Football's Magic Money Tree

[Chester Perry]

Interesting news from Germany - 3 staff members from Cologne have tested positive for Coronavirus - group training continues for the rest while they go into isolation

https://twitter.com/RobHarris/status/12 ... 2824369153

https://www.bbc.co.uk/sport/football/52510597

Interesting that this does not stop the (pursuit of money) training given that when Arteta was confirmed as having it the game shut down across Europe

[Chester Perry]

is it just me that finds this nonsensical = the possibility of a 23 team Premier League next season -

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

it would mean:
a substantial drop in tv revenues per team as there would be no additional TV money - that is likely to £300+ to go the 3 additional teams
greater player costs like additional bonuses for appearances, goals, wins, clean sheets etc
all that on top of no match day income - for Spurs, Utd and Arsenal that is £100m+ Chelsea, Liverpool and City £60m - £90m
and questions over the commercial sponsorship income remaining stable
then there is the probability of 6 teams being relegated
which necessitates the much increased number of parachute payments over the following 3 years - that is at least £210m+ of which around £140m is paid in the first season down

Can any of you see the big six giving away that much when most of their players are on long term contracts, that do not account for such losses of income
Oh and the issues with travel could take away their European Income as well (which including matchdays is £50m - £120m income lost for the big clubs)

[Chester Perry]

It would appear for all the talk and the media speculation about the season continuing that the football authorities are still are long way from strategizing the future, they are still locked into the here and now. Part of the problem they do not seem to now what their job is, they appear to believe that it is running a league and applying rules. That should be a part of it, it is the factory floor - not the whole. At least 40% of their effort (probably a lot more) should be on shaping, protecting, strengthening and growing the game.

Here @AndyhHolt reminds them again that they are not doing so, and perhaps more disconcertingly not exploring and/or discussing alternatives.

https://twitter.com/AndyhHolt/status/12 ... 3034725376

[Chester Perry]

You have to feel that following that from @AndyhHolt (and many similar posts he has made through the lockdown that a large number of officials and executives in the game should spen some time on this - from Simon Chadwick - knowing when to pull the plug - What to Do When You Realize You’ve Made a Mistake

https://twitter.com/Prof_Chadwick/statu ... 2846664704

[Chester Perry]

If you go back to the origins of this thread it was about Manchester United's seemingly endless ability to extract money from it's "brand" (for want of a better word) - hence the Magic Money Tree. Today in the Guardian, Barney Ronay asks (somewhat existentially) will that model apply in the "new normal" of football.

https://www.theguardian.com/football/bl ... k-to-earth

[Chester Perry]

Comcast who bought SKY not so long ago are feeling the pinch - Revenues down significantly in Q1 and warnings about Q2

https://www.cnbc.com/2020/04/30/comcast ... r=sharebar

This is significant because the Premier League are hoping that Sky will pay them the outstanding £350m for this season, even if it does not complete (BT just have £50m outstanding)

SKY themselves have reported a Q1 reduction across Europe and are talking about a reset in revenue rights

https://www.sportbusiness.com/news/sky- ... contracts/

[Chester Perry]

I posted on Thursday about the vultures circling the Premier League for cheap pickings as clubs head out of the financial crisis - we have another contender - Dennis Bergkamp and host of other former Dutch players

https://www.dailymail.co.uk/sport/sport ... -club.html

when I read that I thought it sounded familiar

It is being report by @TheAthleticUK that Dennis Bergkamp, Henrik Larsson, Dirk Kuyt and Ronald Koeman want to buy and run Wycombe Wanderers

You have to say that that is a bit of a step-up from Wycombe though

Looking at the Premier League you would suggest (of the clubs known to be available - Newcastle, Palace and Southampton) the best fit would be Southampton on football philosophy and the fact Koeman knows them.

