Football's Magic Money Tree

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 3:01 am

Martin Samuel had never been known as a shrinking violet - in his latest column he savages first Andrea Agnelli then UEFA/Aleksander Cefrin - he has been slow to the rise (Agnelli has been consistent with his public thoughts for more than 2 years now)

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

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 10:10 am

You know what they say about being careful what you wish for - there is growing speculation that Charlton are on the point of administration as the club's primary backer withdraws funding due to a breakdown with the rest of the board

https://www.bbc.co.uk/sport/football/51814659

the Chairman's statement in full https://www.cafc.co.uk/news/view/5e66d3 ... t-southall

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 10:15 am

This has just appeared on the official Charlton site

https://www.cafc.co.uk/news/view/5e6765 ... e-chairman

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 10:22 am

Today is the EFL's annual day of action - you may think it only comes in a leap year, but it does not - once in every 365/366 days the EFL actually does something

https://www.efl.com/news/2020/march/efl ... mmunities/

you can even follow it here in a live blog https://www.efl.com/news/2020/march/liv ... of-action/

what you won't find is the publication in to the review on the EFL's own governance or how it managed the Bury FC situation - obviously that requires too much action even though it is getting on for 2 weeks since they announced it being complete and discussed at a members meeting

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 1:34 pm

BBC Sport catch up with the problem of EFL games played behind closed doors, even though @AndyhHolt was interviewed on the subject over 24 hours ago on Radio 4

https://www.bbc.co.uk/sport/football/51804544

Chester Perry · Post by **Chester Perry** » Tue Mar 10, 2020 7:34 pm

@KieranMaguire tries to workout what the loss of Matchday Income means in real terms for the pyramid by division (in anticipation of having to play behind closed doors)

https://twitter.com/KieranMaguire/statu ... 2211557376

Chester Perry · Post by **Chester Perry** » Wed Mar 11, 2020 10:12 am

@KieranMaguire looks at Middlesbrough's 2018/19 financial results (they were announced 4 weeks ago but have just appeared at Companies House)- selling players balanced the operating losses - with the prospect of more losses to come following this seasons dire performance in the league

https://twitter.com/KieranMaguire/statu ... 7294687232

full accounts https://beta.companieshouse.gov.uk/comp ... ng-history

Chester Perry · Post by **Chester Perry** » Wed Mar 11, 2020 10:15 am

@SwissRamble looks at Aston Villa's accounts which were published last week

https://twitter.com/SwissRamble/status/ ... 8136159232

this is mind boggling (even though I kind of new it)

" The owners put in £175m up to May 2019 plus £87m subsequent to year-end, so £262m in total."

Chester Perry · Post by **Chester Perry** » Wed Mar 11, 2020 11:00 am

What we are starting to see in the Championship is an unintended consequence of FFP/Profit and Sustainability rules.

Clubs like Middlesbrough and Stoke wanting to "smash" the division with their Parachute money and profits from sales of players who do not want to play outside the Premier League. So they rapidly rebuild teams by buying up the previous years top players, paying inflated prices because they can (at that point) and because that is the only way the selling club will part with them.

Those teams do not always gel, it often becomes rapidly clear that players were not worth the price paid, the team fail to get promoted, the manager gets sacked, cost cutting forces sales - but other clubs want to buy the players that are performing well for you, The ones the club wants rid of, the price people want to pay would leave the club with a negative P&S as it is considerably less than the amortised book value.

As we saw in the Stoke City fans forum on Monday https://www.youtube.com/watch?v=U28aPW5-ZHg - from 6:00 min in

Certainly Stoke are not happy about it as is made abundantly clear in that link. It slows down their ability to regroup and go again - which is painful for all concerned - what is does do though is re-enforce the underlying purpose of these rules - that clubs should be more considered, proactive and strategic in their outlook rather than reactive as that makes them much more sustainable over the long term.

