Football's Magic Money Tree

[Chester Perry]

Is this it? Is this the bubble finally starting to burst?

I think we are in a stall period for the next few years for most, I expect the truly big clubs to widen the gap, for many commercial revenue is the biggest source of income already, I expect the norm for them is that it will exceed 50% or even 60% of their income at Bayern it is already more than 50%, that is with full matchday income back on stream.

[Chester Perry]

I missed this the other day, I have posted a number of times about Ahmad Ahmad the suspended president of CAF, apparently the Court of Arbritation for Sport have re-instated him - from the BBC

Court ruling dramatically restores Ahmad as Caf president
By Piers Edwards - BBC Sport Africa
Last updated on29 January 2021

Madagascar's Ahmad has been dramatically restored as Confederation of African Football (Caf) president following a ruling by the Court of Arbitration for Sport (Cas).

Ahmad was banned by Fifa in November for five years after football's world governing body found him to have breached several of its ethics codes.

Ahmad is still ineligible to contest Caf's presidential elections in March however, since the Cas decision came after both Caf's Governance and Fifa's Review committees sat earlier this week to approve candidates' eligibility.

The Malagasy - who will now resume his role as a Fifa vice-president - is appealing his ban at Cas, which issued a preliminary ruling on Friday.

Sport's highest legal body says it will hear the appeal in full on 2 March, with a decision issued before the Caf presidential elections on 12 March.

"Due to a risk of irreparable harm for Mr Ahmad if the disciplinary sanction is maintained during the period prior to the Caf elections, the Cas panel has upheld the request to temporarily stay the effects of the [Fifa ban]," Cas said in a statement.

This effective suspension of the Fifa ruling will be in place 'until the day that the final Cas award is issued'.

Mysterious money moves and un unholy mess: Why Fifa banned Caf president Ahmad
Since he was banned when Fifa met on Tuesday and Caf on Thursday to vet presidential aspirants, Ahmad was deemed ineligible.

He will now need to overturn the decisions ruling him ineligible to run, since his appeal at Cas is not against the decision barring him from contesting the elections but against his Fifa ban.

Should Cas uphold Fifa's ban when its hearing takes place in early March, Ahmad will be ruled out of the race once and for all.

Yet if he can overturn both his ineligibility and his Fifa sanction, a man who was proclaiming the backing of 46 federations, out of 54, shortly before his ban will have the chance to secure an unlikely comeback.

As of this week, four candidates were cleared to run for the Caf elections in Morocco on 12 March: Jacques Anouma (Ivory Coast), Patrice Motsepe (South Africa), Augustin Senghor (Senegal) and Ahmed Yahya (Mauritania).

Ahmad's stay of execution is uncommon, says a sports lawyer with working knowledge of the Switzerland-based Cas.

"The Cas rarely issues a preliminary decision suspending the effects of a sanction to ban someone from football," said Paolo Torchetti of Ruiz-Huerta & Crespo Sport Lawyers.

Fifa adjudged Ahmad, who took charge of Caf in 2017, to have broken ethics rules relating to duty of loyalty, the offering and accepting gifts, abuse of position and misappropriation of funds.

These were primarily related to a decision to approve deals totalling $4.4m with a French company run by a close friend of Ahmad's then attaché and the financing of a religious pilgrimage to Saudi Arabia for Africa's Muslim FA presidents.

So Ahmad Ahmad will not be in the running for next month's election for CAF President, even though the CAF Governance comittee said he was eligible following that CAS decision to reinstate him, CAF's Executive committee have decided to exclude him, that must have been some meeting

https://twitter.com/PhilippeAuclair/sta ... 2781639686

[Chester Perry]

As many suspected things are about to get very messy for the National League as board member resigns so he can go public with his vehement disagreement with their actions

http://www.doverathletic.com/news/chair ... gue-board/

[Chester Perry]

The bidding for Serie A rights takes a new turn, there are a couple of things to note no matter what the spin insiders are trying to put on it:

- the bidding is still some way short of the last deal and Serie were looking for an 18% uplift
- DAZN have been slashing costs, renegotiating deals, even cancelling deals, selling off sections of business and desperately touting for new funding for over a year, this deal will be based on subscription numbers that they cannot get, think Mediapro's Telefoot and the French Ligue. there is far more certainty with the Sky money on the table.

It should be noted that SKY were prepared to offer the money originally being asked for but the competition authorities would not let them take the whole shebang, that immediately devalued what was on offer to them

from Yahoo Finance

Sport streaming firm DAZN leads race for Serie A domestic TV rights - sources
Sun, 7 February 2021, 4:55 pm·2-min read

Internet streaming service DAZN's logo is pictured in its office in Tokyo
MILAN (Reuters) - Sport streaming service DAZN is leading the race for rights to screen Italy's Serie A matches over the 2021-2024 seasons in a challenge to the country's dominant pay-TV player SKY, two sources familiar with the matter said on Sunday.

Broadcasting rights are the main source of revenue for Serie A and are even more important with matches being played in empty stadiums due to COVID-19 restrictions and companies cutting advertising budgets.

Italy's top-flight soccer league held a round of talks with broadcasters, who increased their initial offers but did not match the 1.15 billion euros ($1.38 billion) target.

DAZN is offering about 850 million euros per season to show all Serie A matches on its streaming app, the sources said.

SKY, a unit of U.S. Comcast, has bid nearly 750 million euros to screen matches on different platforms, they said.

Serie A clubs will discuss the bids at a meeting on Monday.

The size of the bid, however, might not be the only criteria for valuing the offers, a senior club official said.

Both SKY and DAZN declined to comment.

Under a three-year contract expiring at the end of this season, Serie A raised 973 million euros per year from the sale of domestic licenses to SKY, which took the lion's share of games, and DAZN, which made its debut on the Italian market.

Serie A could raise slightly more than 900 million euros combining DAZN's bid and an offer by SKY to screen some matches on its streaming platform, the sources said.

"We are not that far from the amount of the current agreements," one of source said, adding a variable part of the offers could help narrow the gap further.

[Vegas Claret]

Football clubs sent financial warning as Government plan sponsorship clamp down

Football clubs could face significant financial changes with the Government ready to clamp down on betting sponsorship
Football has been warned it faces a “significant impact” with the Government ready to impose a major crackdown on betting sponsorship.

Ministers could impose a complete ban on shirt sponsorship with gambling firms as part of their review with teams from the top two divisions making around £110m-a-year from the tie-ups.

But there are growing concerns about addictions and football’s relationship with the multi-billion pound gambling industry in terms of advertising and commercial deals

Now one of the major firms, the Kindred Group - which oversees UNIBET and 32Red in the UK among nine brands - has taken the revolutionary step of opening up its books.

Neil Banbury, UK General Manager at Kindred Group, says their figures show and in-depth research show that “high risk” customers make up four per cent of their business and their target is to reach zero levels.

But Banbury did admit that the financial implications for football could be huge if the Government tries to pull the plug as 32Red sponsor Derby in the Championship.

While eight top-flight teams out of 20 - Burnley, Crystal Palace, Fulham, Leeds, Newcastle, Southampton, West Ham and Wolverhampton Wanderers - have their shirt sponsored by betting firms.

Banbury said: “Clearly it’s not a good time for football clubs with commercial income streams and the huge pressure, certainly outside the Premier League, partners and sponsors make up a significant part of football clubs’ income. It’s clearly not a good time from that perspective.

“To some extent we would welcome some intervention or some changing in the rules. There should be a much higher bar for being able to get involved in such a visible property within the UK

“The vast majority of brands sponsoring the Premier League don’t have a UK business, have no interest in UK consumers.

“That has created the toxicity around the debate when actually what we should be talking about is a high bar to get involved and then let’s talk about the good work we can do together.

“Ultimately, if the buyers in that market get heavily restricted then the price will go down. So clubs will be facing reduced income streams at a time where they've got plenty of income stream challenges outside of the sponsorship world so there's potential for significant impact.”

But Kindred are stressing that by identifying the number of problem gamblers, they can flag up issues and take action. It comes at a time when ex-Crystal Palace and Tottenham defender Steven Caulker, a self confessed gambling addict, accused firms of being “ugly” and “preying on the weak.

Banbury added: "Ultimately, we are talking percentages and statistics but it's people that are impacted when harm is caused and it's not just the gambler, it's their family and friends. We recognise there's a wider impact as well and we recognise why we get this right.

“Where we need to get to is a position is our ability to identify and the effectiveness of how we interact to a level where we can significantly reduce and ultimately our goal is zero percent.

“That's obviously a lofty target but that depends on the direction we take but we have to find a sensible balance in terms of regulations because tens of millions of people bet now and tens of millions of people will bet in the future and that's all happening within a licensed and taxed environment to make sure the protection levels are at the highest.”

[Chester Perry]

As many suspected things are about to get very messy for the National League as board member resigns so he can go public with his vehement disagreement with their actions

http://www.doverathletic.com/news/chair ... gue-board/

If you are behind on what is happening in the National League - TwoHundredPercent.com can help bring you up to date

The National League Plummets Into Chaos
by Ian | Feb 7, 2021

Everybody’s under pressure at the moment. Everybody’s feeling it. Mistakes will be made, tempers will flare, and people will be selfish. Some mistakes, however, have greater ramifications than others, and the apparent failure of anybody to record in writing an apparent promise made by the Department for Culture, Media & Sport that the second tranche of funding to the National League this season would be in the form of grants rather than loans is having greater ramifications than most.

Clubs played through to last month in the apparent belief that this would be the case. The first tranche of £10m came from the National Lottery and allowed the season to start. This money could only support clubs until the end of last year, though, and the row over whether the second tranche should be in grants or loans has now dragged out to the second week in February. The DCMS states flatly that it has always been low interest-bearing loans rather than grants.

There are further complications, too. Clubs are split over whether the season should continue or just voided. Putting matches on, travelling to matches, being a football club… costs money, and clubs cannot run on fumes forever. The public arena has become a free-for-all of different opinions, potentially causing rifts at a point when these clubs need to be acting in their collective self-interest more than ever.

The National League is not absolved of responsibility in creating a toxic environment either, though. Far from it. Clubs had to submit information when the first payment was to be made, but they didn’t seem to be paid according to average attendances, as many had expected. At the extreme end of the scale, York City (average attendance during the 2019/20 season: 2,507) received £108,000 while Boreham Wood (average attendance during the 2019/20 season: 724) received £252,000. Boreham Wood are a division above York, but this still looked like a vast discrepancy, and it wasn’t the only one.

Following serious criticism of their distribution model, the League brought in a committee headed by Lord David Bernstein to review it. The report was completed and returned to the League, but they have not made the results public and this led to a stinging open letter on the 22nd December from Bernstein, outlining the committee’s disappointment at the fact that Brian Barwick, the chair of the National League, had not made their findings public by that point. Their view was that:

• We are profoundly disappointed that you have not shared our report with your clubs not least because we believe that this should be done in line with open and proper good governance and that the NL was committed to ensuring that the funding was distributed in a transparent manner. We also believe disclosure is in the public interest given that the funding was provided by Camelot.

• We are concerned that the NL are making the December payments on the same basis as the previous two months thereby increasing the imbalance as described in our report. This is particularly concerning if, as we suspect, the arrangements for 2021 may be on a different basis. We encourage interested parties to keep a close eye on this.

• We note the lack of response regarding governance issues and the apparent lack of concern around conflicts of interest and compliance with your own Articles of Association.

More than six weeks on, the report still hasn’t been made public. Small wonder few trust the National League very much, at the moment. Meanwhile, in an attempt to cross this multitude of divides and with clubs threatening to refuse to play matches because the money had run out, the league suspended itself for two weeks. On Monday, though, the National League issued a statement clarifying how the voting will work, in 28 days time. Take a deep breath.

There are four Resolutions that may be voted upon, though it’s not as simple as the clubs voting four times. Resolution 1 will see all 66 clubs vote on whether they want their vote to count towards their individual step (Step one or Step Two) or across the three divisions as a whole. Each National League club gets a vote while the combined National League North and South get just four votes each. This resolution requires a 75% majority in order to pass.

If this happens, Resolutions 2 and 3 come into effect. Resolution 2 only applies to National League clubs and whether they want their season to end and be declared null and void at the end of February. Resolution 3 is the same for the North and South divisions, and both require a 50% majority vote in order to pass.

If Resolution 1 fails to get a 75% majority (meaning that clubs across all three divisions will vote as a collective), Resolution 4 will come into play instead of Resolutions 2 and 3. This Resolution is a vote to end all three National League divisions simultaneously, and it requires a 50% majority in order to pass. However, like Resolution 1, this vote will be weighted in favour of the top division’s clubs. There are, in total, six different resolutions that could be reached from these votes:

• Resolution 1, 2 & 3 pass: All three divisions declared null and void.

• Resolution 1 passes, 2 fails, and 3 passes: National League season to continue, North & South declared null and void.

• Resolution 1 & 2 pass, and 3 fails: National League season declared null and void, North and South continue without fans, promotion or relegation.

• Resolution 1 passes, and 2 & 3 fail: All three seasons continue.

• Resolution 1 fails & 4 passes: All three divisions declared null and void.

• Resolution 1 fails & 4 fails: All three seasons continue.

Clear now? No, me either.

Two days later, 17 clubs from the North and South divisions issued a joint statement saying that they would restart their seasons “…only when both clubs participating in a fixture are in agreement and when there is a fully-funded COVID testing regime in place, as both the National League and its member clubs have a duty of care for the safety of players and staff.” With the vote being 28 days away, what’s the point in running up the costs of playing seven or eight matches which might well turn out to be futile exercises, should the season end up being voided?

This, then, is a catastrophe from which few of those in charge emerge with a great deal of credit. The list of charges against the National League is not inconsiderable. Since the summer, they have:

• Failed to get any written confirmation whatsoever from the DCMS that further payment would be in grants (if it was ever seriously put forward.

• Allowed clubs to believe that the second funding would be based on grants rather than loans.

• Mismanaged the first distribution.

• Refused to release the subsequent report into said mismanagement.

• In the absence of showing any leadership, overseen its 66 clubs collapsing into a squabble-fest.

• Maintained a voting structure which disproportionately favours clubs from its top division over its two regional divisions.

• Put in place a vote which may compel many clubs to play on the the remainder of this season, against their wishes and with no choice but to take out loans which some are already telling anyone who’ll listen they cannot afford to repay.

Regarding the clubs themselves, it’s hardly surprising that self-interest (some may choose to call this ‘self-preservation’) has kicked in. A good number of clubs believe that loans from the government would financially enfeeble them. Other clubs, particularly those near the top of the National League, may spy an opportunity. With other clubs in their division financially weakened, a place in the EFL and a seven figure windfall might be easier to achieve. It’s not difficult to see the fault lines upon which this is all built, but those clubs could reasonably argue that they’re acting in their own self-preservation in thinking this way.

There is no reason, meanwhile, to believe that the clubs who are calling for the season to be voided and who are refusing to play matches are doing so in bad faith. It is important to understand that this is a crisis like no other in the history of non-league football. The joint statement issued by clubs last week ended with a message that was stark in its simplicity: “We must finish the season with all 66 clubs in existence.” There really is little time left for further procrastination, when the future of the top end of the non-league game is at stake.

But for all of this, it still feel as though the descent into chaos has only just begun. What happens if the biggest clubs shoulder-barge through a vote for everybody to finish the season, which leaves a number of clubs unable to fulfil fixtures? Mass expulsions? Mass points deductions? Mass insolvencies? And how quickly is this going to be resolved? It’s now the second week in February and these clubs have had practically no income since the turnstiles were closed again, a couple of months ago. For how much longer can this be dragged out?

Nothing is out of the question right now, apart from, it would regrettably seem, competent leadership. The National League’s entire infrastructure doesn’t appear fit for purpose, its senior members’ behaviour a queasy mixture of obsequious, high-handed, and shifty, its voting processes hopelessly lop-sided in favour of its top division. When this is over and done with, it needs to be gutted and completely restructured from the bottom up. That however, is for another day. For now, it will take uncharacteristic clarity of thought and magnanimity for all of the National League’s clubs to come through this unscathed. But that doesn’t mean that it can’t happen. At this late stage, all we can do is hope for several simultaneous outbreaks of empathy and common sense.

[Chester Perry]

@SwissRamble looks at the debt position of those European big name clubs that have already published their 2019/20 financial results

https://twitter.com/SwissRamble/status/ ... 5462033409

EDIT: Interesting to learn that there is a now a UEFA definition of debt in football that includes outstanding transfer liabilities - this I believe is a very welcome thing and perhaps shows that UEFA are concerned that clubs are struggling to meet their commitments in this area - something I have been posting about since last summer

[Chester Perry]

Meanwhile Plymouth Argyle's new ownership maintain their welcome commitment to transparency and could governance in football, with a full set of financial accounts for 2019/20

official statement

https://www.pafc.co.uk/news/2021/februa ... al-report/

full financial report

https://www.pafc.co.uk/siteassets/pdfs/ ... counts.pdf

[Chester Perry]

An interesting perspective on pandemic funding from John Nicholson who basically says, if the government can spend that much, why not spend it on free to air football - none of us believe it will happen - FIFA rules about state funding is my immediate reaction as to why, but it is an intriguing proposition

https://www.football365.com/news/boris- ... r-football

[Chester Perry]

Chinese PPTV who lost Premier League rights last season after failing to pay their contractual dues, have now been blocked form broadcasting Serie A games as a result of failing to meet payment schedules - the monies are not directly owned to Serie A who sold the global rights to IMG Media, for resale.

PPTV is owned by Suning who also own Inter Milan and the parent company are reportedly struggling to meet their large short term debt liabilities

https://www.scmp.com/sport/football/art ... hts-report

Simon Chadwick notes that this is part of an ongoing trend re foreign sports rights in China

https://twitter.com/Prof_Chadwick/statu ... 9863725056

[Chester Perry]

Remember Project Big Picture and how the EFL were suckered into thinking it was a nirvana for them, well they are now waking up to what it was the big clubs were looking for, first up they do not want to take part in the League cup - so that is no longer worth £86m to the broadcasters is it, the cup provides around three quarters of the EFL's TV revenue - you may remember all the other funding avenues that would dry up that I commented on at the time - here is the Mail with the tale of first recognition of the problems that are coming towards them fast, this one driven by UEFA no less, scared of losing their revenue, you couldn't make it up. Of course the League cup is one of the 3 sets of Golden handcuffs on the Premier League with a tight contractual commitment, my guess is teams outside the big six will end up feeling the effects of any compensation package, put together as it is likely to come out of parachute and equal share earnings.

EFL clubs fear UEFA's Champions League reforms will leave a huge hole in their finances if the extra fixtures kill off the Carabao Cup - worth £86m a year - in another move that would hand yet more wealth to the biggest teams
- EFL concerns raised in critical week for UEFA's Champions League plans
- Governing body wants to agree reforms this month because it fears increasing threat from a rival European Super League competition led by Real Madrid
- Proposals include a shift from six group matches to 10 from autumn 2024
- Move would make it harder to maintain top clubs' inclusion in the Carabao Cup
By CHARLIE WALKER FOR MAILONLINE

PUBLISHED: 16:42, 8 February 2021 | UPDATED: 18:24, 8 February 2021

UEFA's Champions League reforms may focus on the elite European clubs, but they have also sparked concern among EFL teams who fear they will be left with another huge hole in their finances.

The European football governing body is at a critical stage in its efforts to enlarge the Champions League.

It is desperate to force through changes to their premier competition this month to make it more attractive and lucrative to the continent's biggest clubs, and to ward off the threat of a rival European Super League.

But if officials achieve their aim of increasing the number of group matches from the autumn of 2024 from six to 10, it will heap more pressure on the already congested fixture schedule in England.

And that will call into question the future of the Carabao Cup, which is a vital source of income to EFL clubs.

The competition is reportedly worth £86m per year to the EFL in TV revenue and sponsorship by the Thai drinks company, but that arrangement is dependent on the involvement of the country's top teams.

If they don't participate the values will undoubtedly fall.

The League Cup competitions in other European countries have already been abandoned, most recently in France, where the tournament was curtailed last season due to coronavirus and is now unlikely to return.

In addition, the English version has been targeted by Uefa's president, Aleksander Ceferin, who said in March it would be 'better for everyone' if the competition was dropped.

'He means better for the big boys,' pointed out one EFL club chief executive spoken to by Sportsmail. 'There would be a big cost to all EFL clubs if that went, under the current model of funding.'

The Carabao Cup generates around £80m annually in TV revenue under a deal with Sky, and in a contract initially settled in 2017 it brought in a further £6m per year from Carabao.

Some of the money is distributed to clubs through EFL central funding.

'It's big for us and the Premier League involvement in the competition is vital because that is what the broadcasters want,' said the executive.

Participation in the competition is also an earner for lower-league clubs. The prize pot of the Carabao Cup stands at £1m plus the additional income from TV coverage and gate receipts.

A good draw away from home, or an appearance in the later stages, like Brentford's losing semi-final to Tottenham Hotspur this season, brings in hundreds of thousands of pounds.

However, yet again, the power plays at the top of the game impact all the way down the pyramid.

The changes being pushed by UEFA will have a direct bearing on funding and any reform in the English game.

'This is another piece of the jigsaw,' said another EFL executive. 'If the top clubs want to take out the Carabao Cup to play more Champions League there has to be some give and take.

'They need to recognise the impact it has on us. Compensation could be an option.'

This will be a further consideration in the long-awaited reform of English football governance, an important element of which is how the money in the game is distributed.

Currently, the Premier League is reviewing the structure and funding of English football and the Government is yet to launch a fan-led review of the game.

In addition, a consortium led by former FA chairman, David Bernstein, and ex-Manchester United and England full back, Gary Neville, is calling loudly for an independent regulator to oversee a fair and sustainable funding structure.

As reported by Sportsmail on Friday, UEFA is desperate to push through Champions League reforms after detailed proposals emerged last month for the European Super League.

Pushed by Real Madrid President Florentino Perez, and reportedly supported by Manchester United and Liverpool, the new Super League aims to offer the 15 most wealthy clubs guaranteed access to a new competition and increase prize money and TV earnings.

UEFA has suggested increasing the number of clubs in the Champions League from 32 to 36 and offering a safety net to big clubs by suggesting that previous records in European competition will be considered for three of the four new qualification spots. The fourth would go to France.

The proposals were put to a meeting of the European Leagues, which is a representative body that includes the Premier League, last week.

The leagues pushed back, expressing 'strong concerns', and suggested an increase in groups matches from six to eight, not 10, as well as no protected access for the big clubs.

UEFA is due to present its proposals to the football associations this week.

Along with their European counterparts, the Premier League has argued for reforms to maintain a balance between domestic and European competitions.

However, at this stage there has been no specific consideration of the future of the Carabao Cup.

The EFL has not received any formal representation about the future of the competition, although it has been raised by club managers as an additional pressure on resources.

In 2017, then Chelsea manager Antonio Conte followed Jose Mourinho and Pep Guardiola's criticism of the Carabao Cup, claiming the competition was 'not important to him'.

[Chester Perry]

At the recent Soccerex Connected event there was a panel discussion on the multi club model that is fast becoming ubiquitous as investors continue to change football - KPMG whose ANTONIO DI CIANNI moderated the discussion have kindly put the session on youtube

https://www.youtube.com/watch?v=9fiS6km ... e=youtu.be

[Chester Perry]

Soccerex is owned by Joseph DaGrossa who has been sniffing around Southampton for a long time, but still cannot get to an agreement on the price it seems

https://twitter.com/mjshrimper/status/1 ... 9750978562

so naturally he has also been looking in the Premier League too, which he refers to as the "big grandaddy" for some reason, and is not too worried by a club that is generating debt. so that makes Crystal Palace and West Ham understandable considerations (remember they fall into the Project Big Picture 9 who have the longest current tenure in the Premier League).

https://edition.cnn.com/2020/09/07/foot ... index.html

Of course he has been a tyre kicker at Newcastle United too

https://www.skysports.com/football/news ... s-unlikely

he was talking about Newcastle again as recently as September last year

It is not just Premier League clubs he has been linked with, he is known to favour a multi-club model, last year he was reportedly considering partnering in a takeover at Roma.

https://www.chiesaditotti.com/2020/6/3/ ... ed-in-roma

Previously he has also talked up opportunities in La Liga too during the early stages of the Pandemic (you can see why these guys are referred to as vultures)

https://soccer.nbcsports.com/2020/04/21 ... etafe-mls/

He has actually owned a football club for the total of 1 year - his time in charge at Bordeaux is remembered for his over estimation of the value of the club and how much it could grow

https://www.sportspromedia.com/news/gac ... et-capital

this is perhaps a caricature of what American Investors in football are like, but is this really what our game wants or needs, now or ever?