[Chester Perry]

Another legal advisory piece - this time - Players’ Pay Cuts: A Checklist for Clubs, Players and Agents - the longer this hiatus goes on the more likely all clubs are going to have to do something along these lines

https://www.linkedin.com/pulse/players- ... cAaQ%3D%3D

Many may have to do it anyway even if they is a restart and next season goes ahead behind closed doors for the Premier League if these anticipated Match Day losses are anything like correct (if anything they could be an understatement)

https://twitter.com/vysyble/status/1255194369512149001

@Vysyble have produced a breakdown of there initial report on Premier league match Day loss forecast - as I have been saying - it is quite horrific for some to lose so much

https://twitter.com/vysyble/status/1256649746548170752

[Chester Perry]

The French Ligue are negotiating a State guaranteed loan for £uro 162m - roughly the shortfall amount of those cancelled TV deals

https://www.getfootballnewsfrance.com/2 ... overnment/

the key is the State guarantee - if the clubs don't pay it back the government will. While that is effectively what is happening for a lot of British companies - you just cannot see it happening in football

[Chester Perry]

This thread contains a club by club list of mitigations taken to help finances in La Liga, they are helped by rule of law - though not all have taken the option

https://twitter.com/LaLigaLowdown/statu ... 9353345031

- a stark contrast to the Premier League where, following reversals on furloughing only a small number of clubs have taken action on players wages, though that is more likely to be because of the reported stance of the some influential players, particularly at the richest clubs. - from the Mail

Players at rival clubs warned Chelsea stars to drop pay cut agreement
- Chelsea players were told not to accept wage drop amid coronavirus crisis
- Other Premier League captains were concerned that it may set a precedent

By Matt Hughes For The Daily Mail
Published: 22:32, 1 May 2020 | Updated: 09:26, 2 May 2020

Chelsea players' U-turn on accepting pay cuts last weekend followed pressure from players at other Premier League clubs, who were concerned that another squad following the example of Arsenal, where a 12.5 per cent cut has been agreed, would set a precedent for the rest of the top flight.
Many club captains have been particularly vociferous in opposing the cut, as is revealed by a text message sent among the group following their meeting with Premier League officials last month that has been seen by Sportsmail.

'One thing everyone agreed on was that (as the situation stands) NOBODY agrees to take a pay cut in any shape or form,' read a message sent to players following the meeting.

'We have to stay united on this, as there is no need to, and even if there was it is not our responsibility as players to fix this problem.'
That uncompromising message is understood to have been emphasised to Chelsea captain Cesar Azpilicueta last week after the Spain defender had indicated a willingness to consider supporting wage cuts at Stamford Bridge.

Arsenal's players are the only squad to have agreed cuts, although Southampton and West Ham players accepted deferrals.

[Chester Perry]

The I gives us a quick history of footballs journey into the thrall of money - lots missing but not a bad way for many to understand the progression and recognise that money has been diving things behind the scenes almost from the beginning of the games standardisation.

How football got rich
It was once illegal to be paid to play football, but now money makes the sport's world go round. Here's how it happened.
By Glenn Moore -Friday, 1st May 2020, 4:08 pm Updated Friday, 1st May 2020, 5:58 pm

For centuries football was a pastime, then it became a sport. It is still is for millions, but Big Football is now a business, often a grubby one, as the Premier League’s current twin dilemmas - whether to allow Saudi Arabia to own Newcastle United, and how to rescue their TV income in a health crisis - illustrate. Many fans, to paraphrase Gareth Southgate, ‘love the sport, hate the industry’. But how did we get here?

1. Victorian reform and progress (1850s-1870s)
Unruly, sprawling games of football had been played in England’s towns and villages from the 13th century onwards but declined during the urbanisation of the Industrial Revolution. They survived in the public schools which adopted versions to burn off boys’ excess energy. When pupils moved on to universities the need for universal rules arose (so students from different schools could play with and against each other). To codify the laws the Football Association was founded in 1863, launching the FA Cup in 1871-72.

