Football's Magic Money Tree

[Chester Perry]

This deal was trailed by Miguel Delaney in the piece I posted yesterday (which if you haven't read yet you really should)though it has been industry knowledge since at least April - from SportsBusiness.com

Uefa planning ‘€6bn rescue package’ to support clubs, adds new FFP rules
SportBusiness Staff
August 13, 2021

Uefa, football’s European governing body, is reportedly close to establishing a fund worth up to €6bn ($7bn) as part of plans to ease the financial burden on clubs amid the ongoing difficulties posed by Covid-19.

Uefa is set to detail a “three-pronged strategy” to help clubs recover from the pandemic, according to Bloomberg. The news agency said that the funding facility would be worth between €2bn and €6bn and serve as an “emergency pot of money” should similar situations to the pandemic arise.

The plan is also said to include new rules on financial fair play, with The Times reporting yesterday (Thursday) that a salary cap and a so-called ‘luxury tax’ are among the measures being drawn up.

Clubs competing in the Uefa Champions League, Europa League or Europa Conference League would only be able to spend a fixed percentage of their revenue on salaries, with The Times reporting that this figure could be 70 per cent.

The luxury tax would be enforced to punish any club that went over this percentage, with the equivalent or more of the overspend to reportedly be assigned to a pot that would be redistributed. The new guidelines would replace the current financial fair play rules, whereby clubs are required to break even over a three-year period.

Bloomberg, citing sources familiar with the matter, added that clubs would be granted access to funds at lower borrowing rates and be given the chance to restructure existing debt over five to seven years.

The news comes after Bloomberg reported earlier this year that Uefa was in talks with London-based investment firm Centricus Asset Management to finance the plans.

Uefa continues to be at loggerheads with Spanish LaLiga clubs Barcelona and Real Madrid and Italian Serie A outfit Juventus, with the trio refusing to back down from their proposed European Super League project.

The nine other clubs initially involved with the European Super League were quick to denounce the project following widespread backlash, but Barcelona, Real Madrid and Juventus remain committed to the idea.

Earlier this month, the three clubs claimed they “have the duty” to address the “very serious issues” facing the sport after stating they would press on with plans for the European Super League following a court ruling.

It came after the 17th Mercantile Court of Madrid ordered that Uefa end actions taken against European Super League founding clubs, including terminating the disciplinary proceedings against the undersigning three clubs and removing the penalties and restrictions imposed on the remaining nine founding clubs for them to avoid Uefa’s disciplinary action.

The New York Times with more on the UEFA rescue package for European Football

UEFA Plans $7 Billion Pandemic Relief Fund for Clubs
AUGUST 18, 2021

As European soccer clubs continue to count the costs of a global pandemic that has led teams large and small into financial distress, European soccer’s governing body is preparing to establish a relief fund of as much as $7 billion to help struggling teams manage their growing debts.

The plan, according to several officials briefed on the negotiations, would be for the governing body, UEFA, to secure financial relief for cash-strapped teams who play in major European club competitions. The repayments would be tied to the teams’ future payouts from their participation in those tournaments run by UEFA; for the teams involved in the latter stages of the Champions League, Europe’s premier club competition, those paydays can be worth up to 100 million euros a year (almost $120 million).

UEFA has for months been in talks with banks and private equity firms about creating the fund. According to the officials, the first relief payments would be made available to clubs that qualify for Europe’s three annual club competitions: the Champions League, the Europa League and the new Europa Conference League.

For many European teams, the financial relief is desperately needed. Billions of dollars in revenue has been wiped off team balance sheets since the coronavirus first started to impact the soccer industry in early 2020. Clubs in dozens of countries were forced to play games without spectators for months, and some had to pay rebates to broadcast partners and sponsors. All but a handful of teams have endured significant pain.

Barcelona, for instance, was unable to retain the services of its most famous player, Lionel Messi, amid ballooning debts of more than $1.5 billion, and its president said last week that the club was expecting this year’s losses to approach $570 million, a record figure for a soccer club. While many of Barcelona’s financial problems are self-inflicted, the result of years of poor management, red ink has spilled across balance sheets across Europe. The Premier League, soccer’s richest domestic competition, suffered its first drop in revenue since it was first established in 1992.

UEFA had been in talks with Centricus, a London-based investment firm that had also been involved in talks with FIFA about financing its enlarged Club World Cup, but it has more recently focused on striking a deal with a group of lenders that includes Citigroup and UniCredit, according to the people with knowledge of the talks. They declined to be identified because discussions with the clubs are continuing, and because no deal has been reached.

UEFA declined to comment on the talks or the relief fund. But it has discussed the proposal with the European Club Association, the umbrella body representing about 200 top division European teams.

UEFA has asked the E.C.A. to survey its members to understand their financial needs. The most pressing concern is related to tens of millions of dollars in player trading debt. Those obligations, accumulated over several years as teams bought and sold players to one another, are a vital source of revenue to small- and medium-sized clubs. Any default on them risks creating a contagion effect, though, given how interlinked club debts have become.

The player trading market — worth $7 billion before the pandemic — has now slowed considerably, with more sellers than buyers and clubs struggling to offload players they can no longer afford. The chief executive of one of Italy’s biggest clubs said the market for middle-tier players — those worth between $5 and $30 million, trades that lubricate the market in the good times — are now few and far between. Instead, teams have become increasingly reliant on loans and free transfers to unload contracts and salaries they can no longer afford.

According to one of the people familiar with the talks, UEFA’s participation in the relief fund is critical, since it will allow the banks to secure their investment against the future income of its competitions, rather than the balance sheets of individual teams. That arrangement would reduce the risk for the lenders while also ensuring lower than usual rates of interest for clubs. To determine the amounts clubs are eligible to receive, UEFA will create a rating profile for teams based on their likely income from the Champions League, the Europa League and the Conference League, a new third-tier competition that is being launched this season.

UEFA’s initiative comes months after a failed effort by a group of 12 leading teams — citing the need for greater financial stability as well as a greater share of soccer’s wealth — to form a breakaway superleague.

UEFA is only the latest soccer body to seek outside investment in an effort to mitigate the ongoing effects of the pandemic. Spain’s professional league announced earlier this month that it had struck a deal to sell almost 11 percent of broadcast and commercial income for 50 years to a private equity fund in return for a $3 billion investment. Italy’s league has been negotiating a similar arrangement.

UEFA hopes the financing will allow teams to restructure their debts at lower interest rates. At the same time, it is planning to revamp the financial regulations governing the teams in its competitions.

The current decade-old arrangement known as financial fair play has run its course, according to UEFA’s president, Aleksander Ceferin, and clubs are now bracing for a new set of cost-control rules. One likely option is a combination of a cap on spending linked to revenues and a luxury tax, similar to one imposed by Major League Baseball on teams that elect to spend far more than their rivals.

The move is an effort to inject greater clarity into a process that has often left UEFA unable to enforce its rules on the continent’s biggest-spending teams. Under the new system, UEFA leaders argue, teams will know exactly how much they will have to pay if they overspend. The system, though, is unlikely to have any meaningful impact on growing competitive imbalance between clubs that can spend freely on talent and those that cannot keep up.

[Chester Perry]

The Premier League have been very cautious in their Covid rules for this season, which has irritated a lot of fans, however the Premier League are playing the long game ans are aware that the Government is considering imposing universal rules - from FCBusiness.com

1st October – Covid Pass Day?
The date when you might need more than a ticket to get into the match!

Under normal circumstances 1st October should have been just like any other day. But probably not this year.

According to Government sources it could be the pivotal date that so called Covid vaccination passes are introduced and many fans will be legally required to produce evidence of having two jabs before they can get into grounds. All at a time when cashless entry is also the growing name of the game, creating significant extra administrative cost for clubs, and a potential change that could be with us forever.

Call it the calm before the storm, or going back to the future if you like. But with the possible return of Covid restrictions before Christmas also looking like a nightmare waiting to happen, a Plan B – particularly for clubs at the bottom end of football’s pyramid – looks like a lifeline some might have to grab with all available hands.

It comes during a major inquiry into how football is run in this country, led by former Sports Minister Tracey Crouch. And she has already delivered a grim warning that the future of the game here now faces “a genuine risk.”

In an interim report to Culture Secretary Oliver Dowden, she is reported to have called for a new and independent body to protect clubs at all levels and spearhead major reforms at the Football Association, the Premier League, and the English Football League (EFL).

All this is happening at a time when the picture was looking a little rosier than it has done for the best part of two years. But with the rest of an increasingly troubled world looking on sceptically at the way the UK has cocked-a-snook at Covid and opened stadia doors to fans who are optimistically expected to behave themselves and observe social distancing as well an air of nervousness pervades.

What will happen if Covid does strike again and brings another shutdown, even a relatively limited one, in its wake?

You don’t have to be an Einstein to work out that there is no bottomless pit to dip into and the Government can’t realistically afford to help much anymore having already forked out close on £350billion – that’s equivalent to nearly £7,000 for every household in the country – in furlough payments and support benefits to industries like football.

So, the question looms large if crowd restrictions return. Where do we go from here?

Chances are that if limited capacity crowds – or none at all for that matter – make an unwelcome return we may already have witnessed the beginnings of a revolutionary change in the way we watch football.

Such a scenario comes first with those vaccine passports, on phones, cards or documents that many fans may have to produce to prove they have had two COVID vaccinations – and possibly three if booster jabs are introduced – before they will be allowed inside stadiums in England.

At the moment all the English Football League’s 72 clubs have been left to make their own individual decisions on “passports only” entry, but several top clubs like Tottenham and Chelsea have already trialled on phone Covid passes. And the Government has indicated that an initiative that has already been applied to night clubs and other similar entertainment venues is likely to be made mandatory for football stadia from 1st October.

The EFL is currently in talks with the Government on how it will all work, but they are hoping Covid Certification, as it is being labelled, may yet prove to be an important measure for helping avoid reduced capacities at grounds for the whole of this season.

“Government media briefings have so far focused on it applying at matches with crowds of more than 20,000, but we await confirmation,” said an EFL spokesman. “However, clubs are being encouraged to step up their Covid communications to fans in respect of the need to follow current public health guidance to prevent the spread of the virus and get tested if displaying symptoms in order to keep everyone safe.”

The EFL is also urging clubs to encourage supporters to be vaccinated and promote the use of the NHS app.

Whatever happens, however, it is just the start of what looks increasingly like the ever changing face of football in the wake of the Covid pandemic.

Take season ticket holders, for example. Thousands have already forked out millions to watch their teams in action, but who pays if there is a return to restricted crowds or even empty stadia?

Last season, for instance, little Bromley in the National League did the decent thing by deciding not to sell any season tickets because they couldn’t guarantee playing all their home games. Chairman Robin Stanton-Gleaves said at the time: “A tough decision has to be made, and with the inability to guarantee a full fixture list we are not comfortable taking supporters’ money for a product we cannot guarantee we can fulfil. This will be an almighty challenge and we will need all our sponsors and supporters on board more than ever to make it happen.”

Let’s face it, most fans will want at least some of their money back if they are not allowed to watch their teams live for any lengthy period this season, and if the worst comes to the worst many more clubs could be facing a similar almighty challenge over the next few months as a result. Especially those who don’t have a wealthy benefactor like Bromley’s boss – or a Government with deep pockets – to help them balance the books through the season.

The EFL’s governing body is the first to recognise the “significant economic impact” Covid has already had on its member clubs (particularly those in Leagues One and Two) who collectively lost £250million in gate revenue when matches were played behind closed doors last season. And they are seeking a substantial increase in financial help from the Premier League to help cushion the blow.

Whether the Premier League, or the Government for that matter, is prepared or able to deliver any more bailouts is questionable. And seeing as how both bodies have already handed out millions to help rescue EFL and non-league clubs further financial help is almost certainly unlikely.

So now we all have to just wait and see, with fingers, feet (and anything else you consider lucky) very firmly crossed!

[Chester Perry]

@KieranMaguire with a depressing diagram that shows how money determines success in the Premier League - the triumph of Leicester only goes to show that the rule is true - in the first 29 years of the Premier League it was won 14 times by the club paying the highest wages, 9 times by the second highest wages, 4 times third highest wages, once by fourth highest wages and Leicester (15th highest wage)

https://twitter.com/KieranMaguire/statu ... 25/photo/1

Jonathan Wilson runs with this idea and applies it to Leeds defeat to Manchester United las weekend - the point overall is valid but he makes the all to common journalistic mistake that promoted clubs are paying the same wages in the Premier League as they were the season before in the Championship - Leeds of course were paying enormous wages in the championship and were probably paying more than Burnley were last season in wages in the Premier League, it is good to remember this as you read

No surprise Leeds lost to Manchester United, just look at the wage bills
Jonathan Wilson

Although teams can often defy financial logic for a time, to move up a tier is incredibly difficult

Wed 18 Aug 2021 15.00 BST

The easy thing is to blame the manager. It has become football’s default response to any crisis. A team hits a poor run or loses a big game: get rid of the manager. As Alex Ferguson said as many as 14 years ago, we live in “a mocking culture” and reality television has fostered the idea people should be voted off with great regularity (that he was trying to defend Steve McClaren’s reign as England manager should not undermine the wider point).

Managers are expendable. Rejigging squads takes time and money and huge amounts of effort in terms of research and recruitment, whereas anybody can look at who is doing well in Portugal or Greece or the Championship and spy a potential messiah. Then there are the structural factors, the underlying economic issues it is often preferable to ignore because to acknowledge them is to accept how little agency the people we shout about every week really have in football.

That point reared its head after Manchester United’s 5-1 victory over Leeds on Saturday. There was plenty to discuss: are Leeds overreliant on Kalvin Phillips, who was absent? Why does Marcelo Bielsa’s version of pressing so often lead to heavy defeats? Can Mason Greenwood’s movement allow Ole Gunnar Solskjær to field Paul Pogba and Bruno Fernandes without sacrificing a holding midfielder and, if it does, what does that mean for Marcus Rashford?

Yet there was a weird strand of coverage that insisted Solskjær had somehow outwitted Bielsa, even in some quarters that Bielsa needed to be replaced if Leeds are to kick on. (They finished ninth last season with 59 points, the highest points total by a promoted club for two decades). A Bielsa meltdown is possible; they do happen and he has never managed a fourth season at a club. There should be some concern that, like last season, Leeds lost by four goals at Old Trafford, insufficient lessons were learned, even if Bielsa said this was a better performance. But fundamentally, Manchester United’s wage bill is five times that of Leeds.

Everton, who finished a place below Leeds last season, had a wage bill three times bigger. Of last season’s Premier League, only West Brom and Sheffield United had wage bills lower than that of Leeds. To have finished ninth is an extraordinary achievement and nobody should think to slip back three or four places this season would be a failure. Modern football is starkly stratified and although teams can often defy financial logic for a time, to move up a tier is incredibly difficult.

There is still a tendency to talk of a Big Six in English football and while it is true six clubs last season had a weekly wage bill in excess of £2.5m, it is also true that within that grouping there are three with clear advantages: Manchester City (who had kept their wage bill relatively low, although if they do add Harry Kane to Jack Grealish that would clearly change) and Chelsea because their funding is not reliant on footballing success, and Manchester United because of the legacy that has allowed them to attach their name to a preposterous range of products across the globe.

Liverpool can perhaps challenge for the title this season, but their wage spending is 74% of that of United. That they were as good as they were in the two seasons before last was remarkable, but last season showed how vulnerable a team like Liverpool can be to a couple of injuries. Similarly, Leicester’s two fifth-place finishes with the eighth-highest wage bill are a striking achievement, their decline towards the end of the past two seasons less the result of them bottling it or any sort of psychological failure than of the limitations of their squad being exposed.

Which brings us to the other two members of the Big Six: Arsenal and Tottenham. Spurs’ last game at White Hart Lane, in 2017, brought a 2-1 win over Manchester United that guaranteed they finished second. Since when Spurs have bought Davinson Sánchez, Lucas Moura, Serge Aurier, Fernando Llorente, Juan Foyth, Tanguy Ndombele, Steven Bergwijn, Ryan Sessegnon, Giovani Lo Celso, Cristian Romero and Bryan Gil, while United have bought, among others, Alexis Sánchez, Victor Lindelöf, Nemanja Matic, Romelu Lukaku, Fred, Daniel James, Aaron Wan-Bissaka, Bruno Fernandes, Harry Maguire, Donny van de Beek, Raphaël Varane and Jadon Sancho. Money may not be everything in football, but it does help.

The irony of the situation is that it was investment in the infrastructure that should allow Spurs to generate additional revenues and better develop their own talent (much cheaper than buying it) that led to the lack of investment in players largely responsible for the staleness resulting in Mauricio Pochettino’s departure. That Daniel Levy compounded the problem by appointing José Mourinho – acting like a big club as though to jolt them to the next level – should not obscure the fact that until that point he had pursued a ruthless and successful economic logic.

Arsenal had gone through a similar process the previous decade, investing heavily in a new stadium at the expense of the squad, only to discover that by the time it was ready the financial environment had changed and the petro-fuelled era had begun. It was easy after the timid performance against Brentford on Friday to blame Mikel Arteta and ask why he gets such an easy ride. For all that Arsenal have finished the past two seasons relatively well, that criticism will only increase if there are not signs the tanker is being turned round. But the gulf to the top of the table is vast and a desperation to bridge that has contributed to a bizarre transfer policy.

That does not mean managers are beyond reproach and limp displays like Arsenal’s deserve criticism. But equally we should probably remember that where a side finishes in the league has far more to do with economic strata than any of the individuals involved.

[Chester Perry]

I have always been cautious about fan owned clubs, people love the idea and many supporters groups in particular are pushing for some form of fan ownership and it became a regular them in the input into the governments fan led review. We know that there are problems with Germany's 50 + 1 system in that it has done nothing to stop the domination by a single club. We see that in Scotland Hearts are about to follow other clubs into becoming fan owned and even Rangers are actively looking to get fans and fans representatives involved in the ownership and board of the club - In the English game the best known examples are Exeter and AFC Wimbledon, though I number of others have tried and failed/sold up as they find the climb through the leagues to be too much for such a structure - the most recent example being Wycombe Wanderers. But what about the real giants Barcelona and Real Madrid are member owned clubs and we have seen that even for these behemoths being fan owned has it's problems many of which have been highlighted in the last week or so.

Here Simon Kuper talks to OffthePitch.com about his new book on Barcelona, that was trailed on here last week, and opens up on the deep lying intrinsic problems have as a result of being member owned and comes up with the analogy that the club's operations are more akin to a local council than a corporate giant - these are exactly the kinds of issues that feed my caution on member owned clubs


“He's a salesman, he's a convivial bloke, a fun, lively, optimistic guy…not a realist.” – author of new Barca book sceptical of Laporta’s “clean-up” skills
18 August 2021 9:54 PM

• New book by groundbreaking author and journalist draws upon fly on the wall access to chronicle the build up to Barcelona’s crisis.

• Author explains about a working-culture at F.C. Barcelona very far away from the professionalism you see at high-performing companies.

• Complacency, catastrophic recruitment, and Messi’s half-billion wage packet attributable for Barca’s collapse.

• “I don't think anyone in the club would speak of Barcelona as a business. ” he says.

JAMES CORBETT corbett@offthepitch.com

On the morning of 5 August, the first extracts of the journalist and author Simon Kuper’s new book, Barca: The Inside Story of the World’s Greatest Football Club, were published.

For two years Kuper, a columnist and features writer for the Financial Times, had followed Barcelona from the inside, institutional James Boswell, part fly on the wall, and handed a level of access that would make anybody who works in the football industry envious.

He also had nearly 30 years of notebooks to draw upon, a fascination that began in the early-90s, when he wrote his award award-winning debut book, Football Against the Enemy – a genre defining travelogue. Then Kuper had visited Barcelona and interviewed the club’s elderly vice president, Nicolau Casaus, who had outlived a Francoist death sentence, and Johan Cruyff’s assistant, Tonny Bruins Slot. Three decades of further notes, cataloguing encounters with the likes of Cruyff, Frank Rijkaard and Gérard Pique inform the pages of Barca.

But on the afternoon of 5 August, the club’s narrative flipped on its head. At 7.51pm local time, the Blaugrana put out a statement saying that Lionel Messi would be leaving the club.

On and off the pitch it was a sensational development – “a huge shock to me and to Messi as well,” says Kuper. “Like me, he'd woken up that morning thinking that he was going to stay at Barca.”

Fall of Rome

In some subtle way, the subtitle of Kuper’s book appears misleading. Often football books focus on glory and how a club reached greatness and the heading implies such a narrative.

Barca does some of that: it shows how the original thinking of Cruyff, continued by Rijkaard and Pep Guardiola, created over a period of two decades arguably the greatest club side ever.

But much of the narrative shows from the inside the hubris that followed: the bad transfers, the over-inflated salaries, Messi’s increasing dominance of the club finances and on pitch direction. It is all rather like the fall of Rome. Messi’s departure isn’t – for obvious reasons – detailed, but it appears inevitable by the book’s conclusion.

“In some senses I would have loved to have written three more pages with all this in, but in another sense, there's nothing in the book that I'd really change. I feel that it leads up to a crisis and Messi's departure fits into that,” says Kuper.

What does Messi think?