[Chester Perry]

Meanwhile it seems that in Italy the still to be ratified deal with a consortium led by CVC Partners (designed to help clubs with cashflow issues in the short-term) is under the threat of collapse as the big boys wait to see what is happening on the European Super League front - you know self-interest and all that, From SportsProMedia

Report: Serie A’s €1.7bn CVC deal at risk as uncertainty grows over international TV pacts
Private equity group reportedly threatens to walk away unless clubs ratify agreement immediately.

Posted: February 9 2021 By: Sam Carp

- Italy’s top-flight clubs voted to accept CVC-led offer back in November
- Elsewhere, Serie A feed removed from Chinese streaming platform PP Sports over weekend due to missed payments
- Meanwhile, BeIN Sports reportedly unlikely to bid to keep Serie A rights in MENA region

A private equity consortium led by CVC Capital Partners is reportedly threatening to walk away from its €1.7 billion (US$2 billion) investment in Serie A, while there is also growing uncertainty over the league’s international television deals in China and the Middle East and North Africa (MENA).

In November, Italy’s top-flight soccer clubs voted to accept a proposal that would see CVC, Advent International and state-backed Italian fund FSI take a ten per cent stake in Serie A’s new media rights business.

With the deal still yet to be finalised, the investment group has now written to the 20 clubs warning that it will withdraw its offer unless the agreement is ratified immediately, according to Sky News.

The report says that the likes of Juventus and Inter Milan chose not to vote for the deal at a meeting last week, with one source suggesting to Sky News that ongoing discussions about a new European super league competition ‘are likely’ to have played a part in the delay.

Another report from Reuters claims that the clubs again chose to postpone a vote on the deal during a meeting on 8th February due to reservations about losing control of their main source of revenue.

It is unclear whether Serie A’s ongoing domestic media rights negotiations for the 2021 to 2024 cycle have also been a factor in the delay. News emerged over the weekend that the league had received an offer worth €850 million (US$1.02 billion) a year from sports subscription streaming service DAZN, as well as a rival bid of €750 million (US$908 million) from pay-TV broadcaster Sky Italia.

Talks over Serie A’s private equity deal are also continuing amid increasing uncertainty about the future of two of the league’s biggest overseas media rights contracts.

The Calciomercato website reported at the weekend that Serie A feeds had been removed from PP Sports, the Chinese streaming service owned by Inter Milan parent company Suning, as a result of delayed payments to rights agency IMG.

A PP Sports spokesperson has since told Beijing Business Daily that the platform’s Serie A broadcasts will be restored, but it is not the first time the company has failed to make payments to a European soccer league on time.

Last September, England’s Premier League cancelled its UK£523 million (US$720 million) partnership with PP Sports after a UK£160 million (US$220 million) instalment due in February was not received, and later agreed a short-term contract with Tencent Sports to replace the deal.

Elsewhere, Bloomberg is reporting that Qatar-based broadcaster BeIN Sports is unlikely to bid to retain its Serie A rights in the MENA territory.

The pay-TV network currently pays more than US$100 million a year to broadcast Serie A in the region, but the report says the broadcaster has so far not taken part in an auction for the rights covering 24 territories.

The relationship between Serie A and BeIN has been strained since the league elected to stage its Supercoppa Italiana in Saudi Arabia, despite the country’s ties to piracy operation BeoutQ.

Last year, BeIN halted its Serie A broadcasts for a week before the pair agreed a revised deal that the broadcaster said better reflected how the company was sold exclusive rights by the league, only to see its exclusivity effectively removed due to piracy.

BeIN’s tough negotiating stance over TV rights has already seen it choose not to renew its MENA deal with Germany’s Bundesliga, although it did extend its partnership in the region with the Premier League on the same terms back in December.

[Chester Perry]

Also in Italy, Serie B have managed to sell their International rights in a single deal to an OTT broadcaster - LiveNow who are owned by Asser Ventures, the investment arm of Leeds owner Andrea Radrizzani. From SportsProMedia

Serie B overseas streaming deal becomes LiveNow’s most high-profile rights acquisition
PPV contract covers all games for second half of 2020/21 season.

Posted: February 9 2021 By: Ed Dixon

- Each game to cost €4.99, with no subscription required
- LiveNow adds to soccer rights portfolio, which includes Serie C

Aser Ventures’ LiveNow global streaming platform has acquired international rights to Italian soccer’s second-tier Serie B.

The contract for pay-per-view (PPV) matches covers the second half of the season and will run until the end of the ongoing 2020/21 campaign, including the Serie B playoffs.

Access will cost €4.99 (US$6) per game, with no subscription required.

“This is the recognition of a great work that the Lega B and Serie BKT clubs are carrying out to enhance a competitive and high quality league. It also starts the process of internationalisation, one of the goals we have set ourselves,” said Mauro Balata, president of Serie B.

“But there is another aspect that I would like to underline, that of the bond we have with our territories and our people, a bond that with this agreement crosses national borders and reaches Italian communities abroad, who can now follow their favourite team and the Serie BKT championship.”

Andrea Hofer, managing director of LiveNow Italy, added: “We are proud of the agreement signed with the Lega Nazionale Professionisti di Serie B and we thank them for choosing LiveNow.

“From now on, in addition to live streaming concerts, we offer Italians living abroad the chance to feel closer to their home country thanks to the best Serie B matches available on LiveNow.”

Having launched last August, the deal adds to LiveNow’s portfolio of live sports rights, which also includes the overseas contract for Italian soccer’s third-tier Serie C.

In addition, the streaming service struck a wide-ranging deal with Cricket Australia (CA) last November covering more than 70 territories in mainland Europe and the Far East, with the Lanka Premier League Twenty20 competition also in its rights portfolio.

During its soft launch phase, LiveNow also broadcast live sports from its Eleven Sports sister company’s content pool, including La Liga and FA Cup soccer.

[Chester Perry]

Another European club comes under American ownership, this time in Denmark - that is 37 in the top 2 domestic leagues across Europe with at 4 more currently in the pipeline

https://twitter.com/CIESsportsintel/sta ... 1295281155

What I failed to notice about the takeover of Esbjerg FB was that it was lead by the consortium that own Barnsley, that group now has majority holdings in five European clubs making it the 2nd largest (by associated teams) in English Football after City Football Group

https://twitter.com/CIESsportsintel

[Chester Perry]

In a very rare no paywall offering - OffthePitch.com looks at who can afford Lionel Messi - there are a few tables so you can read it at the link

https://offthepitch.com/a/profile-lione ... t-all-time

Profile: Lionel Messi - Who can afford the greatest of all time?
8 February 2021 1:18 PM

- Leaked details of Lionel Messi’s contract revealed him to be the highest paid sportsman of all time, with € half billion 4-year contract.
- Messi has earned €2.95 million per game on 2017 deal, which expires in June.
- Man who brought Pele to New York Cosmos says not even Messi could replicate Brazilian’s commercial impact.
- Sports salaries expert: “It's certainly close to impossible to make a valid case that he could pay back those kind of sums if hired by another club.”

Off The Pitch try to investigate if there is an economic case for the man with a nine figure pay cheque?
JAMES CORBETT corbett@offthepitch.com

Even in football’s era of excess, when Lionel Messi’s four year contract was splashed all over the front page of the Spanish newspaper, El Mundo, last week the numbers seemed to belong to a different stratosphere.

€555,237,619 – the total amount Barcelona agreed to pay the Argentine in 2017, if win bonuses and image rights were included.

€511,540,545 earned so far or €127 million per year.

€2.95 million per game.

€3.57 million for each of his 143 Barcelona goals since 2017.

Or €35,181 for each of the 14540 minutes he has played for the club since the start of his contract.

The figures seemed to be so mind-boggling that they even defined much criticism.

One man, however, wasn’t entirely taken aback by their scale.

Staggering sums

The sportswriter, Nick Harris, has been compiling the Global Sports Salary Survey (GSSS) since 2009, the most authoritative source of salary information in the industry.

He points to the 2017/18 edition of the survey, when Messi signed his most recent deal with Barcelona, and his sources at Barcelona told him the basic element was worth around £57 million – around €64 million at the time.

“The final figures aren't that much of a surprise given the huge bonus and loyalty elements also available to Messi in that contract,” says Harris.

“These are nonetheless staggering sums, putting Messi's annual earnings the number one sum of any sportsman in history, far ahead of any NBA, NFL or MLB star, far ahead of any boxer, any F1 driver, anyone.

“And it's certainly close to impossible to make a valid case that he could pay back those kind of sums if hired by another club.”

This is a crucial point, for in less than a 150 days time, Messi’s contract expires. When that happens Messi will be six days past his 34th birthday. Barca, like many clubs during Covid, are facing the financial abyss.

Man City and PSG, clubs with wealthy owners, are said to be watching, and if they didn’t before, now they definitely know his price.

Will the Argentine stay? Will he go? Either way, is there an economic case for the man with a nine figure pay cheque?

Coveting legends
Signing the ‘greatest of all time’ has never been easy, but equally never really subject to the sort of eye-boggling sums we see today. In 1928, fresh from scoring 60 league goals in a single season, the New York Giants tried to lure Everton’s Dixie Dean to the American Soccer League. Dean was paid £8 per week at Everton; his “stupendous” offer to go to America was £25. Dean declined.

32 years later, Everton’s millionaire owner John Moores tried to lure Ferenc Puskas to Goodison with the promise of a £15,000 signing on fee and a £10,000 salary paid via the back route of his Littlewoods Pools business. Players in England at the time were limited to £21 per week maximum wages – a tenth of the proposed pay on offer.

Puskas, who had just scored four goals in Real Madrid’s European Cup final win over Eintracht Frankfurt was denied by an unholy alliance. “The Home Office would not have admitted him into the country as an alien, the Players’ Union would have objected and the League would have vetoed it too,” Moores complained in 1962.

By the 1980s and 1990s, when 30 was considered ‘over the hill’, superstars went on a farewell tour, mostly without large financial rewards. 36-year-old Johan Cruyff wound up at Feyenoord, having been abruptly left out of Ajax’s plans. At 31 Diego Maradona was washed up and in disgrace by the time he joined Sevilla in 1992, later embarking on several playing cameos in his native Argentina.

Pele in New York
Perhaps the most eye-catching transfer of one of the all-time greats was that of Pele to New York Cosmos in 1975. The New York Times reported at the time that Pele was being paid $7 million over three years – worth around $35 million today (£15.4 million).

To put that into context, the most Britain’s most expensive player at the time – Bob Latchford – ever earned in a single year was £50,000.

The Cosmos’ general manager Clive Toye says the numbers advanced by the New York Times were “total rubbish” and that the sum paid to Pele were less than a third of the published amount. Even still, it was far beyond what anyone else earned from football at the time.

“Pele was paid $2 million plus a little more for three years...not each year but for three years, total,” says Toye. “This included all his marketing rights as well as his playing rights plus 14 more years for his name to be used in connection with the Warner Communications brand [who owned Cosmos].”

Toye trailed Pele all over the world in an attempt to get him to sign up for the Cosmos project. “There was never an agent,” he recalls, just Pele’s personal trainer Julio Mazzei “an excellent English speaker” and brother, Zoca; plus Kurt Lamm of the USSF “who knew Pele well and introduced us”, and some lawyers at the end.

Sponsors were lining up
“We reached a conclusion, after many many meetings, that Pele would sign and said what he wanted,” says Toye.

“We arranged the next meeting, in Rome, where I made him the formal offer. His response, which I can still hear: ‘Cliveee, my English is not good.’ ‘Yes it is Pele,’ I said, ‘Better than my Portuguese.’ ‘No, no, he said, my English is not good...in Belgium I say $3 million for two years and now you say $2 million for three years.’”

Pele nevertheless took the lower amount and Cosmos’s fortunes were transformed.

“Our crowds went from around 10,000 immediately to 25,000+ and then 80,000+ as soon as we could move to Giants Stadium... sponsors were lining up at the door, TV begging for more, huge income from foreign tours,” says Toye.

By the time the Brazilian retired in 1977, he had been joined by Franz Beckenbauer and Carlos Alberto and the Cosmos was America’s greatest football franchise – something arguably true today, despite it not competing in the MLS.

Defraying Ronaldo’s costs
Three years ago, aged 33, Messi’s perennial rival for the title of ‘the greatest’ – Cristiano Ronaldo – swapped Real Madrid for Juventus in a €100million deal.

On the pitch he has helped continue Juventus's domestic hegemony – they have won the last two Scudettas, even if its record in cup competitions hasn’t improved (Juventus have reached the Champions League quarter finals and round of 16 in his two full seasons, having reached the quarter finals and final in preceding seasons).

But how has Ronaldo impacted Juventus's bottom line? Because Covid decimated the 2020 results, it is difficult to show a sustained trend. But we can contrast the figures from Ronaldo’s first season in Turin with the preceding one – where on pitch performance was consistent. Turnover increased by €83.7million, with big increases in commercial revenue.

These rises alone would roughly defray the costs (€25 million amortisation + €30 million wages) of signing a megastar like Ronaldo and give hope for a club looking to sign a Messi. But delve a bit deeper and the deal becomes less attractive. Juventus’s losses rose by 160 per cent to €26.9 million in 2019, while Real Madrid’s profit increased to €53.9 million without their talisman. Turnover, commercial and matchday income remained consistent at the Bernebau, while wages dropped 8.4 per cent to €394.2 million.

“It shows that even the footballer who is arguably the most marketable in the world can ‘only’ add €55 million in income for Italy's biggest club, and hence roughly defray the cost,” says Harris.

“And I specifically cite Ronaldo as more marketable than Messi because A) he's more of a ‘sell’ because of his looks and his vanity and his desire to market himself in a way Messi isn't; B) he knows that putting himself "out there" is necessary and flogs himself in a way Messi never has.”

The case against Messi
Could Messi ever defray his €127 million per year package?

“I think on the surface, the obvious answer is no,” says Omar Chaudhuri, chief intelligence officer of 21st Club, an intelligence and strategic advisory for football clubs.

“No football club upon signing a player or in any circumstances increases their revenue by that much in a single year. The only case is when a club gets promoted from The Championship. I suppose that's the one instance where you see that kind of revenue leap. So arguably Norwich or Nottingham Forest or Swansea could benefit the most.”

Nick Harris says that it is virtually impossible to enumerate Messi’s contribution to the Barca bottom line on a per season basis. But when you take his career at the Nou Camp as a whole a case for a nine-figure salary becomes apparent.

“It is extremely hard to quantify Messi's specific contribution to Barcelona's coffers but it is fairly easy to say he has been THE key figure at the club during its most significant and massive financial growth,” he says.

“If we go back to the 2006/07 season, the first season Messi scored league goals in double digits, and really started becoming the heartbeat of the club, Barca's revenues were €290 million. Without Covid, in 2019/20, that would have become €1 billion for the season.

“You might argue that his pivotal role in this incredible period did in fact warrant his big salaries overall. Whether you could defend more than €100 million per year since 2017 in the same way is harder to justify in hard commercial terms.”

Long term indicators
However, Chaudhuri says that a more holistic view should be made by suitors for Messi’s signature: “I think that would be an overly simplistic argument on the basis that football club will grow their revenues over a longer a period of time. And the revenue that you realise today is not necessarily a function of what had happened in the last 12 months, it'll be the assumption of what happened over a longer period of time.”

He cites the example of Manchester United, whose revenue commercial growth continued to be extremely high off the back of the unprecedented Alex Ferguson era, even as late as 2017 – four years after the Scot had left.

“Ultimately,” says Chaudhuri, “Commercial income is a lagging indicator of performance. If you perform well, then then the commercial income should follow.”

Intangible benefits
Perhaps, also, the benefits of signing football royalty are more intangible. In a wide-ranging discussion paper Jeff Jacobs, Pallav Jain, and Kushan Surana of management consultants McKinsey & Co argue that football sponsorship remains undeveloped compared to US sports and that most sponsors don’t fully understand how to gauge ROI.

Moreover, when it comes to long term brand attributes and indirect benefits, companies “often either neglect or overestimate these sources of revenue when calculating ROI.”

“Sponsorships have the potential to reach beyond short-term sales to build a brand’s identity,” argue the McKinsey authors. “Brand strength contributes 60 to 80 percent to overall sales, making this benefit critical for sustained, long-term sales growth.” Such deals “may also stimulate indirect sales.”

In the case of a Messi or Ronaldo, according to this hypothesis, they add to the value of a club as a brand and their stardust remains even if they have moved on. Sponsors buying into that brand will reap a ROI from that association not only at the time that the player is active, but long into the future. Who wouldn’t want to be sponsoring a club linked to one of the world’s greatest players?

Destination nowhere
If Messi does move on, where does he go? If €127 million per year is the asking price there are seemingly few destinations. Taking aside the improbability that he’d join such a club, non Champions League teams would potentially reap the biggest dividend if Messi elevated his new team into Europe’s elite tournament. But such teams with mega-rich owners are few and those that do exist, like Everton or Zenit St Petersburg, would be precluded by financial fair play rules.

“The reality is that most of the clubs who might hire him are already finishing in or around the top places in their domestic leagues and cups, and advancing fairly deep in Europe,” says Harris.

“The incremental extra bits would be just that, bits, relatively. Low millions, maybe at a push €10-20. Which leaves commercial revenue, and let's start by eliminating the red herring of millions of shirt sales. It doesn't happen, and the added revenue per shirt is buttons in the grand scheme of things.

“So it boils down to whether you can attract a huge sum - €100 million or more, per year - specifically because Messi is on the team, heading towards the wrong end of his 30s.

“This is grossly simplified, but the reality is: that's a tough ask. A huge risk for a sponsor, not least as Messi is not well known for wanting to take on too many promotional duties, even for some of Barcelona's major sponsors.”

A clear bond there
Toye says that the sort of effect Pele once had at Cosmos could not be replicated. “Could a club ever achieve the same, you ask,” he ponders.

“Well, I guess they would have to start not by signing the world's greatest player but in hiring the world's greatest general manager.”

Chaudhuri can’t see Messi playing for another club other than Barcelona, saying that the scale of the finances needed, the existing bond Messi has with Barcelona and the precipitous financial environment due to Covid are likely preclude other interest.

“He is pretty much synonymous with the club; there is a clear bond there,” he says. “You could argue that there's been a sort of friction around that bond in the last 12 months or so, but it's difficult to imagine him in any other shirt than Barcelona or Argentina.

“I think that he will remain, but that's also partly because I think the figures are just so astronomical… Clubs in the current circumstances with Covid would just really struggle to make that outlay unless they're already making it - as Barcelona are at the moment.”

[Chester Perry]

The Financial Times with a piece on the Glazer family and how two big investments in the last year have changed the fortunes of Manchester United and the Tampa Bay Buccaneers - my takeaway comes towards the end where a London based Hedge fund (who has a sizeable chunk of Man Utd stock talks up the rights sales of the Premier League especially expecting it to come from the likes of Amazon - I have to say that I am far from convinced on that one in the short term of the next cycle and possibly the one beyond that. The underlying theme of the Glazers are in it for the money should not be a surprise to anyone.

Glazers’ sporting success shows the benefits of writing big cheques
SAMUEL AGINI FEBRUARY 09, 2021

After 12 consecutive seasons without reaching the postseason playoffs, the owners of the Tampa Bay Buccaneers — the Glazer family — made a $50m gamble at the start of 2020 to turn their American football fortunes round.

Late on Sunday night, after an improbable season culminating with the 31-9 victory Buccaneers victory over the defending National Football League champion Kansas City Chiefs, co-owner Joel Glazer hoisted the Super Bowl trophy with a sense of vindication.

“My father had an expression: if you want to know the road ahead, ask the person who’s been there,” he said, gesturing to quarterback Tom Brady by his side. “We found that person.”

At the age of 43, Brady led the Buccaneers to victory in his first season with the team, collecting his seventh career championship in the process.

The comments provided a rare glimpse at the strategy of the Glazer family, perhaps better known globally for their ownership of Manchester United. In more than 25 years of sports ownership, they have kept a low profile and rarely speak about their ambitions for their investments.

Over the past year they have transformed their clubs’ performances by paying for top talent. Brady, a star whose prospects had been written off by most other teams due to his age, struck a two-year deal with the Buccaneers worth $50m. Across the Atlantic, the Glazers brought young Portuguese star Bruno Fernandes to Manchester United, with his performances on the pitch driving the English football team to second place in the Premier League table behind rivals Manchester City.

“They’re obviously committed, it’s just a question of why are they committed,” said John Tinker, research analyst for Gabelli & Co, of the Glazers and their sports investments. “Is it because they want to win, or because they want to build it up and sell it?”

Originally from the New York city of Rochester, patriarch Malcolm Glazer made his fortune by taking over the family watch-parts business from his immigrant parents, turning that wealth into a diversified portfolio of investments including stakes in motorcycle group Harley-Davidson and toy truck maker Tonka, among other public companies.

It was Malcolm Glazer’s children who convinced him to buy a sports franchise, according to a person close to the family, with the enormous potential returns from NFL ownership being a big appeal.

“It wasn’t sentimental at all,” this person said. When pursuing the Buccaneers, the family “saw it as a tremendous investment”.

A decade after the Buccaneers purchase, the Glazers followed up with the £790m leveraged buyout of Manchester United. The deal made the family unpopular with some United fans who criticised them for using debt to finance the deal. More than £1bn has been spent on interest payments, fees, dividends and other costs associated with the takeover.

Despite success on the pitch after the takeover, including five Premier League titles and victory in the Uefa Champions League, Europe’s biggest club tournament, the team has failed to recapture either trophy since the retirement of manager Sir Alex Ferguson in 2013.

The following year, Malcolm Glazer died, leaving to his six children a sports empire worth an estimated $5.8bn, according to Forbes estimates.

The business of sports franchise ownership has changed since Glazer bought the Buccaneers and is today considerably more competitive, particularly in the Premier League. The surge in media rights fees in Europe has put pressure on clubs to compete for league titles, requiring more outlays of Brady and Fernandes proportions.

The marketplace for those media rights has become more complicated, as has the broader media landscape, Tinker said, pointing to an evolving crisis in French football and private capital interest in Italy’s Serie A.

“If you look at the issues today, this business which was relatively predictable — people pay to watch sports teams — suddenly it’s all changed,” Tinker said.

The complexities of modern sports ownership have been matched by a sharp rise in franchise valuations. The Buccaneers are now worth $2.28bn according to Forbes, a tenfold increase from the Glazers’ initial investment of $192m in 1995 — then a record sum for a sports franchise for a team that had the worst record in American football.

At Manchester United, where some of the shares are publicly traded, the stock fell as low as $12.06 in March last year after Premier League fixtures were suspended because of the pandemic, sinking below the $14 pricing of its initial public offering in 2012. The shares have since rebounded to $16.33, valuing the company at $2.6bn.

The UK fund manager Lindsell Train, one of the two biggest shareholders outside the Glazer family, said in a letter to its clients in January that 2020 was unsurprisingly tough for the club. After the onset of the pandemic, United revenues fell to £509m in the 12 months to June 30, a decline of almost 19 per cent year on year, causing a net loss of £23.2m.

However, the firm is betting that the club will benefit as Amazon, which has already purchased rights to some Premier League games, and other digital streaming platforms spend more on content.

“We expect the digital technology platforms to push up the value of the sports broadcast rights, as they increasingly compete against each other,” Nick Train, Lindsell Train fund manager, wrote in the client letter. “And there is no doubt about the continuing global fascination for football.”