This was still a gentleman’s game, but in the cities football was reviving. The Factory Acts gave working men Saturday afternoons off enabling them to play football, but also to watch. Clubs formed, often inspired by the missionary zeal of ex-public school players. They mostly emerged from the schools opened following the 1870 Education Act (Blackpool, Leicester), churches (Barnsley, Fulham), factories (Arsenal, West Ham) and cricket teams (Derby, Middlesbrough).

Rising literacy, increased telecommunications, and the spread of the railways created the conditions for clubs to arrange fixtures, fans to learn about them, and for teams and fans to travel to them. The pastime was becoming an organised sport.

2. Legalising professionalism (1885)
As the game’s popularity grew clubs began charging small fees for admission. Crowds rose quickly and soon clubs were generating significant income. Some was invested in basic facilities, but it also went on players. Only expenses were permitted but working men, their pay docked for playing, received under-the-counter renumeration. Players from Scotland, where the game was more sophisticated, were lured to Lancashire and paid illegally.

In 1883 the professionals of the north wrested the FA Cup away from the amateurs of the south. The FA cracked down, expelling clubs from the competition, but when Preston threatened a breakaway association they gave in to retain control of the sport.

To pay regular wages clubs needed regular income. This led to the formation in 1888 of the Football League, the world’s first sporting league, made up of a dozen clubs from Lancashire and the Midlands. Instantly successful a second division was added in 1892 and, in 1893, Woolwich Arsenal became the first southern club to join. Crowds mushroomed and football overtook cricket.

3. Abolition of the maximum wage (1961-3)
A maximum wage, £4-a-week, was instituted in 1901 to keep rising wages in check. While at times circumvented by big clubs (who were occasionally caught) it remained for decades. Together with the retain-and-transfer system, which prevented players leaving even when out of contract, clubs the size of Portsmouth, Burnley, Preston, Blackpool and Huddersfield could regularly finish in the top three and even win titles and cups. Tom Finney was once offered a fortune to play in Italy. ‘You’re not going’, said Preston, and that was that.

Led by Jimmy Hill the players’ union finally overthrew the maximum wage (now £20 in winter, £17 in summer) in 1961. George Eastham then won a High Court verdict against Newcastle United earning freedom of movement when contracts expired (until the 19965 Bosman ruling a transfer fee was still required).

Though Fulham’s Johnny Haynes quickly became the first £100-a-week player (Tommy Trinder, the comedian and chairman, had foolishly promised to do this, not anticipating abolition) the developments benefited the wealthier clubs.

4. Havelange wins Fifa presidency (1974)
From inception in 1904 FIFA had been Eurocentric and uncommercial. An old-school Englishman Sir Stanley Rous, a believer in sporting and financial integrity but with a blind-spot on apartheid, was happy to keep it that way. President from 1961 he was deposed in an electoral coup by Brazilian Joao Havelange in 1974. The football world changed.

Havelange won by promising to expand the World Cup (at that stage there were 16 teams with one each from Africa and Asia) and fund development in Third World football. To do the latter he needed to increase commercial revenues. Backed by Horst Dassler of Adidas, who brought Coca-Cola to the party, he turned the World Cup into a money-making machine. The game grew, but along the way corruption went unchecked.

5. Thatcherite football (1980s)
Britain was transformed in the 1980s as Thatcherite capitalism took hold and football was no different. Entrepreneurial figures such as Irving Scholar (Tottenham) and David Dein (Arsenal) came to the fore seeking to revive a moribund sport.

Tottenham became the first club to float on the stock exchange, forming a holding company with the club as subsidiary. Manchester United followed suit.

Using holding companies evaded FA regulations and a rule dating back to 1894 banning directors drawing a salary and limiting dividends to seven.five per cent was quietly dropped. Thus Tottenham’s Daniel Levy could pay himself £7m last year and Manchester United pay out £34m in dividends over the last two years, mostly to the Glazer family.