“They paid Messi about half a billion euros over the last four years, and they spent a billion on transfers over five years. So they spent double on transfers what they did on Messi. On the other hand players like Dembele, Coutino, De Jong have some value, not as much as they paid.

“It's a very significant chunk of the financial crisis that they find themselves in is what was paid to Messi. Messi was getting by the end about three times as much, I think, as any other player on earth.”

“One of my questions at the beginning was ‘Who has power at Barca?’ And I think Messi is the guy within this very complicated club who had the most power. So every big decision they made, every transfer, every manager appointment, they thought, 'What does Messi think?'

“It's sort of inevitable that you do that because the talent has power and nobody has more power than he does. There's also this huge sentimental importance that he acquired in the club as this kind of figurehead, even beyond being the greatest player of all time. And so in the end, he eats the club.”

Lingering complacency

In the book Kuper writes about a sort of lingering complacency at the Nou Camp. He describes European rivals paying visits to its La Masia training complex a decade ago – a time in which it had produced the core of Spain and Barca’s all-conquering teams – and “stealing their best ideas.” Kuper says that this generosity and hospitality wasn’t the problem, more that Barca officials didn’t make reciprocal visits.

Someone described it to me in the book that it's more like working for a local council than working for Microsoft or Apple.

“They didn't care what anyone else was doing for many years. They thought 'Well we do it better. Why go and have a look at Liverpool or Bayern?' - Which is exactly what they should have been doing.

“They stopped thinking, and now it's time to start thinking, and I think that that is happening.”

President’s ‘mates’

Off the pitch, he says, the ‘more than a club’ mantra transcends commercial realities, while a culture of nepotism and parochialism undermines the club’s smarter employees.

“I don't think anyone in the club would speak of it as a business. There are a few executives on the marketing side who would see it that way. And some of these people have worked for real companies like Disney. I think that you do get smart people and then you get 'mates of' a lot because everybody knows each other. When you're president you have a lot of ‘mates’ because you've lived in the city for 60 years and all your mates want jobs and their mates want jobs.

“And so there's a mix of some wonderful people, some ‘friends of’, some not very clever people.

“Someone described it to me in the book that it's more like working for a local council than working for Microsoft or Apple. There are a few people there who would like to be working for a Microsoft/Apple style operation. But mostly it's not that.

Can do whatever we like

This, he says, comes from the very top. “The president doesn't think 'how can we hit our revenue targets? How can we hit the targets?' He thinks about what's going to look good in tomorrow's newspapers. What is going to please the socios - especially now as they need pleasing - and what is going to offend their sense of decency.

“So the president might want to sign a deal with Qatar or the president might want to join the Super League. Will that wash with the Socis?

“If you're a business, you don't have to worry about that kind of stuff because you just think ‘We're going to maximise maximise.’ That's sort of what Manchester United do and United fans don't like that. But the Glazers think 'what the hell? These people are not members. We can do whatever we like.' At Barcelona, you couldn't have that. You couldn't have a kind of Glazer style operation.”

Sheikhs and oligarchs

Many, many things have gone wrong at Barcelona – the season’s opener when just three players with combined transfer fees of €350 million were left out altogether is a pointer at its appalling recruitment – but one of the things Kuper disputes in his work is that the club are a victim of the current football environment. An argument often advanced is that they are now unable to compete with clubs like Manchester City and Paris Saint Germain, which are backed by nation states.

Kuper acknowledges the impact oligarchs and sheikhs had in the noughties, but says that instead of being more difficult, Barcelona’s model should have become “more viable” over the past decade with the advent of financial fair play.

You come to Barcelona where you've got a hundred and fifty socis [working for the club] and this whole local ecosystem that is there every day, these people have worked for the club for decades. You can't simply push that out.

“Even if you have a Sheikh owner it's hard to, under normal circumstances, convert that money into success,” he says.

“It's easy to say, [that being] a member owned club is why they ran into this trouble and now, there's no one to bail them out. But it's hard to bail out any club now. And if you look at clubs that have had similar financial crises like Leeds or Rangers they were structured like a limited company, so I don't think Barcelona's structure is particularly to blame.”

Worked for the club for decades

Barcelona had their own flirtation with a Gulf monarchy in the past decade, when Qatar became the first commercial sponsor of a shirt that had famously always resisted endorsements. Guardiola and former president Sandro Rosell were also paid to lobby for the country’s World Cup bid. For six or seven years the club and the country appeared unlikely bedfellows.

But since 2017 when the sponsorship ended, Qatar has increased its focus on Paris Saint Germain, which an arm of its sovereign wealth fund purchased in 2011. In 2017 it bought Neymar for a world record fee. When Messi left it seemed inevitable where he would end up. While Barca might carry greater prestige or romance, was it simply too much bother for a gulf state to hoist its flag above the Nou Camp?

Kuper says that there was a strong element of the Qataris “wanting to run their own thing”, which they couldn’t get in Catalonia.

“You come to Barcelona where you've got a hundred and fifty socis [working for the club] and this whole local ecosystem that is there every day, these people have worked for the club for decades. You can't simply push that out. Now if you take over a club with less of a history and no members, like PSG and Manchester City, it is much easier. You could do your own thing. So I completely understand why they ended up there. Barcelona is not for sale and so they just couldn't acquire that kind of power at Barcelona.”

New realities

He says that Laporta was correct to reject CVC’s private equity offer (“It would have been an insane thing to do for Barcelona, Real Madrid and probably other clubs to agree to it”) but doesn’t believe that he’s the man to get the club out of its hole.

“Laporta's a salesman, he's a convivial bloke, a fun, lively, optimistic guy. ‘Everything's going to be OK. I can have an asado with Messi and then he's going to sign a new contract.’ Laporta is not a realist. He does not say what somebody should be saying, which is, 'guys, we're not going to win the league - probably for a long time. Forget all that. There's not a Masia generation to replace the side. We have to lower expectations.’ Laporta's not the guy to say that.”

La Liga’s financial rules will probably save Barcelona from going the way of Leeds United or Rangers in Britain, but the reality for the next few years is likely to be grim.

“The league won't allow a Rangers or Leeds situation to develop and the way they will stop that is what they're doing now: policing spending. When you police spending, you lose your great players. So they might lose Pedri or De Jong in the next year or two - their most saleable assets. But even with those guys, it's hard to see them competing all the way at the top. I think they have a team that they can finish third and fourth in Spain with.

“But I think that's the reality. The reality is austerity.”

Barca: The Inside Story of the World’s Greatest Football Club is published by Short Books, priced £20, and out now.

[frankinwales]

Thanks Chester as always.

Some parallels with the denise of the British Motorcycle Industry in the 70,s and an unwillingness to look outside of their bubble at new ideas.

Barca certainly have big problems and will need to use their youth system to bring on their next teams,.


Up the Clarets.

[Chester Perry]

Thanks Chester as always.

Some parallels with the denise of the British Motorcycle Industry in the 70,s and an unwillingness to look outside of their bubble at new ideas.

Barca certainly have big problems and will need to use their youth system to bring on their next teams,.


Up the Clarets.

the problem as acknowledged in the article is that it is not producing as it did for that exceptional team - not unlike at Manchester United who also achieved great success with an Academy group of similar size - United of course are not a member owned club and can be ruthless with staff, which we have seen a little bit under Solskjaer,

[Chester Perry]

Today's Business of Sport Podcast from the Athletic looks at why US Investors love European Football

the blurb

On this week's Business of Sport, Mark Chapman & Matt Slater are joined by Michael Kalt, who was part of the investment group that transformed the Tampa Bay Rays from one of baseball’s worst teams to one of the best and now leads consortiums investing in football across Europe.

As well as comparing financial strategies in US & European sport, Kalt discusses how U.S. investors have been seeking out bargains in football, drawn by the game’s ever-increasing global reach and lower valuations.

Then , Matt Slater is in conversation with Ipswich Town’s American co-owner Brett Johnson & CEO Mark Ashton to hear about their plans for the club following the US backed takeover.

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

[Chester Perry]

@SwissRamble has been preparing 10 year graphical overviews of the greedy six which kelps you see real trends such as the decline of Arsenal relatively to the rest

https://twitter.com/SwissRamble/status/ ... 0353315840

and in a moment of generosity also provided the same data for the first 5 teams requested by his followers - so we also have

Leeds United https://twitter.com/SwissRamble/status/ ... 3068071940

Newcastle United https://twitter.com/SwissRamble/status/ ... 5547653121

West Ham United https://twitter.com/SwissRamble/status/ ... 6261313537

Preston North End https://twitter.com/SwissRamble/status/ ... 3712760833

Wolverhampton Wanderers https://twitter.com/SwissRamble/status/ ... 9796725762

[Chester Perry]

The mess at Barcelona that has dominated football headlines in the last week has led many back to this transaction last summer between Barcelona and Juventus designed to prevent the need for Barcelona's directors digging into their own pockets to make up for the shortfall they helped to create. For some of us it was a real alarm bell, mostly everyone else shrugged their shoulders as the the directors said there was nothing to see here. The Financial Times this week looked at the accounting practices that facilitated such an outcome that was legitimate but questionable

https://outline.com/esxGFc

For all the focus on Barcelona in the Pjanic/Arthur Melo player exchange last summer, few have looked at why Juventus entered into the transaction, a club that has taken on board over 600m Euro's of financing in the last 3 years, a club that has been directly responsible for much of the changes in UEFA's Club Competitions and the way participation is rewarded and which dominated it's own league for the last decade after returning from a bribery scandal. It is a club that is used to getting what it wants when it wants and in many ways is one of the clearest reasons that this thread not only exists but continues to grow.

Here @Tariq Panja posts a thread on Juve's latest player acquisition - which to most of the world looks a very strange deal for Sassuolo to enter into. At some point in the future you would think that this is going to be questioned more deeply

https://twitter.com/tariqpanja/status/1 ... 3866860549

[Chester Perry]

Norwich City: Premier League club says sorry and cancels controversial sponsor deal - https://www.bbc.co.uk/sport/football/57424206

Didn't like the suggestive /lewd adverts of its sponsor apparently

It is interesting how different attitudes in different countries to the same kind of partnerships - remember BK8 and the controversial shirt sponsorship of Norwich City which lasted around 3 days as a result of their essentially soft porn based advertising in some Asian markets. BK8 have lost Premier League exposure as a result, but in Spain it is racking up partnerships - from SportsProMedia

Five La Liga clubs agree deals with BK8
Valencia, Athletic Bilbao, Villarreal, RCD Mallorca and Elche partner with Asian betting firm.

Posted: August 17 2021By: Rory Jones

• Deals include virtual perimeter advertising rights in Asia during matches

• BK8 branding will also appear on clubs’ Asian digital and social media channels

• La Liga clubs were told to cancel domestic betting sponsorship deals last year

BK8 has been named as the official Asian betting partner of five La Liga clubs for the 2021/22 Spanish soccer season.

The new deals will see BK8 work with Valencia, Athletic Bilbao, Villarreal, RCD Mallorca and Elche on a range of player marketing initiatives throughout the partnership.

BK8 branding will also appear on the clubs’ Asian digital and social channels, while the deals also include virtual perimeter advertising rights in Asia during La Liga matches.

Spain’s clubs are limited to overseas betting deals after seven La Liga teams were last year ordered to cancel their sponsorship arrangements with betting companies by Alberto Garzón, the country’s minister of consumer affairs. That move came as the Spanish government introduced new laws prohibiting gambling sponsorship in sport.

One of those clubs, Real Betis, who previously had a partnership with Betway, recently agreed a shirt sponsorship deal with telecoms company Finetwork ahead of the 2021/2022 season.

Michael Gatt, BK8’s managing director for Europe, said: “We are very ambitious and to have joined forces with some of Spain’s leading clubs shows the determination we have to be able to address some of the work we want to do moving forward.

“We are working with a number of football stakeholders across Europe at this moment in time, so we can continue on this positive trajectory and help us invest with not just clubs but also charities and the community who share our ambition to make a difference in football.”

[Chester Perry]

We have known that UEFA were planning to change/adapt it's FFP rules (and from what we have seen recently it is needed) but what are they thinking about - here The Times claims they are planning a luxury tax approach (which has been suggested for a while).

Uefa plans salary cap and ‘luxury tax’ for teams who breach it
exclusive
Martyn Ziegler, Chief Sports Reporter
Thursday August 12 2021, 5.00pm, The Times

Uefa will set out proposals next month to replace its Financial Fair Play rules with a salary cap and luxury tax by next year.

Under the planned system, clubs in European competition would be limited to spending a fixed percentage of their revenue — possibly 70 per cent — on salaries. Any clubs breaching the cap would have to pay a luxury tax, under which the equivalent or more of any overspend would go into a pot to be redistributed.

This would replace the FFP rules brought in 11 years ago, which state that clubs must break even over a three-year period.

The proposals will be unveiled at a convention on the future of European football that Uefa is hosting in Switzerland next month, involving national associations, leagues, clubs, players and agents, sources with knowledge of the plan have told The Times. That meeting will also discuss how to fend off the threat of any future breakaway European Super League (ESL).

The plan is viewed as fairer and more transparent than the existing FFP system and would allow some scope for wealthy owners to spend beyond their club’s income, but only if they are willing to pay the luxury tax. For example, if Paris Saint-Germain’s signing of Lionel Messi and other players this summer pushed the club over the salary-cap threshold, they could remain in European competition but would have to pay a substantial amount extra for the privilege.

Redistributing the money from salary-cap breaches to other clubs would also promote competitiveness, Uefa is expected to argue.

The draft proposals envisage adopting a similar system to those used in the United States in Major League Baseball and basketball’s NBA.

One example would be that for every Euro a club exceeds the salary cap, it would then have to pay a Euro into a fund distributed to the other teams in that competition. If the cap is breached the next year, the repeat offenders would pay €1.5 or €2 for every €1 they have gone over, depending on the scale of the breach.

Repeat offenders would also face possible sporting sanctions, up to the ultimate punishment of disqualification from European competition, as Uefa believes there still needs to be a strong deterrent to stop clubs overspending.

The proposed luxury tax would also be used on a sliding scale — for example, exceeding the cap by up to 20 per cent could mean clubs paying the equivalent amount of the overspend, but for anything over 20 per cent it could be 1.5 or two times that amount.

The review of FFP has been taking place internally in Uefa for the past year and officials believe that the salary cap/luxury tax system would be based only on recent spending by clubs and allow them to plan more easily for the future.

Under the existing system, clubs’ losses from as far back as four years ago can be used as part of the FFP calculation, something that has become almost unworkable after the financial impact of the pandemic on European football.

It is understood that the European Commission (EC) would be happy that a salary cap based on percentage of revenue would comply with European law.

There is also an idea of having one fixed salary cap at a very high level, for example €600 million (about £509 million), alongside the percentage of revenue to stop the elite clubs inflating their income to ridiculous levels via related-party sponsorship deals. That, however, would be less easy in terms of securing agreement from the EC.

A constant criticism of FFP has been that it maintains the elite clubs’ position because owners of smaller clubs who are trying to reach the same level are not allowed to put in money to cover losses.

The salary cap as a percentage of revenue would potentially have a similar effect as those clubs with the bigger revenues can spend more on wages, but it would be more flexible and would at least allow owners to breach the cap if they were prepared to pay for it.

The actual level fixed for the salary cap will be a key decision for Uefa. France’s Ligue 1 is implementing a 70 per cent of turnover restriction from 2023-24, so Uefa may follow a similar path.

Intriguingly, the plans for the ESL, which collapsed in April, also included a salary cap, but the member clubs would have been limited to spending only 55 per cent of turnover on salaries and transfers combined.

The ESL’s founder members, including the “big six” English clubs, would have earned up to £310 million in joining fees and about £220 million a year — twice as much as they get from the Champions League.

The ESL’s plans collapsed when nine of the 12 founder clubs, including the six English ones, pulled out only 48 hours after it was launched, though the remaining trio of Real Madrid, Barcelona and Juventus are still involved in court proceedings against Uefa.

Q&A
Why is Uefa ditching its FFP rules?
There is an acceptance at Uefa that the FFP rules introduced in 2010 have had their day and something more relevant is necessary.

What is the thinking behind the cap being a percentage of revenue rather than a fixed cap?
It is much easier to get the European Commission to ratify a percentage of revenue. Setting a fixed number could lead to legal challenges based on competition legislation.

Why is it called a “luxury tax”?
Clubs who breach the cap will have to pay for the luxury of doing so — for every euro spent above the limit they will have to contribute the same or more to a central fund to be distributed to rivals.

Which clubs would this system help most?
It will make it easier for the state or oligarch-owned clubs to inject more money into their teams to achieve success, so it may be a levelling up with the established giants of European football. For most clubs, it should be simpler to plan to stay within the cap rather than the complicated FFP calculations.

How will the new system be more transparent?
Clubs will know what the penalties will be for breaching the cap, so it won’t be a complex sanctioning system. Sporting sanctions would be imposed only on repeat offenders.

What is the likelihood of stakeholders giving this the thumbs-up?
It appears likely — most people in football agree that FFP needs a total overhaul and this system works well in basketball and baseball in the USA. There is no obvious alternative.

with UEFA reportedly considering a salary cap and luxury tax in a revamped approach to FFP I found this new report from Sportico about the record levels of luxury tax in the NBA last season

https://outline.com/rMkPXL

[Chester Perry]

Sam Wallace of the Telegraph opens the discussion on a potential luxury tax in UEFA's European Club Competitions and immediately raises a couple of my Prime concerns (the club's representative lead negotiator - Nasser Al Khelaifi and how it will lock in an elite by encouraging overspending by those who can afford it while competitors are not even benefitting from the proceeds of the tax as it will likely be spread very thinly accross all levels of the European game.

Uefa's FFP era is over and who drives what comes next? PSG president Nasser Al-Khelaifi
SAM WALLACE AUGUST 19, 2021

The nine contrite clubs of the European Super League quietly came back into the fold on Monday, returning to membership of the European Club Association (ECA) that they once used and abused as cover for that failed breakaway in April.

It was, to put it bluntly, one more stage of the reintegration back into civilised society of Manchester United, Manchester City, Liverpool, Chelsea, Arsenal, Tottenham Hotspur, Atletico Madrid, Inter Milan and AC Milan. Somewhere on the margins, the last remaining Super League fugitives, Real Madrid, Barcelona and Juventus, are still considering their options. It must be getting desperate out there, and while their fragile alliance is holding for now, it will not be easy to see the European game remodelled in their absence.

On September 10 and 11 the stakeholders of European football, its biggest clubs, and Uefa, will meet in Nyon to discuss the future – and everything is up for grabs. The end of financial fair play (FFP), as we know it, the abolition of the two places in the Champions League that were to be awarded post-2024 on coefficient – the built-in safety net for underperforming big clubs to qualify in spite of a bad season. All the rebel clubs will have a say, even the nine still on remand for bad behaviour, but only one of them can lead the ECA, which is the key negotiator for the clubs with Uefa.

The new president of the ECA, who succeeded Andrea Agnelli of Juventus, currently hanging out at the bandits’ outpost with Real Madrid and Barcelona, is the Paris Saint-Germain president Nasser Al-Khelaifi. He is now the most powerful man in the talks with Uefa president Aleksander Ceferin in shaping the future of European competitions, its calendar, its rules, its financial restraints on big clubs – or lack of them. The former Qatari tennis pro, and television executive who rose to be the face of the nation-state PSG project is one of the game’s most influential people.

Al-Khelaifi had, to use the parlance, a good Super League. PSG’s reluctance to join the original breakaway, along with Bayern Munich, put him on the winning side and in prime position to step into the void in European football politics while a lot of expensive suits from a lot of famous clubs had their reputations torched. Now he finds himself as the lead voice in negotiating the replacement for FFP, the luxury tax which proposes a levy on any spending above a certain level. For the man who has signed Neymar, Kylian Mbappe and Lionel Messi in the last four years this is indeed a fortuitous turn of events.

Paris St-Germain's annual revenue each year since they were taken over by Qatar Sports Investments in June 2011
https://cf-particle-html.eip.telegraph. ... 1df93.html

The end of FFP most likely came with Uefa’s defeat to Manchester City at the Court of Arbitration for Sport last year, a governing body defeated on appeal on the very rules it devised. Any lingering doubts were removed by the Covid shutdown of the game, and the necessary relaxing of FFP to allow owners to inject funds. For ten years, Uefa, at the instigation of its former president Michel Platini argued over what was legitimate spending and legitimate revenue with a series of upwardly mobile clubs, most notably twice with PSG and City. That is now over. “We are operating in a new financial reality,” says Ceferin.

Yet at this crucial juncture, the old money clubs that sought to curtail the rise of the new generation find themselves sidelined. As he did over the post-2024 reforms to the Champions League that were in train before the great Super League betrayal, Ceferin typically prefers to negotiate with the great mass of European clubs large and small via the ECA chairman. Once that was Agnelli. Now it is Al-Khelaifi. The rest of the game awaits the outcome.

The luxury tax has its flaws. For a club with bottomless spending power its cost may just become another part of the calculation, along with inflated salaries and exorbitant agents’ fees. How will its redistribution work in preserving the balance of competition at the top of the game? A small slice of a luxury tax premium will be very welcome for a club struggling along with Covid debts in one of Europe’s lower tiers. But what meaningful difference would it make to the competitive edge of a club like, Borussia Dortmund, who will have to face on the pitch a free-spending, luxury tax-paying opponent?