People close to the club say United’s debt does not prevent it from strengthening its playing squad, pointing to €200m of net expenditure on players in the past two years — including Fernandes, who has 21 goals and 16 assists in 37 league games since joining.

In the meantime, the Buccaneers’ Super Bowl victory has generated appreciation for the Glazers’ decision making, after the expensive bet on an ageing Brady paid off.

“They could have looked really, really, really silly hiring him,” said Tinker. “It was a big bet. No guts, no glory.”

[Chester Perry]

apparently Forest Green Rovers have had their plans for a Timber stadium approved by the EFL - this is a significant step, given the opposition to wood in stadium construction following the tragedy at Bradford City - yet as we are aware UEFA does not even like wooden seats

https://www.architectsjournal.co.uk/new ... 1612775924

[Chester Perry]

The salary cap in the EFL has been removed after it was found to be unlawful - this is significant

https://www.sportinglife.com/football/n ... two/189083

the PFA are happy though

https://www.thepfa.com/news/2021/2/9/pf ... -cap-rules

[Chester Perry]

A sorry tale from the Belgian first division in the Guardian. It seems everyman and his dog owns a Belgian club - 7 English teams included at the last count. There is a downside to all this international ownership at times and for fans (and players) of Mouscron it has been a very trying last few years, it is high time the game's authorities did much more

Ownership questions leave Belgian club Mouscron facing uncertain future
Small Pro League side Royal Excel Mouscron, which attracted powerful figures in football, is still under investigation

Ed Aarons Tue 9 Feb 2021 12.00 GMT

Last month Fabrice Olinga celebrated his first goal of the season to set up a surprise 2-0 victory over title-chasing Genk that lifted Royal Excel Mouscron off the bottom of the Belgian first division.

But Olinga, who once made history as La Liga’s youngest ever goalscorer in 2012 for Málaga, and the rest of those employed by Mouscron, face an uncertain future. Gérard Lopez, who took over in May 2020 to become the fourth person to take control of the club since Olinga joined in 2015 from Apollon Limassol in Cyprus, has been in the spotlight, having been forced out of ownership of Lille, the French Ligue 1 club just over the border.

Meanwhile Mouscron wait for developments into outstanding civil proceedings and an ongoing criminal investigation into its previous ownership. No individuals have been arrested or charged in connection with the investigation, although the recent history of this relatively small club, involving some of the most powerful figures in football, remains controversial in Belgium.

Last year Mouscron were forced to reapply for their professional licence for the fifth time in six years in May after complaints from the Belgian FA and two clubs concerning its previous ownership.

In August, five weeks after the club was taken over by Lopez, charges against the club – not individuals – were announced for alleged forgery of documents, use of false documents and fraud. The charges relate to the Belgian police’s investigation into how Mouscron won a licence to play in the top tier of Belgian football from 2015 to 2018.

Lopez told the Guardian last year: “All of this topic predates any of our involvement, as such the club will fully collaborate on all of these allegations.”

Mouscron was bought by the Israeli football “super agent” Pini Zahavi in 2015. A year later he sold it in response to a ruling from the Belgian FA which barred agents from owning clubs.

In October 2018, according to a statement released by the prosecutor’s office in Belgium, raids were carried out at “the offices of Mouscron football club, at the homes of the club’s management and two sports associations”. Belgian prosecutors also alleged that Zahavi had “masked” his continued involvement in Mouscron via a web of foreign companies, a claim he denies.

Zahavi told the Guardian he was not arrested or questioned either then or subsequently. “Although the Mouscron file has been thoroughly researched by competent authorities, no charge has been grounded against me, and I [have] never been interview[ed] by any [law enforcement] official in Belgium,” he said. He has consistently denied any continued involvement in Mouscron.

Zahavi sold Mouscron to a company based in Malta, Latimer International Ltd which lists his nephew, Adar Zahavi, as its main shareholder. Upon taking control of the club, Adar Zahavi appointed another well-known football agent, Marc Rautenberg, to the board. Six months later, the Swiss agent left Mouscron after Belgian clubs Oud-Heverlee Leuven, Westerlo and Sint-Truiden lodged a joint complaint suggesting his presence translated to continued agent involvement.

Italian FA documents seen by the Guardian show that Rautenberg acted as an intermediary while on the board of Mouscron, brokering Ante Rebic’s loan move from Fiorentina to Hellas Verona in January 2016, a practice that was banned by the Belgian FA in December 2015.

In March 2018 Mouscron changed hands again. Pairoj Piempongsant, a close friend of Zahavi who helped facilitate the takeover at Manchester City in 2008 bought the club through an Irish-based holding company, Bogo Ltd. His son, Phubate, was added to Mouscron’s board of directors.

In May 2020 a leaked transcript from Mouscron’s licence hearing at the Belgian court of arbitration for sport (BCAS) revealed a wire-tapped conversation between Rautenberg and Paul Allaerts, the chief executive of Mouscron, said to have taken place on 8 March 2018.

In the recording, Rautenberg can apparently be heard discussing a lunch date he says he had with “Pinion Pirotte” – a name spelled phonetically by investigators – where he claimed they agreed Rautenberg would send money to the club through “Pirotte’s” son, as to not establish a link between himself and Mouscron. In the recording Allaerts apparently approved, asking when the money would be coming through.

Allaerts told the Guardian that Piempongsant sought “advice” from Rautenberg on an “ad hoc” basis. When asked about the identity of “Pinion Pirotte,” Allaerts told the Guardian: “Pairoj Piempongsant, I guess.”

RTBF, the Belgian broadcaster, has reported that a payment of €2m found its way from Rautenberg to Bogo Ltd, the company held by Piempongsant and listed as the owner of Mouscron.

But having failed to establish a concrete link between “Pinion Pirotte” and Piempongsant, BCAS granted Mouscron its licence to play again this season – a crucial step ahead of Lopez’s takeover. The Belgian FA said it disagreed with the “principle” of the decision, while another club, Waasland-Beveren, launched an appeal against it in Belgium’s highest court.

Rautenberg, Adar Zahavi, Pairoj Piempongsant and Phubate Piempongsant did not respond to requests for comment.

In December, Lopez was ousted from Lille after the French club’s largest creditors, Elliott Management and JP Morgan, lost faith in the Spanish-Luxembourgish entrepreneur’s ability to meet the club’s spiralling debts. But Lopez remains the owner of Mouscron. “His interest in the Belgian league and his possibilities to hatch young players remains unchanged,” said the club president, Patrick Declerck, in a statement.

Twelve players have joined Mouscron from Lille on permanent deals or on loan since Lopez took over. The new Lille president, Olivier Létang, has distanced the French club from any sort of long-term association with Mouscron, saying “there is no legal relationship” with the club, only a contract that expires at the end of June. By then the future of Mouscron as a whole may be clearer too.

Additional reporting by Kale Stockwell

[GodIsADeeJay81]

https://theathletic.com/2377090/2021/02 ... ed-article

Have you read this about the Southampton takeover?
Potentially another leveraged deal

[Chester Perry]

https://theathletic.com/2377090/2021/02 ... ed-article

Have you read this about the Southampton takeover?
Potentially another leveraged deal

So much going on here it is the thread in microcosm - Geopolitics, Private Equity, Debt, Multi-club organisations, player trading/farming, future tv rights and the impact of Project Big Picture, European Super League, Sustainable financial management, it goes on

I have posted about DaGrosa a number of times, and of course did that caricature piece yesterday - he wants to pay bottom dollar that is for sure

For the Southampton owner, he wants out , there is no doubt, the focus within China has changed substantially but he wants to save face by coming out with a strong deal.

The MSD loan was always going to affect the sale price, it is easy to see why Southampton as a club are worth more than Burnley from an asset perspective, but a loan is not just the value of it, you have to service it too - it would be easy to say the £80m loan takes away £120m - £130m from the overall value of the club, the principal plus the servicing of interest through the loan's lifespan at net present value, more so when you understand that it was brought in mainly to supplement cashflow (I suspect the owner could not get money out of China) not to generate new income. It would be easier for all parties if the sale saw the debt cleared, something that Mike Ashley wants to do on the sale of Newcastle.

The difference between Southampton and Newcastle, and also Burnley actually, is that Southampton struggle to balance the books without player trading, there growth over the last decade or so has been on the back of selling players at a profit. Most informed observers will tell you that that particular side of footballer operations is going to take a long time to recover post the pandemic as the cost of financing operational deficits kick in, exacerbated by the high levels of current salaries (the desire to protect them is a significant factor for the players). All of this is further squeezed by the uncertainty of current tv revenues (rebates), future tv revenues (including fallout from the structural changes in both the Europe and and domestic game), commercial pressures in the last six months both Southampton's shirt sponsor and kit supplier have withdraws form the marketplace.

A leveraged buyout requires a stable cash generating business, Southampton can be this but is not there currently, the infrastructure is in place, the academy is still producing quality players, I just do not see this as the right time for such a take over at the club unless the price was particularly attractive - which is where the current stand-off sits. In the Premier League there are currently only 3 clubs where you see such a model working - and two have it in operation (Man United and Burnley), with Newcastle being the other, there is a distinct order of risk involved in that also which is why Newcastle hasn't yet happened.

[Chester Perry]

The headlines are dramatic, the the consequences could yet be even more so - change is a coming because of the greed of big clubs and UEFA's capitulation to them - there could yet be a sting in the tale for UEFA as FIFA will undoubtedly seek to muscle in on the revenues. For now I am somewhat surprised by reports that the leagues have not raised objections to the revised plans for UEFA club competitions post 2024 From the Mail

UEFA's money-grabbing plan to supersize Champions League by an extra 100 games 'goes unchallenged as NONE of the 55 countries raise objections despite the threat to domestic competitions and the fact the richest clubs will get even richer
- Proposals to increase group matches from six to 10 and expand clubs from 32 to 36 would lead to a competition with 225 games compared to 125 now
- The enlarged European competition would bleed domestic leagues of TV revenue according to sources spoken to by Sportsmail, widening the wealth gap
- Football Association received a presentation on the proposals on Monday
- Former FA chairman David Bernstein has warned of implications for the game
By CHARLIE WALKER FOR MAILONLINE

PUBLISHED: 07:35, 10 February 2021 | UPDATED: 09:01, 10 February 2021

'Supersizing' the UEFA Champions League by 100 games each season 'would make the richest clubs even more wealthy at the expense of the rest' and threaten domestic competitions, the Football Association has been warned.

The FA, along with another 54 associations across Europe, met with UEFA yesterday to consider plans to reform the competition, but reportedly none challenged the proposal despite far-reaching implicatons.

The proposal includes increasing the number of participating clubs from 32 to 36 and expanding the group phase from six matches to 10.

It is also suggested that clubs with a history of European success would have preferential access to three of the four new slots, with the final one awarded to clubs within the fifth ranked country, which is historically, France

The consequence of all this would be to increase the number of matches each year from 125 to 225 - an 80 per cent rise - in a so-called 'Swiss Model' in which clubs are seeded.

The aim is to make the £2billion Champions League larger and more lucrative, but according to sources spoken to by Sportsmail, the sheer scale of new competition would threaten domestic football.

UEFA, under the leadership of president Aleksander Ceferin, is currently engaged in a fast-track process to agree a new format to offset the risk of a rival European Super League gaining more ground.

Yesterday, the governing body met with the 55 member associations, and talks are ongoing with the European Clubs Association, European Leagues, players' and fans' groups.

A source involved in the consultation told Sportsmail: 'There is already a growing gap between the clubs that participate in the Champions League and those that do not.

'An even bigger Champions League means that more money will be distributed among those participating clubs.

'But the vast majority of clubs are playing at domestic level, so they will actually have access to less money.'

The fear is that broadcasters will pay a far bigger price for the enhanced Champions League, funding the larger competition and prize money, which will leave less revenue to pay for the TV rights of domestic competitions.

In other words, Champions League participants, which tend to be a similar group of clubs from the major leagues each season, could become even richer, and the other teams will see a fall in income meaning the competitive gap between the top and bottom of national leagues will widen.

In addition, the number of extra games would also call into question the future of domestic competitions, such as the Carabao Cup, it's claimed.

Football Supporters' Europe, a coalition of fan groups across the continent, said last week supporters 'care first and foremost about how… clubs fare in domestic leagues and cups'.

CHAMPIONS LEAGUE REFORMS
UEFA’s proposals to reform the Champions League includes increasing participation in the competition from 32 to 36 clubs from 2024.

The teams would be seeded in one division and drawn against each other in the group phase, using a system popular in chess called the ‘Swiss Model’, before proceeding to the knock-out rounds.

This would make match-ups more varied than in the current format and address concerns that the early stages have become stale.

UEFA wants the number of group phase games to increase from six at present to 10, which would increase the number of matches overall from 125 to 225, an 80% increase.

Football’s European governing body is responding to criticism of the current format and reacting to a threat from the continent’s biggest clubs to form a breakaway European Super League.

The super league plan, pushed by Real Madrid among others, would see a competition of 20 clubs, with 15 guaranteed participation based on their previous record in Europe.

The wealthiest clubs want to guarantee their participation in the most lucrative competition.

The expanded Champions League goes some way towards satisfying the big clubs need for more money and access.

The competition would command more revenue and it is proposed by UEFA that two of the additional four places be allocated using a coefficient, taking into account previous performance in European competition.

This would mean that if a Manchester United, Arsenal or Liverpool finished outside of the Champions League qualification places, but in a Europa League of Europa Conference League spot, they may still qualify at the expense of a team with a lesser record.

A third additional place would go to a club with the strongest record in European competition that wins a league with automatic qualification to Champions League.

And the final additional place would go to the country placed fifth in the UEFA rankings, which is usually France.

After it met on Friday, the European Leagues, a representative body of 30 competitions, including the Premier League, said it has 'strong concerns' about UEFA's proposals and highlighted the need to retain 'the sporting and financial balance of domestic leagues'.

European Leagues President Lars-Christer Olsson has warned the associations to look carefully at all the implications of the plans following their briefing from UEFA.

------------------------------------------------------------------------------
SUPER LEAGUE PLANS
Manchester United, Real Madrid and AC Milan are the driving forces behind the plans for a European Super League, to replace UEFA's Champions League, according to The Times.

An 18-page proposal includes details of the proposed league, which includes plans for the format, membership, prize money and even financial fair play rules.

The current proposal is for the league to have 15 permanent founder members, who would receive greater financial reward and five annual qualifiers.

The league would be divided into two groups of 10. The top four in each group would compete in quarter-finals, semi-finals and a final, which would be held at a weekend.

Participating teams would play between 18 and 23 matches a season, as well as competing in their domestic leagues.

It is believed the plan would be for six clubs to be included as founder members from England — this could be the Big Six of Liverpool, the two Manchester City and United, Chelsea, Arsenal and Tottenham Hotspur — plus three from Spain, three from Italy, two from Germany and one from France.

The venture is believed to have the support of investment bank JP Morgan Chase

The document highlights the benefits of the super league, including huge revenues for participating clubs as well as the ability to offset losses associated with Covid.

The privileged teams with 'founder member' status would be awarded up to £310m to join the competition and as much as £213m from competing in the partially closed league.
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'I hope more and more associations understand what is happening,' Olsson, a former UEFA chief executive, told The Associated Press.

However, the proposals 'were not challenged by a single association' at the meeting, according to sources spoken to by Sky.

Many of the relatively small footballing nations, which have little prospect of their clubs qualifying for the Champions League, may be tempted by an offer of an increased short-term revenue stream above the long-term implications.

The English Football Association has refused to comment on the subject, despite the possible implications of the proposed change.

But former FA chairman David Bernstein told Sportsmail: 'The financial disparities within the Premier League and between the top tier and the rest of the game are already great. The implications of a supersized Champions League are far reaching and need to be carefully considered, because it risks making these disparities even greater.

'Regular participation in a much larger and more lucrative Champions League will make the richest clubs even more wealthy, at the expense of the rest and the impact will be felt throughout the pyramid.

'The increased number of matches would put pressure on the domestic game increasing the pressure for a smaller Premier League, the Carabao Cup would be under threat and the FA Cup would be further devalued.

'And if the Champions League takes a greater share of broadcast revenue there will be less money available to the Premier League, undermining the competitive nature of the top tier, and increasing the financial pressure on clubs at every level.'

Speaking as a member of the high-powered consortium, Manifesto for Change group, Bernstein said the proposals and their potential impact underline the need for a single body to administer football in England.

'It has never been more important for English football to speak with one, unified voice,' added Bernstein.

'A regulator would provide leadership and a common position for all of English football in this debate, and it would help to mitigate the impact of whatever changes are agreed.'
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'Saving the Beautiful Game - Manifesto for Change' key recommendations
- Create a new regulatory body for football that is independent of the current structure of the game
- Decide on new ways of distributing funds to the wider game based on a funding formula and a fair levy payable by the Premier League
- Set up a new and comprehensive licensing system for the professional game
- Review causes of financial stress in the English Football League, including parachute payments and salary caps
- Implement governance reforms at the FA which are essential to ensure it is truly independent, diverse and representative of English football today
- Liaise with supporters' organisations
- Learn lessons from abroad and champion supporter involvement in the running of clubs

[Chester Perry]

An opinion piece at SportsProMedia looking at the implications of a potential European Super League on broadcast rights values for domestic leagues

Jamie Gardner | Closing off Europe would hit Premier League clubs where it hurts
With Europe’s top soccer clubs mulling the creation of a breakaway competition, Press Association’s chief sports reporter assesses the possible long-term impact on broadcast rights valuations.

By Jamie Gardner Posted: February 10 2021

Could resale value, rather than revenue, be the real attraction of a European super league to England's top soccer clubs?

Documents obtained by The Times in January outlined plans for a breakaway competition. While the joining fees and annual prize money quoted were eye-watering, for Premier League clubs there is potentially a lot to give up.

Fifa and the game's continental confederations are united in saying they will not recognise such a competition, and Uefa sources say there will be no scope for breakaway clubs to continue in their domestic leagues as hoped for in the super league proposals.

Currently Premier League clubs benefit from the direct link between performance in their own lucrative domestic competition and another - Uefa’s Champions League. So what might the upside be for a Premier League club?

One English top-flight source felt it may come down to club owners wanting to maximise the value of their asset. The source highlighted the value of Major League Soccer (MLS) franchises in the US, with Forbes listing four of them as worth over US$400 million (just over UK£290 million) in November 2019.

Driving those high valuations is the certainty that comes from operating within a 'closed' league - it certainly cannot be the television revenues on offer. The Premier League's deals dwarf those of MLS, yet Newcastle's Saudi takeover was understood to value the club at around UK£300 million (US$415 million).

So, might the 'closed' nature of the competition be what appeals to Manchester United's ownership, for instance? The Red Devils are, according to the words of one source, a 'torchbearer' for the project, though others closer to the club itself dispute that.

There are serious questions for all parties to consider here, as Alexios Dimitropoulos from Ampere Analysis told me. Firstly, what risk is there for the Premier League of clubs joining the breakaway competition and being barred from domestic action as a result?

"The Premier League might have grounds to defend itself for the rights cycle we are in now because it’s not ‘their fault’ [if clubs walk away],” he said. "But, as we saw with Covid-19, when the product is not the same as is promised, it definitely has implications. Broadcasters will definitely go back one way or the other for rebates and changes to the agreement, because it’s not what they signed for.

"Looking to the future, the value of the TV rights will plummet if they don’t have these teams, because the broadcasters won’t have any reason to bid. For future rights it would have a big impact.”

Another unnamed source predicted a 'downward spiral' for the Premier League even if teams were allowed to remain, because the super league would in effect make it a 'secondary' competition.

Uefa would lose out in a dramatic way, with Dimitropoulos saying the diminished Champions League's worth would likely be on a par with the current Europa League - a huge hit for the European governing body to take.

Fifa too would, he expects, suffer a hit to its television revenue if it followed through on its threat to bar super league players from its competitions, such as the World Cup. And super league clubs themselves face a gamble.

"They will have to be reimbursed for everything else they might lose out on," Dimitropoulos said, citing lost earnings from domestic television revenues, plus loss of ticketing and hospitality. "They could find themselves dropping from two or three matches a week to just one, and how would they cover that?”

Dimitropoulos envisages the current broadcasting big hitters would be interested in a super league, but how might a closed league go down with European audiences used to promotion, relegation and the underdog?

"We see that [closed] model work really well in the US, but it’s a totally different market, a totally different culture," he said. "We’re used to promotion and relegation, but this kind of model resembles a lot what EuroLeague is doing in basketball. It’s the same model as the NBA and the NFL is doing with much success, where the big, big audiences come in the playoffs.

"What you lose is the surprise you have when a team like Atalanta performs well; it will be very different from what European consumers are used to. There will also be a lot of rivalries that will disappear, for example Liverpool v Everton."

[Chester Perry]

Following the government inflicted termination of the 2019/20 season and the self-inflicted collapse of an over ambitions tv deal together with closed door games for the whole season the French Leagues have gone cap in hand to the French government - from goal.com

LFP requests 'emergency support plan' amid French football financial crisis

The collapse of Ligue 1's television deal has cast further doubt on the league's economic well-being
The Ligue de Football Professionnel (LFP) has requested a multi-million euro rescue package in order to ease the financial crisis caused by the coronavirus pandemic.

According to the governing body, the interruption and subsequent restrictions introduced to French football as a result of Covid-19 have led to a huge shortfall in income.

In a meeting held on Tuesday, the LFP resolved to meet with government representative to explore options on increasing financing and to put together an "emergency support plan".

What's been said?
"The LFP's Board of Directors met today to take stock of the financial situation of professional football for the 2020-21 season following the agreement made with Canal+ last Thursday on audiovisual rights," a statement from the LFP said.

"In terms of overall revenue, the income is €759.1 million instead of the €1,307.1 million budgeted by the clubs for the 2020-21 financial year.

"To date, losses already amount to more than €1bn (excluding transfer window impact) if we add the consequences of the matches behind closed doors."

The LFP in turn requested a meeting with France's Ministry of Economy, Finance and Recovery, and the Ministry of National Education, Youth and Sports, although it was adamant that it would not call on the state to cover lost television revenue.

What is behind the crisis?
Like most leagues in Europe and worldwide, Ligue 1 and the entire French football pyramid has been hugely affected by the coronavirus pandemic over the last 12 months.

The LFP took the decision not to resume the 2019-20 season after suspending activities last March, leaving most French clubs inactive until the beginning of the current campaign.

Once football did return, fans were barred from entry in a bid to avoid new infections, removing another income stream from hard-hit teams.

Article continues below
To compound matters, a lucrative television deal with Mediapro collapsed in December, leaving Ligue 1 without a domestic broadcast partner.

A stop-gap deal with Canal+ has since been signed until the end of 2020-21, but the league is forecast to lose 49 per cent of its television revenue for the season.

[Chester Perry]

As people start to consider just how the game can recover from the Pandemic - GameofthePeople.com has a strong view - if only it was so easy

Football fans should not have to pay for lost revenues
FEBRUARY 10, 2021NEIL FREDRIK JENSEN

SINCE the pandemic stopped normal life in its tracks, football has been bemoaning the loss of significant sums of matchday income that have pushed some clubs to the brink.

Eventually, fans will be allowed back in the stadiums and clubs will start generating cash from admission prices. Some clubs will have suffered more than others from the complete removal of a vital revenue stream – we may yet see a few go to the wall or at least tip into administration.

How will clubs cope if 2020-21 becomes a complete blank? In 2019-20, it was only a partial lockdown in terms of matchday income, there is a possibility that 2020-21 could see the loss of an entire campaign of home games. Non-league football, for example, is being decimated by a lack of cash coming through the turnstiles and that happens to be the prime source of cash for that level of the game.

The bigger the club, the less reliant they are on gate receipts – that’s the general rule. Clubs like Barcelona (18%), Real Madrid (14%), Bayern Munich (11%) and Manchester United (17%) have diverse revenue streams, but lower down the food chain, a club like Nottingham Forest (30%) or Bristol City (29%) need the money from ticket sales.