You will also notice that there is a trend that this scenario occurs when clubs have a rapid turnover of managers - each of whom has been allowed to bring in the players they want rather than having a long term plan

Chester Perry · Post by **Chester Perry** » Wed Mar 11, 2020 11:20 am

Anyone read this and able to transcribe (The Telegraph have changed their viewing model) - Exclusive interview: Mino Raiola - Why I am going to war with Fifa

https://www.telegraph.co.uk/football/20 ... -war-fifa/

teaming up with that other paragon of virtue Jorge Mendes

Chester Perry · Post by **Chester Perry** » Wed Mar 11, 2020 7:06 pm

@MiguelDelaney highlights just some of the issues now being faced by football as corona virus continues to spread

https://www.independent.co.uk/sport/foo ... 94321.html

if the season is cancelled with no promotion or relegation do you think Norwich, Villa, Bournemouth, Brighton and West Ham will be stronger next season after a summer transfer window? - should we allow a transfer window if seasons are cancelled?

Chester Perry · Post by **Chester Perry** » Thu Mar 12, 2020 2:35 pm

the EFL have finally released their Governance and Bury FC reviews - though this might happen today with all the speculation about a shutdown

https://www.efl.com/-more/governance/reviews/

The Governance Review - https://www.efl.com/siteassets/image/20 ... review.pdf

The Bury Review - https://www.efl.com/siteassets/image/20 ... at-pro.pdf

The Guardian with it's take
https://www.theguardian.com/football/20 ... les-review

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 10:46 am

I have been saying for some time that Southampton had financial problems - today they announced their results and joined the growing trend of not actually publishing them yet - so they can attempt to manage the "news"

https://www.southamptonfc.com/news/2020 ... lts-201819

@KieranMaguire attempts to decipher what they have shared so far which as planned isn't very much

https://twitter.com/KieranMaguire/statu ... 2750119936

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 10:54 am

Are friends at vysble with a few words of warning regarding the threat coraona virus has to English football (and it is only looking at the top two divisions - much greater impact below I fear

https://twitter.com/vysyble/status/1238068571680452609

meanwhile SPL clubs are very worried

https://www.dailyrecord.co.uk/sport/foo ... s-21676495

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 10:57 am

UEFA stalls its club competitions and share prices of clubs collapse (along with the rest of the markets)

https://www.bbc.co.uk/sport/football/51870540

Man Utd https://twitter.com/vysyble/status/1238143137136160776

Juventus https://twitter.com/KieranMaguire/statu ... 9502687232

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 11:03 am

An article outlining the legal implications facing English clubs in the pyramid as Corona Virus makes it's presence increasingly felt

https://www.brabners.com/blogs/coronavi ... s-prepared

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 11:11 am

Question - Do you think a corona virus will help Man City to play Champions League football next season or not?

My thinking is that it will delay the appeals process so City will get to play on a technicality

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 4:23 pm

And so the Legal wrangling commences - BT Sport refusing refunds following suspension of the season

https://www.theguardian.com/football/20 ... are_btn_tw

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 4:28 pm

Meanwhile it is confirmed that the Pilot of the doomed Sala flight had not completed night time flight training, was not commercially qualified and his plane was not licensed for commercial flights - investigators found that all of this was a regular scenario in sport - there will be a major shake-up and tightening of practices no doubt

https://www.theguardian.com/football/20 ... sed-to-fly

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 5:00 pm

@AndyhHolt has just written a column for the Telegraph - he does it on an ad-hoc basis - I would appreciate it if someone would transcribe

https://www.telegraph.co.uk/football/20 ... secondary/

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 5:53 pm

This Bloomberg piece highlights just how much money could be taken out of European football - for TV rights alone - following the suspension of the game. It also highlights that is probably not in the interests of anyone who wants to see the game survive to claim a refund

https://www.bloomberg.com/news/articles ... cer-season

GodIsADeeJay81 · Post by **GodIsADeeJay81** » Fri Mar 13, 2020 9:26 pm

So I was pondering something today.