Uefa needs the big clubs back on side. There is still a legal battle with the Super League rebel three, and Uefa also needs to see off Fifa’s plans for a World Cup finals every two years and a potential Champions League rival in the expanded Fifa Club World Cup. Uefa won the life and death battle over the Super League but it is in no position to dictate. It is both a competition organiser and a governing body, two roles that were much more natural bedfellows in decades past. Now it has to balance curbing the spending of clubs with marketing its marquee competitions to broadcasters for the most lucrative possible contracts.

All this points towards a new era of loosening of regulation – even encouraging clubs to spend greater amounts, when a luxury tax is taken into consideration, rather than less. Ceferin is trying to obtain emergency funding for European football, a package of up to €6 billion including loans. He is not in a position to discourage the wealthiest from spending money, especially if some of it trickles down to the hardest-hit. Uefa has always argued that FFP has created a much more stable European football landscape over the last decade, even if it has proven hard to enforce at the very top of the game. It has also not saved every club from making bad decisions, Barcelona being the most obvious example.

What replaces it will not be a move to less spending but more, while the Super League calamity has changed the political face of the game. When the music stopped in a year of betrayal and backroom deals, it is PSG and their chairman who find themselves negotiating the end of the rules that have restricted them the most.

[Chester Perry]

Following my recent posts about how wage spend has a huge determining impact on who wins the Premier League, this from the Independent looks at the different approaches of the newly promoted clubs to their chances of survival, at a time when the average failure rate in doing so is approaching 50%

The Premier League’s new clubs taking different approaches to surviving relegation
Three clubs with markedly different approaches and strategies, but do Norwich City, Watford and Brentford have what it takes to stay up?

Karl Matchett - @karlmatchett - 21 hours ago

Across the last ten seasons of Premier League football, there has been just a single campaign when none of the promoted sides went straight back down again.

It is, increasingly, a battle against the odds, the financial disparity between divisions and the overdue need to balance risk and reward, which too many clubs failed to do in the preceding years.

Over a 15-year period from 1999 through to 2014, an average of 1.2 teams per season were immediately relegated after a single campaign in the Premier League. Over the past six full seasons, however, it’s up to 1.43 – or to put it another way, over a rolling two-season period, we’re almost at the point that half the clubs who come up will invariably go back down.

Planning and recruitment have never been more crucial, and while there are varying approaches to this and no single “right way”, the pressures remain – from fans as much as any other stakeholder – on clubs to ensure being in the top flight is both a reasonable aim and a sustainable target.

Norwich City, for example, have made it publicly clear that their approach is to effectively remain in the top 25 or so clubs in the country, acknowledging that they might well get relegated from the top flight, but will always be in contention to immediately bounce back. Sporting director Stuart Webber noted the importance of their transfer work maintaining a balance between giving them a chance to improve, but making sure they don’t drop out of the equation thereafter.

“The pressure this time is whether we can build a squad which helps us do better in the Premier League next season,” Webber said. “But, to be honest, we need to do perfect work for us to be able to achieve that – and it is not easy. We could make decisions in this window which means we stay up next season, but which kills the club the year after.

“We have seen enough teams in recent history who have a brilliant year one (in the Premier League), spend an absolute fortune, but then they don’t (stay up). We can’t do that because of our ownership model. We don’t have a benefactor, so any mistakes we make, we have to repair.

“But as we go into it, we are already in a much better place than we were the last time we were promoted.”

With a solid management team, a new long-term contract for head coach Daniel Farke until 2025 and a group of players broadly similar to their last foray into England’s top tier, it’s a rather different approach to that taken by Watford’s ownership group for example, with Xisco Munoz the ninth different face in the dugout since the closing days of the 2015/16 season. Gino Pozzo’s approach hasn’t always been widely admired, but it has at least remained consistent.

Brentford, again, have a very different approach to many, with their renowned incorporation of statistical data in recruitment just part of their wide-ranging approach to buck the trends in football that most clubs chase.

No “right” way, but a fascinating difference in ideals and sporting beliefs as to what best serves for the club’s growth and continuation as a Premier League side.

Two of the three new clubs have made the ideal start to Premier League life in 2021/22.

Watford beat Aston Villa in their opening game, despite a late comeback of sorts, while Brentford kicked off the campaign with a Friday night win which set the tone of the weekend with emotional scenes among the returning fans and questions of Arsenal being underachievers and ill-prepared for the new campaign.

Norwich, meanwhile, lost 3-0 at home – but far from disgracing themselves, they coped reasonably well with Liverpool until the final period of the match, when the 2020 champions strode into the distance somewhat.

The Canaries will not play one of the best sides on the planet every week, however...although they do again this coming weekend, when they head to Manchester City. The fixture list has not been overly kind to them, with Leicester to follow on match-day three, and there’s a case to suggest the old cliché applies to them: their season really starts on 11 September, when they face the Gunners. It’s again far from an easy game, but at least a team in mid-table last year rather than in (or very nearly in) the Champions League spots.

What Farke and his coaching staff must ensure by then is that, if three defeats have already come their way as the odds would no doubt suggest, heads and confidence have not dropped. The League Cup clash with Bournemouth next midweek could be an important match to make sure that’s not the case.

All three clubs will perhaps feel another face or two in the closing two weeks of the transfer window would also be of benefit – and the same might be said of the more established clubs they’ll be fighting for survival against, including Burnley and Southampton. Newcastle United and Crystal Palace were comfortable in the end last season, but the former had a tough run for a period and haven’t renewed the squad particularly, while Palace have done the opposite: a squad overhaul and new boss giving a set-up which could prove tremendously exciting, but of course also comes with fewer guarantees.

The opening weeks of the season are not definitive, though of course it becomes more difficult to climb out of the bottom three the longer a club stays in.

It took a year of tough work in empty stadiums to get promoted to this point; now it’s all about making that count and trying to ensure that the foundations which brought the teams back to the Premier League remain those with which they attempt to stay there.

[Chester Perry]

Technology's role in Fan Engagement has become an increasingly prevalent feature of this thread and this from SportsProMedia is a useful overview of what is currently happening and what is coming into view. I also like that it is upfront in it's acknowledgement that fan engagement technology is first and foremost about monetisation and increasing revenues - a refreshing position. It is also good to note that there is so much more available in this space than Socios and it's fan token/crypto currency trading hybrid (which feels more Football Index 2.0 than anything)

Sports Tech 101 - Part two: Fan and sponsor engagement
SportsPro has teamed up with Sports Tech World Series (STWS) to bring you monthly insights into the current challenges, industry trends, innovative use cases and future predictions in sports technology. Here, STWS head of North America Thomas Alomes casts an eye over fan experience solutions and tools designed to increase value for partners.

By Thomas AlomesPosted: August 18 2021

‘Sports technology’ is an inherently amorphous and unwieldy term. In truth, technology is having a revolutionary impact on all parts of modern sports, from how it’s played to how it's administered to how it’s consumed.

For the second of our monthly expert guides, we’re looking at sports tech applications for fan and sponsor engagement. In other words, solutions designed to enhance and improve the experience of the fan, or increase the value for the sponsor, including physical and digital offerings.

State of play
Fans are the beating heart of sports. The uniquely passionate and dedicated experience of fandom has long elevated sports above other pastimes and entertainment offerings. However, as the Covid-19 pandemic and the disastrous European Super League (ESL) has highlighted, this fandom cannot be taken for granted. Sports teams and leagues are fighting for the attention of their fans. Especially amongst younger demographics that expect a level of interactivity and personalisation that sports have not traditionally offered.

Fan engagement can often be a weak, vague term. At the end of the day, fan engagement is about monetisation. It is about understanding the value exchange at an individual fan level (i.e. how do you give fans what they want, how they want it and when they want it) and from sponsors (i.e. connecting brand partners with fans in a way that builds an authentic, positive relationship). Getting to know fans, their needs and their motivations is of the utmost importance for their long-term financial sustainability. Technology, digital and data hold the answer to gaining those insights efficiently and accurately.

Sports has been slower than most BTC industries in realising the benefits of owning first-party data, rather than having it sit on rented third-party platforms such as social media. This shift to first-party data in sports and many other industries has been accelerated as big tech feels data privacy and antitrust pressure from regulators. Examples include Google’s announcement earlier this year that it will stop enabling cross-website tracking and Apple’s iOS 14.5 update enabling iPhone owners to turn off apps’ ability to track them.

The gamification of the fan experience, whether at home or in the stadium, is an example of the way teams and sponsors are trying to convince fans to directly share their personal data whilst increasing the 'stickiness' of their app or product. The higher the quality of the data on each individual fan the more teams can personalise the content they receive, which leads to longer and more in-depth engagement, which leads to better quality data on the individual fan and so on and so forth.

Providing fans with fun interactive content like mini-games, challenges or quizzes (often with sponsored rewards or prizes) are a basic yet effective fan engagement solution. Prizes can be both physical and digital, including discount codes and digital collectibles. Provided the fan has a positive experience and something to show for their involvement they will begin to form habits around the use of the app or product.

Emerging trends
With competitions postponed or cancelled due to the Covid-19 pandemic, it forced the industry into creative, tech driven solutions to retain fans’ attention and provide the promised value for their brand partners. An example of this accelerated innovation is translating the traditional analogue stadium experience, physically limited to a few thousand fans, into a virtual offering that can be monetised across an unlimited global fanbase.

This is not to say that digital experiences will ever replace the physical. As a fan, there is nothing like being there in person. However, the globalised nature of sports means that the majority of fans will unlikely experience many games or events in person. This presents a great opportunity to create monetisable digital offerings that can bring more fans into the fandom regardless of where they are located.

An example is the Formula One Virtual Paddock Club. This was introduced in 2020 in partnership with Zoom as a temporary solution to further engagement while fans were not being able to be physically present. For the 2021 season, Formula One is set to charge fans US$400 each for a two-day Virtual Paddock Club pass, as compared to a few thousand dollars for the in-person trackside experience. This provides a new revenue stream without cannibalising existing offerings.

Another example is the Golden State Warriors' 'Dub Hub' which uses LED video boards to enable fans to speak directly with players as they pass through the tunnel onto homecourt. In the same way most Formula One fans won’t make it into the Paddock Club, most Warriors fans can only dream of courtside seats. These virtual offerings create a value add to existing membership packages or a new discrete inventory for out of market fans.

As more of these fan experiences are digitised, the tech platforms by which they are delivered must continue to develop to meet the high expectations of user experience. Although fans and sponsors have been willing to accept the pivot to platforms not necessarily 'built for purpose' of virtual experiences over the last year, as this digitisation entrenches into the 'new normal' fans will expect more from how these are facilitated. This is especially true for paid experiences.

Augmented reality (AR) and virtual reality (VR) have obvious roles to play in bridging the physical, digital divide. However, the prohibitive cost of VR headsets for the average fan is still a major hurdle in its widespread adoption. AR experiences, especially mobile-based filters and overlays offer a relatively easy way to engage fans and have seen the greatest traction so far which is set to increase with the widespread deployment of 5G.

What’s next?
Digital collectibles, most notably nonfungible tokens (NFTs), and fan token cryptocurrencies are the next emerging level to digital fan engagement. NFTs use blockchain technology to authenticate both ownership and veracity of a digital item. The highest profile NFTs in sports are digital highlight collectibles such as NBA Top Shot. Although the market has cooled on the value of these collectibles, we are the other side of the hype cycle and the immense broader potential applications of NFTs in sports is just being explored.

The same can be said for the wave of cryptocurrency powered fan tokens being launched by sports properties globally. A fan token is a direct-to-consumer (DTC) scalable, tokenised voting platform that leverages blockchain technology to give fans the opportunity to buy, trade and execute voting rights in their favourite sports teams, with fans purchasing their team's fan tokens using cryptocurrency.

Part of superstar Lionel Messi’s wage package at Paris Saint-German is paid in their own '$PSG Fan Token' with the token’s value more than doubling since Messi was linked to the club. The idea of using tech-powered digital currency as a way to augment the traditional sales structure is a burgeoning trend. Whether it is a financial sugar hit (and crash) or a sustainable engagement tool remains to be seen. But what is for certain is that sports can no longer take the fan’s engagement as a given.

Innovative Companies
Below is a sample of some innovative companies offering fan and sponsor engagement solutions.

SQWAD
Digital engagement and sponsorship activation

Enables teams to build and launch sponsored digital contests that grow connections, drive leads, and send offers instantly to fans in stadium or at home.

Notable clients: Sacramento Kings, Dallas Cowboys, Ohio State University, Chicago Bulls, Cleveland Browns, Auburn University

Tradable Bits
Digital engagement and sponsorship activation

All-inclusive digital marketing platform for sponsorship activations, social aggregation and ecommerce-integrated Fan CRM system. Collects, analyses and activates first-party fan data

Notable clients: Maple Leaf Sports and Entertainment (MLSE), San Jose Sharks, Australian Football League (AFL), San Antonio Spurs, Portland Trail Blazers

YinzCam
Digital engagement and app development

Develops custom mobile apps for teams and leagues. Providing fans with real-time stats, multimedia, streaming radio, social-media and mobile-video technology for in-venue instant replays. Also offers an IPTV product used by venues such as Kyle Field, the Mercedez-Benz Stadium and Banc of America Stadium.

Notable clients: National Football League (NFL), National Basketball Association (NBA), La Liga, AFL

Fanisko
Digital engagement and app development

All in one digital fan engagement and analytics platform. Helps sports organisations unlock new revenue streams through sponsor activations, integrated ecommerce, NFTs and fan engagement tools such as AR filters.

Notable clients: Chennai Super Kings, Tech Mahindra, New Mexico Ice Wolves, Jamaica Tallawahs, North American Hockey League (NAHL)

Greenfly
Social media content curation and distribution

SaaS platform that creates a central media exchange hub and private collaboration network to enable the collection, curation, organisation and distribution of short-form digital media. Automatically tags and routes this digital inventory to galleries based on their attributes, then distributes that digital media to groups of any size.

Notable clients: Paris Saint-German, German Football League (DFL), Rajasthan Royals, San Jose Sharks, Los Angeles Dodgers, Formula One

Latest funding: US$6M Series C (Dec 2020)

INFLCR
Social media content curation and distribution

INFLCR (pronounced influencer) is a SaaS platform for sports team properties to store, track and deliver their content across their influencer network of athletes, coaches, former athletes, media, etc. Each influencer can access their personalised gallery of content on their INFLCR mobile app, which they can use to download and share specific content to their social media platforms, with all influencer user activity tracked back to an INFLCR dashboard for the sports team properties. Acquired by TEAMWORKS in 2019.

Notable clients: Duke University, University of North Carolina, University of California, Los Angeles (UCLA), Kansas University, Virginia Tech, University Kentucky, Texas A&M

Opendorse
Social media content curation and distribution

Social media publishing tool designed to help athletes curate, post and monetise their social media presence. Facilitates the US Olympic and Paralympic Committee’s (USOPC) new 'Athlete Marketing Platform', intended to provide an avenue for more Team USA athletes to access sponsorship money that’s often not available at an individual level.

Notable clients: USOPC, National Hockey League (NHL), Ladies Professional Golf Association (LPGA), NFL Players Association (NFLPA), Minnesota Vikings, US Figure Skating, University of Texas at Austin, Louisiana State University, University of Florida

Socios
Fan tokens

A DTC scalable, tokenised voting platform that leverages blockchain technology to give fans the opportunity to buy, trade and execute voting rights in their favourite sports teams. Fans purchase their team's fan tokens using Chiliz, a cryptocurrency owned and operated by Socios.

Key clients: Inter Milan, Valencia, Paris Saint-Germain, Juventus, UFC, Barcelona, Galatasaray SK, AC Milan, Sacramento Kings, Philadelphia 76ers, Boston Celtics, New Jersey Devils, Portuguese Football Federation (FPF)

Greenpark Sports
Social platform

The flagship product is a native, free-to-play mobile game played over the top of sporting events. In the game fans battle their avatars to become the undisputed 'best fans' of their league and season whilst earning real and virtual rewards in the process. Targeted at the new crossover generation of sports and esports fans.

Key clients: NBA, League of Legends Championship Series (LCS)

Latest funding: US$14 million Series A (Dec 2020)

Matchpint
Digitally connected global stadium

Free mobile app and website that connects fans with venues televising live sport creating a digitally connected global stadium. Gamification mechanics and rewards are used to gain insights on fans at these venues whilst monetising through brand partnerships and activations.

Key clients: AB Inbev, Six Nations, NFL, Coca-Cola, Foxtel

Creator Global
IoT fan gadgets

SaaS fan experience platform linked to smart devices designed to bring the stadium experience into fans’ homes including team branded, voice activated smart speaker.

Key clients: Collingwood FC, Dallas Cowboys

Scorz
IoT fan gadgets

Integrated IoT products, such as sponsor branded smart hockey goal light, reacts to events like team scoring moments or celebrations through multi-sensory engagement including light, sound and vibration.

Key clients: AB InBev, Labatt, Budweiser

Thanks for reading the second instalment of a monthly series examining the world of sports technology, brought to you by Thomas Alomes and the team at Sports Tech World Series.

In each column, we will provide insights into the global sports tech market drawn from our latest industry research, consulting clients and expert interviews. Our aim is to quickly inform you on what’s happening in the industry now, where it’s heading in the future and who are the major players, both emerging and established, operating at the cutting edge of this exciting space.

To make more sense of sports tech, we have classified the industry into sub-categories. Having covered fan and sponsor engagement in this edition, the different areas being covered in this series are:

Stadiums and venues
Solutions designed to improve the efficiency and customer experience in stadiums and venues.

Athlete performance and tracking
Devices and platforms used to measure or track athletes with the purpose of testing and improving performance.

Athlete, team and event management
Solutions that support the management of athletes, teams, leagues and events, with a focus on improving overall efficiencies at an individual and organisational level.

Betting and fantasy sports
Solutions focused specifically on the unique challenges of betting and fantasy sports.

Data capture and analysis
Data processing, capture and analysis solutions that support insights and decision making for a variety of sports related organisations.

Esports and virtual sports
Solutions focused specifically on the unique challenges of esports and gaming.

Fan and sponsor engagement
Solutions designed to enhance and improve the experience of the fan, or increase the value for the sponsor, including memberships and social media engagement.

Media and broadcast
Solutions that enable and enhance the sharing and distribution of sports content such as streaming platforms, automated broadcast graphics and online content publishers.

About STWS
Sports Tech World Series (STWS) is the trusted resource in the global sports technology ecosystem. We provide research, consulting and market insight services to help teams, leagues, governments, investors and vendors to achieve results and meaningful impact over the hype in sports technology and sports innovation.

About Thomas Alomes
An industry consultant, researcher and speaker, Thomas Alomes is a global leader in sports technology ecosystem growth and development with a passion for connecting the best people with the best ideas. He is currently head of North America at STWS and the founder of Sports Innovation Texas.

[Chester Perry]

some interesting OTT broadcasting going on in the no league pyramid - including this commitment from Isle of Man in the North West Counties League - from FC Business

First Non-League Club Breaks Away From Media Rights Blackout Window
Fan owned FC Isle of Man will live stream all its home fixtures this season by hosting matches outside of UEFA’s blackout window.

The North West Counties Division One South club will play its homes games on Saturday evenings so it can eliminate logistical barriers visiting teams face when travelling from the mainland and broadcast matches unrestricted online.

The club is leading non-league football’s media rights revolution in partnership with TicketCo Media Services.

Last season, UEFA lifted its blanket ban on Saturday afternoon fixtures being streamed while games were held behind closed doors due to the COVID-19 pandemic. However, the restriction has been reinstalled for the 2021-22 season meaning matches played between 2.45pm and 5.15pm on Saturdays cannot be broadcast domestically online.

Ty Smith, Commercial Director at FC Isle of Man, said being able to stream fixtures without restrictions is important to ensure the club can engage with its fanbase outside of the Isle of Man.

“All our home games will take place outside of UEFA’s blackout window this season so matches can be live streamed,” said Ty. “A proportion of our supporters are unable to physically attend matches, meaning the only way they can engage in the club’s home games is via live streaming.

“So many people in the UK and worldwide have a strong affinity to the Isle of Man and we have supporters living in Hong Kong, Canada, USA, Australia, Italy and other countries.

“We’re proud to be a fan-owned club and want all supporters to be able to experience matches at the same time together as one community – that is only possible by live streaming.”

Last season, FC Isle of Man staged what was believed to be the first ever ‘hybrid match’ where supporters could attend the club’s historic pre-season friendly against Guernsey FC either physically or digitally.

Physical tickets quickly sold out while digital viewers tuned in across the world. The match justifies FC Isle of Man’s belief in the true power of digital and how it can help clubs source a fresh and sustainable new revenue stream.

“Supporters living on the island are our primary audience,” added Ty. “If they want to watch football at the highest level on the island, then FC Isle of Man is where they will see it.

“But it is important to also make sure we are satisfying the needs of our secondary and tertiary audiences too. They are those with a strong emotional connection to the island and football purists who want to follow a positive story.