Most clubs have been fortunate in that the fans have not stormed the stadiums asking for their money back. In fact, the loyal audience that many clubs cherish have been most charitable, often raising money to keep their club afloat. The debt of gratitude that some clubs owe their fans is quite enormous.

But could those very people be the ones that carry the burden of recouping the monies lost over the past two seasons? The corporate world, in other words the major sponsors, are very unlikely to shoulder the responsibility of ensuring their favourite teams come through unscathed. Club owners are also going to try and limit the longer-term damage by recovering losses over the next few years. The alternative is lower wages and who is going to be first to bite that bullet once the all-clear sounds?

It could be that clubs will have to raise their season ticket prices in order to compensate for the pandemic. They are not alone, other industries started to increase their charges when the initial lockdown in the UK was lifted – you cannot blame small traders and businesses that reply on personal contact such as hairdressers.

It is less palatable when the football industry’s salary structure is so out of touch with reality. Of course, any club chairman or Chief Executive Officer will tell you that unless you pay for performance, you lose players and that’s partially true, but this problem is a universal one – no one country has not be touched by the pandemic. A collective effort led by governing bodies could solve the wage issue.

Will the fans pay higher prices? History tells us they will, because for many years – indeed decades – supporter discontent has never really manifested itself in the form of boycotts. In England, getting a season ticket at a top club is a test of endurance, wallet size and basica good luck. Therefore, nobody is very enthused to show their disapproval by staying away. The fans have been starved of their weekend and midweek rituals and they cannot wait to get back. However, that may have changed with the pandemic. Who will feel relaxed about being in a heaving crowd inside a football ground? It is not inconceivable that fans might have to be coaxed back, at least some of the more vulnerable groups of society.

The fans should not carry the burden because they have kept afloat the one area of income that has been the salvation of some clubs – the commercial department. Making football more expensive will be unfair and a little foolhardy. In reality, we do not know how clubs will react to their falling matchday income, but if they want to see their fanbases as partners and stakeholders, they must do the right thing and put them first in any discussions.

[Chester Perry]

Some people may see the headline and think that the Premier League/football/sport is quids in, it is far from that - Sportico looks at what changes may occur as non-Sports fan Jeff Bezos steps aside to have his place taken by a "sports-mad" Andy Jassy

INCOMING CEO ANDY JASSY COULD EXTEND AMAZON’S SPORTS REACH

BY JOHNWALLSTREET

February 9, 2021 5:55am

Last week, Amazon founder Jeff Bezos announced in a letter to employees that he will be stepping down as CEO at the end of the second quarter (he will transition into the role of executive chairman). Replacing him will be Andy Jassy, a long-time lieutenant who has run Amazon Web Services (the company’s cloud computing division) since its inception.

It has long been speculated—due to cord-cutting and the more than $40 billion in cash and marketable securities Amazon has on its balance sheet—that the company would become a serious challenger for live sports rights. But to date, Amazon has done little more than dabble in non-exclusive (see: TNF) and/or limited packages with little competition (think: EPL games on bank holidays). With a sports-minded chief executive set to take over, it’s reasonable to wonder if the e-commerce giant is finally on the precipice of acquiring a full slate of exclusive, elite, tier-one rights.

Our Take: Despite rumored interest in acquiring an NFL team, Bezos has never been known to be a big sports fan. By contrast, Jassy is a minority owner in the NHL’s Seattle Kraken and is said to be an “avid sports fan.” While it’s anything but certain the incoming CEO will be more aggressive on media rights acquisitions (Amazon declined to share details of his plans), Hedgeye global retail analyst Jeremy McLean says, “On the margin, it definitely makes sense” that they would be under his leadership. Jassy recently told NFL Commissioner Roger Goodell on a 1st and Future panel that he views sports as a tremendous platform for storytelling.

The toughest challenge Jassy will encounter should he wish to pursue exclusive, elite, tier-one rights is turning a positive ROI on the deal (forget the leagues’ reach concerns for a second). The packages are costly (think: billions of dollars) and remain difficult to monetize over-the-top. Remember, Amazon doesn’t operate as a traditional broadcaster. The company uses sports rights as a means of attracting Prime members.

None of the three analysts/consultants we spoke to felt Jassy would quickly shift gears on the exclusive tier-one rights front. Amazon has never confirmed that it’s video efforts to date have successfully helped the company acquire or retain Prime customers. McLean says, “It makes more sense to continue making smaller [less costly acquisitions] that can bring people into their ecosystem.” Once in the ecosystem, Amazon can begin to capture a share of the consumer’s wallet.

While McLean doesn’t envision Amazon involved in a bidding war for exclusive big four rights, he does believe Jassy could be the “change that amplifies Amazon’s involvement in sports” and predicts the company will increasingly use sports as a marketing vehicle moving forward (think: AWS Next-Gen Stats within games).

He also suggested the company could boost its sports sponsorship spend. “Regulatory action would be the biggest growth impediment [the company faces],” McLean said. “So, the more the company can connect with the general public and look like a good corporate citizen, rather than just a big tech company making a ton of money, [the better].” One of the ways Amazon may be able to “sports-wash” its image—and connect with the consumer on a more personal level–is to put its name on a sports venue (and associate the brand with the local team). It should be noted the company bought the naming rights to the hockey venue in Seattle as part of an effort to promote climate change awareness.

Sportico’s Eben Novy-Williams recently wrote that Amazon’s first-of-its-kind retail partnership with Tottenham represents a “new level of interest from [the company] in licensed sports merchandise.” While it’s possible –if not likely– the company will continue building out its sports licensing and distribution business under Jassy, McLean reminds that it’s not a particularly large opportunity for Amazon. “Even if they took 50% of [Fanatics’] business, it’s not going to be a big needle mover for them.” Fanatics did “just” $2.5 billion in revenue in 2019. Amazon reported $36.3 billion in 2019 EBITDA.

Amazon has been clear that the company’s goal is to maximize absolute long-term cash flow. Assuming that remains the focus under Jassy (as expected), it’s not unreasonable to suggest the e-commerce giant could also at some point look to take ownership in an upstart sports league. “There’s definitely some big potential money there,” McLean said. Of course, that doesn’t necessarily mean traditional sports. “The spot where they have a leg up is in esports.” Remember, the company owns the live streaming platform Twitch, he added, a company with a “huge following and [one that] drives huge engagement amongst viewers or consumers in the gaming world.”

[Chester Perry]

The salary cap in the EFL has been removed after it was found to be unlawful - this is significant

https://www.sportinglife.com/football/n ... two/189083

the PFA are happy though

https://www.thepfa.com/news/2021/2/9/pf ... -cap-rules

Nick de Marco QC who never loses when facing the EFL it seems, has written this for the Times about his latest victory - it has caused a bit of ire, more of that later - this is my free article for the week

Salary cap is incompatible with leagues that promote growth and investment

Nick De Marco, QC
Wednesday February 10 2021, 5.00pm, The Times

Early this week an eminent independent arbitration tribunal upheld the claim brought by the Professional Footballers’ Association (PFA), the players’ union, that the EFL had breached its legal obligations by introducing a salary cap in League One and League Two in August last year without the agreement of, or consultation with, the PFA.

The case is significant because, in the tradition of cases brought by other players asserting their rights such as George Eastham in 1963 and Jean-Marc Bosman in 1995, it has led to the EFL changing its rules, as it immediately scrapped the first salary cap in European football.

The EFL — like the Premier League, the FA and the PFA — is party to the Professional Football Negotiating and Consultative Committee (PFNCC), a collective bargaining agreement under trade union law. The PFNCC constitution requires that “no major changes to the regulations of the leagues affecting a player’s terms and conditions of employment shall take place without full discussion and agreement in the PFNCC”. When the EFL decided to introduce a salary cap, it refused to consult with, or obtain the agreement of, the PFNCC.

The salary cap is no more and the EFL’s prospects of bringing in another controversial cap in the Championship look unlikely. But everyone in football agrees that there needs to be a functioning system of financial controls to stop clubs that overspend becoming insolvent — as happened with Bury in 2019.

One of the problems with the salary cap was that it prevented clubs who could afford to pay higher salaries than others from doing so. A club with income five times that of another was forced to pay the same wages as the smaller club, limiting competition between clubs and driving players’ wages down to the minimum.

Such a cap is incompatible with the pyramid structure of English football, which encourages clubs to try to achieve promotion and then compete in higher leagues. It is incompatible with a transfer system in which clubs can buy and sell players at whatever price they choose. That is why most sports that operate successful salary caps, mainly in the United States, have closed leagues, without promotion and relegation, and do not operate a transfer system. US salary caps are also the product of collective bargaining with players’ unions.

Financial controls that limit the amount a club can spend compared with their income make more sense, but two major problems arise here too. First, the EFL’s rules in the Championship limit club owners from investing in clubs by treating such investment as debt. That acts to discourage investment in football when it is most needed, encourages clubs to seek loopholes and means far too many clubs breach the rules.

The second problem is the opposite one — the old salary cost management protocol rules in League One and Two, which limited spending on player wages to a percentage of turnover, did allow owners to invest but failed to put in place appropriate rules and procedures to prevent an owner from “turning off the tap” and allowing a club to go under.

The best outcome from the salary-cap case will be for all the football stakeholders, from clubs and the players’ union in each of the leagues, to engage in consultation to create new financial rules that encourage investment, secure the long-term future of clubs and can be fairly enforced. Such a process should be linked with a fairer distribution of football revenues throughout the leagues. The window of opportunity is open; the football industry and fans can only hope it is not closed by a rush to bring in new rules without proper thought or consultation.

•Nick De Marco, QC, along with Ravi Mehta of Blackstone Chambers (instructed by Mills & Reeve), represented the PFA in the salary-cap case.

[Chester Perry]

Josimar.com with another gobsmacking expose of FIFA and CAF

The pyramid scheme
10/02/2021

The twisted tale about how Caf lost a billion dollar deal – and why the cash-strapped organization wanted out of the deal, with Fifa’s blessing.

By Pål Ødegård


On the eve of 16 March 2017, an elated Ahmad Ahmad stepped into a luxury sports car along with an Egyptian businessman outside Hotel Hilton in Addis Ababa. They were heading off to an upscale brothel to celebrate the Malagasy’s election win over incumbent president Issa Hayatou from Cameroon just a few hours earlier in the congress hall of the African Union headquarters. Most of Ahmad’s supporters, including his campaign team and Fifa president Gianni Infantino’s closest advisor, Mattias Grafström, stayed at Hilton to celebrate.

The landslide election victory over Hayatou, who had ruled autocratically for more than 29 years, also radically changed the setup of important decision-making committees like Caf’s executive committee, and the confederation’s seats on the Fifa council as Hayatou loyalists lost their places to Ahmad’s closest supporters. As the crowd in Hotel Hilton’s lobby and bars were congratulating each other with words like ‘change’, ‘freedom’ and ‘new beginning’, many of them knew they would benefit personally from the “revolution”. None of them seemed concerned about Ahmad’s Egyptian companion. Just as they hadn’t asked many questions about Ahmad’s promise in his election manifesto that the media rights contract Caf had with the French marketing rights company Lagardère would have to be reviewed for possible renegotiation.

In the end this contract wasn’t only renegotiated, but completely terminated just three years later. For the French company, who were about to sell most of their portfolio in this sector to the American investment company HIG, it was a disaster. But as we shall see, it had perhaps even worse consequences for Caf itself, whose cash reserves were already hemorrhaging because of reckless spending and lack of financial control. So why were Caf along with Fifa, who intervened in order to ‘stabilize’ the confederation, so eager to terminate the billion dollar deal?

A happy marriage
Caf had traditionally been almost entirely dependent on grants from others, Fifa especially, for covering daily expenses. Income from marketing rights were meagre, while from broadcasting it was practically non-existent for decades as matches were aired for free on national, state-owned broadcasters. In the sixties, following Caf’s inception in 1957, hardly anyone on the African continent owned or had easy access to a television set. Only in the nineties did marketing and broadcasting rights become increasingly privatized, yet the income from this was still relatively moderate until the 21st century.

In 2011, the French media rights company Sportfive bought the rights for several editions of the Africa Cup of Nations (AFCON, or CAN for Coupe d’Afrique des Nations) and the Caf Champions League for 50 million US dollars. Sportfive divided the rights into regions, and sold them on to regional broadcasters such as Eurosport in Europe, the ART (Arab Radio and Television) network for North Africa and the Middle East, LC2 International and the South African mobile telephone operator MIT for sub-Saharan Africa.

This agreement was a success for both Caf and Sportfive. The former received substantially more income from selling these rights, while Sportfive consolidated their position as the leading sports rights holder on the continent. The company had made its first incursion into Africa in 1994 acquiring a marketing agreement for the AFCON for just 300,000 US dollars. The value of these rights rose over time, helped by increased demand and technological advances, not least in sub-Saharan Africa, where television sets now had become almost as ubiquitous as in the Western world.

This encouraged Caf and Sportfive to bolster their relationship, and go into longer, more extensive agreements. So in 2004, Caf made Sportfive an exclusive agent for both its marketing and broadcasting rights from 2009 until 2016. The value of the deal has never been disclosed, but is rumoured to have been in the region of 150 million US dollars. This included marketing and media rights for the Cup of Nations, Champions League, youth tournaments and Fifa’s Confederations Cup between 2008 and 2016. Sportfive’s conquest of Africa was near complete.

Built into the agreement was also an option for Sportfive to renew the agreement before it expired in 2016, which duly happened in 2015. Only now Sportfive wasn’t named Sportfive anymore. The company had first been acquired by HIG in 2009 before the Lagardère group bought it two years later, and renamed their new African branch Lagardère Sports and Entertainment Africa. It largely kept the team from Sportfive, as they had the experience, contacts and infrastructure set up already. And they kept the CEO, Idriss Akki, a Moroccan who had worked his way up within Sportfive since the early 2000s, and who had a large hand in its African hegemony.

A Billi
Lagardère had no straight option-to-buy clause in 2015, as the agreement was to be renegotiated. Neither did Caf open a tender, at least not officially. Among other offers received through informal channels were two serious ones, both in the range of approximately 500 million US dollars for an eight-year period of bundled marketing and media rights, including all important Caf competitions save for World Cup qualifiers. The Chinese Dalian Wanda-owned Infront was one, and was generally considered Lagardère’s strongest competitor. Although they asked for a shorter term of agreement than Lagardère, Infront couldn’t match Lagardère’s eventual offer, which was one billion US dollars minimum guarantee over a 12-year period.

“We have appreciated and are very satisfied with SPORTFIVE performance over the years. We are excited to expand this agreement for 12 additional years and to jointly continue to cooperate in the future to promote our sport. The contract which includes marketing and media rights of the CAF competitions is concluded until 2028 and coincides with the medium-term strategy of the CAF and the development of African football,” Hayatou told the press as the agreement was announced.

“We are very proud of the trust and confidence CAF has given us. We are delighted to continue our collaboration and to work closely with CAF in order to promote African football worldwide. We strongly believe that the African continent is a source of significant growth for our business activities in the coming years and this partnership renewal with CAF is a perfect example of this vision,” said Arnaud Lagardère, the CEO and owner of the Lagardère Group.

How could Lagardère offer one billion US dollars, almost twice as much as Infront? Much of the reason was beIN Sport, the Qatari-owned sports network operating under the umbrella of state-owned and government run news network Al-Jazeera, who contributed 400 million US dollars in exchange for the rights for Northern Africa and the Middle East (MENA nations). Of other main sub-licencees in the region, Supersport paid 130 million for the sub-Saharan rights, also over eight years from 2017.

It was an expensive undertaking by Lagardère, who had also acquired the commercial rights of several competitions organized by AFC, the Asian football confederation. The Lagardère group had traditionally focused on media and travel retail, and it was only when Arnaud Lagardère took over from his father Jean-Luc, who died in 2003, that the group aimed at becoming one of the leading actors within the sports rights world. Instead of putting in their own teams to run these sub-companies, the Lagardère Group simply inherited the directors from the acquired companies. In Sportfive Africa’s case this was the Moroccan Idriss Akki, who had worked at the company since 1990 and had become its managing director in 2011.

A source told Josimar that “Sportfive Africa is Idriss Akki and vice versa. Other senior staff were often left in the blue about possible agreements, he micro-managed everything.” The 61-year old had for a long time cultivated a close relationship with the former administration under Issa Hayatou. When Ahmad won the election, Akki had to establish a friendly relationship with the new Caf president. But he would quickly find out that Ahmad was unwilling to help against the new threat from Egypt.

The court ruling
Two months before the elections, the Egyptian Competition Authority (ECA) filed a complaint with the country’s public prosecutor against Caf, its president Issa Hayatou, and its secretary general Hicham el Amrani for having violated Egypt’s competition laws. More precisely, the ECA accused Caf of not following a proper tender process, and for ‘having abused its dominant position’. Caf retorted that its executive committee had followed correct procedures when they voted in favour of the offer. In a statement replying to the complaint, Caf added that it wished to point out “that the contract with Lagardère Sports does not contravene national or supranational legislation, as established by categorical legal opinions in this regard.”

In a press statement released in June 2017, the ECA indicated that its complaint had originally been made on behalf of Presentation Sports, an Egyptian media rights company which claimed that they had bid a higher amount for the rights than Lagardère Sports had. Presentation Sports’ CEO Amr Wahby also accused Lagardère of paying bribes to Caf officials in order to obtain the contract. According to sources involved in the agreement at the time, the offer came after Lagardère and Caf had announced the extension of the previous partnership. It only consisted of a single sheet of A4 sized paper, and gave absolutely no details about how the proposed agreement would function. Worse, the Egyptian company could only muster a bank guarantee of 50,000 US dollars. Caf understandably threw the ‘offer’ in the bin. But why did this Egyptian company bother to send an offer it couldn’t guarantee and at a stage when Caf had already signed its agreement with Lagardere?

Presentation Sports was initially an advertising company, and called just that, Presentation Advertising Company. And up until then they had nothing to do with broadcasting contracts, but offered services as promotion on billboards around football stadiums. It had such a contract with the Egyptian football federation from 2015, but it involved just billing for displaying the advertising of the federation’s sponsors. Their turnover was in this context insignificant. But this changed radically as the Egyptian steel magnate Abou Hashima bought a 51 % stake in the company in June 2016.

Just a few days previously he had also bought the big private news and sports network OnTV and OnSports from businessman Naguib Sawiris, one of Egypt’s richest men, and the elder brother of Aston Villa’s co-owner Nassef Sawiris. Presentation Sports then went on to conclude several sponsorship agreements with the Egyptian football federation (EFA), as well as with some of the biggest clubs in the country, like Al Ahly and Zamalek. And in September 2016, they announced they intended to buy the commercial rights of Caf competitions, in a direct challenge to Lagardère Sports’ hegemony. When this failed, they tried to purchase the rights for the MENA region from Lagardère, who, as we know, had already assigned this segment to beIN Sports.

In the end, the case was heard in Cairo’s economic court, who ruled in favour of the ECA, and declared the entire agreement invalid. The ECA had already issued a verdict the previous year against Issa Hayatou and Hicham El-Amrani, imposing a fine of 500 million EGP (Egyptian pounds), or approximately 30 million US dollars (!) on each of them. This was later reduced to 200 million EGP (12 million US dollars) by a decision in the Competition Commission of the Common Market for Eastern and Southern Africa (CCC), a commission of the African free trade organization COMESA, which also concluded that the agreement had violated their anti-trust regulations.

Lagardère appealed to the International Chamber of Commerce, but again lost out, as the international arbitrator concluded the agreement had been in breach of Egypt’s anti-trust laws, noting both the length of the contract as well as the lack of a public tender process. The contract stipulated that Swiss law would be the place to go for any dispute regarding the agreement, but as the violations affected the Egyptian market, the ECA argued, this clause had to be disregarded.

And that could have been that. Regardless of the lucrativeness of the agreement, Caf was forced to cancel it as it had violated Egyptian law. Sources have told Josimar that this law is considered dormant and is seldom applied. The ECA was set up in 2005 in order to attract investors to a best practice market. Until it chose to pick a fight with beIN Sports, Caf, and Lagardère, it had only been involved in a handful of prominent cases with global companies such as Uber and Apple (who received lenient fines and were able to continue doing business in Egypt), as well as a cartel of local pharmaceutical companies.

But hadn’t the ECA simply just done their job, ensuring fair competition and hence a cheaper, better product for their citizens? Or could their motivation have been based on something else? This is what the prominent local law firm Al-Tamimi & Co commented regarding the beIN/Caf/Lagardère cases:

“Arguments were raised about the actual nature of the practice; whether it was normal business practice, or an anti-competitive practice. The facts had shown that the choice of a broadcasting company in following a successful bid offer, which is a normal business practice is beyond the scope of the ECL and therefore beyond the scope of the ECA.

“Besides, the CAF has the right to market and obtain maximum returns in its broadcast agreements. Imposing a sign of broadcasting contract with some designated broadcasting companies, on the CAF, could be seen as an intervention by a public entity in its business, which may lead to negative effects on conducting business in the Egyptian market.”

“I am dying, Egypt, dying!”
From ‘Antony and Cleopatra’ by William Shakespeare

The protests in the Tahrir Square in downtown Cairo are probably the images that most people around the world will think of if you mention the Arab spring – perhaps with the exception of the Libyan dictator Muammar Ghaddafi being pulled out of a mud hole and subsequently executed without trial. The riots in Cairo, that included pitched battles in which supporters of president Hosni Mubarak charged on camel backs against the protesters, culminated with the removal of the general who had ruled Egypt with an iron fist since 1981. For the first time in its history, the largest Arab nation in the world by far held free elections. And when Mohamed Morsi was declared the winner, the country also got its first leader since its independence who wasn’t a member of the army council.

This, however, only lasted two years. Morsi had tried to incorporate the army leaders and its enormous security and intelligence network into his administration in order to appease the opposition. One of the decisions, in an attempt to create some sort of reconciliation between the factions, was to appoint Abdel Fattah Al-Sisi as head of security. But in June 2013, the army leaders and their followers staged a coup, killed 800 pro-Morsi protesters in the process, and sentenced the elected president to death. The death penalty was later overturned, but Morsi died in 2019 before his trial was concluded.

The so-called ‘stadium riot’ at a league match between Al Masry and Al Ahly at Port Saïd stadium on 1 February 2012 is considered by many to be the watershed moment when the tide of the Egyptian revolution was reversed and the counter-revolutionaries regained the momentum. Although it has been described by some as just another tragic stadium accident provoked by football tribalism and hooliganism, it carried all the trademarks of a well-planned massacre. The Al Ahly fans, many of whom had featured prominently during the 2011 protests in Tahrir Square, stood no chance. Hundreds of what were supposed to be Al Masry fans, but were in reality members of the security forces in disguise, armed with knives, clubs and iron rods, stormed the trapped supporters of Al-Ahly, who, according to surviving witnesses, found the gates welded shut where they tried to escape, leaving the desperate fans with no escape route.

Meanwhile, the police and guards made no attempt to intervene. 74 people were killed, while approximately 500 were injured. League football in the country was immediately halted, and didn’t resume until two years later. Matches are still played without fans in the stands, apart from a few recent exceptions before the Covid-19 pandemic gave another argument to not allow fans back in the stands.

“Al-Sisi is Mubarak on steroids”
Anonymous regime critic to Foreign Policy Magazine, 2019.

Yet, for Al-Sisi and the other generals, one thing was to seize power, and another was to govern a huge, divided nation with a booming, young population increasingly discontent with shortages of basics like water and, recently, potatoes. The extensive intelligence service, a state within a state since the coup by the Free Officers which toppled King Farouk in 1952, is now said by independent observers to be worse than ever, as arbitrary arrests without trials, torture, and, in some cases, extra-judicial executions have become more and more common. The newly established regime couldn’t arrest and intimidate everyone, however. They also had to win hearts and minds. And that was good news for Abou Hashima. He had first been on good terms with the Mubarak regime, and later on managed to establish good relations with the Morsi government.

