’re in it for the long-term, it’s going to be around building a deeper, more meaningful set of KPIs and planning about what do we really want to achieve over the course of the contract?”

Kensell’s faith in the structure has been backed up this year. Despite Norwich’s relegation to the Championship and the ongoing uncertainty surrounding the Covid-19 pandemic, the club has penned 15 renewals with commercial sponsors this year, and has brought 12 new brands into its portfolio.

The relationships Norwich’s commercial team maintains with its partners have been key to weathering the storm of this year. For many regional sponsors, much of the value of their deals is driven by the eyeballs of 27,000 in-stadium fans on their brand at home games, as well as hospitality and the business network supported by the club. That has all been lost since the lockdown earlier this year, and Kensell admits that “we’re relying on built-up credit and brilliant relationships, if I’m completely honest.”

“We’ve built up a lot of credit from the way that we’ve worked with our partners and ultimately delivered for our partners. We have a really healthy network that actually is supporting each other now financially. As a group we have been very good at networking and building a business community that actually does business with each other.

“People buy into that community, they understand that there isn’t just an opportunity from a B2B perspective or a B2C perspective, actually it’s from people and businesses within the network. I think a lot of our partners have paid us back for that by remaining with us in this time, and both professional and personal relationships remain very strong.”

Creating an ethos
More than just a lack of structure, there was a lack of “ethos” around the club in 2014, Kensell says, with Norwich failing to distinguish itself in the market. There, Kensell has overseen a major transformation, with the club leaning heavily into its community and socially-conscious image when working with partners.

“I do believe a lot of people sometimes look at the money before they look at how well that fits with the club’s values and ethos,” he says. “We’re not a club that really does that. Of course we have targets to hit, we’re a self-financed club, so we’ve got tough targets but we tell the NCFC story. It’s about firstly understanding what makes someone tick, what their objectives are, and then you deliver them a solution as to how you’re going to hit them. And then you talk about money afterwards.”

This summer, for instance, a deal was struck with video game advertising platform Bidstack – a previous sponsor during Norwich’s last spell in the Championship – to sponsor the back of Norwich’s shirts. Bidstack, however, donated all of its inventory – the space on the back of the home, away and third kits – to local charitable initiative Badu, an educational organisation which uses sport to provide opportunities to students from underrepresented backgrounds.

“That’s exactly the kind of deal we look for, where we can drive value but also bring in that sense of equality and inclusivity. The deal was borne out of relationships which Ben [Tunnell, the club’s head of commercial development] maintained brilliantly and the opportunity became available.

“The partnership has a real purpose for all parties and a common goal. What I also like about it is that ,it’s a deal where we as the rights-holder have to work even harder, because there’s an obligation to deliver not just for Badu on their KPIs around being a force for change, but for Bidstack as well, because they’ve gifted their rights and paid the sponsorship.”

Another new primary partner at the club, War Paint, a make-up brand aimed at men, will feature on Norwich’s shorts this season, and is using the platform provided by the club to promote issues of men’s mental health and body dysmorphia. With these kinds of deals, Kensell says he encourages the commercial team to focus first on how Norwich can support a brand’s objectives before a value is discussed.

“Ultimately, we’re at a really distinct advantage geographically” Kensell says. “We have no other large rival sporting institution, be it cricket, rugby, football, anywhere within Norfolk, and we’re a large county but that doesn’t mean we should take that for granted. Our supporters are ardent Norwich City fans and deserve the best and it helps with telling the story of Norwich as a club and as a city. In this part of the country, we are really the best platform for connecting with these fans, we are the heartbeat of the city.

“When I arrived, the club didn’t really capitalise on that, certainly didn’t commercialise it. Now we’ve got all the tools in place and a brilliant team to do that by engaging partners and helping to open the door to millions of Norwich fans. We now sit at the centre of a major network of businesses within this region that we have brought together as a commercial hub but there is still growth and we will never continue to stop with our good, better, best attitude across the entire business on and off the pitch.”