“The two latter audiences wouldn’t be able to access games physically, so it is a no-brainer that we open up matches to supporters on a global scale. TicketCo gives us the platform to satisfy the demand of those supporters and bring in extra revenue by streaming.

“We have fans in Australia who support the club because they visit the island each year for the iconic Isle of Man TT – that passion has now been channelled into following the club’s weekly narrative.”

Joe Edwards, Global Key Account Manager at TicketCo Media Services, expects more non-league clubs to embrace digital technology through the 2021-22 season.

Already, teams playing in the Southern Football League can partner with the disruptive tech company to broadcast matches live globally online as part of a multi-year media rights deal.

Mr Edwards said: “Thanks to our hybrid technology clubs and leagues can now take ownership of their own Media Rights. It is empowering smaller clubs and congratulations to FC Isle of Man for pushing boundaries and leading the revolution.

“FC Isle of Man became early adopters of our HD-quality pay-per-view streaming service and is now taking it to the next level. Moving fixtures not only eliminates major logistical barriers visiting teams faced when travelling from the mainland, but it also enables the club to fulfil its broadcasting ambition.”

TicketCo Media Services a cloud-based event payment and online broadcasting company. It has offices in Norway, UK, Netherlands, and Sweden. Its technology combines event payments with live streaming and on-demand services.

Non-league clubs partnered with TicketCo this season include Solihull Moors, Altrincham FC, AFC Telford, Tonbridge Angels, Oxford City, Welling United, Brackley Town, Kidsgrove Athletic, Canterbury City FC, FC Humber United, Newcastle Town and Bacup Borough.

[Chester Perry]

More from the Telegraph's Sam Wallace on those proposals that UEFA are contemplating for FFP

UEFA's new FFP rules will allow them to monitor squad spending and wages in real time
SAM WALLACE AUGUST 19, 2021

The proposed replacement for Uefa financial fair play (FFP) would have the power to make Champions League clubs change their squads immediately, under plans that it will operate in real-time rather than try to dish out punishments retrospectively as with the current system.

The new luxury tax proposals, which will be discussed by Uefa, clubs and leagues in Nyon next month, would take into consideration “squad costs” – not just transfer fees and player salaries but also agents’ fees – when calculating whether limits had been breached. Clubs would have to submit to Uefa each player’s squad costs with their proposed 25 names for the upcoming season, which would then be scrutinised as to whether it passed controls.

Any breaches would potentially see clubs forced to drop players from their squads for the three Uefa competitions to bring them into line with spending limits.

While the details are still to be decided over the next few months, some form of the luxury tax proposal – which would see clubs pay a premium when spending breached a certain level - is certain to replace the current ten-year FFP system. It is likely that the luxury tax control would be two-pronged. There would be a top-limit of the percentage of a club’s revenue that could be spent on squad costs, and potentially in addition to that a “hard cap” on the total of capital that could be invested each year by an owner.

Uefa does not believe any system can realistically hope to close the competitive gap between wealthier and poorer clubs, but by redistributing the income from luxury tax to clubs lower down the hierarchy, it believes it is following a principle of fairness that should lead to greater financial stability. Repeated breaches of the luxury tax would result in disciplinary measures, potentially leading to sporting sanctions.

The governing body has faced huge challenges in applying FFP rules to wealthy clubs, including Paris Saint-Germain and Manchester City – both of whom have won significant victories over Uefa in the Court of Arbitration for Sport. The relaxing of the rules over the pandemic, to allow owners to inject funds into the clubs, have seen FFP become even more difficult to enforce. Currently clubs are not permitted to make losses of more than €30 million over a three-year assessment period.

It is the proposed real-time monitoring of squad costs that those familiar with the proposals believe would be one among the most effective safeguards against overspending and financial instability. For example, under FFP, the wages of Lionel Messi will only be included in PSG’s financial results for the 12 months ending next July. Those results will most likely be submitted to Uefa in October next year, leaving a gap between spending and enforcement. The real-time nature of the system would see Uefa regulators working off unaudited club accounts with verdicts much more difficult to challenge. There is no suggestion that PSG have broken FFP rules.

Uefa’s priority is to see financial stability across leagues and clubs hit hard by the pandemic, and next month’s convention on the future of the game will also discuss how to stimulate the transfer market post-Covid. Spending this summer across Europe is around €2.8 billion with little more than two weeks of the window remaining, the majority of it coming from English clubs. The total European summer market spending pre-pandemic was more than €6 billion.

With Uefa president Aleksander Ceferin having made clear that FFP is no longer fit for purpose after 11 years, the switch to a new model is likely to be rapid with regulations finetuned this season and then a brief transition period. Uefa also aims to be more transparent in the application of a luxury tax with a publicly available system of tariffs depending on the scale of the breach of spending limits.

The luxury tax description is the working name for the plan although when it is finally launched it is expected to be called something else, with “tax” regarded as creating a misleading impression. Uefa also hopes that by monitoring fixed costs in salary levels and agents’ fee so closely clubs will be encouraged to ally wages with performance.

Uefa has studied the cost controls measure of Major League Baseball, which operates a luxury tax threshold, set each year. When the threshold is broken teams have to pay a percentage of their overspend as a penalty. That percentage rises according to how many times the threshold has been broken over successive previous years. For example, since 2003, the New York Yankees have paid around $350 million (£256 million) in luxury tax, known officially as “competitive balance tax”.

The Premier League and Football League, which will be represented in Nyon next month, are also expected to change its FFP laws to harmonise with Uefa. As it stands, Premier League clubs are permitted to lose £105 million over a three-year period.

[Chester Perry]

An article from the New York Times which looks at the problems in the Scottish transfer market caused by the new Brexit induced regulations (of course Scotland voted against Brexit in the Referendum)

Scottish Soccer’s Brexit Problem: No Way In, and No Way Out
AUGUST 19, 2021

Juhani Ojala knew he would have to wait. Travel restrictions were still in place in Scotland when, in the middle of July, the Finnish defender agreed to join Motherwell, a club of modest means and sober ambitions in the country’s top division. Upon landing, Ojala knew, he would have to spend 10 days isolating in a hotel before joining his new teammates.

What he did not know was quite how long his wait would be after that. Even after he completed his compulsory isolation, Ojala was still not allowed to start preseason training. Legally, for another two weeks, he was not even permitted to kick a ball. The quarantine was one thing. The bureaucracy, it turned out, was quite another.

A year ago — indeed, at any point in the last two decades or so — Ojala’s move to the Scottish Premiership would have generated as little fuss as it did attention. Once Motherwell had agreed to a fee with his former club and to a contract with the player, it would have been a simple matter of “jumping on a plane and doing a medical,” Motherwell’s chief executive, Alan Burrows, said. “He would have been ready to play within 24 hours.”

All of that changed in January, when — four and a half years after the Brexit referendum — Britain formally, and finally, left the European Union. As of that moment, clubs in England, Scotland, Wales and Northern Ireland no longer had the untrammeled access to players from its 26 member states (a different set of rules apply to Ireland) they had enjoyed since the 1990s.

Instead, potential recruits to Britain from Europe — as well as the rest of the world — are now judged according to a points-based system that takes into account everything from their international career and the success of their club team to how much they are going to be paid. Access to Britain’s leagues is granted only to those players who can accrue 15 points or more.

For the cash-soaked teams of the Premier League, that change has meant little. There are occasional administrative delays — Manchester United had to wait several days for Raphaël Varane to be granted his work visa even after it had been approved — but the vast majority of potential recruits clear the new, higher bar with ease.

The effect, though, has been starkly different in Scotland. Unlike the Premier League, the Scottish Premiership is not one of Europe’s financial powerhouses. Its clubs do not habitually recruit decorated internationals, or pluck stars from one of the continent’s most glamorous leagues.

Instead, their budgets dictate that they must search for lesser-known names in smaller markets. That approach, many say, has been made immeasurably more complex by the Brexit rules. With the cost of hiring players from England spiraling, too, clubs and their executives are increasingly worried about what the future of Scottish soccer may look like.

“What we have seen, really, is that the markets are chalk and cheese, but we have a one-size-fits-all solution,” Motherwell’s Burrows said. “There is a premium on current international players that is outside the financial capabilities of most Scottish clubs.”

Britain’s biggest teams face no such hurdles. The current system grants an immediate work permit to any player who has featured in at least 70 percent of competitive games over the last two seasons for any one of soccer’s top 50 national teams. That means any player who has also been a regular for a successful club team in one of Europe’s better leagues is almost certain to be given a pass — or, to use the technical term, a Governing Body Endorsement. It is in these rich waters that clubs in the Premier League tend to do much of their fishing.

In Scotland, though, only the country’s two dominant clubs, Rangers and Celtic, can even dream of pursuing players of that quality. The rest of Scotland’s teams tend to shop for bargains, or at least for value, every time the transfer window opens. “It’s clear to me,” Motherwell’s Burrows said, “that we would struggle to get anyone we could afford to sign to 15 points.”

That was certainly the case with Ojala. To Burrows and his team, the defender represented something of a coup: not just a Finnish international, but a player who had on occasion captained his country; a veteran not only of the Danish league but with experience in Switzerland and Russia, too.

But when Motherwell tallied up how many points he was worth, he did not come close to the requirements.

“The Danish league is ranked in the fifth band of six by the Home Office,” Burrows said. “He got a couple of points there. We got a couple more for what his salary would be in relation to the league average. But his team had finished fourth from bottom in Denmark. It had not played in Europe. He had not played enough international games.” Ojala’s application, in the end, only mustered eight points.

This is where the bureaucracy came in. Clubs in Scotland, at the moment, have access to an appeal system. They can apply to the Scottish Football Association for an exemption, making an appointment to press their case as to why a player who has fallen short would still be a worthwhile signing.

That, though, is only the first step. If the authorities grant a Governing Body Endorsement on appeal, the player — assisted by the club — must then apply for a work visa: filling in an online form, followed by booking a biometrics appointment at a visa application center, run by a number of outside companies to whom the job has been outsourced by the British government. Only once that is complete is the player granted a visa, and the transfer signed off by the government.

Though the “largely faceless” process can be smooth, according to Stuart Baird, a partner at Centrefield Law, a firm that specializes in international sports law, clubs navigating it for the first time — increasingly the case post-Brexit — have not always found it straightforward.

“One of the problems is that a lot of clubs had not needed to use the Home Office sponsorship system, because previously it was only required for non-E.U. players,” he said. “Sometimes it can depend on the right people being available to help you to get the timely responses that clubs need.”

The concern for many clubs in Scotland is that the current system does not appear to take into account the type of player they can afford to sign. Many of the markets Scotland’s teams have access to — in Scandinavia and the Balkans, say — are ranked in the lower bands of the Home Office’s criteria, and few of their teams compete in the later stages of European competitions.

One head of recruitment at a Scottish Premiership team has, in his rare idle moments over the summer, developed a thought exercise to work out if a theoretical target might be able to accrue 15 points.

So far, even in his most fanciful scenario — signing an occasional international (no points) from the Czech league (Band 4, four points), who had featured regularly (four points) in his club’s unexpected run to the later stages of the Europa League (Band 2, four points) — he has not made the math work.

The lesson, to some, is straightforward: Clubs must learn to adapt to the new rules, to find recruits in places they have not always looked for them.

“If we operate like we have done previously, then that will take us nowhere,” said Ross Wilson, the technical director at Rangers. “Clubs will have to build strategies around the points system.”

Rangers, for example, has started to take greater interest in players in South America, realizing that while it might no longer find it easy to sign a player from a traditional market like Scandinavia, a regular Paraguayan or Venezuelan international might sail through the application process.

“The world is much smaller now,” Wilson said. “There is more data available, more advanced scouting systems, more intelligence. We can access far more markets than we could previously.”

Wilson said he did not believe cost should be a barrier to having a “solid infrastructure,” pointing out that clubs of all means can use third-party platforms like Wyscout and Scout7 to look for players, but the far greater resources that Rangers — and Celtic — can dedicate to scouting dwarf those of most of their competitors in the Scottish Premiership.

For those clubs, the future is troubling. Burrows has noticed Scottish teams “being squeezed at both ends.” Not only is it harder to identify players from abroad who meet the visa criteria, but clubs in England’s lower leagues are increasingly shying away from importing talent, too.

That has led to a “significant inflation in domestic salaries,” he said, pricing Scottish teams out of markets in the second, third or even fourth tier of English soccer. “It is simple supply and demand,” Burrows said. “Players are a kind of commodity, and those players have become infinitely more valuable.”

Worse still, this may just be the start. As things stand, the exemption system that eventually allowed Motherwell to sign Ojala this summer is set to be abolished at the end of the current transfer window. If the appeal mechanism is not retained, or the planned system is not changed, then many of Scotland’s clubs may find it all but impossible to import players.

“I’m hoping that in the next four or five months, between windows, we can find a solution that is not a 15 point-style system,” Burrows said. “If that remains the bar, the market will shrink beyond all recognition, and it is going to make life very difficult not just for Scottish clubs, but for teams in England, outside the Premier League.”

[Chester Perry]

This is quite fitting given this thread started with Manchester United's record financial results has passed 500k views tonight

An interesting tale from Michael Knighton about why he walked away from his Manchester United takeover in 1989 - from the BBC

Michael Knighton: The man who could have bought Man Utd for £10m but walked away
By Simon Stone BBC Sport Last updated on15 hours ago15 hours ago.

On 19 August 1989, a 37-year-old man walked on to the Old Trafford pitch before the first game of the new league campaign.

Arsenal were the opposition and the stands were packed; the official attendance was 47,245 - about 10,000 higher than the previous season's average.

In full Manchester United training kit, Michael Knighton juggled the ball skilfully before firing it into an empty goal. He stood in front of the Stretford End, arms out, taking in the adulation. A few weeks before, he would have been a complete unknown.

But the previous day, Knighton had announced a £10m takeover deal that "rocked football" - in United's words. He was the flamboyant prospective new owner making an early mark on the club that seemed soon to be his.

Not everybody was behind him.

While supporters lapped it up, in the corridors of power the scheming and plotting was already under way. Knighton's takeover would very soon come tumbling down - and his decision to go out on to the pitch seemed to be the catalyst for its demise.

What happened next at Old Trafford is a well known story - success on and off the pitch during a boom era for football business has seen the club's value rise to about £3bn today.

But what happened to Knighton?

Scarred by the experience of exiting his dream deal, in the end he became something of a recluse, concentrating on the other passion of his life - art. The memories are still vivid, though.

Here, the man who walked away from buying Manchester United gives his account of how it all fell through.

Knighton built his fortune in property. In the late 1980s, he looked at Manchester United and saw an opportunity. He believed he could turn the club into a £150m operation. And he was right in thinking chairman Martin Edwards would be open to his offer.

"The raison d'etre was very simple," Knighton says now. "There was a lot of resentment against the board. Edwards was incredibly unpopular and desperate to exit. The business was losing money and home gates had fallen to as low as 18-20,000."

He saw an untapped business potential in United's sizable fanbase - and he also knew that their support was crucial in getting the club to grow. Hence the decision to go out on to the pitch.

"I wanted to show the fans I was a football man first and a businessman second," Knighton says.

"I wanted to bridge the gap between the boardroom and the terraces. Yes, it was novel. It was unorthodox. I knew it would attract interest and criticism. But I didn't care. I needed the fans on my side more than I needed Bobby Charlton or Alex Ferguson, whose job was on the line at that time.

"I knew there was a massive captive market. If you are going to exploit that market, not in a pejorative sense, to sell them everything in order to generate the profits to buy any player in the world, you need them on your side. Look at what is happening now with the current owners and how the sponsors are being lobbied and some fans are not buying memorabilia and shirts.

"Of course I loved it. Who wouldn't? Despite how it all turned out, I don't regret going on that pitch and if I had £5bn to buy Manchester United today, I would do exactly the same again. I was fulfilling every schoolboy dream in the world.

"If you look at the pictures of that day and the smiles on the faces of the fans in the stadium, it worked."

That is Knighton's view. The other side have a different one.

"Ridiculous," is the assessment of one senior Old Trafford figure from that time as he recalls Knighton's pre-match entertainment. According to this assessment, that was the moment when Edwards realised he had made a mistake.

But before the next home match, against Norwich, Edwards wrote something in the programme to explain his decision to sell. Read with the benefit of 32 years of hindsight, there are some fascinating bits of detail.

Edwards pointed out he was not looking to sell the club but that what had persuaded him it was the right move was Knighton's offer of capital investment for vital ground improvements.

"It is not a secret that we have wished to develop the Stretford End for a number of years now," reflected Edwards. "The budget of £7.5m made me realise the commencement of the work is light years away.

"What Mr Knighton's offer has brought us is the opportunity to develop the stadium as well as the playing staff and this offer was impossible to refuse."

Those words were read by fans on 30 August. By that time, the takeover deal was watertight. But Edwards and his associates were looking for a way out.

They tried to exploit Knighton's weak points, to wear him down and make him feel the deal was not worth the hassle. Going on the pitch wasn't the 'United way', it was said behind the scenes. Neither was appearing on talk shows, which Knighton also did.

Their efforts ensured that negativity about the deal circulated quickly, and word began to spread that Knighton didn't actually have the money he said he did.

No matter the personal view of anyone reading this, one thing is certain - and this is important to Knighton. He did have the money to push through the transaction. Nonetheless, his backers were made to feel wary.

A copy of what was known as his 'blueprint' to turn United into a £150m operation was left at the house of newspaper proprietor Eddy Shah, who knew the United hierarchy and immediately got in touch.

Senior figures at the club went to Shah's house in Macclesfield as a matter of urgency to get hold of the documents. Sir Bobby Charlton arrived and apparently had the impressive effect of immediately calming Shah's aggressive dogs with his presence.

The documents were supposed to be confidential. More pressure was applied to Knighton to withdraw his bid. He was offered a place on the board if he agreed to walk away from the takeover. Eventually, he agreed.

A couple of years ago, on the 30th anniversary of his aborted buyout, a biographical account of his plan was published, entitled 'Visionary'. Knighton says he doesn't like the book's title. But he does believe that his template laid the foundations for what United eventually became.

"I did an interview with the Financial Times, which was published on 12 September 1989," Knighton says.

"Everything in the blueprint, I said to that journalist. He was incredibly tolerant of me because he must have thought I was a raving lunatic. I said I was going to turn the club into a £150m leisure vehicle that would make profits so large we could buy any player in the world. He told me we were turning over £7m and the club hadn't made money for 20 years and had just announced £1.3m losses. I told him it would happen.

"At that time, hardly anyone thought satellite TV would replace terrestrial. I said it would transform football.

"It is extraordinary how Martin Edwards has claimed credit for what happened in the following decade after my involvement. Unbelievable. I kept my mouth shut and my head down because my reputation had been hammered and it is virtually impossible to change a public image.

"But Martin and the other people on the board decided to hide behind the fiasco Michael Knighton caused and claim the credit themselves. If they could really see what was going to happen, why did they agree to sell the club for £10m?"

Speaking to someone who was involved at that time, there is a grudging acceptance that a lot of Knighton's blueprint was used to drive revenues, long before the Glazer family got involved and took the club to another level entirely from a commercial perspective.

But in that case why, if he was so certain his plan would work, and he had the money to proceed, did Knighton back away?

"I didn't need to own the club to do what I envisaged," he says. "I needed to make a contribution.

"When Martin invited me on to the board, yes, I snapped his hand off. Financially, I knew what I was giving up. No question about it. Was I right financially to abort the deal? Clearly not. If I was looking to enrich myself and become a billionaire instead of a guy who made a bob or two, I should have completed.

"Perhaps that was the biggest commercial mistake of my life. But I was never there to enrich myself. That was never my motivation. I don't regret it."

BBC Sport has been told Knighton was a "quiet" presence in the Old Trafford boardroom. His wings, from a club sense, had been well and truly clipped.

He remained at Old Trafford until 1992, when he bought Carlisle United, enjoying some initial success before hard times hit, disenchantment grew and he sold up in 2002. He never returned to the game.

Now 69, Knighton concentrates on the other great passion of his life, art. His most famous piece is a 15-foot-high marble sculpture of Jesus Christ that was exhibited at King's College, Cambridge in 2008.

"I am a great believer in the value of things from an aesthetic point of view," he says.

"I will make a prediction. Michael Knighton will go down as an artist, not a football man."

Knighton is engaging to talk to, impossible to dislike. Even through the distance of a telephone call, there is a buzz of energy about him. His greatest goal now, he says, is to "create an art and design school for those students who can't afford the university fees".

Perhaps some may not judge his time in football kindly. Some might consider he lacked the bravery to push through what might have been one of the most lucrative deals in the game's history.

But on that day in August 1989, he did go on to the Old Trafford pitch, and he was welcomed by the Stretford End. The pictures prove it.

"I gave Martin my blueprint after we aborted the deal," says Knighton. "I said 'there is the cheque for £150m'. I am not deluded. I know the truth of the matter. I am a flawed individual but I know what happened.

"I probably kept my mouth shut for far too long. I am not the kind of person to shout from the rooftops about how wronged I had been.

"But it is all history now."