I know our wage bill is more than covered by the Sky money, but does that money cover all of our running costs?

I'm curious because other clubs have wage bills alone that exceed the TV money, plus other running costs on top.

Just wondering if our prudent approach will be our saviour with no matchday revenue.

Royboyclaret · Post by **Royboyclaret** » Fri Mar 13, 2020 9:47 pm

GodIsADeeJay81 wrote: ↑
Fri Mar 13, 2020 9:26 pm
So I was pondering something today.

I know our wage bill is more than covered by the Sky money, but does that money cover all of our running costs?

I'm curious because other clubs have wage bills alone that exceed the TV money, plus other running costs on top.

Just wondering if our prudent approach will be our saviour with no matchday revenue.

Our financial results to Jun'19 will not be released until the first week in April, but the previous years' results clearly indicate that all costs are covered by the Broadcast Income. In the figures to Jun'18 TV money amounted to £121.5m with Wages at £81.6m.

Other costs, including Overheads, Player Amortisation and Depreciation totalled £43m, but Total Income was boosted by £5.6m in Matchday receipts and £11.9m in Commercial revenue. The final Net Profit was also boosted that year by a Profit on Sale of Keane & Gray of £30.9m

The numbers will be somewhat different to Jun'19 but if you look on page 62 of this thread Chester and myself have attempted to provide as realistic as possible a set of figures for the last financial year. Hope that answers your query.

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 9:51 pm

GodIsADeeJay81 wrote: ↑
Fri Mar 13, 2020 9:26 pm
So I was pondering something today.

I know our wage bill is more than covered by the Sky money, but does that money cover all of our running costs?

I'm curious because other clubs have wage bills alone that exceed the TV money, plus other running costs on top.

Just wondering if our prudent approach will be our saviour with no matchday revenue.

we will do better than most that is for sure (the benefit of the bonus structure) if the season is declared void and the TV rights distributors demand recompense for the quarter of season not played - assume we just got the £95 - £100m from Central distribution

- there will be no merit payments (which we pay as bonus) our basic salary will be around £65m
- better still that portion of Premier League rights income could be used as refund to the rights owners
- our matchday income is so low that losing a quarter of it (less than £1.75m) is negligible (which assumes a retained income of close to £5m)
- similar with commercial income (a quarter will be around £3 - £4m) (which assumes a retained income of £9m +)

we could still turn a profit

IanMcL · Post by **IanMcL** » Fri Mar 13, 2020 10:19 pm

Chester Perry wrote: ↑
Wed Mar 11, 2020 10:15 am
@SwissRamble looks at Aston Villa's accounts which were published last week

https://twitter.com/SwissRamble/status/ ... 8136159232

this is mind boggling (even though I kind of new it)

" The owners put in £175m up to May 2019 plus £87m subsequent to year-end, so £262m in total."

Should have invested in a manager!

Royboyclaret · Post by **Royboyclaret** » Fri Mar 13, 2020 10:25 pm

IanMcL wrote: ↑
Fri Mar 13, 2020 10:19 pm
Should have invested in a manager!

Ian, the word on the street suggests this enforced PL shutdown has merely delayed his departure from Villa. We'll see in the fullness of time if there's any truth in that.

As Chester P alludes to, some of the financial figures coming out of Villa almost beggar belief.

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 10:34 pm

Chester Perry wrote: ↑
Fri Mar 13, 2020 9:51 pm
we will do better than most that is for sure (the benefit of the bonus structure) if the season is declared void and the TV rights distributors demand recompense for the quarter of season not played - assume we just got the £95 - £100m from Central distribution

- there will be no merit payments (which we pay as bonus) our basic salary will be around £65m
- better still that portion of Premier League rights income could be used as refund to the rights owners
- our matchday income is so low that losing a quarter of it (less than £1.75m) is negligible (which assumes a retained income of close to £5m)
- similar with commercial income (a quarter will be around £3 - £4m) (which assumes a retained income of £9m +)

we could still turn a profit

I will add that the termination of the season and the refunds mentioned would do serious damage to our cash held position which we have been building for a rainy day - which was really meant for relegation.