Under pressure from bigger clubs the FA allowed home teams to keep all gate receipts (previously they were split 80-20) but it was not enough for some and Spurs also led the way in commercial developments, not all of them successful. When their Uefa Cup-winning manager Keith Burkinshaw quit in 1984 he nodded in assent to a journalist’s suggestion that ‘There used to be a football club over there’ adding, in his own words: “Where the team was all, the centre of everything that went on at a football club, it has become just a part of a marketing formula.”

6. Satellite television arrives (1988)
Football long had an ambivalent relationship with television, occasionally banning it out of a belief coverage would damage gates, and irked by a BBC-ITV cartel that kept rights fees low. Then satellite television arrived offering competition.

The ‘big five’ (Arsenal, Everton, Liverpool, Manchester United, Tottenham) conspired with Greg Dyke’s ITV to kill off fledging channel BSB, and gain an edge over BBC, signing a £11m-a-year deal for exclusive rights to the top flight (the previous price was £3.1m). BSB was forced to merge with Sky.
Four years later BSkyB outbid ITV to secure the inaugural Premier League TV deal paying £61m a year. The rest is mutually lucrative history. The current domestic deal is worth an annual £1.67bn and clubs are so dependent on this income they are desperate to fulfil this season’s fixtures.

7. The Taylor Report (1990)
All-seat stadia had long been suggested as a panacea to hooliganism but was expensive to install and unpopular with fans. The Taylor Report, produced after the Hillsborough tragedy, made it compulsory. Largely underwritten by taxes redirected from the football pools it produced a wave of stadia development unmatched since before WWI.

The combination of seating, improved facilities, the removal of perimeter fences and stewards replacing police made attending top-flight matches, previously often a grim experience, largely family-friendly. Tickets also became more expensive. The result was a more diverse audience, in gender and class, and a wealthier one, more likely to buy merchandise and hire an executive box.

8. Premier League formation (1992)
The big clubs increasingly resented sharing the TV riches they were creating with the rest of the 92-club Football League. Gradually they upped their share to 75 per cent and increased their voting power, but it was still not enough. Exploiting the century-old division between Football League and FA they persuaded the latter to back a breakaway on the promise of an 18-club division and more time for England to prepare. The FA failed to get all this in writing.

9. Champions League invites non-champions (1997)
The European Cup had begun in 1955, prompted by French sports paper L’Equipe after Wolves’ manager Stan Cullis proclaimed his team the best in Europe. After a slow start Real Madrid’s five-year reign established its glamour but while it was financially useful – and helpful bankroll Liverpool’s domestic hegemony – the lack of seeding and knockout structure meant income was uncertain.

In 1992 Uefa rebranded, to Champions League, and added a last-eight group stage. That helped, but a champions-only format meant big clubs struggled to qualify. A breakaway superleague was threatened. So, for 1997-98, Uefa widened qualification starting the process that has led to clubs from England, Spain, Germany and Italy (plus, recently, Paris St Germain) dominating the competition.

With centralised TV and sponsorship rights the competition is now so lucrative it entrenches the power of the elite who qualify and skews domestic leagues, but some big clubs still miss out and more change is threatened.

10. Abramovich buys Chelsea (2003)
Enraptured by a Champions League tie (Manchester United v Real Madrid, 2003) Russian billionaire Roman Abramovich decided to buy a club. He settled on Chelsea becoming the Premier League’s first truly foreign owner (Fulham’s Mohamed Al Fayed was Egyptian, but long-time London resident). Abramovich has poured £1bn into Chelsea turning a moderate club into a powerhouse.

In his wake the local butchers and brewers of the past have been replaced by owners from across the globe: Americans and Thai, Chinese and Italian, Arab and Uzbek. While the old link between a club and its community survives, it is strained in places.

Foreign owners tend to appoint foreign coaches, who tend to sign foreign players. Besides raising standards this internationalisation further enhanced the Premier League’s global appeal bringing in more foreign viewers, prompting a sharp rise in overseas TV income (now worth £1.45bn annually) and attracting yet more foreign owners.