[Chester Perry]

@SwissRamble has been preparing 10 year graphical overviews of the greedy six which kelps you see real trends such as the decline of Arsenal relatively to the rest

https://twitter.com/SwissRamble/status/ ... 0353315840

and in a moment of generosity also provided the same data for the first 5 teams requested by his followers - so we also have

Leeds United https://twitter.com/SwissRamble/status/ ... 3068071940

Newcastle United https://twitter.com/SwissRamble/status/ ... 5547653121

West Ham United https://twitter.com/SwissRamble/status/ ... 6261313537

Preston North End https://twitter.com/SwissRamble/status/ ... 3712760833

Wolverhampton Wanderers https://twitter.com/SwissRamble/status/ ... 9796725762

@swissramble adds 3 more requested 10 year financial overviews

Everton https://twitter.com/SwissRamble/status/ ... 7093608451

Ipswich Town https://twitter.com/SwissRamble/status/ ... 7751427075

Leicester City https://twitter.com/SwissRamble/status/ ... 5582113795

[Chester Perry]

I have always maintained that :iverpoo;'s signing of Ben Davies from Preston was about profit not to add him to their squad - it seems the Athletic agree

https://theathletic.com/2768841/2021/08 ... ed_article

[Chester Perry]

As regularly trailed on here it appears that at the highest levels FIFA is more committed to a World Cup every two years than ever (and yes that will be 48 teams taking part, which also means it will have to be multi-country bids (possibly multi continent bids) as so few have the infrastructure or funds to host a tournament of this size with visiting fans)

https://twitter.com/tariqpanja/status/1 ... 3611101188

I will also add that FIFA appear to be working in the belief that broadcasters will maintain the same level of rights fees for a tournament whose scarcity has been removed - this is the ultimate fallacy. But this may not be the ultimate goal, which is more likely to be to reduce the financial might of UEFA (and it's member associations and leagues). Essentially a move to level up by levelling down, which is just a very poor powerplay.

[Chester Perry]

The legal battles between video game producers and big name football clubs over IP copyright continue - though with plenty of precedent's set including EA paying both FIFA and clubs licence fees for the IP you would assume the matter was settled - maybe not

https://theathletic.com/2776637/2021/08 ... istelroum/

[Chester Perry]

Martyn Zeigler of the Times who was the first to break the news that UEFA was considering a salary cap and luxury tax in a revamp of FFP talks to the front three podcast about what he knows of the plans - the hosts are a bit behind on their knowledge on what else the governing bodies have in the works particularly FIFA's plans for agents

https://podcasts.apple.com/gb/podcast/f ... 0532423268

[Chester Perry]

This is a good listen @TariqPanja talks to the SportsPro Podcast ostensibly about the Lionel Messi transfer and what it means but there is a lot of other stuff in ther about the way in which the game is being run - his final point point about how the next year is possibly the most important in football history is one I found particularly resonant, but that may just be because it brings together most of the various themes that have been intertwining on this thread for almost 4 years now

the blurb

The New York Times’ global sports reporter Tariq Panja joins deputy editor Sam Carp to assess the commercial impact of Lionel Messi’s arrival at Paris Saint-Germain.

Following Lionel Messi’s shock departure from FC Barcelona, The New York Times’ global sports reporter Tariq Panja joins SportsPro deputy editor Sam Carp to discuss whether it really should have come as a surprise at all.

They discuss what led to one of the greatest soccer players of all time having to leave the Nou Camp after more than 20 years, 672 goals and 35 trophies, the inevitability of his subsequent arrival at Paris Saint-Germain, and the potential commercial implications for Ligue 1 and La Liga.

There is also time for the pair to consider what this all says about Uefa’s existing financial fair play (FFP) rules, how Qatar will look to capitalise on Messi’s presence in Paris in the build-up to the 2022 Fifa World Cup, and some of soccer’s regulatory issues that have been laid bare by the whole saga.

https://podfollow.com/689306502/episode ... 30978/view

[Chester Perry]

Socios Fan Tokens - if this is true then PSG are close to covering the cost of Messi's first year (when you add in all the other commercial/retail uplifts - there must have been a lot of people paying vastly inflated sums for the tokens based on the trading price

https://twitter.com/sgevans/status/1425775216379277313

"The price of PSG's fan token obviously rallied hugely this week - am told it brought in 30 million euros from new sales with PSG getting a majority of that."

Things to consider if this is true:
- If this is true then when combined with the commercial and retail uplift PSG will have more or less covered Messi's first year in wages in the first two weeks
- clubs benefit from the trade of/speculation in their fan tokens - just let that sink in - and then think about what transfer rumours can do in such an unregulated marketplace
- clubs appear to befit from trade whether the market is up or down
- the return to PSG appears significant but it took billions of euros of trade in their tokens to get that figure
- it is another area in which the biggest clubs will benefit the most because there are more people interested in them, which means they will attract more ordinary investors


and in the end while sophisticated speculators made a lot of money fresh faced fans who bought at the top of the market are sitting on a significant loss

https://twitter.com/uglygame/status/1427169009540141056

well well well - Simon Evans was the first to break the news but here the Telegraph claims that the sums made by Europe's big clubs from the Socios/chiliz speculation tops £150m in the last year - this is starting to look like only regulation is going to put an end to this questionable moneymaking scheme

https://outline.com/fr4SfB

Exclusive: Europe's top clubs - including Arsenal and Man City - bank £150m from Socios 'cryptocurrency'
TOM MORGAN AUGUST 21, 2021

Europe's biggest clubs have made £150million in the last year from the controversial Socios scheme that lures fans into buying cryptocurrency.

Supporters groups have complained that users are unknowingly taking risks over investments into unregulated online currency markets.

Yet the booming Socios.com app - in which supporters buy virtual tokens in return for extra "engagement" with their club - has already seen close to a million sign ups.

Arsenal, Leeds and Manchester City are among more than 40 of Europe's biggest clubs to sign up to the scheme which brands itself as "the first fan influence and rewards app".

The Football Supporters' Association is among a host or organisations to voice opposition to loyal fans being invited to get involved in speculative currency trading.

After sharp fluctuations in token values around Lionel Messi's move to PSG, the Clean Up Gambling group described the business as a "gateway into speculative cryptocurrency".

Martin Calladine, author of The Ugly Game, branded advertising methods as "completely misleading" as he criticised pre-sale advertising by Socios at Arsenal which describes the scheme as "like buying foreign currency for a holiday".

The Advertising Standards Authority has yet to receive any formal complaints about the scheme, but has invited concerned fans to get in touch.

With fans groups and clubs at odds over the new revenue stream, Socios founder, Alexandre Dreyfus, insisted that scepticism had been misplaced. "The blockchain is transparent - that's the beauty of it, everything is public," said the French entrepreneur, dismissing claims that fans could lose huge amounts due to fluctuating values.

Laying bare the potential value of his business, he revealed four clubs that already made almost £20million each in the past 12 months - "that's a significant revenue during Covid-19". In total around £150million in revenue has been released to the clubs, with the product soaring in popularity in South-East Asia, Brazil and Turkey.

Dreyfus says he has simply found a "a new way to generate revenue" from a fanbase that is different from the traditional matchday ticket-holder. As it stands, the UK market accounts for just 1.5 per cent of revenue.

"I understand why people challenge us, but that's precisely why clubs like us because they see that as an incremental revenue," he added. "It's not cannibalising any other revenue they have and that's important. It doesn't touch ticketing, it doesn't touch merchandising - it's an additional revenue for a new type of consumer, which are these digital fans all over the world."

The launch of Arsenal and Leeds tokens were announced this summer, with Barcelona, Juventus, Manchester City and Paris Saint-Germain having already joined up.

Proponents for the scheme say the tokens offer fans unprecedented opportunities to vote on matters such as training pitch names or music inside stadiums. However, other investors have nakedly admitted they see the scheme as a potential money-spinner. West Ham fans were first to lead a first successful revolt against the scheme in 2019, and now Arsenal, Leeds and Aston Villa fans now hope they can get their clubs to renege on deals.

Adam Willerton, secretary of Leeds United Supporters’ Trust, said: "Our worry is for vulnerable or less technologically adept people coming into this ecosystem of cryptocurrency. For us, this has been misleading in the sense that the marketing that Socios has put out seems to be at odds with what Leeds United are saying. Socios is very much pushing the fan engagement and interaction angles, whereas Leeds are saying that it's going to be used for very low level things."

In response, Angus Kinnear, the Leeds United chief executive, has said the deal was "categorically not about monetising fan influence" but was instead about "low level fan engagement".

Q&A: How Socios scheme is prompting revolt - and potential regulation
By Tom Morgan

A business nakedly helping Europe's biggest clubs squeeze yet more money out of fanbases is facing revolt in the UK - but the scheme's founder is far from concerned.

"Is it good or bad? That's not the point," is Alexandre Dreyfus's response to fan bodies and campaigners warning that his Socios business is a "gateway into speculative cryptocurrency".

The French entrepreneur says criticism is misplaced as his scheme - which offers tokens which enable buyers to vote on minor club decisions or potentially even play on the pitch - is not for the "traditional" fan.

So how did this controversial new market which has already landed clubs £150million, and is now expanding in the Premier League, become so big?

What is Socios?
With close to a million customers since it launch in 2019, Socios - meaning "partners" in Spanish - is marketed towards a young generation of fans whose support for their club is lived out almost entirely online.

By owning virtual "fan tokens", which generally cost £2 each when they are launched by the clubs, supporters can use the app to vote on decisions such as songs to be included on stadium play-lists. Users are encouraged to eventually accrue enough credit to get the chance for "unique" opportunities such as playing on the pitch of their chosen team. Socios says "creating opportunities for the fans is our mission" and "we are still educating both clubs and fans to understand the countless opportunities we can create for them.”

Socios pays clubs directly to work with them. The launch of Arsenal and Leeds tokens were announced this summer, with Barcelona, Juventus, Manchester City and Paris Saint-Germain having already joined up. As it stands, just 1.5 per cent of Socios's customers are UK-based. In Turkey, South-East Asia and Brazil, the business is booming.

Why cryptocurrency?
The tokens are bought and traded in cryptocurrency via a currency called Chiliz, which use blockchain technology allowing transactions to be recorded without a central authority like a bank. "The blockchain is transparent," says Dreyfus, who likens his model to buying tokens at an arcade. "And that's the beauty of it, everything is public."

Dreyfus says his idea has caught on because clubs have bought into his vision of monetising fan "engagement". "The point is there are fans everywhere in the world that are supporting, buying fake jerseys and following teams on Twitter but not having any link or contribution to the club," he tells The Telegraph. "We believe that what we created is a new link to the club. Is it the only one? No, but it's a new one for a very big, very specific category of fans... It's not cannibalising any other revenue they have and that's important. It doesn't touch ticketing, doesn't touch merchandising - it's an additional revenue for a new type of consumer, which are these digital fans all over the world."

What are fans' concerns?
The app features pop-ups informing customers that the product is for engagement rather than speculation, but a host of supporter groups and campaigners fear loyal fans are at risk of being ripped off by crypto traders.

The Football Supporters' Association says it has received complaints from multiple Premier League fan groups concerned with "how platforms are being marketed to supporters". Adam Willerton, secretary of Leeds United Supporters’ Trust, added: "Our worry is for vulnerable or less technologically adept people coming into this ecosystem of cryptocurrency."

The fragility of Socios' values was laid bare earlier this month by Lionel Messi signing at PSG. So-called “$PSG” tokens surged in value in the days before the move was confirmed, with traders imploring on social media channels that the price would “explode”. However, the value has since fallen again.

Entrepreneur Dreyfus, who also launched a major online poker empire, has denied any parallels with the gambling industry. But six months after £58million was wiped out by the collapse of the Football Index betting firm, Matt Zarb-Cousin, founder of the Clean Up Gambling campaign group, said comparisons with the industry are impossible to avoid. “After more than a decade of relentlessly encouraging their fans to gamble, football clubs are now acting as a gateway into speculative cryptocurrency trading," he added.

Dreyfus initially secured financial backing from Stanley Choi, chairman of the controversial Hong Kong-based investment group that effectively plunged Wigan Athletic into administration in July 2020. He insists he parted company with Choi long before the launch of Chiliz and Socios.com.

Who might act?
Dreyfus says he would welcome more regulation to prove his product is legitimate. Fan-power and potential involvement by Britain's advertising watchdog appear the most likely obstacles for his business in the UK.

After West Ham fans led the first successful revolt against the scheme in 2019, Arsenal and Leeds fans are in dialogue with club executives to potentially renege on deals.

Calladine, an author and critic of the scheme, took issue with Socios telling Arsenal fans during its launch this summer that buying club tokens is “like a foreign currency for when you go on holiday”.

The Advertising Standards Authority has yet to receive any formal complaints about the scheme, but has invited concerned fans to get in touch.

"What we can say at this stage is that our advertising rules, which apply across media including online, prohibit ads from being likely to mislead, whether through exaggeration, ambiguity, omission or otherwise," a spokesman told Telegraph Sport. "Our rules also require ads to be prepared in a socially responsible way."

What are the clubs saying?
Amid unprecedented revenue pressures brought about by Covid, the potential for fresh revenue streams are proving irresistible for clubs. By the end of the year up to 50 clubs across Europe are expected to have signed up. The list is not endless - Socios only want teams with global fanbases.

Angus Kinnear, the Leeds United chief executive, has responded to criticism by saying the deals were "categorically not about monetising fan influence" but instead about "low level fan engagement". Ultimately clubs believe they will be left behind if they don't sign up. Kinnear told the Square Ball podcast. "No, it's not going to be for everyone, but at the same time we want to ensure that the club is positioned well commercially, and at the forefront of new developments in the industry and in society more generally, that might be beneficial to the club."

[Chester Perry]

regular readers of this thread will know I have been posting about the goings on at Rochdale for some time - here The Athletic look at the sorry tale of a takeover attempt

https://theathletic.com/2768648/2021/08 ... ed_article

The Guardian are reporting that the hostile bid to take control of Rochdale has been abandoned - let's hope it is not a temporary tactic

Rochdale takeover is abandoned after EFL launches disciplinary investigation
Supporters’ trust had raised concerns over Morton House MGT
EFL claims investors ‘acquired control … without prior consent’

PA Media and Guardian sport
Sat 21 Aug 2021 13.16 BST

Rochdale’s new owners have abandoned their takeover after an investigation was launched into the acquisition of the League Two club, the Football League has announced.

The proposed takeover of the club has been a subject of bitter controversy with the Labour MP for Rochdale, Sir Tony Lloyd, among those questioning the intentions of the new investors, Morton House MGT.

The EFL issued a statement on Saturday, saying: “On 16 August 2021, in accordance with its regulations, the EFL issued notice to multiple individuals of the commencement of disciplinary investigations in respect to the acquisition of shares in Rochdale AFC.”

“It is alleged that Morton House MGT acquired control of the club, and a number of individuals became relevant persons without the prior consent of the EFL in accordance with the Owners’ and Directors’ Test (OADT),” the statement continued.

“The EFL’s objective was to gather additional evidence as it continued to investigate whether the club, any official and/or any persons wishing to acquire control of the club complied with the requirements of the OADT and whether any relevant person(s) are subject to a disqualifying condition.

“Having considered the request for information made of them, Morton House MGT has now informed the League that it is formally withdrawing from the approval process and plans to divest the shares acquired in the club at the earliest opportunity.”

The Dale Supporters’ Trust had raised concerns about the takeover, reportedly led by investors Andy Curran, Darrell Rose and Alex Jarvis. The Football League responded with a statement in July, claiming that “the EFL is still to receive any evidence of the source and sufficiency of funding on behalf of any potential purchaser.”

In Saturday’s statement, the league added that “Morton House MGT, its directors and representatives have confirmed to the League they are refusing to cooperate with the League’s ongoing investigations.”

“Despite these developments, the EFL will be continuing with its disciplinary investigations into this matter and will take the most appropriate action available. More importantly, the EFL will continue to work with Rochdale AFC as we collectively seek to ensure a successful and sustainable long-term future for the club.”

Rochdale have published the EFL statement on their official website, but have yet to comment further. The team were relegated from League One last season and have taken just one point from their first three games in the fourth tier under their new manager, Robbie Stockdale,

[Chester Perry]

@SwissRamble looks at the overall revenue impact of the Pandemic on the Premier League and clubs - it ends with his prediction of overall lost revenue for each club - I find his figure for our club a little low (but he used a 15% estimate of commercial revenue losses and ours could be quite a bit more

https://twitter.com/SwissRamble/status/ ... 1582136326

[Chester Perry]

The EFL agree to give Derby another 6 days to refile their 2015/16, 2019/17 and 2017/18 accounts following the successful appeal against the amortisation approach Derby had been taken - still no word as to when Derby's 2018/19 and 2019/20 accounts which have never been published

https://www.efl.com/news/2021/august/ef ... rby-county

Can you believe that Derby is such a regularly used word on this thread that I can no longer use it to search for posts about them within the thread

the question is have they submitted the relevant account details on tine and the EFL's statement on this is a little vague

https://twitter.com/EFL_Comms/status/14 ... 9638098946


They certainly haven't made a filing at companies house - that is one thing for certain

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

[Chester Perry]

Anyone wondering what all the kerfuffle is about clubs releasing players for international matches - it is just FIFA being FIFA as this report from Tariq Panja for the New York Times shows - I will also remind you that FIFA are actively pushing for a 48 team world cup every two years, I predict that will mean a mandatory cap on league size - probably set at 18 teams but could be lower

Don’t Like FIFA’s Schedule? Go Ahead and Appeal. To FIFA.
AUGUST 23, 2021

A meeting was called, discussions were held, and groups representing some of the world’s biggest soccer clubs and leagues were given a chance to have their say.

Their concerns were immediate: Extra dates being proposed for qualifying matches for the 2022 World Cup would badly affect their operations, they said, with dozens of their players from South America, including Lionel Messi and Neymar, set to miss crucial league games because of their national team commitments.

FIFA, world soccer’s governing body, reassured the officials from the clubs and the leagues. Do not worry, the clubs were told, FIFA would consider the needs of all the affected groups before deciding how to squeeze in the extra dates, which were needed to accommodate matches postponed by the pandemic.

But in the end, FIFA chose what worked best for FIFA. Ignoring entreaties from clubs and leagues around the world, FIFA and its regional confederation for South America, CONMEBOL, went ahead and added two extra days for qualifying matches in September and October. The clubs, not World Cup organizers, would just have to adjust.

The outcome was perhaps the clearest example of the immense power FIFA wields when it comes to directing a sport for which it is the chief governing body and also the organizer of the World Cup, one of the biggest sporting events on the planet. While everyone involved agreed something needed to be done to find a spot for the games, which had been postponed earlier this year because of the coronavirus pandemic, only FIFA had the final say on when they would take place.

While the leagues, clubs and players’ unions are often given a hearing, they had little say in the matter beyond expressing impotent frustration at the outcome. That was what a lobbying group, the World Leagues Forum, did this month when it noted FIFA’s ruling would most likely leave clubs in Europe and elsewhere without hundreds of millions of dollars’ worth of talent for key early-season games because the new dates — and player travel — would overlap with domestic schedules.

“As a governing body, FIFA should be trying to find the best solution for the entire football community,” read the statement by the World Leagues Forum, an umbrella organization for about 40 top leagues. “Instead, FIFA has decided to impose the worst possible option with practically no notice. This poses an obvious governance issue which will have to be addressed.”

The growing tension comes amid a wider discussion about the future of soccer, with FIFA pushing for new competitions and new revenue streams and even evaluating the possibility of staging the World Cup every two years. That discussion, which officially is related to soccer’s calendar for the next decade starting in 2024, is expected to conclude by the end of this year.

The talks follow perhaps the most fractious period in modern soccer history, encapsulated by a failed attempt by a group of leading European clubs to form a closed superleague and break away from the century-old structures that bind the game together.

While their efforts did not ignite the revolution they had designed — their so-called Super League collapsed in a matter of days — their revolt did highlight the unequal distribution of power in global soccer: While teams and leagues invest billions of dollars in the game, they have little say over how it is run.

At present, FIFA has signed so-called memorandums of understanding that provide a framework that allows players, who in the main are trained and compensated by their clubs, to play for their countries. Under the terms of that relationship, clubs are required to release players for national team duty for up to 10 days for each international window.

For years, that agreement largely held firm, until the coronavirus changed everything and cut the time available to fit in matches before the World Cup at the end of 2022. Instead of two games and their accompanying travel in each window, national teams now would be scheduled for three.

At a meeting on July 27, FIFA, represented by Victor Montagliani, its vice president and the head of the regional body for North and Central America, met with officials representing the leagues and clubs. All agreed that a solution needed to be found in order for South America’s qualifiers — backed up by pandemic-related cancellations — to be completed in time for the World Cup.

An official from CONMEBOL, according to notes taken at the meeting reviewed by The New York Times, explained that traveling to and within South America was extremely challenging, and that the confederation required three extra days in September and October to ensure the games could be played safely.

A representative for the leagues said that would not be acceptable, since it would mean scores of players would be unavailable for at least one weekend of league play, and perhaps more, because of quarantine requirements upon their return to their clubs. He said the leagues could accommodate one extra day, and suggested that the games be played in a secure bubble to minimize travel. At the same meeting, a representative of the players’ union, FIFPro, reminded FIFA of the health effects on athletes of traveling long distances and playing so many games in quick succession.