As for the summer transfer window (particularly following a summer of no promotion) Those who have ready cash are going to be able to negotiate some good deals with clubs in the EFL who are struggling financially - a proper opportunity to be a predator/lifesaver in one swoop

Another thing to note is that if seasons are cancelled across Europe, many will be thankful that FFP has been in place for so long as the impact will be much less than it once would have been.

I also suspect that some really big clubs will be in danger (Barcelona, Real Madrid and AC Milan come to mind) if the season is stopped and declared void and rights holders request refunds. Remember in June both Barca and Real make a 6 month wages payment(with bonuses) that obliterates their trumpeted cash held positions of a few days before in their accounts

GodIsADeeJay81 · Post by **GodIsADeeJay81** » Fri Mar 13, 2020 10:38 pm

Thank you both Roy and Chester.

It would indeed seem like our prudent approach will be our saviour this season regardless of what happens.

Going to be interesting to see what happens with the other clubs.

IanMcL · Post by **IanMcL** » Fri Mar 13, 2020 10:44 pm

Let's hope football and normal life resumes, intact.

Royboyclaret · Post by **Royboyclaret** » Fri Mar 13, 2020 11:05 pm

GodIsADeeJay81 wrote: ↑
Fri Mar 13, 2020 10:38 pm
Thank you both Roy and Chester.

It would indeed seem like our prudent approach will be our saviour this season regardless of what happens.

Going to be interesting to see what happens with the other clubs.

Have to say, in terms of the current shutdown, I'm much less pessimistic than Chester P regarding the season's outcome. I'm of the mind that the final nine games will ultimately be played no matter when the season eventually has to finish. There's far too much at stake for the powers such as Liverpool and Leeds for matters to be left open-ended. If that turns out to be the case then no refunds will be due to the TV companies and we will be paid for the season in full, albeit in stage payments.

Just another word regarding our Total Income GodIsADeeJay...........Our matchday receipts of £5.6m within a total Income of £139m represents a mere 4% and if we had to play behind closed doors all season we would hardly feel a financial ripple. Compare that to the likes of Accy Stanley and Rochdale further down the pyramid where their matchday income is nearer to 75%. Not difficult to see therefore why these clubs will be in serious trouble whilst our prudent approach and our PL status will mean no problems at all for Burnley.

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 11:16 pm

Royboyclaret wrote: ↑
Fri Mar 13, 2020 11:05 pm
Have to say, in terms of the current shutdown, I'm much less pessimistic than Chester P regarding the season's outcome. I'm of the mind that the final nine games will ultimately be played no matter when the season eventually has to finish. There's far too much at stake for the powers such as Liverpool and Leeds for matters to be left open-ended. If that turns out to be the case then no refunds will be due to the TV companies and we will be paid for the season in full, albeit in stage payments.

Just another word regarding our Total Income GodIsADeeJay...........Our matchday receipts of £5.6m within a total Income of £139m represents a mere 4% and if we had to play behind closed doors all season we would hardly feel a financial ripple. Compare that to the likes of Accy Stanley and Rochdale further down the pyramid where their matchday income is nearer to 75%. Not difficult to see therefore why these clubs will be in serious trouble whilst our prudent approach and our PL status will mean no problems at all for Burnley.

Roy I wouldn't say pessimistic - just looking at the worst case scenario - I agree that Leeds and Liverpool (amongst others) will be pushing like mad for a finish to the season, so much riding on it especially for those Championship promotion/Champions League spots, there is no alternative to declaring a result for the season without playing the games though and that is showing an increasing possibility of not happening - remember the rules are agreed before the season starts. Every approach that does not involve playing out the season (including voiding it ) will see a mass of litigation of that we can be sure.