Judging by their instagram accounts at the time, Abou Hashima and Cristiano Ronaldo look like soul mates. Both style-conscious, surrounded by luxury, as well as being fitness fanatics, it would be natural to think that they got along splendidly during their frequent meetings throughout 2016. Not only that: Cristiano Ronaldo’s sister, Katia, had a relatively long-running affair with the Egyptian magnate, and her Instagram posts see them together not only in Egypt on a yacht in the company of Cristiano Ronaldo himself, along with their mother. They also spent time together in the Balearic Island of Formentera, and in Madrid at Santiago Bernabéu while the Portuguese superstar played for ‘Los Blancos’. But their relationship also had a significant business-side. Abou Hashima had paid Cristiano Ronaldo for various promotional spots for his company Egyptian Steel.

The origins of Abou Hashima’s fortune are opaque. According to his own words in a video posted on his company Egyptian Steel’s home page, he started out working in a bank during his university years, earning 100 US dollars a month. “I figured I didn’t want to be an employee all my life, so that’s when I started building myself up in the metal business,” he says to the camera as he strolls around in his luxury villa. But Hashima is said to have ‘stolen’ the company from an associate, who later unsuccessfully tried to bring Hashima to court. By then, Hashima had already started to make friends in high places, and he became a national celebrity when he married the famous Lebanese pop singer Haifa Wehbe. The wedding held in Beirut was reported to have cost nine million US dollars. And although the love between them faded fast, Hashima’s fame didn’t. Instead he became Egypt’s most attractive bachelor. All those hours at the gym had paid off.

And all of a sudden, the playboy invested heavily in different sectors. Could he have received an offer he couldn’t refuse from the Egyptian regime?

During the Mubarak era, Ahmed Ezz, who had been a secretary of state under Mubarak, had a monopoly on Egypt’s steel industry. But after the 2011 revolution, he was stripped of his assets. These were mostly picked up by Abou Hashima. Having risen from obscurity during the Mubarak regime, he managed at some point to gain favour with the autocracy and get a firm foothold in the steel sector. As Mubarak was toppled, he inherited Ezz’s empire by courting the newly elected government led by Morsi.

He also managed to stay on the winning side of the counter-revolution, which earned him the moniker ‘the prince of all rulers’.

According to many independent observers, Hashima, along with other prominent businessmen, was told to follow strict orders from the government as to which companies to sell, buy and create in order to perform a ‘strategic restructuring’ of the Egyptian economy. In return, they would become richer.

In 2017, Hashima paid for three full days of advertising ‘The New Egypt’ as the world’s new global investment hub on Times Square’s iconic billboards during Al-Sisi’s visit to the UN General Assembly. Instead of being stripped of his assets like his predecessor in the steel industry, he had already been instructed to monopolise another: the media.

Propaganda Times
Egypt has hardly ever been a beacon of press freedom. But under Mubarak a journalist would normally only get in trouble if he or she reported badly on the military or on Mubarak’s health. But after Al-Sisi’s ascendancy to power, several global monitoring organizations have rung the alarm bells on what has developed since. Following the Rabaa massacre in 2013 (a protest in Cairo that was brutally suppressed, and the first sign of wide discontent with al-Sisi’s regime), three reporters from Al Jazeera were arrested for reporting ‘fake news’, and sentenced to a minimum of seven years in prison. Subsequently, more and more reports came out about journalists being silenced by threats, while those who didn’t take heed were fired, arrested or simply disappeared. A police station in downtown Cairo had been transformed into an interrogation centre. Journalists who were summoned to it didn’t dare to decline the invitation, as they feared reprisals for themselves and their families.

After Mubarak’s overthrow, several independent blogs and news sites popped up, fueled by the increased accessibility of social media. But then, as Al-Sisi served as minister of defence under Mohammed Morsi, a leaked video from an army council meeting had revealed him saying: “[the media] has been on our minds since the council’s first day. We’ve had a taste of that fire.”

He adds: “It takes a long time to realize that you have significant control over the media and can interfere with it. We are working on that, no doubt. We’ve been achieving better results. But what we aspire to accomplish, we haven’t yet.”

A characteristic of the Al-Sisi regime has been mass trials and, subsequently, sentences, where individuals with no or only peripheral association with the charges went down with the main suspects.

Shortly after Morsi was put out of the way, Abou Hashima started investing heavily in the media industry. Operating under the umbrella company Egyptian Media Group (EMG), he acquired half a dozen of the country’s main newspapers, most of the largest television network, including ONTV with its sports channel ONSports. In 2016, at about the same time he was courting Cristiano Ronaldo’s sister, EMG acquired a small company called Presentation Sports. Founded in 2010, they only had a small portfolio dealing exclusively in advertising until Hashima bought 51 % of the shares.

A year later, Abou Hashima sold his entire majority stake at EMG. The buyers? An equity firm called Eagle Capital, which is in effect controlled by Egypt’s notorious security services Mukhabarat – in other words: Al-Sisi’s regime.

Moreover, according to, among others, Al-Monitor and Reporters sans frontières, Abou Hashima was just one of several prominent businessmen who had received instructions from the government as to what they should do exactly in order for the regime to take total control of Egypt’s media landscape without causing too much of a stir.

“First they came for the journalists. We don’t know what happened after that”
Egypt’s remaining independent media were almost entirely scooped up, and almost overnight, the staff and editorial lines were neatly aligned with one that fitted the regime’s agenda.

Editors and journalists were fired in droves, if not arrested. A law ratified at the same time made it possible to sentence reporters for any ‘disinformation’. Editorial lines were dictated by the security services, who sent ready-made propaganda pieces to the news desks. In short, if you reported even the slightest thing the regime didn’t like, you’d be out of business at best. At worst, you faced detainment, torture and death.

Simultaneously, Egypt’s football scene also experienced radical changes. After having failed to qualify for the 2014 Fifa World Cup and the African Cup of Nations since the Port Saïd tragedy, suddenly huge investments were made both at club and national team level. For the club scene, it came in the form of the billionaire and then chairman of Saudi Arabia’s sports authority, Turki Al-Sheikh, who bought a stake in all the most popular clubs, including fierce Cairo rivals Zamalek and Al Ahly.

His prestige project, however, was that of the small club Al-Assiouty Sport, which had been founded as late as 2010. Rebranded Pyramids FC, it moved to Cairo, and was filled up with the best local stars along with five Brazilians. Al-Sheikh also set up his own TV channel where he invited football celebrities like John Terry and Ronaldinho Gaucho as pundits. We shall not dwell much on this chapter, but in short, Al-Sheikh was immensely unpopular among football fans in Egypt, especially with fans of Al Ahly. By 2019 he had had enough, and sold Pyramids FC to another sheikh, Salem Saeed Al-Shamsi, this time from the United Arab Emirates.

The timing of the investments from their richer Gulf neighbours and allies against the Qataris wasn’t lost on many observers as the blockade of the 2022 Fifa World Cup hosts reached its climax. UAE and Saudi Arabia had long provided substantial financial support to Egypt, but their loans, grants and investments sky-rocketed during the blockade of Qatar.

But despite the foreign investments of the last few years, Egyptian football is still in decline, and many blame al-Sisi’s regime.

The Moses of Football
The most controversial incident came when national football icon Mohamed Aboutrika was effectively sent into exile after his support for the victims of the Port Saïd massacre. The 42-year old former Al Ahly striker was officially charged for a tax offence, accused of owing 44,000 dollars in undeclared taxes. A revered figure in Egypt, Aboutrika saw the 3-year prison sentence as an attempt by the regime to silence him, and went into exile in Qatar, where he still is, waiting to return to his home country, which he had always refused to leave in his playing days, despite lucrative offers from big clubs in Europe. Aboutrika is also an ambassador for the 2022 Qatar World Cup.

Others, for the most part anonymously, have complained about the drastic drop in the quality of how Egyptian clubs are managed, as who gets to coach and play depends more on who you know rather than how good you are. Professional and skilled coaches have been unable to renew their coaching licenses, while untrained, well-connected upstarts have been handed the reins. The same happened with which players clubs signed, who got contract renewals, and who ended up in the starting line-ups.

In the midst of the decline was Presentation Sports, which sponsored most clubs while also controlling how the football was reported.

The Egyptian football federation was still led by Hany Abo Rida, a Fifa council member. He was mostly famous for accompanying the Qatari billionaire Mohammed Bin Hammam to the Caribbean as the latter bribed the Concacaf delegates present through the then Concacaf president and Fifa vice-president Jack Warner, most likely to gather votes to beat then incumbent Fifa president Sepp Blatter in the Fifa elections in 2011. Abo Rida has the dubious distinction of being the only surviving member of the Fifa executive committee that voted for Russia and Qatar as hosts of the 2018 and 2022 Fifa World Cups who have yet to be either banned by Fifa’s ethics committee or faced criminal charges since the voting in late 2010.

Like Abou Hashima, Abo Rida seems to possess excellent survival skills. Coming from Port Saïd, the city founded by Napoléon Bonaparte, which is reputed to be very regime-friendly, he has been a board member of the Egyptian federation since 1991 and of the Fifa Executive Committee (then Fifa Council) since 2009. His resumes usually mention that he has been a footballer himself. This is unlikely to be true, according to Josimar’s information, as in the period he was meant to have played, there was no league play in the country due to the Suez crisis. Rather, it was an old trick to become eligible for the EFA board in the first place, as an activity period at an associated club is a prerequisite.

As mentioned above, he already had links with Qatar through Bin Hammam, even if Qatar is not known to have the friendliest of relationships with the Egyptian regime. Abo Rida had to play along with the projects of the regime to an extent, but was also protected by his role within Fifa.

And as Ahmad ran for the Caf presidency, Abo Rida aimed to hold on to his place on the Fifa council, a position which could offer some protection in case the regime got tired of him. Two months after Ahmad had been crowned the new president, Fifa staged its annual congress in Manama, Bahrain, on 11 May 2017.

Behind the scenes
Seven days days ahead of the congress, most of the FA presidents who had supported Ahmad in his election were invited by the Egyptian FA for a luxury stay in Cairo before departure to Bahrain. And when it was time to attend the Fifa congress, the same officials were flown on private jets to Manama.

Rida’s three rivals; Leodegar Tenga from Tanzania, Samir Sobha from Mauritius, and Zelkifli Ngoufonja from Cameroon, were not among the invited. Ngoufonja also complained he was not allowed to present his platform in front of the executive committee before the vote, and that Caf had tried to put up several obstacles to discourage him from running. Come election day, Sobha and Tenga had pulled out of the race. Ngoufonja, now Abo Rida’s lone opponent, eventually lost out by 4 votes to 54.

Hany Abo Rida won, as did many others who had supported Ahmad and challenged Hayatou’s loyalists for similar spots on the Caf executive committee. In fact, the Egyptians had a special treat for those who had earlier conspired with the Ahmad camp to topple Hayatou as the head of Caf. A double-digit figure of association presidents had been flown in to Cairo and accommodated there just days ahead of the 17 March 2017 elections in Ethiopia. According to Josimar’s information, this was both to coordinate their strategy for the elections, and, some sources claimed, to receive ‘rewards’ for voting against Hayatou. Other officials who were not part of this group, including Issa Hayatou himself, arrived in Addis Ababa without being greeted by Juneidi Basha, then president of the Ethiopian football federation, as is customary. Basha was still in Cairo, and only arrived back less than twenty-four hours ahead of the assembly.

The days before the Caf elections were eventful, at least behind the scenes. Fifa’s independent committees received a torrent of accusations from both camps, but couldn’t do much about them before the election, as there was no time for hearings and fact-checking. While the sitting Caf administration accused Ahmad and his campaign team of conspiring against them using cash, gifts and attractive positions within Caf as incentives, Hayatou himself was accused of using bullying tactics against his electorate. But perhaps the most interesting complaint to enter a Fifa inbox was an email from the ECA to Fifa’s Governance Committee, which is responsible for performing eligibility and integrity checks on candidates for important Fifa committees such as the Fifa council, which includes the president of each confederation by default. Again, with just four days to go, there was little the governance committee could do before the elections.

But as Josimar has learned, they found it peculiar that the ECA should ask for Issa Hayatou to be barred from the election. Had the governance committee had time to dig a little deeper, they might have come across reports by the independent Arab news site Al-Monitor, which claims that almost all the members of the ECA board were also employees or shareholders of the media companies that the regime now controlled.

The “velvet” revolution
Josimar, who was present in Addis Ababa in the days leading to the Caf election, talked to several officials present who revealed that Egyptian intelligence personnel were “working the lobby” offering red velvet pouches with ‘nice things’. According to our sources, the pouches included several thousand US dollars in cash, as well as luxury gold watches. One official told Josimar:

“I was approached by two men in blazers. They were Egyptians, and said they belonged to the delegation from the Egyptian football federation, but they certainly weren’t members of EFA. They said it was a small gift from EFA. They didn’t tell me to vote for one or the other, but everyone knew what it meant; you were expected to vote for Ahmad. I declined the pouch, I knew what it was, and I have no need for it. But I also know that many accepted them”.

Another official, who also insisted that he had refused the pouch he was offered, told Josimar that the Egyptians had funded the accommodation for all the Ahmad supporters who were staying at Hotel Hilton. Caf’s congress organizers had booked rooms for the officials at Hotel Sheraton and the Radisson near the congress hall, but the Ahmad loyalists chose to stay at the Hilton instead.

And after the election, in an interview to the Egyptian media channel OnTV, now owned by Abou Hashima, Abo Rida expressed his gratitude to the Egyptian government for their support: “Without them, it would not have been possible for Ahmad to win.” Ahmad also expressed his gratitude: “I’d like to thank Egypt and all the Egyptians who supported me, because that gave me strong push when I first launched my campaign,” and continued “Egypt is one of the biggest countries in the continent, it would have been very hard to lose the election having big countries supporting me.”

The Malagasy stated that he never doubted getting Egypt’s vote despite the secret voting scheme, and revealed that Egyptian Football Association (EFA) President Hany Abo Rida played a crucial role in his election. “I have a great relationship with him,” he concluded to OnTV.

The honey trap
According to Josimar’s sources, some of whom worked at Caf at the time, Ahmad’s affection for the Egyptians wasn’t unconditional. “For those who had paid attention, it was a no-brainer that Abo Rida would vote for Ahmad and not Hayatou after the complaint from Presentation Sports and the ECA about the contract with Lagardère”, one of our sources said. “Ahmad himself had no interest in this agreement, despite having been part of the executive committee that had unanimously ratified it. The Egyptians – and by that we mean the Egyptian regime – also had an incentive to remove Hayatou after the ECA declared war on him and secretary general Hicham El Amrani. Hayatou had threatened to move the Caf headquarters from Cairo, where it had been since the founding of Caf, to Morocco.

So when the Egyptians saw that Ahmad had Infantino’s backing, and hence gathered support among other member associations, they invited all of them to Cairo before the election. Ahmad was accommodated in a suite, got girls sent to his room, while all the action was recorded by hidden cameras. Ahmad was honey-trapped! Shortly after, the Moroccans did the same, lured him with nice girls and cars.”

Six months after the elections, Caf gathered again in Morocco for various committee meetings, including the new executive committee, plus a symposium meant to brainstorm reforms that no one had dared to air while Hayatou was in power. Among the topics was the contract with Lagardère Sports, just as Ahmad had promised in his manifesto. But when Josimar sat down with Lagardère Sports Africa CEO Idriss Akki in Rabat, he assured there was no risk of any annulment of the contract, simply an amendment ratified by the executive committee the same day as the Africa Cup of Nations had been expanded from 16 to 24 teams, which naturally meant adjusting the contract accordingly. Next to Akki sat his young assistant Amr Fahmy. The Egyptian was the son of former Caf secretary general Mustafa Fahmy, whose father Mourad also had served in the same position. Now it was Amr’s turn, and working for Lagardère was just a grooming for the eventual secretary general job at Caf, which he duly got a month later.

Fahmy, who was an avid Al Ahly fan, would later be sacked on Ahmad’s orders for leaking documents that eventually led to the Malagasy’s ban by Fifa’s ethics committee, while also instigating an investigation by the French anti-corruption police (Ahmad was apprehended by French police during the Fifa congress in Paris in June 2019, but released without charges. According to Josimar’s information, the investigation is still active.) It took one year from the moment when Fahmy filed his complaint to Fifa’s ethics committee in March 2019 until its chairwoman Maria Claudia Rojas opened a formal investigation, which resulted in a 5-year ban of Ahmad from all football activities. Fahmy passed away in March last year after a battle with cancer, just 36 years old.

“My father might be smarter than I am, but I’m braver than him. I have nothing to lose”
Amr Famhy to Josimar the day he was fired from Caf by Ahmad

Before long, Fifa’s secretary general Fatma Samoura was in Cairo on a more permanent basis, as Ahmad allegedly called upon Fifa for help, and persuaded the Caf Executive Committee to allow Fifa to intervene, an unprecedented move by what is supposed to be an independent body (MAs are members of Fifa, and therefore subject to Fifa statutes, but confederations are not). The six-month mandate which started 1st of June 2019 was ended 1st of February last year, as the same ExCo this time rejected a prolongation of the intervention. With Samoura acting as de facto Caf president, the ExCo ratified the termination of their contract with Lagardère Sports Africa in October 2019.

During Fatma Samoura’s stint, she was accompanied in Cairo by Mario Galavotti, an Italian lawyer hired by Infantino who became director of Fifa’s independent committees – a position that until then had not existed, and which critics say undermine the independence of the so-called independent committees. According to Josimar’s sources, Galavotti orchestrated the termination on behalf of Caf.

This created a headache for those who had bought the rights from Lagardère. Caf told its partners that all rights fees should be paid directly to their accounts. Lagardère on their hand told broadcasters and sponsors to continue to make payments directly to the agency, as had been the case throughout the lifetime of the contract. One rights-holding broadcaster told the industry magazine SportBusiness Media: “We have Caf saying they’ve terminated the agreement with Lagardère and we must deal with them. Lagardère tells us that termination is not valid, and we must deal with them. We’re the ham in the sandwich. We’re in the crossfire. It really is chaos.”

Supersport, the largest rights holder in sub-Saharan Africa, chose to stop broadcasting matches altogether, and hence abandoned an agreement they had paid 130 million US dollars for, and which was supposed to run until 2024.

Fifa’s intervention also saw them hire the global auditing company PriceWaterhouseCooper to go through Caf’s finances and administrative mechanisms, and their conclusion – listed in a report that Fifa leaked to the media – was damning. Caf haemorrhaged money as there was no due diligence on spending. Strangely, the PwC report’s entry regarding the contract with Lagardère never made any arguments to uphold or renegotiate it, despite the obvious financial difficulties this put Caf in. Instead, the report hinted that the extended duration of the agreement meant Caf might have undervalued their rights.

“The length of the agreement (12 years period from 2016 to 2028) make (sic) the assessment of the value of this deal quite complex, if not impossible as TV audiences and media interest fluctuates from tournament to tournament, with uncertainty in the future. The assessment of the minimum assured value requires reasonable estimation of the value of Caf’s properties (AFCON, CHAN, etc) in the forthcoming years and typically such estimation cannot be reasonable performed for a period beyond 3-4 years, especially due to the growing popularity of Caf competitions,” PwC wrote in point 18 of their audit summary.

The price of geopolitics
But experts in sports broadcasting Josimar have talked to were of a different opinion. They claim that, although the length of the agreement was unusually long, its scope was limited, and the same went for the projected rise in value. “There are no indications that the value of competitions such as AFCON will rise at the same rate as in Europe where especially the English Premier League and Uefa Champions League have seen their value increase astronomically.

The World Cup qualifiers weren’t part of the agreement, and the only competition to have some interest outside Africa is the AFCON, but even that is quite limited. Also, the length of 12 years is quite long, but eight years has not been uncommon in similar agreements elsewhere, and it made sense for Caf to have a long-term agreement for economic and political stability”, one told Josimar, who added “it’s obvious that ECA wasn’t really motivated to protect local markets from monopolistic practises, but rather to upset beIN Sports.”

The Qatari sports network had already been fined by the ECA twice in January 2017; one for ‘using exploitative practices against subscribers, who had to buy a bundled product’, and the other for obliging them to use the Qatari satellite Souhail instead of Egypt’s own NileSat, making the latter lose income. These verdicts came at the peak of the Gulf crisis, and appears to have been part of a coordinated effort from the triple alliance between UAE, Saudi Arabia and Egypt. Saudi Arabia also fined beIN Sports on similar pretexts a few months earlier, while the UAE followed up in June 2017 by banning beIN Sports altogether, and fined anyone who sold their cards or receivers. This also has to be seen in the context of the rogue beoutQ, a channel that pirated beIN Sports broadcasts over a Saudi state-run transmitter, clearly as a part of their larger embargo against Qatar.

The ECA also took on Fifa itself about beIN Sports, who had the exclusive broadcasting rights for the 2018 Fifa World Cup in Russia in the MENA countries, demanding that at least 22 matches would be aired free on a national broadcaster. Here as well, the ECA called on the help of COMESA to add pressure, even though Egypt, Tunisia and Libya were the only MENA nations in the 21-member trade organization. In the end, beIN Sports saved Fifa the headache, and offered the matches aired for free on NileSat.

Whose lawyers?
During 2017 and 2018, Ahmad and the Caf exco seemed to be in the same boat as Lagardère in the legal disputes with the ECA and the Egyptian prosecutor, as minutes of ExCo meetings and email correspondence seen by Josimar show. A senior Caf official also told the Kenyan football news site SokaEast24 that “When we came to office we sought the advice of top lawyers to see if the CAF/Lagardère deal could be either quashed or reduced but the outcome of their intensive investigations was that the deal was watertight, done by brilliant lawyers appointed by Largadere with no loopholes at all. Therefore it cannot be breached in any way. At CAF we have decided we will honour the deal but we will discuss improvement because of the new development as we will now have a 24-team Afcon instead of the 16 teams when the deal was signed meaning more money should be pumped in to cover for the deficit.”

After all, the contract had stipulated that, should any part of the agreement become unenforceable for legal reasons, the remaining provisions would still hold effect. In other words, there was nothing stopping Caf and Lagardère to amend the existing agreement to comply with Egyptian law. Minutes from Caf ExCo meetings in 2018 show that Ahmad and the rest of the committee seemed committed to make it work. Back in November 2017, COMESA had sent a delegation to the Caf headquarters in Cairo, where they, according to the minutes of the executive meeting which took place in Rabat the same month, had received criticism from the Caf president for tarnishing Caf’s image. Ahmad expressed his intention to use the African Union to make COMESA back down from pressuring to end the Lagardère agreement. After all, Egypt is very dominant among the COMESA nations. Yet, the same minutes also mention a meeting between Caf and Lagardère in Paris the previous month, whose purpose was to coordinate their efforts in defending the contract against the demands from ECA and COMESA.

“According to Lagardère’s advice, Caf lawyers in these litigations appear more like lawyers of the Egyptian authorities than those of the Caf”, read one line, which added that the French company asked for another meeting, but without the lawyers present. The minutes further read that Caf had no intention to break the contract altogether, just to amend it, and that ECA and COMESA had no legal basis to break it. The minutes also mention that Constant Omari, the Congolese administrator who is the current 1st vice president of CAF, and who attended meetings with Lagardère, together with Moroccan FA President and Caf ExCo member Fouzi Lekjaa and Abo Rida, complained that it indeed seemed as if Caf’s lawyers appeared to represent the ECA rather than Caf when dealing with the Lagardère issue, and that one of Caf’s lawyers even had worked on ECA’s board in the past.

«We very much regret this decision»
Minutes show Ahmad himself seldom raised a voice on the topic during ExCo meetings. But Josimar got hold of an email dated 19 March 2017, which was sent by the Malagasy to the president of the Asian football confederation (AFC) Sheik Salman Bin Ibrahim Al Khalifa, the man who’d lost his own presidential race against Gianni Infantino at Fifa in 2016. Ahmad addresses Sheik Salman as Caf president, despite him not having taken office by the date stated on the letter. Could it have been a typo? The email appears authentic, and was obtained together with other documents which have been proved to be genuine. Yet, when Josimar asked Sheik Salman if he had read it, and if so, answered the letter, a spokesperson said the AFC president “had no recollection of such correspondence.” In the letter, Ahmad praises Lagardère’s professionalism, and it comes across as a sales pitch towards his Asian counterpart. Ironically, AFC had a substantial agreement with Lagardère running, something Ahmad doesn’t seem to be aware of in the letter

(AFC did not renew their deal with the French rights company, now owned by HIG, and opted for an eight-year deal with Chinese DDMC and Fortis for a total of eight billion US dollars instead.)