A few weeks later, on Aug. 7, FIFA announced its decision. In a meeting of its most senior body, the Bureau of the FIFA Council — a group made up of the FIFA president, Gianni Infantino, and the leaders of the six regional confederations — it was decided that the South American qualifiers in September and October would be triple match days — three matches in one international break — and clubs would be required to release players for two additional days. Only UEFA, Europe’s governing body, voted against the plan. Previously, it and CONMEBOL had worked together to oppose some of Infantino’s suggestions.

“The addition of two days will ensure sufficient rest and preparation time between matches, reflecting the longer travel distances required both to and within South America, thus safeguarding player welfare by mitigating the negative consequences of this more intense schedule, while ensuring fair competition as well as a prompter return to their clubs of the players involved,” FIFA said in a statement.

That hardly mollified the clubs. To make matters worse, FIFA said it had scrapped a regulation that allowed teams whose players faced quarantines upon return to withhold releasing them for national team games.

“From a regulatory standpoint, this means that FIFA compels players to play for their national team even if they are restricted afterward from playing for their club for several games,” the leagues said in a letter addressed to the FIFA president. The effect, the leagues said, would be quarantine measures that would result “in the disruption or discontinuation of domestic leagues.”

With the first games of the September window just over a week away, leagues and clubs are weighing their options. Under FIFA’s current regulations, they may not have many: They will be sanctioned if they refuse to release their players for the looming international window. The complaint would be brought by national soccer associations that comprise FIFA. The body that would rule on the complaints? FIFA.

[Chester Perry]

Tifo Football look at Doping in Football

https://www.youtube.com/watch?v=3E3hZyx-8BQ&t=7s

[Chester Perry]

This will make FIFA smile - forfieted funds from a US corruption probe are to be given to them - from the BBC

Fifa awarded $201m in forfeited funds after corruption probe by US Department of Justice
Last updated on 12 minutes ago.

Fifa will receive $201m (£146m) in forfeited funds seized during a corruption probe, the US Department of Justice has announced.

More than 50 defendants have been criminally charged since the Department of Justice unveiled its corruption probe in 2015.

Twenty-seven people and four corporate entities have pleaded guilty, with two people convicted at trial.

The repayment will begin with an initial $32.3m (£23.5m).

The money, which was seized from the bank accounts of former officials who were prosecuted for corruption, will be used by the Fifa Foundation, an independent foundation, to help finance football-related projects which, Fifa says, can "positively impact so many people across the football world, especially through youth and community programmes".

The 2015 scandal, the biggest in the sport's history, involved collusion between officials from the governing bodies and sports marketing executives, with fraud, bribery, racketeering and money laundering offences committed.

It led to the end of Sepp Blatter's 17-year reign as the governing body's president and the election of Gianni Infantino as his successor in February 2016.

"I am delighted to see that money which was illegally siphoned out of football is now coming back to be used for its proper purposes, as it should have been in the first place," said Infantino.

"I want to sincerely thank the US Justice authorities for their efforts in this respect, for their fast and effective approach in bringing these matters to a conclusion, and also for their trust in general.

"The truth is that, thanks to their intervention back in 2015, we have been able to fundamentally change Fifa from a toxic organisation at the time, to a highly esteemed and trusted global sports governing body."

[Chester Perry]

This will make FIFA smile - forfieted funds from a US corruption probe are to be given to them - from the BBC

Fifa awarded $201m in forfeited funds after corruption probe by US Department of Justice
Last updated on 12 minutes ago.

Fifa will receive $201m (£146m) in forfeited funds seized during a corruption probe, the US Department of Justice has announced.

More than 50 defendants have been criminally charged since the Department of Justice unveiled its corruption probe in 2015.

Twenty-seven people and four corporate entities have pleaded guilty, with two people convicted at trial.

The repayment will begin with an initial $32.3m (£23.5m).

The money, which was seized from the bank accounts of former officials who were prosecuted for corruption, will be used by the Fifa Foundation, an independent foundation, to help finance football-related projects which, Fifa says, can "positively impact so many people across the football world, especially through youth and community programmes".

The 2015 scandal, the biggest in the sport's history, involved collusion between officials from the governing bodies and sports marketing executives, with fraud, bribery, racketeering and money laundering offences committed.

It led to the end of Sepp Blatter's 17-year reign as the governing body's president and the election of Gianni Infantino as his successor in February 2016.

"I am delighted to see that money which was illegally siphoned out of football is now coming back to be used for its proper purposes, as it should have been in the first place," said Infantino.

"I want to sincerely thank the US Justice authorities for their efforts in this respect, for their fast and effective approach in bringing these matters to a conclusion, and also for their trust in general.

"The truth is that, thanks to their intervention back in 2015, we have been able to fundamentally change Fifa from a toxic organisation at the time, to a highly esteemed and trusted global sports governing body."

I was struggling earlier for words to describe the news of FIFA would benefit from the corruption investigation of it's own senior officials - I still am but I can marvel at the fact Gianni Infantino can keep a straight face about it all - from the New York Times

FIFA, Deemed a Victim of Its Own Scandal, Will Share $200 Million Payout
AUGUST 24, 2021

Even as top soccer officials were still being arrested as part of a sprawling corruption investigation in 2015, lawyers for the sport’s global governing body and U.S. prosecutors began to embrace an intriguing premise:

The soccer organization, FIFA, and its affiliates were not only the hosts of the scheme, the thinking went, they were also its victims.

For prosecutors, the notion distinguished between the hijackers and the hijacked: It held individuals accountable for their crimes but spared the organizations and the sport that they had defrauded. For FIFA and its new leaders and lawyers, the framing had a bigger benefit: It protected against prosecution, and it offered the organization a chance to reclaim the tens of millions of dollars siphoned away by corrupt officials.

Tuesday brought the payoff: Six years after a wide-ranging criminal indictment laid bare decades of corruption in global soccer on a stunning scale, and five years after those in power started pursuing a piece of the millions that American authorities were rounding up, the U.S. government approved the payment of more than $200 million to FIFA and its two member confederations most implicated in the scandal.

The repayment will begin with an initial payment of $32.3 million in forfeited funds, the Justice Department said, but prosecutors have approved a plan in which the soccer organizations could receive as much as $201 million.

In a statement, FIFA’s president, Gianni Infantino, thanked the American authorities for their “fast and effective approach in bringing these matters to a conclusion, and also for their trust in general,” adding that soccer now considered itself “well past” its corrupt history.

“We will make sure that these funds are used properly and bring tangible benefits for people who really need it,” Infantino said.

The repayments will be directed to FIFA as well as to CONCACAF, the organization overseeing soccer in North and Central America and the Caribbean, and CONMEBOL, which governs the sport in South America. The previous leaders of those organizations, as well as those of national soccer federations across the Americas, had been implicated in the scandal in colorful detail. More than 50 people and companies were charged in the case, and dozens have pleaded guilty. Along the way, at least two defendants have died.

The Justice Department’s decision to return millions of dollars suggested a measure of restored faith in FIFA’s management, even as the money — something the organization first requested years ago — came with strings attached: It must be walled off in a foundation and directed toward developing soccer around the world, according to Tuesday’s announcement. A significant portion of the money will be directed to projects in the Americas, FIFA said, “given that they suffered significantly as a result of the criminal activities.”

Any spending from the new account, the World Football Remission Fund, will be subject to oversight and independent audit measures, American authorities said.

The money will be held in the U.S. bank system instead of in Switzerland, where FIFA has its headquarters, according to the terms of the agreement, which were described by two people familiar with the arrangement who requested anonymity because they were not authorized to discuss the details publicly.

Parameters for spending money recovered from the government have figured into other corruption cases, like the United Nations oil for food case, in which the Justice Department specifically designated restitution money for a development fund in Iraq.

“It’s not unprecedented to have the Justice Department weigh in on the appropriate use of the money,” Antonia M. Apps, a lawyer with Milbank, Tweed, Hadley & McCloy and a former federal prosecutor for the Southern District of New York, said. “The scale of this corruption case is much larger than your typical corruption case, so the dollars are greater than you would normally see.”

As American authorities announced their case in 2015 and dozens of powerful officials and marketing executives pleaded guilty to charges including racketeering, wire fraud and money laundering conspiracy, prosecutors made clear they saw the soccer organizations as victims that had been co-opted by dishonest operators.

Lawyers for FIFA and the regional confederations were quick to embrace that view, and fought further to manage the perceptions of prosecutors and the public by seeking to distance the organizations from the accused criminals, both by cooperating with the authorities and to solidify the sports organizations’ role as victims, powerless to their top leaders’ fraud.

In a court filing in 2016, lawyers for FIFA argued that the organization had lost at least $28 million paid to 20 soccer officials over 12 years, along with having suffered other incalculable costs.

CONMEBOL, the South American confederation, has already recovered millions of dollars through other channels. In July, it said it had been awarded more than $1.7 million by the Swiss authorities — money that had been in a personal account of one of its former leaders. That came in addition to the $55 million the organization said it had clawed back from the accounts of other former officials.

In the years since the FIFA corruption scandal burst into public view with raids on a luxury hotel on the eve of a FIFA congress in 2015, the case, one of the largest criminal prosecutions in America when it was announced, has moved forward even as public attention to its proceedings and to corruption in global soccer has waned.

Just this week, Reynaldo Vasquez, El Salvador’s former top soccer official who was charged in 2015, pleaded guilty in federal court in Brooklyn. And earlier this year, prosecutors announced the Swiss bank Julius Baer had agreed to pay more than $79 million in penalties for its role in laundering money in the scandal.

Even so, years on, key figures await sentencing, and some former officials remain at large. One, Marco Polo Del Nero, the former head of Brazil’s soccer federation, was recently recorded appearing to direct the federation’s affairs despite having been barred for life by FIFA from working in organized soccer.

But in announcing a new conviction this week, American law enforcement officials telegraphed that they were still keeping tabs on the sport. Tuesday’s announcement underscored that.

“From the start,” the acting U.S. attorney for the Eastern District of New York, Jacquelyn M. Kasulis, said in a statement, “this investigation and prosecution have been focused on bringing wrongdoers to justice and restoring ill-gotten gains to those who work for the benefit of the beautiful game.”.

[Chester Perry]

La Liga President Javier Tebas has been making some strong claims about the benefits of the CVC finance deal, he believes La Liga will be stronger/bigger than Premier League globally in 7 to 9 years (that is within the next three tv cycles

https://translate.google.com/translate? ... 0e1f.shtml

Those claims about the benefits of the CVC/La Liga deal from Javier Tebas are not as big as the benefits to CVC who stand to make their money back in 9 years and then have 41 years of pure profit - this is why I use the Vultures are at the door trailer for Private Equity posts - I believe OfftthePitch.com have put this in front of their paywall - which allows you to see the charts

https://offthepitch.com/a/cvcs-laliga-p ... unravelled

I will place the text here for when/if that changes

Special Report: CVC’s LaLiga proposal unravelled
23 August 2021 2:59 PM

• Off The Pitch has had access to high level documents detailing and scrutinised the CVC deal in detail.

• Our modelling shows that the US private equity group would see a return on its 50 year deal by the end of this decade.

• Experience in growing F1 revenues advanced as an argument to clubs for taking the deal, but team official alleges CVC “raped” the sport after making a 450 per cent ROI in the space of a decade.

• The CVC-deal gives LaLiga an opportunity to break free from a business model that has been “run to the benefit” of the Madrid clubs and Barcelona “for too long.”

JAMES CORBETT corbett@offthepitch.com

On 14 July, the La Liga president, Javier Tebas, met club officials from Barcelona for dinner, including its new club president, Joan Laporta.

The meeting was just three months after Barcelona’s involvement in the attempted Super League plot and in the midst of a stand off over the club’s salary cap that would culminate in the departure of its star player Lionel Messi.

But while relations between the Catalan giants and the league supremo have traditionally been testy, they have not been martial – as is the case with Real Madrid, the club Tebas, ironically, supports.

In any case, Tebas had a proposition for Laporta, something he had been working on with his executive committee and other LaLiga clubs – though not, it must be noted, Real Madrid.

“Am I going to talk to Real Madrid when they set up the Super League in April?” Tebas later reflected. “That is why I didn’t talk to Madrid. I am not going to tell these things to people who want to destroy LaLiga.”

The proposition was an enticing one indeed. Tebas had agreed a private equity deal with CVC that would see €2.7 billion ploughed into LaLiga. The ears of the Barca executives, desperate for cash after years of bad recruitment and hammered by the Covid-19 crisis, pricked up. Documents explaining the deal were handed over.

“There was enthusiasm in abundance,” claimed Tebas.

Scrutiny

This initial enthusiasm from Barcelona soon dissipated. When LaLiga clubs met on 13 August to ratify the deal, Barca, along with Real Madrid, Athletic Bilbao and Oviedo, were just four of 42 clubs to reject the deal.

Between them they also negotiated an opt out clause and won’t take any cash at all, whilst retaining the 10.95 per cent of broadcast rights value they would otherwise have surrendered for the next 50 years. The revised deal will see a total of €2.1 billion drawn down, valuing LaLiga at €24.25 billion.

“Obviously I’d like them to be part of it, but they’re not and I’m not going to cry about it,” said Tebas. “LaLiga will continue to grow. We’ve grown LaLiga in the last few years without their active collaboration.”

Laporta, however, dismissed the idea that the CVC deal was a strategic investment that would grow LaLiga and that he believed that it undervalued the league.

“It is not structured as direct income, it is a loan,” he said. “We also consider that CVC value on LaLiga is too low.”

Real Madrid are very firm in their denial of the CVC-deal. Pictured is their stadium Santiago Bernabéu.
Photo: Alamy Real Madrid are very firm in their denial of the CVC-deal. Pictured is their stadium Santiago Bernabéu.
But where lies the truth?

Is LaLiga priced fairly? Is the CVC proposal an example of vulture capitalism or will it provide LaLiga with the liquidity to improve its strategic goals, take advantage of new technology, and challenge other leagues in the market for broadcast dominance?

Off The Pitch has enjoyed exclusive access to documents provided to LaLiga member clubs that give an unprecedented insight into the deal. They include the valuation provided by bankers Rothschild, which suggests that CVC overvalued LaLiga, and a breakdown of LaLiga’s composite parts.

Anatomy of a deal

Rothschild provided a Support Valuation Report based on commonly used market valuation methodologies including Discounted Cash Flow methodology (“DCF”), precedent transactions, trading comparable and peer set groupings.

It utilised a combination of publicly available and confidential information provided by LaLiga and its advisors, including 15 years of financial modelling and its “Integrated Club Development Plan”.

In doing so it reached a valuation of €24.250 billion for LaLiga, which incorporated its broadcast rights, joint ventures and technology division. According to its proposal it would pay €2.688 billion in exchange for €10.95 per cent (this amount has been revised down to around €2.1 billion after the opt out of four clubs).

It points to similar deals it has conducted in F1 and Motorcycle racing as evidence of its track record. After buying into F1 in 2006, revenues increased 80 per cent to $1.8 billion over 11 years, with team payments rising more than 300 per cent to $980 million

Once the deal is executed, LaLiga propose reorganising its structure, so that LaLigaTech (incorporating its OTT, Content Technological Protection and Media Coach business), its international subsidiaries (in Mexico, Dubai, Singapore and Southern Africa) and joint ventures (in China and USA), as well as the traditional (sponsors and licences business) be transferred to a subsidiary (“LaLigaHoldCo”) with LaLiga owning a controlling stake in it.

In tandem it would run the centralized marketing of broadcast rights together “with all required resources relating to the organization and management of the competition”.

On completion of this restructuring CVC would invest €100 million in the new holding company “to fund both the development of the international and technological development of the platform as well as LaLiga’s traditional business in exchange of 10.95 per cent of the economic rights and 9.9 per cent of the legal rights.

Unspecified annual fee

”There would be separate partnership agreements worth €51 million apiece with the Spanish FA (RFEF) and Spain’s High Council for Sports (CSD), the government agency responsible for sports developments. In addition €5 million would be paid for Female Football.

The balance – around €2 billion in the revised deal (originally €2.460 billion) – would be transferred to clubs in the form of “participating loans” in four tranches. In exchange, for the next 50 years 10.95 per cent of cashflows distributable to clubs (i.e. Broadcasting revenue less LaLiga’s commercial and operating costs) would be paid to LaLiga (this rate could go up to as high as 11.4 per cent or as low as 10.5 per cent based on the success or failure of the plans).

In addition there would be a further – unspecified – “annual fee” paid to CVC. The loan would mature in 40-50 years at a 0 per cent interest rate.

The valuation carried out by Rothschilds concludes that CVC has been generous with its valuation of €24.25 billion. Rothschilds gave La Liga a summary valuation of €22 billion with a valuation range of €20-27 billion depending on analysis type.

It gave value to parts of LaLiga’s business that have never generated a cent: Its OTT business, for example, is given a €29 million enterprise valuation and La Liga Tech is valued at €395 million, despite having no trading record.

Track record

CVC argue that their role transcends pure cash. It is claimed in the valuation documents that it would provide “Support to develop and maximize the potential of LaLiga, with the clear objective of becoming the world reference in sports entertainment.”

It says that it is a “Trustworthy partner with extensive experience and a proven track record in the sports world to provide digital and commercial development capabilities.”

The result, it says, would be a “Resilient league with stronger clubs with a more solid balance sheet: more valuable, with a greater ability to retain fans and increase income.”

All their actions have been taken to extract as much money from the sport as possible and put as little in as possible

It points to similar deals it has conducted in F1 and Motorcycle racing as evidence of its track record. After buying into F1 in 2006, revenues increased 80 per cent to $1.8 billion over 11 years, with team payments rising more than 300 per cent to $980 million.

Earlier, in 1996, it bought Dorna, which organises MotorGP, and increased its broadcast contracts from 13 to 33 and sponsors from 15 to 36. A separate deal with Sky and Sky Bet saw new investments in technology and an increase in net profitability.

What is notable about these previous deals is that CVC has always sold its stake after just over a decade: 10 years with Dorna, 12 years in F1, 14 years with Sky.

Although the term of the proposed La Liga deal is for 50 years, does anyone seriously think they would still be present in 2071? CVC’s offer earlier this year for a similar deal with Serie A was for ten years and the company’s funds don’t normally last beyond a decade.

There does not appear to be any provision for LaLiga to “buy back” its equity after a certain period, so the long period remains a mystery.

Raping the sport

Moreover, the revenue projections – provided until 2035 – suggest that CVC would recoup their investment by the end of this decade. They show that total forecast revenues will rise from €1.954 billion for last season to €3.281 billion for 2034/35.

Modelling carried out by Off The Pitch which shows a 15 per cent operating cost margin cut out, demonstrates that CVC’s originally proposed €2.425 billion investment would be repaid in full by 2029/30, possibly sooner depending on the size of the unspecified “service fee”.

The F1 deal, which is presented as evidence of CVC’s aptitude in sport, is worth scrutiny. In 2006 CVC paid a highly leveraged $2 billion for its 70 per cent stake. Within a year CVC recouped most of its investment by raising debt to pay itself and its partners a dividend.

According to Bloomberg, another $2 billion in debt-backed dividends followed in later years. It also sold off shares to investors including BlackRock and Waddell & Reed. When it sold its remaining 35 per cent stake to Liberty Media in 2016, it was estimated that it had made a 450 per cent return on its initial investment.

Mexican driver Sergio Perez from Red Bull Racing), won the F1 Grand Prix of Azerbaijan at Baku City Circuit on June 6, 2021 in Baku, Azerbaijan.
Photo: Alamy Mexican driver Sergio Perez from Red Bull Racing), won the F1 Grand Prix of Azerbaijan at Baku City Circuit on June 6, 2021 in Baku, Azerbaijan.
Bob Fernley, the then deputy team principal of one of F1’s teams, Force India, accused CVC during that time of “raping the sport”.

Sponsors, broadcasters and fans were squeezed at every opportunity, not least with the fixation with Pay TV to the exclusion of all other broadcasters. F1 was taken to anywhere that would pay the rapidly increasing host fees – Baku, Abu Dhabi, Bahrain, Sochi – irrespective of their relationship with the sports’ culture or heritage, or for that matter democratic or human rights values.

“All their actions have been taken to extract as much money from the sport as possible and put as little in as possible,” said Fernley.

Trailing in EPL’s wake

Moreover, is this growth actually worth La Liga partnering CVC. Javier Tebas is insistent that CVC are not “bailing out” LaLiga and that it is largely structural investment, with only 15 per cent allowable for player acquisitions and 15 per cent allowed for debt repayments.

But are the gains promised that great or obtainable? CVC and La Liga say that they will grow revenues 60 per cent over 15 years to €3.281 billion. But much of this growth is predicated on increases in TV rights, which, as we have seen in recent deals, have plateaued.

Some would argue that the proposed gains will be highly challenging to obtain unless domestic Pay TV viewers in Spain pay significant increases in their subscriptions.

Tebas has made it repeatedly clear over the years that he aims to overtake the Premier League.

“The Premier League broadcast rights sell for the biggest value and the Premier League doesn't have the best players nor the best clubs. The market for broadcasting rights does not work like this,” he has said – but the projections don’t even come close to what the Premier League earns now, never mind in 2035.

Even in 2019, the last year before Covid, the Premier League dwarfed La Liga’s projected figure for 2035 by around €600 million. This was also achieved without a private equity fund taking its pound of flesh.