For some the attraction is reflected glory, others see the chance to turn a quick buck, for a few it is about sport-washing.

A village pastime once banned by English kings as it interfered with archery practice, then viewed as a means to promote health and discipline, has become a global investment opportunity and geo-political tool.

[Chester Perry]

I posted many times on this thread that games authorities and the clubs organise everything to maximise their incomes with the assumption that players will do as they are told, with little regard for their welfare, physical or mental. John Nicholson has another chat with his now infamous player X and he has little confidence that football is or will do the right thing

https://www.football365.com/news/back-s ... footballer

[TVC15]

Hi Chester - hope you are keeping safe and well.
I really don’t go for this Player X thing - seriously doubt he exists

[Chester Perry]

Hi Chester - hope you are keeping safe and well.
I really don’t go for this Player X thing - seriously doubt he exists

I understand where you are coming from - and he does sound like an extension of John Nicholson's own personality, but from what I know of Nicholson, and I regularly disagree with his perspective, he just does not seem like the type to make this up (or be duped).

[TVC15]

Just think it’s a lot more believable to think a journalist would make this up than believe that a footballer would do the things this guy claims he has done - and manage to keep it a secret !

[Chester Perry]

I have been trying to piece together a post/series of posts looking at the impacts of the hiatus on the Premier League, our club and how we will find ourselves financially when we emerge from the great pause (and getting twisted up in the process). Central to my thinking was the issue of cash flow - only @SwissRamble has gone and beat me to the punch, shame he has only looked at the big six clubs - I think there is a huge amount to be interested in with the other 14 especially Southampton, Sheffield Utd, Brighton, Bournemouth and Palace.

https://twitter.com/SwissRamble/status/ ... 8615494656

[LeadBelly]

Hi Chester - hope you are keeping safe and well.
I really don’t go for this Player X thing - seriously doubt he exists

Agreed, the " He hasn’t kept any wages for about three years" is unbelievable. (Unless it means he's spent it all on cars, bling and not banked/saved any).
I'm quite prepared to believe that many footballers are good people and donate money to charity/good works etc but that is too much to swallow.

[Chester Perry]

There was a new twist in the Qatar/Saudi stand off today with false reports of an attempted coup in Qatar - fuelled by what appear to be Twitter bot armies one spreading the rumour the other rubbishing it

https://twitter.com/marcowenjones/statu ... 4314887169

the apparent source of it all

https://twitter.com/marcowenjones/statu ... 8765890562

[Chester Perry]

the Bundesliga confirms today that it has had 10 positive tests across it's 36 teams from the 1724 it took last Thursday following the resumption of training - still pressing ahead for now

https://www.independent.co.uk/sport/foo ... 98011.html

[Chester Perry]

The question is why do the Saudis or any of the Gulf states want to be involved in English football. And almost certainly the answer is that they want to show themselves as decent, respectable nations, well-integrated with the global mainstream; and not at all vicious totalitarian regimes that restrict women's rights, violently suppress all opposition, and wage brutal wars against Yemeni civilians. I am so, so glad that they have not become involved with Burnley however much money they might put in. How will we feel if they ever come our way?

A theory doing the rounds today is that the Saudi's think they can make a profit on the club in the next few years, through a rapid acceleration of revenues

[Chester Perry]

The Football Today Podcast looks at the recent La Liga match-fixing scandal

https://www.footballtodaypodcast.com/po ... ng-scandal

[Chester Perry]

The FA's predicted losses are huge - https://www.dailymail.co.uk/sport/sport ... risis.html

FA Chairman Greg Clarke was pretty blunt today about the next few years for football at all levels and the scale of budget courts he is going to have to oversee

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

over course there is no word on the letter to Fulham owner Shadid Khan to see if he still values Wembley at £600m+ and is still interested in buying it

[Chester Perry]