Strategic meetings and amicable correspondence between Caf and Lagardère continued throughout 2018 and early 2019, but the tone changed abruptly at the end of 2019, as Fifa’s intervention task force headed by Fatma Samoura arrived to supervise operations at the confederation. After Caf told Lagardère that they terminated the entire agreement on 5 November 2019, the French company desperately begged to defend their position at a Caf ExCo meeting on the 19th of the same month. After all, the announcement meant that the company’s share price had fallen by 5,68 % in a single day. Lagardère’s Ugo Valensi wrote the following to Caf in a letter dated November 19:

“Dear President, Following today’s telephone conversation with the CAF Secretary General, Mr. Mouad Hajji, we take note of your refusal to allow Lagardère Sports’ representatives to be heard by the CAF Executive Committee at its next meeting of 21 November 2019, as kindly requested in our letter of 15 November to which you have not seen fit to respond. We very much regret this decision. Indeed, we continue to consider that such a hearing before the CAF Executive Committee would be the forum for a constructive and unfiltered dialogue and, as indicated in our letter mentioned above, would make sure that the CAF Executive Committee’s members have complete and clear information before making a conscious decision about the future of CAF’s relationship with Lagardère Sports, within the framework of the position to be taken by the Executive Committee on the disputed decision of CAF’s Emergency Committee to terminate our contract dated 28 September 2016.”

The petition was denied by Ahmad the same day, and while most observers expected some sort of amendment or out-of-court settlement, Caf, under its Fifa administration, never budged. One can only conclude that Infantino’s envoy Mario Galavotti saw no option to salvage the agreement in any way, or, alternatively, imagined that a better agreement could be made for Caf by offering the rights again in an open tender. According to Josimar’s sources, Arnaud Lagardère met up with Emmanuel Macron, the president of France, to complain. And when, on 5 October 2020, Gianni Infantino, who never declines a rendez-vous with a head of state, visited Paris to discuss the opening of a Fifa office in the French capital in January 2021, he met Macron. To Josimar’s knowledge, one of the main topics was the annulment of the Lagardère contract, something Macron expressed his displeasure with.

The lost golden ticket
Can Caf find a replacement for Lagardère?
Could they land an agreement with Infront, the rights company which was acquired by the Chinese investment group Dalian Wanda in 2015? Some of Lagardère’s employees have since been hired by Infront, which is led by Philippe Blatter, a nephew of former Fifa president Sepp Blatter. Although Infantino and Sepp Blatter aren’t on good terms, the current Fifa president has long been courting Chinese investment plans, as shown in his so far unsuccessful attempt to create a global club tournament. Meanwhile, the Chinese leadership is investing heavily in Africa in sectors like infrastructure, but has lately also focused on sports, investing in dozens of stadium projects all across Africa, from Ghana to Zanzibar, to the extent that political analysts now speak of the Chinese ‘Stadium Diplomacy’, for example. But according to Josimar’s information, interest in Caf’s broadcasting rights has since been lukewarm, not least because of the manner in which Lagardère lost their agreement. Yet, Lagardère SE itself, now controlled by HIG, and again under the name Sportfive Africa, is rumoured to have made a new offer. The man they have chosen to accomplish this is Idriss Akki.

In Egypt, the regime has also shown signs of tiring with trying to project their image through football. The 2019 AFCON, which Egypt hosted after the original host Cameroon was stripped of the hosting rights as they failed to complete the construction of stadiums for the event in time (in the Caf ExCo vote held to determine who should replace Cameroon, Egypt beat South Africa by 16 votes to one). After first crashing out in the group stage in the 2018 Fifa World Cup, they – the competition’s favourites – exited their own tournament in the second round after a 0-1 loss to South Africa, making the propaganda show turn into a PR disaster for the regime. Abo Rida and the entire EFA board resigned in name, but were in reality fired. Rida kept his place on the Fifa council, however, and snuck silently back into the EFA presidential role as soon as the disappointment had died down.

Fifa themselves have now turned their back on Ahmad, as Fifa’s ethics committee banned the Malagasy for 5 years, while hinting at further investigations. The verdict on 23 November last year, came over a year and a half after former secretary general Amr Fahmy filed his complaint and at a strategic time as Ahmad had announced he intended to run for re-election.

This time, Gianni Infantino is hoping he has chosen a candidate that at least will be more discreet when sticking his hand in the honey jar. Whoever of the four candidates who aim to replace Ahmad as Caf president wins will have a mountain to climb to regain the financial stability left by Issa Hayatou and find a rights buyer that can promise the same amount or more than Lagardère did. Presentation Sports have yet to announce any intention of bidding. BeIN Sports are likely to bid again now that the blockade by their Gulf rivals has ended. So are several others, as Infront. But with the corona pandemic also affecting the value of the rights, no one believes Caf are able to obtain anything near their now lost golden ticket of one billion dollars.

[Chester Perry]

It seems the EFL managed to borrow money from the Bank of England after all, judging by the sum it was for their own operations and not that of it's members

https://twitter.com/KieranMaguire/statu ... 1079777281

could it be that the BoE did not think the clubs could be trusted to used the monies for the purposes intended - - it is entirely possible that the scenario is completely different, but one cannot help wondering

EDIT that sum from the BoE is in line with expectations of this article in the Financial times from 3 weeks back

https://outline.com/8dP5Hx

we still are to hear whether the EFL have been successful in sourcing funds from the private sector - they will have had to do this because the loans from the Premier League were on such stringent qualifying conditions that very few if any Championship clubs would qualify - which is more or less how the Premier League designed and desired it to be.

[Chester Perry]

KPMG's Football Benchmark have analysed the transfer market activity over the last year and come to the conclusion things are difficult, and they were prior to Covid, the pandemic has just underlined the fact that there is a new reality at play

https://footballbenchmark.com/library/p ... h_covid_19

[Chester Perry]

Still on the subject of transfers, I am not really a fan of net transfer spend measures because they hide all kinds of anomalies, and as we know with Liverpool and Coutinho the numbers only become applicable when the cash has actually been received and not booked into the accounts to create false numbers The same applies to player swap deals at hugely convenient price points that help balance the financial reporting but do nothing to the cash holding.

Here CIES Football Observatory look at the spending over the last 10 windows from the perspective of Europe's big 5 Leagues and determines that Burnley's net spend is pretty darn close to Real Madrid's (who sit just above them in the net spend table - now there is a story that could be subject to a lot of spin

https://football-observatory.com/IMG/si ... /wp324/en/

[Chester Perry]

Simon Chadwick has been underling the changing position in China and how it faces out to the world in his tweets over the last few days

first up - China looks out and likes football, then changes focus as economic clouds loom at home

https://twitter.com/Prof_Chadwick/statu ... 3017775105

Sport and the Premier League are desperate in their desire to access the Chinese market though

https://twitter.com/Prof_Chadwick/statu ... 4356447235

unfortunately for British sport our government has drastically changed it's view of the Chinese for reason sound and not so sound, this is being felt in revenues and is likely to get worse

https://twitter.com/Prof_Chadwick/statu ... 4356447235

Chadwick links a particularly downbeat article in the Financial Times at the end of that thread - I have transcribed it

Why the Anglosphere sees eye to eye on China
GIDEON RACHMAN FEBRUARY 08, 2021

As a general rule, it is a good idea to be wary of people who bang on about the “Anglosphere”. In Britain, it is an idea that has a strong whiff of imperial and second world war nostalgia about it. The notion harks back to Winston Churchill, who wrote a four-volume History of the English-speaking Peoples.

Now, however, the idea of an Anglosphere is taking on an unexpected contemporary relevance. The trigger is the increasingly assertive behaviour of China, which is bringing together a group of English-speaking countries, all of whom have adopted more confrontational policies towards Beijing.

The Trump administration started a trade war with China and ramped up naval operations in the Pacific. A willingness to confront Beijing is clearly going to persist, in modified form, during Joe Biden’s administration. The new US president has promised “extreme competition” with China. The first phone call between Antony Blinken, US secretary of state and Yang Jiechi, his Chinese counterpart, was spiky.

However, some of America’s European allies are very wary of what they fear will be a new cold war with China. The EU shocked Biden’s team by signing a new investment deal with Beijing — ignoring pleas for consultation with the US. Angela Merkel, the German chancellor, went out of her way in a recent speech to warn against anti-China sentiment dividing the world into blocs. Emmanuel Macron, France’s president, has made similar statements.

By contrast, the US is getting more support from the UK, Australia and Canada. These nations have all seen their relations with Beijing deteriorate sharply over the past couple of years. As a result, they are more inclined to take the American view that a rising China is a threat that must be countered.

Australian hawkishness is partly a product of the close links between the security establishments of Washington and Canberra. But it is also a result of China’s imposition of trade sanctions in response to 14 Australian “sins”, identified by China, which included Canberra calling for an international inquiry into the origins of Covid-19.

Canada’s arrest of Meng Wanzhou, chief financial officer of Huawei, in response to a US extradition request, sparked fury in Beijing. Shortly afterwards, two Canadians, Michael Kovrig and Michael Spavor, were arrested in China and accused of spying. They have essentially been held hostage ever since. Relations between Canada and China are in their worst state since diplomatic ties were restored 50 years ago.

Britain’s view of China has also been transformed over the past year. China’s crackdown in Hong Kong caused an outcry in political circles. The UK has offered a path to citizenship to potentially millions of Hong Kong residents — a move denounced in Beijing. Each week seems to bring a fresh downturn in UK-China relations. The British media regulator has just banned CGTN, the Chinese broadcaster, on the grounds that it is ultimately controlled by the Communist party. China has denounced the BBC for broadcasting allegations of systematic rape in Uighur detention camps. Relations may chill further this year when the British dispatch an aircraft carrier to the Pacific, where it will take part in exercises with the US Navy.

The Chinese government has noticed this emerging Anglosphere. When the US, Canada, Australia, New Zealand and the UK issued a joint statement about Hong Kong, China’s official response was ferocious. These countries form the “Five Eyes” intelligence-sharing group, which prompted Zhao Lijian, China’s foreign ministry spokesman, to comment: “No matter if they have five eyes or 10 eyes, if they dare to harm China’s sovereignty . . . they should beware of their eyes being poked and blinded.”

British officials point out that the Five Eyes is not an alliance — its remit does not go beyond intelligence. But there is now discussion of giving the group a more overtly political edge by adding a sixth pair of eyes. Boris Johnson, UK prime minister, has suggested Japan might be invited to join. Many China-watchers in Washington are keen on this suggestion, although the US intelligence community is sceptical.

Japan is not the only Asian nation being courted by the Anglosphere. India is also central to strategic thinking in Washington, London and Canberra — as indicated by the increasing vogue for the term “Indo-Pacific” in all three capitals. The US renamed its Pacific military command the “Indo-Pacific” command in 2018. The Indo-Pacific is also likely to be heavily emphasised in Britain’s new national security strategy, which will be published soon.

New Delhi has always guarded its foreign policy autonomy. As an emerging superpower it has no intention of being used by Washington, let alone London.

On the other hand, in what is likely to be seen as a historic blunder, China killed Indian troops in a clash in the Himalayas last June. India’s attitude to China has since hardened considerably — with Delhi pushing through controls on Chinese investments and technology. Technological co-operation is one area where India and the Anglosphere are likely to work together. India is already part of “the Quad”, which brings together the US, Australia, Japan and India for naval exercises

As the US seeks allies willing to push back against China, the Anglosphere plus the big Asian democracies looks like the most promising combination.

[Chester Perry]

Chelsea announced their 2018/19 financial results just before the new year, they have finally lodged the accounts at Companies House

https://find-and-update.company-informa ... ng-history

@KieranMaguire has been having a look

https://twitter.com/KieranMaguire/statu ... 9848859649

[Chester Perry]

Today's business of sport podcast from the Athletic looks at the collapse of the salary cap in the EFL . Contributions from Nick de Marco QC who was the PFA legal representative and Andy Holt owner/chairman of Accrington - should be tasty

https://podcasts.google.com/feed/aHR0cH ... IBxAF&ep=6

[Chester Perry]

Amazon sign deal to show La Liga in the UK from SportsBusiness, not sure how many are going to pay £7 a month for it though, Amazon have not actually paid anything for this as it is a carriage deal, but will gain useful metrics and potentially revenue.

Amazon Prime Video Channels strikes LaLigaTV carriage deal in UK
Alex Taylor February 11, 2021

Amazon Prime Video, the OTT platform of internet retail giant Amazon, has struck a deal to carry LaLigaTV on its UK arm in an exposure boost to the Spanish league.

The channel will be available for a surplus charge of £6.99 (€7.97/$9.66) per month in a distribution deal that runs until the end of the 2021-22 season.

The LaLigaTV channel available via Amazon Prime Video Channels will stream every match from the remainder of this season. LaLiga has attempted to arrange all of its matches at individual kick-off times, though in instances where this has not been possible, a match that may overlap with one which has kicked off will be aired later that day.

SportBusiness understands that conversations over a carriage deal for LaLigaTV on Amazon in the UK first started during the 2019-20 season.

LaLigaTV launched as a linear TV channel in the UK at the start of last year as part of LaLiga’s deal with UK subscription broadcaster Premier Sports. The pair signed a deal which would grant Premier Sports exclusive linear and non-exclusive digital rights for a three-season period covering the 2019-22 cycle.

The deal sees Premier Sports and LaLiga share subscription revenues in the UK and Ireland on top of the broadcaster paying a rights fee. It is understood that subscription revenues derived from the Amazon distribution agreement will be split between LaLiga, Amazon and Premier Sports.

LaLigaTV first became available in the UK on Premier’s OTT platform (Premier Player) in October 2019 before distribution deals were announced with Sky and Virgin Media at the start of 2020.

The first match to be broadcast on LaLigaTV via Amazon Prime Video Channels as part of the deal will be Granada vs Atlético Madrid at 1pm (GMT) on Saturday, February 13.

Also broadcast on the channel will be more than 25 hours of live studio programming and exclusive interviews. All content will be available both live and on-demand.

LaLiga and Premier Sports have been working to increase the league’s exposure since the beginning of that deal which has seen the creation of free-to-air windows for Friday night matches in the UK and Ireland. The initiative was dubbed ‘Fútbol Fridays’ in a four-hour window on Premier Sports’ FreeSports linear channel.

Amazon first established itself in the football rights market with the acquisition of a package of English Premier League rights during the 2019-22 cycle. The platform also holds rights to a range of ATP tennis properties for the 2019-23 cycle.

[Chester Perry]

Manchester City are about to get very clever with their pitchside advertising boards - fromSportsProMedia

Manchester City’s Etihad Stadium to be fitted with ‘supersized’ LED system
Club says two-tier digital display will ‘revolutionise’ how matchday content is showcased.

Posted: February 11 2021By: Sam Carp

- Manchester City’s Etihad Stadium to be fitted with ‘supersized’ LED system
- City claim new inventory will be ‘most commercially valuable’ pitchside media space in Premier League
- Wolves were first club to install a supersized LED system in 2018
- Display allows for multiple aspects of the same campaign to be presented across two levels

English soccer giants Manchester City are installing a ‘supersized’ perimeter LED display system at the Etihad Stadium which they claim will be ‘the most commercially valuable’ pitchside media space in the Premier League.

The two-tier digital display system, which will be operational towards the end of this season, features high-definition screens that will provide better picture quality even for still images and slow motion footage.

The screens can synchronise to form one supersized pitchside presence, while content can also be mirrored across the two tiers to deliver twice the exposure of a traditional LED system. There is also scope for multiple aspects of the same campaign to be displayed across the two levels, with options for different messages or languages.

Manchester City named world’s most innovative sports team

The system, which is being provided by City’s new partner Unilumin, the LED displays solution provider, also includes control features that allow for content to be adapted depending on the camera angle and weather conditions.

Wolverhampton Wanderers were the first Premier League club to install a supersized LED system in 2018 through a partnership with technology company ADI.

In other Manchester City news, the club has agreed a global sponsorship deal with wellness technology company Therabody, which will become the official recovery partner of the Premier League leaders and three other CFG teams – Melbourne City, Sichuan Jiuniu FC and Mumbai City.

[Chester Perry]

Part 3 of Jordan Gardner's "An expert’s guide to owning a European soccer club" from SportsProMedia

An expert’s guide to owning a European soccer club - part three: The first 90 days
In the third instalment of a four-part weekly series, Jordan Gardner, an American sports executive who is currently chairman and co-owner of Danish side FC Helsingør, outlines what to expect in the first 90 days of ownership at a European soccer club.

By Jordan Gardner Posted: February 11 2021

After all the excitement and media buzz of a takeover has died down, the hard work begins and the challenges of owning and operating a soccer club quickly become apparent. The first 90 days after a club acquisition are the most important and potentially decisive period of time for a new ownership group, and can often be predictive of future success or failure.

In part one of this series, I described the motivations of individuals, private equity and institutional investors who look towards European soccer for investment opportunities. In part two, I discussed building the right investment thesis and thoroughly assessing the purchase of a European soccer club. This instalment will focus on the first 90 days after the closing of a club acquisition, with a focus on my personal experiences at FC Helsingør after our takeover in the spring of 2019.

Evaluating club assets
The most important post-closing task is analysing a club’s assets both on and off the pitch.

Since most clubs in Europe have minimal real estate assets, the most important club assets are the players, staff and people connected to the club. Hard questions must be asked: Does club leadership have a well thought-out, long-term business plan that has been communicated to key staff members? Is the sporting staff making sound decisions when it comes to roster construction, player management and recruitment? Has the club’s chief executive built a strong organisation culture and do the club’s employees enjoy coming to work everyday?

When we purchased a controlling ownership stake of FC Helsingør in March 2019, it was apparent very quickly that the club had problems that needed to be urgently addressed. Throughout our conversations, we were looking for indicators of a positive work environment, an efficient and streamlined organisation, and forward-thinking and ambitious employees.

Many of the players were disinterested, thinking they were too good to be at our club. The coaching staff was constantly changing formations and tactical strategy from match to match in an incoherent way that led to confusion and poor results. Several staff members we spoke with were on the verge of quitting because they felt underappreciated, and were not treated with the respect they deserved from club leadership.

Unfortunately, every conversation we had - from the players on the pitch, to the employees in the front office - showed signs of a poor work environment, something that would need to be quickly and decisively addressed.

Making decisive changes
Being a successful owner of a professional sports club requires making difficult and unpopular decisions, including potentially significant personnel changes. However, the quicker and more decisive a new ownership group recognises that these decisions must be made, no matter how unpleasant, the better.

With our acquisition in Denmark, I don’t think I was prepared for the amount of change that was needed, as my hope was many of the key staff members would be assets to our new ownership moving forward. Ultimately, over a period of six to nine months I made wholesale organisational changes including replacing staff in all key areas of the organisation, bringing in a new chief executive, finance director, head coach, and sporting director.

The prior chief executive had led the club with an iron fist, creating an environment of mistrust between employees and staff. The head of finance was months behind in many important aspects of the club’s bookkeeping. The sporting staff had no direction, with players who did not want to be at the club, and staff who felt they had no leadership.

What we discovered sounds surprising, but the landscape of European soccer is filled with clubs run in a similar manner. This type of club management shows why there is an opportunity for good management to have a significant impact as many clubs are run quite poorly.

In retrospect, my only regret was not making these decisive changes in the first days and weeks after the acquisition, rather than delaying these hard decisions on the hope that things would change for the better.

Patience is key
Once decisive changes are made, it’s important to take a step back and give the key staff members time to implement a new vision and build a positive culture. New ownership groups can at times fail to give their key staff members the tools to be successful and back away from keeping their original vision.

At FC Helsingør, we empowered our new chief executive Jim Kirks and new coach Morten Eskesen to change the club’s culture and build a successful organisation from the ground up. We felt it was crucial to empower, delegate and trust these key executives to implement our long-term vision for the club. While it took some time, both men were able to bring positive cultural change to the club, which resulted in a promotion after one season with vastly improved performances on the field. In the front office, the new lean and efficient management team quickly professionalised the club, improving all aspects of commercial operations.

While these organisational changes paid dividends for us, it’s not always clear in the moment if these decisions are the right ones. In Major League Soccer (MLS), expansion club Inter Miami CF fired their head coach, sporting director and chief business officer less than 12 months after the team's first official match. Was this the correct decision? Only time will tell. However, it’s very possible they have been too focused on a poor inaugural season on the pitch, and are making potentially rash decisions without giving their original leadership team the proper time to build the organisation and execute their plan.

The first 90 days is a crucial opportunity for new ownership to implement its vision and set a soccer club on a new trajectory. Putting in the hard work during this important time to evaluate the organisation, make changes where needed and stick to a sound business plan will set up any ownership group for success.

Ultimately, not every group will succeed, but following a well thought-out plan and being patient throughout the process will give any group the best chance to have success on and off the field.
-----------------------------------------------------------------------------------
About the author: Jordan Gardner is an American sports executive and investor in several soccer clubs across Europe including Swansea City AFC in the United Kingdom and Dundalk FC in the Republic of Ireland. He is currently the chairman, co-owner and managing partner at FC Helsingør, an American-owned soccer club in Denmark, and was previously vice president, investment and business strategy for the digital media company JUGOtv before it was acquired by Relevent Sports Group. He was also the owner and chief executive of a live event ticketing and technology company based in San Francisco, California.

[Chester Perry]

More interesting stuff on the Chinese exit from European football - not the full article (paywall - arrrghh) but enough on public view to get the gist

https://offthepitch.com/a/its-not-coinc ... ll-chinese

particularly took notice of this
"The benefits - if you are a Chinese businessman - of owning a European football club are over."

we know Southampton and West Brom are for sale and then there is that call for funding at Inter Milan, where it appears Suning are looking for a partner at best and probably a sale is a favoured route, then there is Wolves and Fosun who are being kept under close scrutiny by the Chinese government.

https://twitter.com/Prof_Chadwick/statu ... 3536446467

[Chester Perry]

European reforms just a power grab – but do we care?

Matt Dickinson, Chef Sports Writer
Friday February 12 2021, 12.01am, The Times

Do we accept the growing might of the European superclubs or try to resist their insatiable grasping of power and wealth by whatever limited means available?

This is not just a practical question but, long-term, potentially an existential one raised by Champions League reforms that are not some procedural tweak but a fundamental alteration to what we value in our much-loved game.

The news that Uefa is set to award two Champions League places on historic success rather than finishing league position is, I would suggest, worth your consideration. To put it in real terms, Tottenham Hotspur would have been elevated into this season’s Champions League from sixth place in the Premier League. Leicester City would have stayed in the Europa League despite finishing fifth.

This goes under the dry guise of “Uefa club coefficients” but strikes me as revolutionary given the break from the age-old simplicity of points and finishing positions. In a sporting world in which every single alteration seems designed to favour the wealthy elite (largely because it was designed and driven through by them), this is not just going with that flow but hurtling down the road irreversibly.

Where does it end? Not with competition growing any easier or fairer for the aspirational middle classes — and if we are going to judge the grand sweep of football history, Aston Villa have more claim to being “big six” than Chelsea or Manchester City.

How long before the next demand from the wealthiest and most powerful? Why not a nation such as Italy being bumped into the World Cup finals, even though they failed dismally in qualification for Russia 2018, on the basis that the four-times champions had not missed a tournament since 1958?

We probably do not need to canvas the views of fans of Leicester, Everton, Wolverhampton Wanderers or perhaps West Ham United who, on present positions, would be the most likely to end up feeling denied by a system that rewards clubs based on five-year records in Europe.

The potential complication for those teams arguing against this significant change — which several senior football figures have described as highly likely to be approved this spring — is that the “big six” will challenge them over what is best for wider English football. England stands to benefit more than any nation from this new route for two clubs into football’s most prestigious, and increasingly lucrative, competition, which yielded Bayern Munich an estimated €130 million (about £114 million) for winning it last year.