"Look, you're desperate"

The author and journalist Simon Kuper, who this month published Barca: The Inside Story of the World’s Greatest Football Club – an insider’s account of the decline and near implosion of Barca – says that the club were right to reject the deal.

He says it offers the worst of both worlds – a long term obligation to a private equity firm without the short term fillip of using some of that money towards a headline grabbing deal, such as trying to keep Lionel Messi.

“I think CVC were engaging in vulture capitalism, which they also tried in Italy, where they saw almost all football clubs were desperate after the pandemic,” he says.

There is a real opportunity for some structural change that can benefit the whole league here. If that happens, in the long term, the big clubs will also benefit too

The approach, Kuper believes, was simple: “They say to these guys, ‘Look, you're desperate. We're going to give you a bit of cash to get you out of your hole right now. And then for the next 40 or 50 years, we earn a large chunk of your rights.’”

“I think it would have been an insane thing to do for Barcelona, Real Madrid and probably other clubs to agree to it. And Barca might have been tempted if they could have used some of that money towards signing Messi and buying one or two other players, but the structure of the deal didn't seem to allow that. They weren't even given the full temptation of Christ on that.”

Can benefit the whole league here

However, Dr Rob Wilson, Head of Department for Finance, Accounting & Business at Sheffield Business School says that the private equity proposal gives LaLiga an opportunity to break free from a business model that he says has been “run to the benefit” of the Madrid clubs and Barcelona “for too long.”

“What we need to remember is that any private equity is geared for a return so in many ways it’s not a surprise to see a good return – that’s what the business plan, and investment is about. What PE brings is extra value (theoretically) and that benefits everyone,” he says.

“La Liga has been run for the benefit of Real Madrid, Barca and, to an extent, Atletico for too long. There is a real opportunity for some structural change that can benefit the whole league here. If that happens, in the long term, the big clubs will also benefit too.

“The methods of valuation are fair in my view and provide a genuine platform for acquisition. There will always be alternatives, but CVC along with a couple of other big private equity firms like Red Bird have this space dialled in so it’s hard to disagree.”


With additional reporting by Alberto Medici

[Chester Perry]

KPMG's Football Benchmark takes a look at the finacial impact on matchday revenues across Europe's big 5 leagues during the Pandemic

https://www.footballbenchmark.com/libra ... all_season

[Chester Perry]

This is something I comment on from time to time - Miguel Delaney in the Independent and the very small world for those closest to Football's MAgic Money Tree

Cristiano Ronaldo, Harry Kane and a football world only getting smaller
The very top of the football world is getting smaller and smaller, with its unique economics ensuring a tranche of elite players and managers only have a few options

Miguel Delaney Chief Football Writer @MiguelDelaney
1 hour ago

Harry Kane is staying at Tottenham Hotspur because Manchester City failed to put in an official offer anywhere near the number Daniel Levy might have deemed reasonable. The Independent has been told that not even a bid of £150m came in.

That is reasonable in itself, because there are a lot of arguments against spending so much money on a 28-year-old, especially when the City hierarchy themselves wondered whether he was completely the right fit for Pep Guardiola’s football. One perspective was that Kane might drop back into a No 10 position too much, and that his great quality of shooting early doesn’t completely fit with the Catalan’s build-up play.

Either way, Kane stays at Spurs, and a great player remains outside the Champions League. That may not be great for a star in his prime, but it is good for the competitive balance in the game.

There is a merciful irony to that since City represent the very top of a steep football football chain, but they may just have opened another link. Jorge Mendes is actively looking at options for Cristiano Ronaldo, and City is now seen as “at least possible”. The Portuguese would prefer an English club in the Champions League.

It would be a complicated deal to do in the space of a week, because of the nature of Ronaldo’s contract and so many commercial attachments.

That still wouldn’t be anywhere near as complicated as his Manchester United legacy. Such a move would affect the meaning of his time at Old Trafford.

That might sound like an airy intangible, but it has substantial importance, as well as a commercial importance too. It is what attaches people to clubs and creates legacies, as well as – forgive the term – “brands”.

That is one of the deeper concerns about this window, and what is so relevant about the Kane situation.

The very top of the football world is getting smaller and smaller, with its unique economics ensuring a tranche of elite players and managers only have a few options, that are increasingly transactional.

It is all becoming so interchangeable, a relatively meaningless rotation among the super clubs.

It isn’t an exaggeration to say that in a slightly different world – like even the mid-2000s – a player like Ronaldo would not have considered a move to another English club because of his Old Trafford legacy. No one should be under illusions about sentiment here, but the difference was that there were far more Champions League options. There was a greater potential variety to careers. More clubs in France, Italy, Spain and Germany had better chances of a title challenge and to go further in the Champions League. That allowed players to make these considerations.

As it is, if Ronaldo wants to win the Champions League or a Ballon d’Or, he only has a handful of choices. It was the same with Lionel Messi. It is the same with Antonio Conte as a manager. Sources close to the Italian say his only acceptable choices now – unless he willingly drops down to a level he sees himself as above – are Real Madrid, United and Paris Saint-Germain.

This should not be seen as a lament for United, it should be noted. They are part of this same process, among the super-predators.

It is more about the increasing direction of football, and the uniformity of its top level. It is why revelations like Lille winning a title are so celebrated – because they are so rare.

Football is a better and more exciting sport when there is a greater diversity of competition and unfancied teams can be exciting. That is made more likely when the better players are more spread around, but that is dependent on money being more spread around too.

We keep returning to the same problem. This is what created the Super League.

This market is somewhat what a Super League would have looked like – the best players just emotionlessly moving between the franchises; sport as content rather than any deeper emotional connection.

This is what the NBA has become.

It is such an avoidable shame given the sheer size of the game, and its truly global nature. We shouldn’t be in a situation where the top end is so narrow and so dominant, but Covid has only exacerbated long-term forces.

It now puts an odd pressure on Kane. He maybe needs a 25-goal season more than ever, as he turns 29, and players under 25 like Kylian Mbappe and Erling Haaland become available.

The market for a top striker by then will be even bigger. The football world is only getting smaller.

[Chester Perry]

I have been talking about the American invasion of European football (and club ownership in particular) for a while now - this is the current picture for clubs operating in the top two leagues domestically across Europe - that's 36 clubs

https://twitter.com/CIESsportsintel/sta ... 9831510017

It has been quite a while since I posted an update on the number of European clubs owned on American Investors - the number keeps on rising (29 so far in the last 3 years and 45 overall - here you can see a list of them all

https://twitter.com/CIESsportsintel/sta ... 0100418565

[Chester Perry]

some Podcasts for you to get into

1, - Unofficial Partner with another episode of their series Rethinking Sport - this time with FA Chief Exec Mark Bullingham

https://www.unofficialpartner.com/podca ... bullingham

2 - The Athletic's Business of Sport Podcast today talks to Hib's owner and their desire to topple the old firm and also looks at the (failed) hostile takeover of Rochdale

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

3 - today's Price of Football Podcast talks to Tracey Crouch who heads the government's fan led review of the game

https://podcasts.google.com/feed/aHR0cH ... A&hl=en-GB

[Chester Perry]

@SwissRamble looks at the wage bills across the big five European Leagues for the 2019/20 season

https://twitter.com/SwissRamble/status/ ... 8156238850

[Chester Perry]

Daniel Storey for inews.com with a tale of what life is like for those who dreamed big and failed to manage it correctly

Barcelona and Inter’s wage requests were emotional blackmail on a corporate scale
Now players have all the power to make or break the future of the clubs that asked for their money back

By Daniel Storey
August 25, 2021 5:40 pm(Updated 5:42 pm)

You do wonder, when Gerard Pique metaphorically entered Barcelona’s boardroom and offered to halve his salary to play for the club this season, whether there was any embarrassment from those wearing suits. A communal, humiliatory red face that this grand club, this financial behemoth, had been forced to go cap in hand to one of its own employees would be appropriate.

It appears unlikely, given the evidence. Taking a club of this magnitude so close towards a financial abyss cannot happen overnight. It requires a series of wretched calls made one after other, spending foolish money to chase foolish decisions. None of those can involve much self-reflection or the preposterous pattern would simply not be repeated.

Pique was seemingly happy to play his part. He might reason that he has done alright by Barcelona who first developed him and then chose to buy him back from Manchester United. But he should not have to, particularly given that it merely allowed them to register new signings who themselves had been signed onto expensive contracts that the club had little hope of honouring without the charity of the existing Blaugrana.

Pique’s view was not widely shared. When the call-to-arms from Joan Laporta was delivered to Barcelona’s players, many rejected the chance to be paid less for the same job under more difficult circumstances. It’s a difficult sell: you decided I was worth a certain amount each week and I signed the contract accordingly. Now, because of your miserable mismanagement you need me to be worth less.

To double down on their arrogance/inanity (delete as appropriate), Barcelona reportedly considered taking those who desired to stick to their legally binding contracts to court. Unless employment law has shifted, no judge in the land would rule in the favour of a club that had simply grown tired of paying what contracts stipulated because they fancied seeing Memphis Depay and Sergio Aguero in blue and red. There is another, admittedly niche, solution: don’t keep buying new players when you can’t pay the wages of the ones you have. It’s all a bit robbing Pedri to pay Paul.

This is not exclusive to Barcelona. According to La Repubblica, Inter’s players and staff listened to the public appeal from club chairman Steven Zhang in May for them to take a two-month salary holiday to ease the board’s concerns about their immediate financial emergency and then rejected it. Inter’s situation was less self-inflicted – Covid-19 had decimated the share price of Inter’s owners Suning – but there were other obvious ways of raising funds. Inter subsequently sold Achraf Hakimi and Romelu Lukaku for £155m.

There is a PR war at play here. Clubs leak the need to cut expenditure, pleading poverty. They hope to create a surge of emotional blackmail from their supporters that will provoke one high-profile, senior player into acquiescence. That example then provokes a raft of other players to do the same, as has happened at Barcelona.

But why should any player feel obliged to help out? They were handed contracts by their clubs and loyalty is a two-way street. Those players were feted by their clubs as vital components in title challenges and agreed to terms that were agreed upon by both parties. If they were not part of the appalling decision-making, why should they pay the price for its disastrous results?

Lionel Messi’s departure from Barcelona was viewed in some quarters as a line in the sand for the concept of player power: he wanted to stay but the club’s mismanagement ultimately made that an impossible scenario. But Messi’s influence over his own situation was falsely eroded by the expiration of his contract.

Instead, a difficult balance is emerging as we wait to see which other superclubs are teetering on the edge of financial implosion. At Barcelona and Inter and perhaps elsewhere too, players are not just capable of winning trophies, of disappointing supporters and making them jump with joy; they hold the short-term future of their clubs in their hands after periods of spineless, shapeless or thoughtless mismanagement. Their predisposition towards charity or self-protection may well determine the fate of their employers. Now that’s real power.

[Chester Perry]

Real Madrid show a positive side to being under the tight grip of a President - even when they are essentially fan owned - as they declare a small profit on the 2020/21 season

https://www.realmadrid.com/en/news/2021 ... 4000-euros

[Chester Perry]

the sheer perversity of Socios fan tokens which you can only buy with the cryptocurrency Chiliz

2 days ago majority of fan tokens were up in Chiliz value but because of a drop in the cash equivalent of Chiliz over half were worth less in real money

by last night all fan tokens were down in Chiliz value but because Chiliz had increased in cash value many of the fan tokens were worth more in cash terms

https://twitter.com/uglygame/status/1430620317509210117

[Chester Perry]

some fascinating detail on the Premier Leagues new TV deal in Serbia from Private eye brought to our attention by @UglyGame, the thrust of his post is about the politics in the deal and he is right to point it out - personally I am more shocked by the reported numbers - that is more than La Liga are getting in their record breaking US deal, it is also more than Canal + have paid for over a dozen territories including France

https://twitter.com/uglygame/status/1430929795882405895

[Chester Perry]

Interesting follow up to that Josimar article by Phillipe Auclair "The Trillion Dollar gambling game" which you can find here

http://www.uptheclarets.com/messageboar ... 3#p1616193

The Insider
26/08/2021

«Now, look, very often, these bank guarantees aren’t worth the paper they’re written on. Like I saw one example where the bank guarantee came from that country’s central bank, but when the money came, it came from a hundred different accounts, and you think, what on earth is going on there?»

By Philippe Auclair

Following the publication of Josimar’s investigation into the links between Asian e-Gambling platforms and Premier League clubs, we were approached by a number of individuals who wished to provide us with additional information. One of these individuals is an industry insider who was intimately involved in a number of deals brokered by Premier League clubs with, in particular, Chinese e-Gambling operators. Some details of this conversation have been changed to protect our informer’s anonymity.

What explains the prevalence of partnerships between Premier League clubs and East Asian e-Gambling platforms that are geared almost solely towards markets in their region, China in particular?
“There is so much commercial pressure from owners now, and so much money in that sector in Asia, that they go for it. And now this has expanded with the ‘crypto space’, FX traders, NFTs, fan tokens…Any club which brokers a commercial deal has to do due diligence, and some clubs are better at this than others. I did some work for one which was better than most at that; but even in that case, I didn’t think our due diligence process was as thorough as it should have been. Ultimately, we’d do our due diligence, the legal team would come back with information about the company, and then, it’d be, ‘cool, let’s proceed’! And that was that, regardless of the findings. It was just a question of ticking the boxes, going through an administrative process. This is what is happening all across football at the moment.”

How does the process work? Are clubs approached by agents, or by the e-Gambling operators themselves?
“It varies from case to case. Manchester United, for example, are a very-well organised sales machine. They have a big sales team and are constantly reaching out to the market. They’ll identify a sector and say, ‘right, we want a drinks partner, we want a betting partner’. So they will create a plateau and they will send that plateau [marketing offer] to every entity in the market they’ve identified, they’ll keep on doing that, and that’s why they have the marketing power that they have. But Manchester United are very distinct from the other clubs in the Premier League – bearing in mind that Premier League clubs are way ahead of other European leagues in terms of commercial teams. One club I was involved with also tried to be proactive and reach out to people, but mostly, you’ll have inbound requests.”

What do you mean by that?
“The offers will come from intermediary agencies. Some of them are established people in the market, like Octagon and Lagardère. These people work by the book, totally above board. But as clubs are getting more and more desperate for income, there are more and more of smaller, less reputable intermediaries and agents coming up. From my experience, these intermediaries are just conduits which the Asian e-Gambling operators use to track the clubs. Because if the companies went straight to the clubs, it would be more of a ‘who are you?’ kind of response. But if an intermediary comes to a club and says, ‘look, I’ve got this brand’, it’s easier. There is so much commercial pressure on the clubs. If someone comes to me and says, ‘hi, I work for this agency and I’ve got this brand who’d like to speak to you’, I’ll take the call and say, ‘ok, tell me about the brand, tell me who you are’. Very quickly, you come to a place where, before the legal team has even been involved, we’re talking about financials and so on. Because we’re not doing due diligence immediately. It comes very, very far down the line, and by that time, when you’ve started talking about financials, forecasts, etc, and the commercial team says, ‘we want that money in’, the legal guys do their thing, we take the information, ‘all right, they’ve got this, this and this, they haven’t got this, this and this, but ok: is there a bank guarantee?’ And then we make a decision.”

And then you get the money?
“Ah. No-one – and I mean no-one – pays these fees upfront. Usually what they do is pay the first instalment. You’re happy. Then come the second and third and third instalments, and this is where the problems start. It varies from club to club of course. I know some clubs which wouldn’t go into this kind of deal. But I know of some other clubs in the UK, you go to them, you get the deal. If I’m an gambling operator, I know that if I go to club X or Y [he names two PL clubs], you’ll get the deal done. Because they need the money, and there is so much pressure on the commercial team that they won’t say no.”

Who are those agents who work for those gambling platforms?
“The established ones, like Lagardère or Octagon, are actually very good. They won’t bring you this kind of betting brands. The problem is the smaller intermediaries or agencies. You go online, you see a website that looks kind of professional, and some clubs are being duped. ‘We are a leading sports marketing agency’…but who are they? But the deal’s been done. This is the big problem: the clubs are not vetting the intermediaries and agencies.”

Can you give us some examples?
“Well, X [name withheld] is an example. Often it will be a contact or acquaintance you have dealt with, you used to be at a club who has now set up their own agency. In one instance a contact came to me and said, ‘there’s this company, they do this, they do that, etc’. I don’t know the company he’s talking about, but I know this guy and some of his clients and I think, ‘this is credible’ – and, straight away, your guard is down. But when I met them, something just didn’t seem right. Their guy was supposed to be the CEO of this innovative company, but there wasn’t much substance to what he was saying. Later, I learnt they hadn’t paid their bill with [another PL club]. The kind of company which tells you they’re based in this country, but then you realise they’re registered in a tax haven, and you think ‘oh, this is all a bit dubious’. These are the guys you’re dealing with, the kind of guys these gambling operators use to get through to you.”

We’ve also been told that some of those e-Gambling brands are ephemerous and disappear after a couple of years, or morph into another brand – and the payments stop. When you do due diligence, do you try to establish who the Ultimate Beneficial Owners of those companies are, back in Malaysia, China or the Philippines to avoid this kind of scenario? Let’s say club X is approached by agent Y who says he’s got this Asian e-Gambling client Z who’s looking for a Premier League partner. Then you enter the negotiation. But who do you negotiate with?
“Essentially, the correspondence will be done with the entity in China, and the agent will be on the calls to facilitate the conversation. Usually, you’d say, ‘this is who we are as a club’, the entity will tell you what they’re looking for, we want to be big in that region. We’ll then do a sales presentation, we’ll have mock-up imagery of their brand on the LED boards, we tell them how much space they’ll get there, how much hospitality, how much digital imagery, this is the value you’re getting, this is the investment. Some kind of negotiation will follow. If they’re happy, you create a ‘Heads of Terms’ document, a two-page Word document outlining everything they’re going to get and the cost. This doc will be signed, then you go to a long-form contract, which is quite a long-drawn process, during which your legal team will do due diligence. The legal team will only come in at a very late point, a point at which everyone’s excited by the money the deal will bring in. That is a big part of the problem for me. It should be done the other way, and a lot of these conversations would be done before they even got off the ground.”

Who does that due diligence work?
“Some clubs do it themselves, others use third-party companies.”

Like, say, the business intelligence agencies you’d find in Mayfair in London?
“Yeah. But only to a certain degree. Like, the owners, the board members, are there obvious red flags somewhere? That’s the extent of it, most of the time.”

Are you talking about the actual owners and board members, who might be operating from Macau or Manilla?
“Yes, I am. The big guys, not those who’ve been paid to be a front. Like you’ll go through their financial history. Or, rather, you try. Because there is no financial history to be found, really. It often is a new company, so there’s nothing to be found. Same for the bank guarantee in case a payment can’t be made. Now, look, very often, these bank guarantees aren’t worth the paper they’re written on. Like I saw one example where the bank guarantee came from that country’s central bank, but when the money came, it came from a hundred different accounts, and you think, what on earth is going on there? So, even these bank guarantees, pff…The due diligence process is just a box-ticker. Yeah, done that, not a rigorous analysis of who these companies are, who controls them, and whether we should be dealing with them or not.”

Do you know how big these East Asian e-Gambling companies are?
“Not, not really. I’m not sure anyone does. The due diligence process with them is nowhere near what it should be.”

You’ve actually spoken to some of the Chinese operators who are now ubiquitous in the English game…
“Lots of the time, that’s why the agent or intermediary will sit on the call, because their English is not the best.”

Now, let’s talk about the UK Gambling Commission’s role. After talking to them on several occasions, our impression is that, whilst they have a very robust regulatory framework in place, which is rigorously applied to British or Irish e-Gambling operators, we always end up at the same point when we talk about East Asian/Chinese gambling platforms: it is always up to someone else – their licensed operators, who are proxies – to verify their credentials. To quote them, “We also require operators to tell us websites they will be using under their licence and this includes white label websites. We do not currently investigate marketing partners as part of an application, but we would if an issue was brought to our attention. Where an operator contracts with a third party, we expect the operators that we licence to carry out all necessary due diligence to satisfy themselves that the proposed relationship will not in any way compromise the operator’s own compliance“. So we end up going in circles. But you’re telling me that the clubs who have struck deals with companies such as W88, sportsbet.io, FUN888, will at some point talk directly with their Chinese owners?
“Yes.”

Would you know who the Ultimate Beneficial Owners of these companies are? Would you know who is hiding behind those brands?
“It will change from club to club. But, outside of the really big clubs, the question will not be asked, and not by the Gambling Commission. They will not look for answers in a proactive fashion. It’s never “we can’t proceed with that deal if we don’t know about this and that’. And that’s the point. Due diligence doesn’t cover this. Due diligence is ‘can you provide us with this and that?’. And then it’s, ‘done it, done that call?’ ‘Yeah, ok’. and…yeah, ok. That’s all. The clubs, 100%, have to take more responsibility. The fact is that these companies are coming via intermediaries and agencies which are English-speaking and have their motivations as well. For the clubs, it’s more palatable, they’re dealing with marketing agencies, not with the e-gambling operators, through much of the process. Also, I know that these companies don’t deal with just one club. A betting company comes up and, all of a sudden, they’re partners of PL clubs X. Y and Z. That’s often because the agent will have done a multi-club deal. The operator will say, we have 5 million pounds to spend. We could do Man United…or what don’t we do something with this club and this club and this club? That’ll be a much easier process to get done, and much more lucrative as well for the agents.”