Wonder how much stronger Norwich, Villa, Bournemouth, West Ham and Brighton will be next season if none are relegated

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 11:34 pm

This story is popping up in a few places - FA Chief believes that the season will not be completed - this is what led to my response earlier

https://www.dailymail.co.uk/sport/sport ... eason.html

Chester Perry · Post by **Chester Perry** » Fri Mar 13, 2020 11:38 pm

This article in the Guardian highlights some of the issues facing the games authorities

https://www.theguardian.com/football/20 ... ds-to-halt

Chester Perry · Post by **Chester Perry** » Sat Mar 14, 2020 12:02 am

An informative legal article that focuses on the issue of refunds at all levels following todays suspension of football

https://www.sportslawbulletin.org/coron ... e-majeure/

Chester Perry · Post by **Chester Perry** » Sat Mar 14, 2020 11:45 am

Chester Perry wrote: ↑
Fri Mar 13, 2020 9:51 pm
we will do better than most that is for sure (the benefit of the bonus structure) if the season is declared void and the TV rights distributors demand recompense for the quarter of season not played - assume we just got the £95 - £100m from Central distribution

- there will be no merit payments (which we pay as bonus) our basic salary will be around £65m
- better still that portion of Premier League rights income could be used as refund to the rights owners
- our matchday income is so low that losing a quarter of it (less than £1.75m) is negligible (which assumes a retained income of close to £5m)
- similar with commercial income (a quarter will be around £3 - £4m) (which assumes a retained income of £9m +)

we could still turn a profit

I am going to revise that Tv revenue figure downwards - It is estimated that the rights distributors could claim refunds north of £750m if the season is cancelled - given the number of people indicating on this board that they are about to cancel subscriptions/demand refunds (on this board alone) then they will be forced to demand refunds from the Premier League. In that scenario I reckon we will get around £70m from TV income - that will guarantee a loss when we add in amortisation (around £35m) and general maintenance.

Chester Perry · Post by **Chester Perry** » Sun Mar 15, 2020 12:28 am

It is useful when your best mate is a multi-billionaire - Everton may do what Tottenham have failed to do (even though they are on the major flightpaths over London and also host NFL games) and get a £200m naming rights deal for their Bramley Dock from the same guy who pays more to sponsor the training ground than they get from their shirt sponsor - Is it only me that finds that dodgy

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

Chester Perry · Post by **Chester Perry** » Sun Mar 15, 2020 1:34 pm

@KieranMaguire with an article about the financial implications of the suspension of football

https://www.dailymail.co.uk/sport/footb ... l#comments

there is quite a lot in here I disagree with particularly relating to the Cash positions of the Premier League clubs, he should look at the operating profits and overall losses like he did for the Championship

While the notion of a cash bailout is a solid one (he has upped it by £50k a club since first propositioning the idea during the week) you just know that the Premier League will use it to get their own way at some point in the future

Chester Perry · Post by **Chester Perry** » Sun Mar 15, 2020 1:41 pm

@KieranMaguire does better in this article about the upcoming hearing for Sheffield Wednesday

https://www.examinerlive.co.uk/sport/sh ... t-17927410

Chester Perry · Post by **Chester Perry** » Sun Mar 15, 2020 2:03 pm

@SportingIntel in the Mail looking at the positions of Sky and BT following the sporting calendar suspension

https://www.mailonsunday.co.uk/sport/sp ... virus.html

Chester Perry · Post by **Chester Perry** » Sun Mar 15, 2020 2:42 pm

I said it might happen - CAS is starting to build a backlog of cases as a result of corona virus - it could delay the Man City hearing

https://www.independent.co.uk/sport/foo ... 02256.html

ecc · Post by **ecc** » Sun Mar 15, 2020 3:38 pm

I'd just like to begin by saying that I think we, UTC users, are very fortunate to have two gentlemen (Chester and Royboyclaret) on here who:

a) know about finance per se;

b) are "measured" and "serious"

They use their knowledge to help those of with far more limited financial understanding to get a sound overview of our own club's situation and the game in general.