Taking in the five-year club ranking of European performance, the Premier League has six teams — City, Manchester United, Liverpool, Arsenal, Spurs and Chelsea — in the continent’s top 16. Only Spain gets close with four. There is a strong chance of England grabbing the maximum allocation of six sides in the expanded Champions League — 36 clubs rather than 32 and 225 matches rather than the present 125 via the new “Swiss” system from 2024 — provided that the established “big six” finish in the Premier League’s top seven to enable themselves to be bumped up from the Europa League if necessary. They normally manage seventh, even in indifferent seasons. The likes of Leicester are fighting the justification that no one has lost a Champions League place by this expansion — just that others can benefit.

They are being asked to accept that a five-year coefficient, rather than ten years, which is how some Champions League revenues are distributed to the advantage (inevitably) of the wealthy elite, offers some hope that the “big six” is impermanent — though, of course, the proposed change has every chance of making the “big six” even more secure.

Perhaps you have limited sympathy for any team finishing fifth. Maybe you want the biggest European clubs facing off more regularly. But if this move sails through Uefa, it is not just acknowledging that we are locked in the age of the superclub but also embracing it in a firm clinch. Such a move serves an obvious purpose in providing a safety net for the richest and most renowned clubs, increasing the broadcast value of the Champions League as a whole and averting the most recent threats of a European Super League (until the next time) but it also calls to mind that quote from an unnamed “big six” executive to The Independent: “We don’t want too many Leicester Citys.”

Where will it end? And given that you are being offered many more big Champions League nights, potentially involving more English clubs, will you care?

[Chester Perry]

the Telegraph with the sorry tale of Birmingham City's fall from grace since their League cup win a decade ago

X-rated rants, swingeing cuts and a manager on the brink - how Birmingham City descended into chaos
A decade after the finest moment in their history - the League Cup final win over Arsenal at Wembley - Birmingham are a club in tatters

By John Percy 12 February 2021 • 10:51am

Welcome to the mad, bad world of Birmingham City, where the volatile chief executive has become notorious for swearing at officials, a once-vaunted academy is now threatened with closure and yet another manager is under growing pressure to prove he should keep his job.

Almost exactly 10 years after the finest moment in their history - the League Cup final win over Arsenal at Wembley - Birmingham are a club in tatters. Having improbably escaped relegation in three of the last four seasons, they are circling the drain again and will need a dramatic intervention to prevent them being sucked into League One.

For the fans who descended on Wembley in their thousands in 2011, there is now simply frustration and disillusionment with a club which appears to be losing its soul and identity.

Aitor Karanka, their sixth permanent boss in four years, is under increasing scrutiny and defeat against Luton on Saturday could leave him facing the sack from Zhao Wenqing, one of the club’s more powerful directors. Karanka is an experienced manager in the division, after spells with Middlesbrough and Nottingham Forest, but there is no disguising his struggles at St Andrew's.

The recent statistics paint a bleak picture of their survival chances: over the last 46 games - a full league season - Birmingham have accrued just 41 points, a lower total than any of the three clubs relegated last year, and they have not won at home since Oct 28, losing six of the last seven games.

Yet it is behind the scenes where Birmingham seem to be unravelling, with controversial chief executive Xuandong Ren continuing to run the club seemingly unchallenged. During Ren’s tenure, he has appointed Harry Redknapp, Steve Cotterill, Garry Monk, Pep Clotet and now Karanka, but it seems no manager can navigate a path to progress amid the chaos.

Ren, known at the club as ‘Dong’, was appointed in 2017 and is a hands-on operator who attended training at Wast Hills last season in full tracksuit. Long-serving senior employees, the fabric of the club, have mysteriously departed due to “Covid-19 reconstruction” and cutbacks over the past three years, including Julia Shelton, the club secretary for two decades, and financial director Roger Lloyd.

Recruitment staff have been furloughed, while Karanka was allegedly staying at the plush Hampton Manor hotel, where the top suite costs £500 a night, for three months after his appointment.

Ren had threatened to close the highly-regarded academy, which has recently produced the likes of Borussia Dortmund’s £30million signing Jude Bellingham, Nathan Redmond and Demarai Gray, before an embarrassing U-turn.

The uncertainty over the academy’s future has already resulted in the sale of 15-year-old Calum Scanlon to Liverpool. A number of other youngsters are being targeted by rival clubs. The influential academy manager Kristjaan Speakman recently left after 14 years to join Sunderland.

Birmingham City's on-field plight
English Football League - Championship
Team P W D L GD Pts
18 Nottingham Forest 28 8 8 12 -5 32
19 Coventry City 28 7 10 11 -11 31
20 Rotherham United 27 8 5 14 -5 29
21 Sheffield Wednesday 28 9 7 12 -9 28
22 Derby County 27 7 7 13 -11 28
23 Birmingham City 28 6 10 12 -13 28
24 Wycombe Wanderers 27 3 7 17 -29 16

On matchdays, Ren sits behind the dug-outs and can frequently be heard swearing and shouting at officials. At a recent match, a local radio station had to turn their effects microphone off as it was picking up Ren’s bad language, while in December he was fined £7,500 by the Football Association for confronting a referee after a defeat at Cardiff.

Birmingham have also been charged twice by the EFL for breaching financial rules, which included the nine-point deduction in the 2018/19 season. Figures also show the club to be more than £100million in debt.

Lockdown and the absence of fans has arguably saved Ren from further scrutiny, yet there is mounting fury over the perceived lack of accountability and football knowledge around the club.

Ren is 39 this month and his Birmingham future could be intrinsically linked to Karanka: he is understood to have told the board and chairman it was an appointment that could take them back to the Premier League.

In fairness, Ren has backed Karanka with funds in the transfer market this season as they began a proposed three-year project. But a recent 0-0 draw at bottom club Wycombe, where Karanka’s decision to make only one substitution left fans bewildered, suggested simply avoiding relegation should be the priority this season.

The general consensus is that unless there is a change of regime the future does not bear thinking about. Birmingham have not operated in the third tier since the 1994/95 season, a time of Barry Fry, Steve Claridge, Ian Bennett and Kevin Francis.

It used to be Aston Villa who circled the plughole, before they were eventually relegated in 2016: now it is their Second City rivals who are scrapping to avoid a similar fate.

[Chester Perry]

there is a seperate thread about it, but it fits right in with the "vultures are at the door" section on this thread - the Financial Times on the growing presence of MSD Capital in English football

Michael Dell’s investment firm is a new force in football finance
SAMUEL AGINI FEBRUARY 12, 2021

MSD’s first foray into English football predated the pandemic, but the crisis has helped forge an opportunity for the investment firm © FT montage
As players compete in empty stadiums, clubs shun flashy signings and once-fat TV revenues shrink, an unlikely new force has emerged in English football: a US firm that invests some of PC pioneer Michael Dell’s fortune.

Over the past year, MSD Partners has lent almost £80m to Premier League team Southampton, provided funding for the £200m takeover of rival Burnley and made a loan to Derby County, a historic English club.

MSD’s first foray into English football predated the pandemic, but the crisis has helped forge an opportunity for the investment firm as the sport confronts an unprecedented financial crisis and other lenders retreat. The Premier League, the world’s richest football competition, estimates that every month without fans in stadiums collectively costs English teams £100m.

“Clubs need cash and MSD has cash,” said Kieran Maguire, a football finance academic at the University of Liverpool and author of The Price of Football. “Commercial banks won’t touch football clubs. It’s perceived as high risk.”

MSD, which recently hired senior Goldman Sachs banker Gregg Lemkau to lead the firm, is not the only financial institution barrelling into the sport. Private equity firms are trying to buy into Serie A, Italy’s top football division.

Founded in 2009, MSD manages about $15bn, with investments spanning public equities, real estate, private equity and credit. As well as investing some of Dell’s wealth — and working alongside the tech entrepreneur’s family office — it also manages substantial amounts for other investors.

Helping bankroll the owners of sports teams is not new to MSD. The firm counts US National Hockey League clubs the St Louis Blues and the Dallas Stars among its borrowers. In 2017, it was part of the financing for the $1.2bn purchase of baseball team the Miami Marlins by a consortium including Derek Jeter, one of the sport’s most celebrated players.

The fresh source of funding for English football has been embraced by an industry that high street lenders had largely steered clear of even before Covid-19.

Since the crisis, Arsenal and Tottenham Hotspur, two of the “Big Six” teams in the Premier League, have borrowed nearly £300m at ultra-low interest rates from an emergency lending scheme run by the Bank of England. But smaller Premier League clubs and those in lower leagues have complained about the struggle to secure financing.

MSD’s willingness to extend loans for longer periods has increased their appeal. Historically, loans to clubs have often been relatively short-term or subject to annual renewal, especially for those outside the upper echelons of the Premier League. The firm has lent about £170m in total to English clubs, according to a person familiar with the matter.

“Typically banks provide short-term working capital cash flow. These guys are longer term strategic money,” said a banker with knowledge of MSD’s operations. “For the most part they don’t finance purchases, they just provide long-term stable funding . . . they provide something that doesn’t exist.”

That, however, comes at a price. The latest accounts for St Mary’s Football Group, the holding company for Southampton, showed that the £78.8m loan, which is due for repayment in 2025, carries an annual interest rate of 9.14 per cent. That interest rate is in line with what MSD has charged other clubs, according to people familiar with the matter.

While MSD is writing cheques during a historic crisis for the sport, there are fears that the steep costs attached could prove punishing for the borrowers.

Confidence in English football
The English Football League, which runs the professional divisions below the Premier League and was last year seeking funds to help stricken clubs, explored financing from MSD, among others, but ultimately borrowed £75m through the BoE’s facility.

“We’re not paying 9 per cent”, said one of the EFL’s top executives.

MSD’s push into English football has been spearheaded by Robert Platek, a former fixed-income portfolio manager and the firm’s global head of credit, and managing director John Licciardello. It began with Newcastle United, the team owned by UK retail billionaire Mike Ashley.

When the possibility of a transaction involving Newcastle fell through, MSD was approached about the north-east team’s local rivals Sunderland, a club whose struggles were captured by Netflix documentary Sunderland ‘Til I Die. Although MSD opted against a deal, a group of partners at the firm made a loan to Sunderland in 2019, according to two people familiar with the matter.

The firm, which is run out of offices in New York and Santa Monica, California, is confident that English football’s local appeal and global reach will emerge largely unscathed from the pandemic. Despite the crisis, MSD has not ratcheted up interest rates compared with loans it made before the crisis, according to a person familiar with the matter.

Mel Morris, the owner of Derby County, told the Financial Times that clubs were confronting a dearth of financing options, especially those that did not qualify for the government’s coronavirus emergency loan schemes.

“We took out a loan with MSD while the pandemic was raging,” said Morris, who made some of his fortune from the Candy Crush video game and late last year reached an agreement in principle to sell the club. “In strange times thank heavens people like MSD do exist because they’ve certainly helped us get through a sticky patch.”

MSD can require clubs to put up considerable assets as security for the loans, including property. Derby’s Pride Park stadium is part of the security for the loan, Morris said.

The spectre of having to call in a football club’s loan or seize assets has long been a deterrent for commercial banks considering financing teams, according to Maguire of the University of Liverpool.

“From a reputational perspective commercial banks don’t want to take that on and put themselves in an awkward position of calling in the debt and weaponising the fan base,” said Maguire.

According to people familiar with the matter, MSD has no interest in taking over any of the teams it has lent to, a view echoed by Morris, who recalled being visited by Dell himself in Derby in the early 1990s when one of his business ventures was a customer of the PC maker.

MSD’s most recent wager on English football was sealed on New Year’s Eve, when it helped fund US investment firm ALK Capital’s purchase of Burnley, a fixture of the Premier League for the past five seasons.

Alan Pace, managing partner of ALK and a former chief executive of US Major League Soccer team Real Salt Lake, told the FT last month that the financing for the takeover was “very reasonable and we feel that it’s sustainable” and that MSD was a “brilliant partner”.

If MSD’s burst into English football gathers further pace, the pressure to continue to live up to that billing will grow.

[Chester Perry]

A fascinating thread on on the salaries/finance at Liverpool under the ownership of FSG - it is lengthy but worthwhile

https://twitter.com/MoChatra/status/1359968527038504966

note that the heavily weighted bonus is a similar approach to Burnley under the previous ownership structure, I suspect this will continue with the new owners.

[Chester Perry]

I posted about Joseph DaGrosa the other day and the persistent links with Southampton, you have to say he is a very good self-publicist and he keeps talking up that desire to build a multi-club group - which is interestingly referred to as a platform here - this from CBSsports.com

Kapital Football Group's Joseph DaGrosa has plans for a soccer network to equal the likes of Manchester City
Former Bordeaux Chairman adds Tahuichi academy and eyes top 5 European opportunity

By Jonathan Johnson
Feb 10, 2021 at 4:05 pm ET 5 min read

Kapital Football Group (KFG) Chairman Joseph DaGrosa Junior believes the United States of America is five to 10 years away from being a "huge talent supplier" in world soccer as young athletes switch from sports like baseball, American football and basketball to soccer.

January saw Bryan Reynolds join AS Roma from FC Dallas, Brenden Aaronson as well as Mark McKenzie swaped Philadelphia Union for Red Bull Salzburg and KRC Genk respectively while DeAndre Yedlin was signed by Galatasaray and Paul Arriola followed Jordan Morris to Swansea City.

DaGrosa believes this busy winter transfer window is a sign of things to come over the next decade as playing at Europe's top level becomes the norm.

"Great talent is coming out of the US," the 56-year-old told CBS Sports exclusively. "We are probably 5-10 years from really hitting our stride. Double digit growth pre-high school, high school and college has been extraordinary.

"Baseball -- demographically -- is a dying sport and soccer is less prohibitive than basketball and without the NFL's concussion factor. The move towards soccer is natural. When our athletes reach their potential and play at European level, we will be a huge talent supplier."

DaGrosa now leads KFG's ambitious vision of a "world-class soccer platform with a proprietary pipeline" in Europe as part of the group's "ecosystem" that will feature an anchor club, satellite outfits and top youth academies.

KFG, who list American soccer luminaries Landon Donovan and Charlie Stillitano, have secured Bolivia's Tahuichi Academy as the first of what is hoped to be nine youth setups across the Americas, Africa and Asia and DaGrosa is confident the "Bolivian talent factory" will prove key for the group.

"We think this combination will give us the best global footprint for sourcing talent, said the former Chairman of Girondins de Bordeaux in France's Ligue 1. "Tahuichi are Bolivia's number one academy -- by far -- with 3000 kids in their system. The other thing that attracted us is their social work. They have several Nobel Peace Prize nominations and are very consistent with our values.

"Portugal, Spain and Belgium are natural considerations for satellite clubs," he added. "Moving a kid from a small town to a big city in a different language is a very delicate issue and this is one of the things I learned in Bordeaux. We want an ecosystem that eases this transition."

KFG are influenced by the likes of the City Football Group (CFG) and Red Bull's global network best known for its Leipzig, Salzburg and New York teams and DaGrosa admits CFG, in particular, possess the "strongest platform structure" but sees some COVID-19 differences.

"Imitation is the sincerest form of flattery," the Yonkers native told CBS exclusively. "We have a high regard for CFG and what they have accomplished. COVID offers an opportunity to do things on a more accelerated basis but for less financially. These are unique times.

"We think there is a short to medium-term opportunity with clubs and players before the pendulum ultimately swings back the other way as it is a great sport and business. We want to put our 'ecosystem' in place now to emerge as a major player in the global soccer game when a seller's market for talent returns."

European clubs with decades of history are suddenly within reach and KFG have been linked with the likes of English Premier League sides Southampton and Newcastle United in recent months with DaGrosa convinced that the economic impact of COVID has presented a unique opportunity.

"Very few businesses can stand the test of time," he said. "Almost any soccer club has a multi-generational history. Very few businesses stick around for 100 years or are likely to still be around in another 100.

"Soccer is the fastest growing sport in the world, and we do not believe the business will be rendered obsolete by technological changes. If anything, it will benefit from those changes. Many clubs are struggling and need investment. We are moving as we think we can be good partners."

UEFA Champions League and UEFA Europa League soccer is key to major investment in soccer and DaGrosa believes that the only exception is the Premier League due to its relatively even distribution of television rights money.

"The only way to make money is by making it to the UCL," the KFG chief exclusively told CBS. "If you are not, you are probably breaking even -- if you are lucky. If you are not in UEL, you are probably losing money. You do not have to be a top four club to make money in the EPL as it is the largest league in the world and mid-table clubs are particularly interesting -- we are looking at some."

You can stream every match on CBS All Access. Sign up now and enjoy a free trial of CBS All Access ahead of the big matches.

Nine of 20 EPL clubs now have American ownership or backing but DaGrosa would prefer for KFG to learn from the best functioning soccer business models with CFG's multi-team and continent approach particularly appealing.

"We want to take the best aspects from all owners, not just Americans -- we are looking for best practices and approaches," he said. "CFG, on balance, is a very attractive model to follow as you do not live or die by the success of one particular team."

DaGrosa and Hugo Varela took over at Bordeaux in France back in 2018 and learned some of their most valuable lessons in the complicated environment that surrounds a Ligue 1 competition that has suffered severely at the hands of the COVID crisis.

Good match against Dijon. Narrowly won but we got the victory! Congratulations to the team. pic.twitter.com/3C5sxNp8FR

"Bordeaux was interesting," CBS heard exclusively. "It is more difficult to make US-style HR changes in France and I would also say tax is more challenging than in other markets. You spend more than you otherwise would, and the salary is the starting point but not even close to the finish. We enter the top five market better educated on the pros and cons.

"Pre-COVID, Ligue 1 was not on the same footing as EPL as broadcasting revenue is weighted heavily towards the top. The situation is distressing and Mediapro was the nail in the coffin.

"I still love Bordeaux and am a fan. The last thing that I want is for them to not to succeed. I want French football to succeed. The European soccer ecosystem must succeed. I think we will see major club and league restructuring. A lot of lenders are probably worrying about their collateral."

Despite DaGrosa's bittersweet experience at Matmut Atlantique, he is hungrier than ever to get back into European soccer and KFG is primed to soon make a splash with CBS sources indicating that the acquisition of a club in a top five league is close.

When KFG do finally enter the European market, they will have a meticulously planned "ecosystem" featuring the likes of the Tahuichi Academy of Bolivia in tow ready to put into action as they ultimately look to join CFG and Red Bull at the summit of soccer business.

[Chester Perry]

Spezia become the 38th club in the top two divisions across Europe's domestic leagues to fall under American ownership - not ALK as earlier suggested but Robert Platek and his family. The Italian club becomes part of a multi-club business. At least the new owners used their own money to buy the club and the many links to MSD Capital have proved unfounded with the ownership stating clearly that MSD were not involved, though Piatek is a partner of that company. This from BeSoccer.com

Spezia latest Serie A club to accept US takeover
BeSoccer by BeSoccer @besoccer_com - 11 Feb 21 0 162

Spezia became the fifth Serie A club to be under American ownership after announcing on Thursday a takeover by businessman Robert Platek and his family.

The Italian outfit, declared bankrupt in 2008, join Roma, Fiorentina, AC Milan and Parma in being owned or part-owned by American firms or individuals.

They were relegated to the fifth tier due to their financial issues before reaching the top flight for the first time this season.

"It has been our long-held ambition to find the right opportunity to partner with a special club in Italy," the Platek family said in a statement.

"We are humbled by this opportunity to become stewards of the club.

"As a family, we are proud to play a small role in helping the team to grow, achieve further success and make the fans proud."

According to Italian media, the Plateks paid around 25 million euros ($30.3 million) for the side, sitting 16th place in the table.

Spezia said it was a personal investment by the Plateks and has no link to MSD capital, a fund started by technology giant Michael Dell, despite Robert's position in the company.

Robert Platek is also majority shareholder of Danish top-tier outfit SonderjyskE.

[Chester Perry]

The New York Times with a lengthy review of the the financial mess at Barcelona and a bit of an expose on why that was allowed to happen, together with a forecast of how much the Pandemic could actually cost them in lost revenues (and penalties from the extra borrowing). Inevitably the Messi contract features too

Barcelona and the Crippling Cost of Success
FEBRUARY 12, 2021

The careful plan hatched by Barcelona, the richest soccer club in the world, fell apart almost as soon as its negotiators entered the room.

On a sweltering late summer afternoon, Barcelona’s executives had come to one of Monte Carlo’s most exclusive hotels to strike a deal with the German club Borussia Dortmund for one of the most exciting young prospects in Europe: the French forward Ousmane Dembélé.

Barcelona had decided on its strategy, and its price: Dembélé, in Barcelona’s eyes, was worth $96 million, and not a cent more. No matter how hard Dortmund pressed for a higher fee, the men from Barcelona would hold firm. The two executives steeled themselves as they headed to the suite the Germans had booked. They embraced before knocking on the door. And then they stepped inside, only to find that Dortmund’s executives had decided on a strategy, too.

The Germans told their guests that they had a plane to catch. They had no time to exchange small talk, and they were not here to negotiate. If Barcelona wanted Dembélé, it would have to pay roughly double the Spaniards’ valuation: $193 million. The price would make the 20-year-old Frenchman the second-most expensive soccer player in history.

Barcelona’s president, Josep Maria Bartomeu, was stunned. But he did not walk away. He quickly agreed to pay almost the entire amount, settling at a fee of $127 million up front, with a further $50 million in easily-achieved performance bonuses. For all his intentions of playing hardball, he felt he did not have a choice.

Only a few weeks earlier, Barcelona had seen one of its own crown jewels, Neymar, plucked by Paris St.-Germain. Bartomeu could not risk disappointing a fan base still reeling from that blow by returning home empty-handed. He needed a marquee signing, a trophy, a trinket. He had to pay the price.

The Billion Dollar Club
F.C. Barcelona has, for much of the last decade, had the look of a sporting and commercial colossus. This century, its on-field success and its off-field wealth have made it the envy of even its most bitter rivals.

It is the first (and only) team to surpass $1 billion in annual revenue. It employs arguably the finest player in history, Lionel Messi. On matchdays, the cavernous, iconic stadium it calls home fills with almost 100,000 card-carrying, dues-paying club members.

But Barcelona has been living on the edge for much of its recent history, a consequence of years of impulsive management, rash decisions and imprudent contracts. For years, soaring revenues helped paper over its worst mistakes, but the coronavirus has now changed the math.

One former board member believes the pandemic will eventually cost the team more than half a billion dollars in revenue. Its salary bill is the highest in Europe. It has already broken debt covenants it agreed to with its creditors, which will almost certainly mean higher interest costs in the future.

The result is that the club that brings in more money than any other in world soccer now faces a crisis: not only a crushing financial squeeze, but a contentious presidential election and potentially even the loss of its crown jewel, Messi. Its hurried pursuit of Dembélé, among others, is only one part of how it got here.

Even as Bartomeu finalized that deal, in August 2017, Barcelona knew it had been stung. The club had banked $222 million from the sale of Neymar weeks earlier and now needed a flashy signing to change the conversation. Every seller in Europe, though, knew Barcelona was cash-rich and time-poor. “You have a weaker negotiating position,” said Jordi Moix, Bartomeu’s former vice president for economic affairs. “They’re waiting for you.”

If any club could afford to overpay, though, it was Barcelona. Over the previous decade, it had been transformed into not only the best team in the world — the winner of three Champions League titles in seven years — but also its greatest moneymaking machine.

Its revenues were then inching ever closer to the target of one billion euros set by Bartomeu in 2015. It hit the mark — in dollars, at least — in 2019, two years ahead of schedule. Plans for a sleek entertainment and leisure district around the team’s stadium and the launch of the Barcelona Innovation Hub would keep the river of money flowing.

At the same time, though, the club was walking an increasingly delicate financial tightrope. There is another billion-dollar watermark it has passed: its total debt, including the amount owed to banks, tax authorities, rival teams and its own players, has ballooned to more than 1.1 billion euros.