What’s the benefit for them?
“The smaller clubs will pay a much higher commission rate. The big PL clubs will pay between 5 and 7.5% commission rate. But I’ve heard that some of the smaller clubs will pay between 20 and 30% commission rate to the agent. This explains why the agents, when the Chinese operators come to them, will say, ‘let’s not go to Manchester United, let’s to X, Y and Z’ and do a multi-club deal. Because you’re not going to get Man United, but you’ll still get the exposure thanks to all the games you’ll play against Man United, Man City or Liverpool. People in China will still be exposed to your brand, at a lesser cost. They’ll see the images, the messages on the LED boards, the sleeves, the shirts. So it’s arguably much more cost-efficient to go to smaller clubs. There’s less due diligence. The deals are done a lot more quickly. And that’s why you see all those deals falling in place. Smaller clubs are also perhaps less concerned by the impact a relationship with an e-Gambling platform in Asia will have on their reputation. Smaller clubs don’t think that way. They’ve got revenue targets they’ve got to meet. ‘Do you have the money? Get on board’.”

Do you know where the money comes from? It ends up in club X…FC’s account, but from where? From the East Asian companies themselves? We were told that British banks would probably not accept those payments. Is this correct?
“The money will never come from the entity – the gambling operator – itself. You know who you’re dealing with, but, when it comes to payment, you’re dealing with another contracted entity. ‘We’re a Chinese entity, but we have a contracted entity which is based elsewhere and will pay you’. Then the first transaction comes through, there’s a sigh of relief, and everyone says ‘cool!’ It’s a different story when it gets to the second or third instalment of course. By that stage, the brand has established its presence, and if you’re the club and you’ve got that name on your shirt, it’s not a simple process to remove your commercial partner’s logo from everything.”

Can you think of a time when the UK Gambling Commission got back to you or to another club to tell you they were not satisfied with a particular relationship with an e-Gambling platform?
“No, never. And I think that’s why you see the prevalence of these brands throughout football. I know they have protocols in place, but never have I come across a scenario in which the Gambling Commission came back to a club and asked for more information.”

[Chester Perry]

There is a third piece to the Josimar investigation into gambling sponsorship in the Premier League - What have the clubs prepared to say about it, you will not be surprised to find out that it is not much

The Sound of Silence
25/08/2021

Premier League clubs are unwilling to answer questions regarding their Asian betting sponsors and partners.

By Lars Johnsen

Following the publication of the article The trillion-dollar gambling game, an 18-month investigation about Asian betting sites and their partnerships with Premier League clubs, Josimar asked eleven Premier League clubs about their relationship with ultimately foreign-based, overwhelmingly Asian betting operators. A list of these clubs and of their e-Gambling partners can be found at the end of this article.

We asked ten clubs to reply no later than Friday 20 August. In the case of Leicester City, we asked for a reply on Tuesday 24 August.

These are the questions we put to them:

Josimar magazine is looking at the relationship between Premier League clubs and Asian e-Gambling platforms, which, in your club’s case is: X

How did you enter this partnership?

Were you approached by X directly, by a ‘white label’ company, or by a different UK agent?

How long has this partnership been in place for, and when is its term?

X is ultimately owned by foreign-based/Asian shareholders. Do you know who they are?

Have you sought to establish their identity? If yes, who are they? Have you sought to establish whether they were suitable partners for your club?

If not, why did you not deem this necessary?

Who was the partnership fee paid by?

To date (25 August), only two clubs have responded to our enquiries.

Manchester United replied on Thursday asking to have the deadline extended as it was “tough to get a response by the end of the week given the time differences”. We told Manchester United that extending the deadline through to Monday would be no problem.

We got an answer on Tuesday:
“I’m afraid that we are not able to answer your specific questions because:
We do not comment on confidential negotiations with prospective partners, nor on the due diligence carried out as part of this process.
We do not comment on confidential financial or contractual details of our commercial partnerships.

This is an approach we follow in respect of all our partnerships and discussions with prospective partners, not something specific to HTH.

As background, we can confirm that our agreement with HTH complies with all relevant UK gambling laws.”

Wolverhampton Wanderers gave this answer:
“Unfortunately this is not something we plan to provide answers on I’m afraid. Many thanks for your understanding.”

Arsenal, Aston Villa, Burnley, Crystal Palace, Leeds United, Leicester City, Newcastle United, Southampton and Watford have remained silent until now (25 August). We will update this page if and when we receive responses from the clubs concerned.

In parallel, Josimar got back in touch with the UK Gambling Commission to ask the following questions.

– Does the UK Gambling Commission know who the ultimate beneficial owners/shareholders of the Eastern Asian platforms which operate through a “white label” company are?

– Does the UK Gambling Commission proactively seek to establish who these beneficial owners/shareholders (a vast majority of which are Eastern Asian) are? Do these beneficial owners/shareholders have a duty to provide you with this information?

– If yes, are these beneficial owners and shareholders subjected to verification of their credentials and suitability? If not, why?

This is the response we received from a UK Gambling Commission spokesperson.

“We do not talk about individual operators or cases. […]

Before we licence an operator we investigate the suitability of a company to hold a licence – this is a detailed look at who is involved in the company, who are the shareholders, criminal record checks, financial reports, how the company is funded and the source of funding. […]We would only offer a view on a licence application once we had carried out all of the necessary checks and reviewed all relevant aspects of the business.

We also require operators to tell us websites they will be using under their licence and this includes white label websites. We do not currently investigate marketing partners as part of an application, but we would if an issue was brought to our attention. Where an operator contracts with a third party, we expect the operators that we licence to carry out all necessary due diligence to satisfy themselves that the proposed relationship will not in any way compromise the operator’s own compliance. (Josimar note: we understand that this means that it falls to the operators themselves to carry out due diligence of companies of which they are subsidiaries)

We expect licensees to ensure that when agreeing commercial deals with sports clubs, that all parties are aware of, and compliant with, the relevant advertising and sponsorship rules and regulations.”

The English Premier League clubs we contacted and their foreign-based/Asian e-Gambling partners (shirt sponsors, sleeve sponsors, ‘global betting partners’ and ‘official partners):

Arsenal: sportsbet.io
Aston Villa: OB Sports
Burnley: Spreadex Sports
Crystal Palace: W88
Leeds United: SBOTOP
Leicester City: HTH, W88 and Lovebet
Manchester United: HTH
Newcastle United: FUN88
Southampton: sportsbet.io
Watford: Stake.com
Wolverhampton Wanderers: ManBetX

[Chester Perry]

Can you believe that Derby is such a regularly used word on this thread that I can no longer use it to search for posts about them within the thread

the question is have they submitted the relevant account details on tine and the EFL's statement on this is a little vague

https://twitter.com/EFL_Comms/status/14 ... 9638098946


They certainly haven't made a filing at companies house - that is one thing for certain

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

John Percy in the Telegraph with an update on the Derby situation re accounts - he is often in the know about the situation at Pride Park less so about the EFL

Derby County close to EFL settlement with a points deduction still possible
After being fined £100,000, Derby close to an agreement with EFL over punishment for breaches of financial regulations

By John Percy 26 August 2021 • 6:07pm

Derby County are moving closer to finally resolving their bitter row with the Football League, with the Championship club considering whether to accept a hefty points deduction.

Derby are locked in talks with the EFL over striking a settlement on their punishment for breaches of financial regulations, in order to end the dispute that has dragged on for over 18 months.

Ahead of their 99th league meeting with local rivals Nottingham Forest on Saturday, Derby and their legal team have this week been in further negotiations to try and thrash out an acceptable deal for both sides.

Derby were initially charged in January 2020 over breaches of spending rules and cleared, but the EFL’s appeal over their accounting policies resulted in a £100,000 fine in June this year.

The club were then instructed to file restated accounts for financial years ending 30 June 2016, 2017 and 2018, with the deadline expiring on Tuesday this week.

Under pressure from rival Championship clubs, the EFL is pushing for Derby to be punished and it is understood that a deduction of 12 points - nine points plus a suspended three points - and an imposed business plan has been discussed, but is yet to be agreed.

Derby are already under a transfer embargo which restricts them to free transfers or short-term loans, while they will also be deducted three points if they fail to pay their players in any of the months this season.

The question now is whether Mel Morris, the Derby owner, reluctantly accepts the EFL’s proposed punishment or, as expected, challenges it. Derby have always maintained they did not seek any competitive advantage with their amortisation policy.

Morris is determined to sell the club, with talks ongoing with a number of parties, but is effectively in limbo until the situation is resolved.

He is also aware that a heavy punishment of up to nine points will severely impact Derby’s season and give manager Wayne Rooney a huge task to avoid relegation.

Sheffield Wednesday were relegated to League One last season after being hit with a six-point deduction, which was initially 12 before it was reduced after an appeal.

Birmingham City were also docked nine points in March 2019 for breaching financial rules, but survived the drop.

Talks between Derby and the EFL, who both declined to comment, will continue but there is a clear sense that the saga must come to an end soon.

Both parties are keen to avoid another drawn-out legal battle which could go before another disciplinary commission.

Rooney has endured a difficult start to management throughout the uncertainty, leading Derby to safety on the final day of last season. They will face Forest unbeaten in the last two Championship matches.

While Derby are hopeful of removing the cloud that has hung over Pride Park for almost two years, Forest will travel down the dual carriageway known as Brian Clough Way with their own problems after a miserable start to the season.

Forest are bottom of the table after losing all their league matches so far and manager Chris Hughton is under increasing pressure from supporters.

Hughton’s position has come under further scrutiny following the drab end to last season, and a defeat against the arch-enemy will only increase calls for him to be sacked.

Within the Forest boardroom, there is a determination to stick with the 62 year old and sympathy over the current situation: fifteen players left the club last season but only four have arrived this summer.

The transfer deadline is on Tuesday night and Forest are working to bring in at least four new additions, with the final day expected to be very busy.

The remit is to reduce the squad’s average age, with recruitment now data-driven after the arrival of former Barnsley chief executive Dane Murphy, but the market has proved a real struggle.

Hughton said: “We are devoid of players and the squad is not as strong as we need it to be for this type of division.

“We know this league very well and it’s relentless. We need to add to the squad and I will have a better feel on what we can do once we get to the end of the window.

“The unfortunate part of football is that you’re judged every day and by every game.

“We know what this game means to the supporters and these are games that can kick-start your season. We want to put a smile back on the supporters’ faces.”

Forest are unbeaten in their last eight meetings with Derby and Hughton is considering giving American goalkeeper Ethan Horvath his league debut.

Separated by sixteen miles, the two famous clubs will compete for the Brian Clough Trophy with the rivalry as intense as ever, but with the same target of a brighter future.

[Chester Perry]

Well it didn't take Brentford long to adjust to life in the Premier League. and I am not talking about on the pitch either - they have factored two years of Premier League tv money to Barclays so they can manage cash flow - as always it comes at a cost though, banks don't do this for free, though it will be cheaper on the interest than going to MSD or Rights and Media Capital

https://twitter.com/KieranMaguire/statu ... 6035772416

On a side note it is interesting that Barclays remain the only high street bank willing to get involved in football financing, even for something such as factoring Premier League TV monies, where (because they are a registered UK Bank) the Premier League will pay them directly and deduct the sums from payments to Brentford (see section 5 of the Charge in the 19th of August 2021 filing at companies house https://find-and-update.company-informa ... ng-history)

[Chester Perry]

some Podcasts for you to get into

1, - Unofficial Partner with another episode of their series Rethinking Sport - this time with FA Chief Exec Mark Bullingham

https://www.unofficialpartner.com/podca ... bullingham

2 - The Athletic's Business of Sport Podcast today talks to Hib's owner and their desire to topple the old firm and also looks at the (failed) hostile takeover of Rochdale

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

3 - today's Price of Football Podcast talks to Tracey Crouch who heads the government's fan led review of the game

https://podcasts.google.com/feed/aHR0cH ... A&hl=en-GB

should have added this to the list yesterday

The Sport Unlocked Podcast talks about a revised UEFA FFP - the Geo Politics of UEFA football particularly Nasser Al Kelaifi - with Tariq Panja, Martyn Ziegler and Rob Harris

https://open.spotify.com/episode/2Qolm2 ... 84f02&nd=1

[Chester Perry]

In a completely opposite approach to build a club (or is it a brand) where admittedly the ambitions are somewhat different this extensive piece from the Athletic on Inter Miami covers a a whole range of things that makes you question what the game has become

https://theathletic.com/2773516/2021/08 ... ckham-mls/

there have been lots of strange events going on at Inter Miami since it formed (and it still has to build a ground (last estimates were around a billion dollars) but this valuation as ownership consolidates shows that David Beckham is likely to make money from it - from Sportico.com

Inter Miami Valued Between $600M-$650M as Mas Brothers Buy Out Son, Claure
KURT BADENHAUSEN AUGUST 27, 2021

CF owners Jorge and Jose Mas are buying out two of their partners, Marcelo Claure and Masayoshi Son, in a deal that gives the MLS club an enterprise value between $600 million and $650 million, according to multiple people familiar with the negotiations.

The Claure and Son stakes total about 48% of the team, according to the people, who were granted anonymity because the specifics are not public. Should the transaction close, it would leave the Mas brothers and David Beckham as the team’s remaining owners as it continues to pursue a Miami stadium.

The deal comes amid some turmoil within the ownership group, the people said. That includes fallout from a $2 million fine that MLS levied on the team earlier this year for circumventing roster guidelines, an infraction reported to the league by Claure, according to The Athletic.

The Mas brothers are financing the deal with cash and a loan from Goldman Sachs, according to two of the people. It is likely that limited partners could buy into the team in the near future, they said.

A spokesman for MLS declined to comment, while representatives for Goldman Sachs and Inter Miami didn’t immediately respond to requests. Attempts to reach Claure, Son and the Mas brothers weren’t immediately successful.

A valuation in the $600 million to $650 million range would be among the highest ever for an MLS team in a transaction. Inter Miami was valued at $525 million in Sportico’s most recent valuations.

Inter Miami’s roots date back to David Beckham’s original MLS player contract, which gave him the right to a franchise for $25 million, significantly below expansion fees paid for other teams that have joined the league recently. It is MLS’s second attempt in Miami—the Fusion were contracted in 2002 amid financial troubles—and the team’s first 12 months have been marred with setbacks and controversy. The club is currently playing in an interim home in Fort Lauderdale as it continues to seek approval for its permanent stadium project, called Miami Freedom Park.

In May, MLS fined Inter Miami $2 million, a league record, for underreporting player salaries and circumventing roster guidelines. Following a review of more than 1,400 documents, the league also issued a $250,000 fine to Jorge Mas, managing owner at the time of the infractions. (The league said Mas failed to disclose his knowledge of one of the violations, but that it found no wrongdoing on the part of Claure, Son or Beckham).

People around the league believe this transaction could help the team move forward with unified ownership. The Mas brothers, who run Coral Gables-based construction and engineering firm MasTec, are considered the likeliest owners to be able to push the stadium project through.

Inter Miami is the latest MLS team involved in a major transaction this year. The Wilf family, owners of the NFL’s Minnesota Vikings, purchased Orlando City earlier this year in a deal that valued the club and its stadium at $400-$450 million. Real estate developer Ted Segal purchased the Houston Dynamo in a $400 million deal two weeks later. Meanwhile, the league is running the sale process for Real Salt Lake and discussing another expansion franchise.

Son is the billionaire founder of SoftBank, where Claure, the former CEO of Sprint, serves as a high-ranking executive.

Raine Group represented the Mas brothers and the team in the negotiations.

[Chester Perry]

This is an interesting legal opinion piece for SportsBusiness.com that brings together the issues of gambling and speculation in pseudo and crypto markets

Richard Williams | Gambling and football sponsorship – the end of an era?
Richard Williams, a gambling and regulatory partner at Keystone Law, discusses the possible future relationship between gambling advertising and sports sponsorship.

August 27, 2021

In December 2020, the UK Government began a review of the Gambling Act 2005. The consultation sought evidence to investigate whether the current regulatory framework for gambling in Great Britain is effective, and whether further protections are required to prevent the exploitation of vulnerable people. The Government’s review noted that, while gambling is a popular leisure pursuit in Britain, 0.5 per cent of the adult population are problem gamblers, with approximately 55,000 children having a gambling problem.

The review focussed on several key areas, including “the positive and negative impacts of the advertising and marketing of gambling products and brands”, paying particular attention to children and young adults. The review noted that the implementation of the Gambling Act 2005 had removed longstanding advertising restrictions, allowing gambling companies to advertise gambling in any media (subject to mandatory and voluntary restrictions, such as the 9pm watershed on TV advertising). It also noted the strong link between gambling advertising and sport, including sponsorship of sports teams and shirt sponsorships and growing public concern about the relationship between sport and gambling.

As recently as September 2018, following press reports that football clubs were selling replica kits featuring gambling advertising to children, the Gambling Commission and Advertising Standards Authority issued a reminder to operators about gambling advertising and sponsorship rules. Gambling operators and football clubs were reminded that their adverts should not appear on junior sections of club websites and that children’s replica shirts should not include logos for gambling operators.

Respondents to the Government’s review were asked to comment on the benefits and harms of gambling advertising, including “what is the positive or negative impact of gambling sponsorship arrangements across sports, esports and other areas?”

The consultation period closed in January 2021 and a white paper is now awaited from the Department for Culture, Media and Sport, which will set out its response and include proposals for revised legislation.

Interested parties will then have the opportunity to respond to the proposals before any legislative changes are implemented. If new primary legislation is required, this is unlikely to be before 2023, although some changes could be made earlier via secondary legislation or revisions to the LCCP (Licence Conditions and Codes of Practice).

As things stand, gambling sponsorship of football clubs remains big business. While the larger Premier League teams appear to be migrating away from gambling sponsorship (perhaps pre-empting any legislation) this season, nine out of twenty Premiership clubs retain gambling operators as their main shirt sponsors. Some of these gambling companies do not operate in the UK and are not licensed by the Gambling Commission. Football shirt sponsorship remains a good way to reach customers in international markets, where Premier League football is extremely popular, but where remote betting is often illegal.

Given the focus on gambling advertisement in the consultation document, it is reasonable to assume that some new restrictions on gambling advertising will be implemented. Whether that leads to an outright ban on sports sponsorship by gambling firms remains to be seen. However, any new restrictions on gambling advertising would not happen overnight. When Italy implemented a ban on all forms of gambling advertising in January 2019, it is reported that Serie A clubs lost a collective €20m per season in sponsorship revenues. Deals in place prior to the ban were allowed to run their course, but despite recent pleas by the Italian FA to relax the restrictions, to allow clubs to recover from Covid -19, the ban remains in place. Is the UK soon to follow suit and, if so, what will replace the gambling industry?

Early signs are that, if like tobacco and alcohol before it, gambling’s relationship with sport is heading towards the exit.

Financial trading platforms, currency exchanges and cryptocurrencies appear to be ready to move in to fill the void. For instance, Watford Football Club has recently announced a shirt sleeve sponsorship deal with cryptocurrency Dogecoin, replacing an earlier sponsorship agreement with Bitcoin.

However, concerns have already been raised about football clubs encouraging their fans to migrate from betting to financial trading and investing. Last season, Queens Park Rangers and Nottingham Forest had to terminate their shirt sponsorships with Football Index overnight, after the Gambling Commission regulated platform had its licence revoked and crashed into administration. Despite being licensed as a gambling product, Football Index was more like a financial trading platform. Many football fans were left nursing heavy financial losses after it collapsed and £58m of customer funds were wiped out. An independent enquiry by the Government into the Football Index collapse and the role of the regulator is still ongoing.

Opposition has also been growing to the Socios scheme, where club supporters buy virtual tokens in return for club engagement. Press reports indicate that Europe’s biggest clubs have made £150m in the last year from converting fiat currency to Socios’ Chiliz cryptocurrency and then selling engagement tokens to fans.

Some fans appear to be pressurising clubs to renege on such deals, fearing that these sponsorships are a gateway into speculative cryptocurrency trading. In July 2021, the FCA issued a warning to consumers that they have very little protection if they invest in crypto assets, that investing holds very high risks and that consumers must be prepared to lose all of their money.

Whilst we await the outcome of the Government’s review, new sponsors are already moving into football to replace gambling sponsorship. If the Government does ban gambling advertising in sport, it’s possible that alternative sponsors could also present a high risk to the vulnerable. It will be interesting to hear the fans’ reaction towards their clubs if they end up investing with these sponsors and lose more than a matchday bet.

[Chester Perry]

this is interesting, even astonishing, the Spanish government apparently extends repayment schedules to 10 years to loans made to Real Madrid and Barcelona - is this another case of State aid for the European Union to rule against again - though we know that takes years to reach a conclusion

https://twitter.com/tariqpanja/status/1 ... 1245178883

a basic translation:

Money bag Spain's government grants rescheduling to Barca and Real to repay their loans.

White heavy check mark The two clubs now have 10 years to repay the amounts borrowed, 100M for Barça and 200M for Real!