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Re: Football's Magic Money Tree

Post by The esk » Tue Sep 22, 2020 3:02 pm

Congratulations on your third birthday - this is one of the best threads in Football IMO - well done to all who contribute

Chester Perry
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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 3:53 pm

The esk wrote:
Tue Sep 22, 2020 3:02 pm
Congratulations on your third birthday - this is one of the best threads in Football IMO - well done to all who contribute
That is very kind of you Paul, thank you - must say I am looking forward to Part 5 of football shorts that you teased a couple of weeks ago

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 4:06 pm

Leaked documents show where the FA are looking to make cuts - from the Guardian - it carries a stark warning for the future of the game

FA cuts to hit grassroots football and futsal hard, leaked documents show
Men’s national futsal teams scrapped and no women’s side
Grassroots game facing £22m-a-season funding cut
Exclusive by Jamie Fahey

Tue 22 Sep 2020 12.42 BST Last modified on Tue 22 Sep 2020 13.17 BST

The Football Association’s Covid-19 cost-cutting strategy dismantles key strands of its celebrated England DNA coach education programme and abandons its commitment to the small-sided format of futsal hailed by Gareth Southgate as a “great game and development tool” to help create the next generation of players, according to leaked documents seen by the Guardian.

Grassroots football, long underfunded and hobbled by an alarming dearth of facilities, also faces a reduction in funding of £22m a season over four years.

The decision to “remove all futsal national teams and staff”, revealed in a document sent to the FA’s technical department, also in effect abandons the commitment to create a women’s national team.

Sue Campbell, the FA’s director of women’s football, described futsal as a “key part in our strategy to grow the women’s and girls’ game” in 2018, when the sport was finally accepted as one of the FA’s core pillars in the National Game Strategy. The six-year plan, called “Fast Forward with Futsal”, vowed to create a women’s team for the Uefa Women’s 2021 European Championship.

The decision to scrap the men’s senior futsal team and under-19 and under-23 teams comes as the seniors await a postponed play-off against North Macedonia in the 2022 European Championship qualifiers and is likely to be met with concern in Uefa. The partially sighted futsal team is the only one retained.

Futsal, the five-a-side indoor game born in South America in the 1930s, is widely recognised as essential to youth football development in nations such as Brazil, Spain, Portugal, Russia and Iran, where it is the dominant game in schools and a professional sport in its own right.

England’s men’s senior futsal team was founded in 2003 and the game has grown markedly at the grassroots level in recent years, with youth teams increasingly playing it indoors in winter breaks. The men’s and women’s national league structure was overhauled in 2018, with the introduction of a National Futsal Series.

Dozens of futsal clubs, many with thriving academies, will be plunged into uncertainty. The total FA funding for the sport will fall from £900,000 a year to £125,000 to meet minimum contractual obligations in the youth game under a three-year sponsorship deal with Pokémon.

Southgate, who has taken a 30% pay cut along with other FA executives, declared his support for futsal at the time of the 2018 strategy launch. The sport is lauded by many of the best footballers in the world, from Lionel Messi and Cristiano Ronaldo to Brazil’s Neymar and Philippe Coutinho and Belgium’s Kevin De Bruyne.

The internal Covid cuts document says the teams are being axed because futsal has only a “limited link” to the ambition to win a major 11-a-side tournament first cited by the incoming chairman Greg Dyke in 2013.

A senior FA coaching tutor, who wished to remain anonymous, told the Guardian: “It’s astonishing that futsal is being dropped after the past 10 years of the FA saying this is the future and that it was [the game] we’re looking to use for kids to get the techniques and tactics of the DNA.”

An FA spokesperson said: “We continue to review our overall Futsal strategy in light of the significant financial challenges associated with Covid-19 and will provide a further update in due course.”