More than 60 percent of that is considered short-term debt — more than any team in Europe — but that did not stop the lavish spending in the transfer market: not only the price paid for Dembélé but, a few months later, the $145 million committed for the capture of Philippe Coutinho from Liverpool — another negotiation in which Barcelona folded, and agreed to a price it could not afford to pay.

The burden of paying the players already on the club’s books, too, has continued to grow. According to Carles Tusquets, its interim president since Bartomeu was deposed last year, Barcelona’s annual salary bill of $771 million now eats up 74 percent of the club’s annual income, a much larger slice than its contemporaries, many of whom aim to keep that percentage no higher than 60. “It is an awful lot,” Tusquets said.

In some ways, Barcelona was a victim of its own success. The more its players won, the greater the figures they could command in salary negotiations. The fact that so much of its squad — the likes of Messi but also Gerard Piqué, Sergio Busquets and Jordi Alba — were seen as the spiritual soul of the club, visible proof of the road from the club’s La Masia academy to the first team, gave the players, not the club, leverage.

“Clearly a lack of leadership, the leadership of the board being afraid to say no, is one of the key things that needs to be avoided going forward,” said Víctor Font, one of the candidates to become the club’s next president when elections are held in March. “Wages had gone too high.”

But when the club could rely on revenues tipping $1 billion every year, paying out almost $700 million in salaries was “a stress, but affordable,” Moix said, adding: “It did not give us much room for savings, but they were the backbone of the team. If we did not make the agreements, they would have gone.”

Moix admitted that Bartomeu and his board made mistakes, but he is convinced that it was an event outside of their control that finally tipped the club off its high-wire. “As time goes by things will be put in perspective,” he said. “How much is due to management, how much to Covid? It’s a subjective discussion.”

Either way, the scale of the damage is vast. In its most recent financial reports, Barcelona announced a loss for the year of $117 million. It estimates that it already has lost $246 million as a result of the pandemic. Moix suggested the total hit eventually will top $600 million.

At the same time, its debt to financial institutions and other clubs has risen by $327 million. Barcelona executives believe that figure — despite drastic efforts to cut costs — will climb further in 2021. Both its stadium and museum, two of Spain’s most popular tourist destinations, are likely to remain shut to visitors for at least the rest of this season.

With its forecast revenues for the next year revised down by $250 million, its players’ salaries may soon account for as much as eighty cents of every dollar brought into the club. The same squad that brought Barcelona such glory in the recent past seems, now, to foreshadow toil in the immediate future.

And there is no clearer example of that than the player who — above all — has come to symbolize this Barcelona, the player on whose shoulders its rise to global pre-eminence rested and whose salary, now, represents its single greatest financial commitment: Lionel Messi.

Pharaoh
The contract Messi signed with Barcelona — in the fall of 2017, in the aftermath of Neymar’s departure — runs to 30 pages, according to a Spanish newspaper that was leaked a copy of the document. It contains a screed of eye-watering figures: a signing bonus of $139 million. A “loyalty” bonus of $93 million. A total value, if Messi meets every clause and every condition, of almost $675 million.

Last month, the newspaper that revealed its contents, El Mundo, described it as “Pharaonic,” a deal that was “ruining Barcelona.” That Messi was the world’s best-paid player was not a surprise: It had been reported at the time the contract was agreed that he would earn an annual salary of around $132 million.

To those outside Barcelona, it was seeing the sheer scale of the deal in black and white that was most striking. To those inside the club, though, the problem was not the figures but that they had been revealed to the public. Ronald Koeman, Barcelona’s coach, called for anyone found responsible for leaking the contract to be excommunicated. The club threatened to take legal action. Messi, too, was furious at what he perceived as an attempt to sabotage his standing at the club.

Messi’s relationship with Barcelona has been strained for some time. But last summer, after a third consecutive season of disappointment and a historic 8-2 humbling in the Champions League, his frustration boiled over and he gave the club formal notice that he intended to end his contract and leave.

Bartomeu refused even to countenance the idea. If any suitor wanted to sign Messi, he declared, it would have to pay a fee. Though Messi saw that as the breaking of not just a promise but a contractual obligation, he eventually backed down, unwilling to take the club he has represented since he was 13 to court in order to force his exit.

Six months later, his future is no more certain. His deal expires in June. Since Jan. 1, he has been free to agree to a move this summer to any club outside Spain. In a television interview last month, he said he would “wait until the season ends” before making any decision. “If I do leave,” he said, “I want to leave in the best way possible.”

Though it is taboo for it to be said in public — and though nobody would welcome it — there are those inside Barcelona who believe Messi’s departure may be a necessary evil. Last summer, a few whispered that it made sense to cash in on Messi while the club still could, and not just because the transfer fee and the savings on his nine-figure salary could add more $250 million to the team’s bottom line.

Given his status, and his impact, few believe Messi himself is overpaid, but some members of the previous board wondered if he had an inflationary effect on the squad as a whole. Barcelona was paying out salaries worth hundreds of thousands of euros a week to fringe players. Messi’s earnings had raised the wage ceiling so high that the salaries of his teammates — especially the senior, home-reared ones — were rising quickly alongside it.

Moix, for his part, did not share that logic. “We can’t negotiate with an asset like this,” he said. Nor could Barcelona, really, negotiate at all; there are only a few clubs in the world capable of meeting Messi’s salary and his ambition, and none were eager to pay a premium for a player they might be able to get for free this summer.

Regardless, according to Moix, fixing a price for Messi proved irrelevant. “It is a theoretical question whether we would have sold him for 100 million euros,” he said. “Nobody made an offer.”

Fire Sale
As the club’s presidential election draws closer, each candidate is trying to position himself as the only man — and they are all men — with a solution to the financial crisis.

But Barcelona’s charm, in a sense, is also its curse: Every move the club makes has to be made not only with the support of whoever wins the election on March 7, but with the backing of its 140,000-strong membership.

“It makes it a bit more difficult to manage,” Moix said. “But that fact is also one of the differences we use to try to attract sponsors and business. The members are the real owners.”

In the past, that has contributed to the club’s largess: Bartomeu might not have been so desperate to land Dembélé, whatever the cost, had he not feared a fan revolt if he failed. Font, one of his potential successors, is convinced the lack of professional experience among previous boards has led to some of the poor decision-making.

Joan Laporta, a former president now running for his old post, last year labeled Barcelona “the club of three billion: one billion in income, one billion in expenses and one billion in debt.” He, like his rivals, has vowed to repair the team’s financial fortunes.

“It’s not your money but you can’t just do what you want,” Font said. “It has nothing to do with ownership structure, it has to do with poor governance, people who are not equipped to make decisions. For them it’s fun. It’s like a fun toy, I play with it, and I make decisions I believe make sense. That’s why you need people that understand playing with a toy in the wrong way can be dangerous.”

Now, though, it leaves the three remaining candidates for president with the toughest of electoral sells: promising cutbacks while continuing to meet the fans’ expectations. Most accept that the club’s salary commitments will have to be reduced, though that is rather easier said than done.

Just as Borussia Dortmund realized that Barcelona, in 2017, was in no position to haggle, European soccer — ravaged by the pandemic — is well aware that it is now, in effect, a distressed seller. Its players are unlikely to command premium prices, if buyers in a position to pay distorted salaries for aging stars can be found in the first place.

That has forced executives to examine other measures to try to alleviate the financial strain. Some of the costs — like an annual payment of five million euros to Atlético Madrid, a putative rival, for first refusal on any of its players — make little sense. Others, like seven-figure payments for past signings, are already baked in.

For now, the club has been scrambling to renegotiate some of what it owes with its creditors, but it is likely that any attempt will mean doing so on worse terms.

It is exploring whether it can be granted an advance on future television income — worth around $190 million per season — or strike an innovative deal, designed by Goldman Sachs, to raise $240 million by selling a stake in a basket of Barcelona’s nonsporting assets — including its content creation business and its merchandising operation. The response, according to people familiar with the offer, has been positive.

Font said officials had pitched details of the money-raising plans to him, but he remains unconvinced. “We have a saying in Spanish: bread for today, hunger for tomorrow,” he said.

Goldman Sachs also has agreed on a proposal with the club to arrange financing for a $988 million refit of the Camp Nou, a stadium that does not have a single sky box and is mostly uncovered. The project — which requires member approval — also includes for the creation of other properties, including a smaller, secondary stadium.

There is, of course, one other option. Allowing Messi to leave might solve many of the problems on the balance sheet in one fell swoop, and buy the club some breathing space. But while all of the candidates talk of the need to restore financial sanity, that is a road nobody is willing to take.

“The best player in the history of such a sport generates a lot of commercial value,” Font said. He is so determined to ensure that Messi stays that he would offer him a lifetime contract, one that would bond the player to the club even after he has retired. It would be fitting reward, after all, for the player who — more than any other — brought Barcelona here.

[Chester Perry]

Serie A still have not managed to come to an agreement as to who will win the next cycle of domestic rights - from SportsBusiness.com

Serie A delays domestic rights award with DAZN, Sky bids still on table
Martin Ross - February 12, 2021

Italian football’s Lega Serie A has postponed a vote on the award of its domestic broadcast rights from 2021-22 to 2023-24 with bids from incumbent rights-holders DAZN and Sky Italia still under consideration.

The latest delay, which is set against the backdrop of doubts over the sign-off of Serie A’s private equity investment, follows the launch of the domestic rights sales auction at the start of January.

Both DAZN and Sky made presentations to the Serie A clubs at a meeting in Milan yesterday (Thursday), with the OTT subscription broadcaster still leading the bidding in the main ‘communications operators’ tender.

DAZN is understood to have bid €840m ($1.02bn) per year for rights to seven exclusive matches per matchweek and co-exclusive rights to three matches.

The DAZN offer involves a partnership with Telecom Italia. The telecoms operator would provide its fibre backbone to DAZN and provide ‘economic support’ of between €300m and €400m per year, according to la Repubblica newspaper.

Sky is thought to have bid €750m for Package 2, one of the ‘mixed’ marketing packages offered by Lega Serie A, comprising rights across all platforms but with only co-exclusivity for internet, IPTV and mobile rights.

Existing deals with Sky and DAZN (from 2018-19 to 2020-21) are worth €973m per year.

Lega Serie A said: “During the meeting, DAZN and Sky had the opportunity to explain to the clubs their offers for broadcast rights for the Italian territory, detailing their strategic visions for the next three years.

“At the end of the presentations, the clubs, in order to explore all aspects related to the proposals received by the communications operators, decided to update themselves in a new Assembly meeting next week.”

Should rights be awarded to DAZN on the terms reported, then revenue over and above the €840m per year would come from the sale of non-exclusive rights to the three matches. The league would also be saving a commission payment of between €50m and €60m per season to the Infront agency, its outgoing media-rights adviser.

The DAZN presentation was headed by James Rushton, co-chief executive, Veronica Diquattro, chief customer and innovation officer, and Jacopo Tonoli, chief commercial officer.

SportBusiness understands from sources close to DAZN that the broadcaster was pleased with the progress of the conversations held yesterday. It is thought that DAZN believes that the project would allow Serie A to guarantee itself future growth and development in line with market expectations.

While DAZN appears to be of the stance that it has submitted the most competitive offer and that the result of the invitation to tender is clear, the smaller Italian clubs were inclined to hold off as they wait to see the level of private equity injection that will be forthcoming.

A scheduled meeting yesterday to finally ratify the private equity deal with companies including CVC Capital Partners did not take place, prompting nervousness about whether an agreement can be thrashed out.

CVC is understood to have told external parties that the project remains on ice.

The launch of the domestic tender came just weeks after Serie A clubs accepted an offer from private equity companies including CVC for a 10-per-cent stake in a new entity that will manage its media-rights business. The proposal is worth €1.7bn and also involves fellow private equity firm Advent International and Italy’s state-backed investor Fondo Strategico Italiano (FSI).

The private equity consortium last week asked the league to give its final response to the proposed deal, reports Reuters, threatening to walk away and refusing to negotiate further. Issues around the commercialisation of archive rights are thought to be among the sticking points.

While Serie A’s smaller clubs stopped short of backing a vote for the domestic media rights sales, the league’s top clubs were keen to vote. These included AC Milan, Inter Milan, Juventus, Lazio, Udinese, Napoli, Fiorentina, Atalanta and Cagliari, according to Italy’s Calcio e Finanza.

A total of 14 votes would be needed to ratify the league’s new domestic broadcast deal.

DAZN is thought to be keen to retain premium content for its linear channels, which are available on Sky Italia’s pay-television platform. The DAZN offering is also available as an add-on for subscribers to Telecom Italia’s TIMvision live streaming and video-on-demand service, and to Vodafone’s television customers.

Invitation to tender details
In going to market at the start of January, Lega Serie A issued separate invitation to tenders for “communication operators” and “independent intermediaries” while also inviting proposals for companies looking to create a thematic Serie A channel.

Both Sky and Infront are among those reported to have bid for the channel project.

Following the first-round bid deadline, Lega Serie A chief executive Luigi De Siervo said that Sky, DAZN, production and agency group Mediapro and Eurosport, the Discovery-owned sports broadcaster, had all bid in the communications operators tender.

The league’s stated aim of raising a minimum of €1.15bn per season from the sale of its domestic broadcast rights represents an 18-per-cent increase on the current deals.

In the Serie A tender, the rights for communication operators were split up into three main packages, covering exclusive satellite platform rights (Package A), exclusive digital terrestrial platform rights (Package B) and co-exclusive internet, IPTV and mobile platform rights (Package C). An optional ‘Gold’ package of ‘accessory rights’ was also made available and could only be acquired by the purchaser of (at least) one of the main packages.

Alternatively, three ‘mixed’ marketing packages were included in the ITT document. Package 1 included rights across all platforms exclusively, while Package 2 comprised rights across all platforms but with only co-exclusivity for internet, IPTV and mobile rights. Package 3 included the internet, IPTV and mobile rights held co-exclusively with the winner of Package 2.

Sky Italia was recently left reeling after its appeal against a ban on it acquiring exclusive digital media rights was thrown out by Italy’s Council of State. The decision means Sky’s ban on acquiring exclusive digital rights to sports properties is upheld.

[Chester Perry]

GameofthePeople.com assesses the recent transfer activity across Europe and wonders if the game is at an inflection point for the transfer market - one thing for sure is that pinning your hopes on selling players as an income generator is going to be a difficult task for the next few years

The end of transfers as we know them?
FEBRUARY 10, 2021NEIL FREDRIK JENSEN

SHOULD Lionel Messi and Barcelona fail to repair their differences over the coming months, and the little Argentinian magician decides to leave Catalonia for a swansong, who will be able to afford him? Messi will be costly, unless he opts for a charitable mission, perhaps one that elevates or enhances an under-achieving club while adding to the legend.

With the financial and cultural cost of the pandemic still uncertain, the full extent of which may not be known for another 12 months, Messi and others of his kind could find the cost of securing a world-class superstar, albeit one that is at the tail-end of his career, may deter clubs that would normally have bitten-off the hand of the players’ agents in an instant. There may be a whole list of stars, such as Mbappe and Neymar, and would-be stars that could find themselves temporarily priced-out of a moribund market, which may stop transfers or, at the very least, put moves on hold.

Rightful
The question is, should the transfer market be rightfully depressed in a time when clubs have lost a significant slice of their income, wages have been suspended or cut and, outside the rarified cauldron of professional football, people have lost their jobs, been furloughed and the pandemic has claimed thousands upon thousands of lives? Would tempered enthusiasm for high-spending and a curb on spiralling wages not be more empathetic than somewhat hollow gestures of solidarity and agenda-driven virtue signalling?

The Premier League has its critics concerning its activity in the transfer market. In the summer of 2020, around £ 1.2 billion was spent, which prompted politicians to question the wisdom of such spending when the UK government was considering financial support for sport.

There are signs that the transfer market, which has over-heated like a 19th century Californian gold rush in recent years is losing momentum. Just consider that the recent transfer window was arguably the most uneventful in years. The covid-19 pandemic is far different from the financial crisis of 2008-09 in that clubs are actually being affected operationally. In 2008, there were pressures, but by and large, football was able to continue almost as normal. There has never been anything like the financial impact of the pandemic to test the solidity of football’s business model in the post-WW2 world. According to Deloitte, the top 20 revenue generators in European football could lose around € 2 billion over the course of 2019-20 and 2020-21.

The January 2021 window saw gross expenditure in the Premier League total just £ 70 million from 24 transfers, of which 75% of the spend was connected to just three transactions. A year earlier, the amount was £ 230 million from 46 transfers. Moreover, the gross spend in January 2021 across the Bundesliga, La Liga, Serie A and Ligue 1 was around one third of the January 2020 window.

Declines
In all of the big five leagues, 2020-21 spending has dropped dramatically versus the three-year average, most notably in Spain, which has dropped 70%. Germany has fallen by 51%, France 40%, Italy 33%. The Premier League, in 2020-21, has declined by just 20%.

Interestingly, in 2020-21, only one a small number of the elite clubs has increased their gross spending in the transfer market. Chelsea, who paid the equivalent of € 247 million versus € 45 million in 2019-20, were the biggest spenders, accounting for approximately 20% of overall Premier expenditure. This was partly attributable to the transfer ban imposed on the club in 2019.

Of Chelsea’s rivals in England, Manchester City only just increased their outlay, while Liverpool spent € 83 million compared to € 10 million in 2019-20. Internationally, all the major clubs spent far less than normal, notably Real Madrid, Atlético Madrid and Juventus. The elite clubs are all net buyers, but some clubs rely on transfer income to balance their books and to remain competitive. If the pandemic induces a prolonged period of transfer inactivity, these clubs are likely to experience some real challenges.

For example, Portugal’s top clubs have generated over € 2 billion since 2011-12 from transfer sales, resulting in a net gain of more than € 1 billion. Similarly, the Netherlands’ trio, Ajax, PSV Eindhoven and Feyenoord have earned € 1 billion, on a gross basis, from the market. Should a lack of liquidity hit the football market, net-sellers like Benfica, Porto and Ajax could be squeezed in the short-term. English clubs will also be faced with additional hurdles due to Brexit such as a restriction on the amount of under-21 players and a ban on making under-18 signings.

Evolution
The transfer market has shifted in recent years in so far that fund managers have realised the opportunities in professional football. InterTrust Group, a specialist financial services company, said in its paper, All change – how player transfer funding has evolved, “the game changer to football player transfer funding has been long coming”. In the past, bank lending was the primary source, but bespoke financing arrangements have become more common, including the use of special purpose vehicles.

However, the pandemic has seen some funding sources retract from the market. The consequences of a diminishing appetite have included loans being subject to early repayment, payment holiday requests and in the worst cases, payment defaults which have impacted cash flows and investors.

The next key period will come in the summer, which will provide pointers to the long-term health and capabilities of the transfer market. There’s little doubt that clubs will come under enormous financial pressure over the coming year, but the after-shock of a depressed market will extend beyond the balance sheet of the clubs themselves and the personal wealth of players.

A lot of the football industry’s peripheral business will suffer, starting with intermediaries such as player agents, not to mention the smaller clubs that rely on regular sales of home-produced talent to more affluent members of the football hierarcy. We could be at an inflection point in the transfer market, which some will wholeheartedly applaud, but others will fear because of the dislocation. Change is certainly needed and long overdue, but slow, measures may have to be adopted to ensure the eco-system remains intact and shock-proof.

Source material: KPMG Football Benchmark, Deloitte, Keiran Maguire, InterTrust Group, Transfermarkt.

[Chester Perry]

super agent Jonathan Barnett with a column in the Mail about why English football should not have a salary cap - I can't say I agree with all his thinking

JONATHAN BARNETT: Salary caps will DESTROY decades of English football growth if they are allowed to come in... we don't moan about money made by film stars, so why is it happening in sport?
- EFL plans to introduce a salary cap in Leagues One and Two have been dropped
- An independent arbitration panel found in favour of players and agents this week
- Top agent Jonathan Barnett explains why the cap would have been a disaster
- Barnett says it would have destroyed decades of growth in the English game
- Any attempts to introduce a salary cap would simply lead to an exodus of talent
- The Chinese Super League found this out to their cost with their salary cap
By JONATHAN BARNETT FOR MAILONLINE

PUBLISHED: 16:24, 12 February 2021 | UPDATED: 17:32, 12 February 2021

Plans drawn up by the EFL to introduce a salary cap for League One and League Two were withdrawn last week following a verdict by an independent arbitration panel.

Clubs in the third and fourth tiers voted through a £2.5million per club cap for League One and £1.5m for League Two last August.

But The Football Forum, the Professional Footballers' Association and others campaigned successfully on behalf of players to block the cap.

The issue has divided opinion in the EFL. Clubs who have seen finances hit hard by Covid-19 insist the cap is the only way they can stay afloat, while players and agents against it have had accusations of greed levelled at them.

In this exclusive column, Jonathan Barnett - world-leading football agent, vice-president of The Football Forum and representative to Gareth Bale and countless other stars - explains why the EFL salary cap would destroy decades of growth in English football.
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Last month marked the 60th anniversary of the abolition of the £20 maximum wage in English football following the threat of a strike led by legendary footballer and then Fulham star Jimmy Hill, turning the tides of history and becoming the making of the modern game.

With the waiving of the wage cap, English football was allowed to flourish again and for six decades it has. English football is undeniably the best, most exciting and most competitive in the world.

From Hereford United's David vs Goliath killing of Newcastle United in the FA Cup in 1972 to the imports of global superstars, the eyes of the world have always been fixed on our football.

But last year all that was put under threat as the English Football League ('EFL') pushed through a new salary cap in League One and League Two that was set to destroy decades of growth for English football.

The EFL did this without the consultation of players – without question the most important part of the game, followed quickly by fans. In what other industry could wholesale changes be implemented without workers getting a say?

Thankfully and justly, an independent arbitration tribunal ruled this week against the EFL's salary caps, which The Football Forum ('TFF'), an association of football players and agents for which I am co-founder, has been campaigning against on behalf of players.

Football is a fantastic and often fantastically cruel game. Your team may dominate for 90 minutes in every area of the pitch, but sometimes the result just does not go your way.

The good thing about independent tribunals are the results usually go the right way, as the interests of all parties are taken into account.

The spectre of salary caps has been haunting Europe and the wider world since the EFL unlawfully implemented it in League One and Two.

Rumours have circulated about the French flirting with the idea for Ligue 1, while head of Germany's football federation (DFB) Fritz Keller proposed salary caps in May 2020. The EFL Championship too, was said to be considering caps.

For the time being, these proposals are firmly on the bench but the idea that there should be a cap on players' earnings is so utterly wrong that, to put it in football terms, they should be made to train with the U23s.

Players have short careers. For most, they are able to maximise their earnings for a decade, give or take a few years. During that period they should be free to earn the market rate for their talent, and as an agent, it is my job to ensure that they do.

We do not question the earnings of movie stars. If a big-budget film tanked at the box office we would not say that it did so because the actors were paid too much and therefore we should cut their earnings next time.

The brilliance of football is its competitiveness, and nowhere is that more true than here in England.

If governing bodies start capping salaries then the talent will depart, it's as simple as that.

The Chinese Super League, which has been enjoying huge growth and seen some of the world's best players join in recent years, has implemented new caps on players' earnings, and unsurprisingly, those players are already looking to leave. Years of growth has been undone.

The cases of League One and League Two and the Chinese Super League should be stark reminders to football's authorities that football is made by the players.

The Football Forum will be continuing to remind them of that and stand on the side of players.

We all want to see a sustainable future for football, particularly in the wake of the pandemic, but this must never be at the expense of the players, and ultimately the fans.

Because in the end, if clubs can't pay the players and they do leave, who are the real losers? It is the supporters, going to the games or sat at home watching a now worsened spectacle on TV, their favourite players donning new colours.

For football to once again flourish in a post Covid world, salary caps must remain in the history books, alongside the great Jimmy Hill who helped modernise the beautiful game by abolishing them in the first place.
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The Football Forum (TFF) is an international association of football players and agents, united in developing the best practice of football agency and the best employment-related standards for players, to the benefit of its members and the entire football community.