And, my thanks goes to them.

Clearly, predicting the future for anybody is impossible because nobody knows how long this crisis will continue. Hence, the need for caution as well as"best case" and "worst case" scenarios (as is the case for all business sectors and all individual companies).

FWIW I tend to agree with Royboyclaret that every effort will be made to finish the season even in empty grounds. The total lack of atmosphere will impact viewing figures but people will still watch especially after several weeks without live football (IMHO).

.

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 10:40 am

@SwissRamble looks at Cardiff City's 2018/19 financial results

https://twitter.com/SwissRamble/status/ ... 7715894272

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 10:48 am

The Price of Football Podcast with a Corona virus special - https://podcasts.google.com/?feed=aHR0c ... IBhAE&ep=6

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 12:23 pm

It is that time of year again - The annual workers welfare progress report in Qatar re their world cup preparations - they are still not implementing the reforms promised and people are still dying

https://www.theguardian.com/global-deve ... -six-years

the full report https://www.qatar2022.qa/sites/default/ ... 019-EN.pdf

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 1:11 pm

I have posted advisory legal documents about Governing bodies, rights holders and clubs so it is only fair that here should now be one for the individuals or talent

https://www.linkedin.com/pulse/coronavi ... OpNQ%3D%3D

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 1:21 pm

That Price of football podcast is likely to have created the mantra for al football fans who take an interest in their clubs (and games) future viability, stability and sustainability.

"Revenue Is vanity, profit is sanity but cashflow is reality"

It is something I have been keen on (@AndyhHolt bangs on about it), and it would appear to be the same for our club's board too - long may it continue

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 2:05 pm

Just been reading the Premier Leagues rules on insolvency - subject to a worst case scenario of no football for a year, this season being played out from March next year and the 20/21 season not occurring at all - It is likely in such a scenario some clubs may have to/choose to take the insolvency route (Administration/CVA) to manage their liabilities - to me this looks like the key section here

E.40. Upon a Club or its Parent Undertaking suffering an Event of Insolvency the Board shall have the power to impose upon the Club a deduction of nine points scored or to be scored in the League competition. If the Board exercises this power it shall forthwith give written notice to the Club to that effect.
E.41. Subject to Rule E.42, the Club may appeal against the deduction of points by sending or delivering to the Board Form 4 so that it receives the same together with a deposit of £1,000 within seven days of the date of the notice given under the provisions of Rule E.40.
E.42. The only ground upon which a Club may appeal in accordance with Rule E.41 is that: E.42.1. the Event of Insolvency was caused by and resulted directly from circumstances, other than normal business risks, over which it could not reasonably be expected to have had control; and E.42.2. its Officials had used all due diligence to avoid the happening of such circumstances.

I believe clubs could manage their financial loss through administration and stay in the league with minimal points loss in the circumstances described above.

Not advocating it for a second and I would prefer to see other measures including big wage earners taking deferments on part of their salaries

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 5:12 pm

Time for a bit of corona virus distraction - CIES Football Observatory with it's "Scientific" approach to transfer values

https://football-observatory.com/IMG/sites/mr/mr53/en/

Tricky Trevor · Post by **Tricky Trevor** » Mon Mar 16, 2020 5:14 pm

I’m not up with the financial side like so many posters on this excellent thread so a question.

We, supposedly, do not pay great salary but pay very good bonusses. If the season ends how might this affect our first team squad? I’m not thinking specifically about the £ in their pocket but their thoughts as to future negotiations.

Apologies if this has come up previously.

Chester Perry · Post by **Chester Perry** » Mon Mar 16, 2020 5:16 pm

Same people this time on squad valuations - there are now 6 teams with squads valued at over Euro 1 billion

https://football-observatory.com/IMG/si ... /wp287/en/

we are 18th in the Premier league above Sheffield Utd and perhaps surprisingly Crystal Palace in 20th - Euro 2m covers the 3 of us