In recent weeks, dozens of coach educators, tutors and other staff based at St George’s Park have departed at the end of the redundancy consultation process as the FA seeks to cut 82 roles and leave 42 more vacancies unfilled.

The coach mentor programme, set up in 2015 to support volunteer coaches in understanding and applying the ethos of the England DNA to the grassroots youth game, was scrapped in July, with 300 part-time mentors and eight full-time staff losing their roles.

The FA declared in June it wanted to save £300m over four seasons in response to the downturn triggered by the coronavirus pandemic. Its chief executive, Mark Bullingham, admitted to a shrinking of the FA’s responsibilities as it made “tough choices” to account for the collapse in income from sources such as £35m a year in Wembley stadium hospitality.

A second document seen by the Guardian outlining the National Game budget for the 2020-21 season details the total reduction of £75m in funding, including the £22m grassroots cuts, £22m to the professional game and £31m a year on other areas.

The scale and depth of the cuts jeopardise the pursuit of the so-called England DNA, hailed as a “golden thread” of technical and tactical skill running from grassroots to the England senior teams when introduced by Les Reed’s predecessor as technical director, Dan Ashworth, in 2014. The joined-up approach is seen as key to the recent success of the England youth teams.

Grassroots football is expected to be hit hard. The network of expert coach developers assigned to every county FA, supported by tutors and mentors offering in-situ support on the ground, has been dismantled. The futsal coaching courses have been axed and the football introductory Level 1 course has gone online only. A new, shorter “Playmaker” course, also online only, is designed for coach volunteers.

The FA is expected to announce plans for a slimmed-down replacement coach education structure shortly.

The FA coaching course tutor, who has experience in academies, said the cuts had caused widespread frustration at the “cull of knowledge and expertise” and threatened the future of the game.

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Re: Football's Magic Money Tree

Post by Chester Perry » Tue Sep 22, 2020 6:27 pm

The Telegraph claims that the Government have no plans to assist the Premier League or the EFL

Exclusive: Government does not plan to include Premier League and EFL in sport bailout
JEREMY WILSON SEPTEMBER 22, 2020

The government does not intend to include the Premier League and English Football League in a bailout fund for sport and instead expects the richest football league in the world to help the rest of English football’s professional pyramid.

Leaders from across more than 100 British sports and governing bodies, including the Premier League, warned prime minister Boris Johnson on Monday that sport was facing a potential “lost generation” without an emergency recovery fund.

The letter was signed by the league’s chief executive Richard Masters but, with his clubs currently likely to surpass last year’s summer transfer window spending and the vast majority of their £9.2 billion three-year broadcast deal still intact, the government’s focus is not elite professional football.

It still stands by the expectation that the Premier League should share the benefits of Project Restart with the rest of the football pyramid and the EFL wants £200 million from the Premier League to cover the ongoing lack of crowds.

The government is sympathetic to helping both the Women’s Super League and men’s National League, which would not be viable without crowds, as well as non-league clubs and the grassroots. Numerous other sports are also in dire need of an emergency Covid-19 bailout similar to the £1.57 billion that was provided in July for the arts sector.

Almost half of all public leisure facilities were unable to reopen when lockdown measures were eased in July and 6,000 permanent and casual jobs in the sector have already been made redundant or ceased to exist.

Culture secretary Oliver Dowden is meeting with sports leaders on Tuesday afternoon to discuss their needs and the Premier League has so far indicated that it expects to be part of the settlement.

As well as signing the letter to government, which was not signed by the EFL’s chief executive Rick Parry, the Premier League issued a statement on Tuesday which called for the return of fans. “Last season, Premier League clubs suffered £700m in losses and at present, our national game is losing more than £100m per month,” said the statement. “This is starting to have a devastating impact on clubs and their communities.

“While there is a current pause in a date for fans returning to sports venues, the Premier League and our clubs will not slow down in our preparations for providing safe, bio-secure environments. We will continue to work with Government to bring supporters safely back into grounds as soon as possible.”

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