It has been posted on the Current Season of Void thread, and I have commented about it on that thread but I will also put it on here for continuity @KieranMaguire Premier League 2020-21 without fans? Eight charts on the impact

https://www.bbc.co.uk/sport/football/52529679

which reminds me of this post from Sunday

@Vysyble have produced a breakdown of there initial report on Premier league match Day loss forecast - as I have been saying - it is quite horrific for some to lose so much

https://twitter.com/vysyble/status/1256649746548170752

[Chester Perry]

The Guardian have started a week long special on How Football will Change - First up Peterborough Chairman Darragh MacAnthony - Hard choices in the EFL: 'Football is a trillion-dollar industry. It can't die'

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

This is exactly the argument I posted from one of MacAnthony's Video Blogs a few weeks ago and there are a number of holes in it,

first and very definitely the most Critical is that £170m is quite probably not enough to help clubs through the changes he is proposing - EFL clubs lose much more than that and the existing contracts of Championship would take 3 years to end in many cases.

I still find it somewhat ironic that he and his new chum Andy Pilley are campaigning for stricter rules when they have been prepared to play the overspend game for a number of years (I will give Peterborough credit for player development and trading though) - if they truly believed in it they would have taken of the approach of Accrington and Tranmere, invest in their infrastructural assets and not overspend on wages.

Oh and Football is not a Trillion Dollar industry (well not American ones) It has not generated that amount in it's entire history

EDIT I should also add that the salary cap based as a percentage of turnover exists in Leagues 1 and 2, it is the owners themselves that made it possible to effectively ignore it by pumping additional monies in

Next in the series, due tomorrow, is Mark Palios the Tranmere owner a strong advocate for the abolishment of Parachute Payments wanting those moneys added to the solidarity payments and distributed throughput the EFL

[Chester Perry]

Everton are apparently looking to be the first Premier League club to have a shirt sponsor whose products are Cannabis based. It follows the move to replace betting company SportPesa - at the clubs AGM early this year chief executive Denise Barrett-Baxendale said "in an ideal world" the club would prefer a different type of sponsor. I suspect some sections of the media would have a field day with this

https://www.sportspromedia.com/news/eve ... Pc.twitter

[Chester Perry]

For all the relative discussions as to how to finish the season, and who can watch it - I find it surprising that up until now we have not heard very much from the ultimate paymasters - the broadcast rights holders. the Times believe they have the scoop on this and it is not good news for those clubs who think the can call for no relegation - The broadcasters say it is part of their contract for it to happen

Some Premier League matches could be shown on YouTube
Martyn Ziegler, Chief Sports Reporter - Monday May 04 2020, 5.00pm, The Times

All of the 92 remaining Premier League matches would be shown live on TV with selected games shown free to air via Sky and BT Sport’s YouTube channels, under proposals being discussed with broadcasters.

Most of the matches — which are to be played in empty stadiums under a plan to restart top-flight football — would be on Sky and BT Sport’s pay-TV platforms but a few would be shown by Amazon, according to the plan. The BBC would potentially be permitted to show highlights more often but it is unlikely any games would be live on terrestrial TV.

The only time a Premier League match has been shown free to air since the competition started in 1992 was on the opening day of the 2013-14 season when Sky showed Manchester United v Swansea and BT screened Crystal Palace v Arsenal for free.

Senior figures in the broadcasting industry have also told The Times that moves to scrap relegation — as at least one top-flight club is proposing — would risk making the TV contracts invalid as it would turn many of the remaining games into little more than meaningless friendlies. With Liverpool 25 points clear at the top of the league and needing just two wins to be confirmed as champions, that may also mean that many games become superfluous.

The government has raised the idea of matches being available on free-to-air platforms but will not push for them to be on terrestrial TV and it is understood to be happy that the majority will be on pay-TV.

Much of the pressure for the Premier League to finish the season is to protect £762 million in TV money that would otherwise have to be repaid to the broadcasters. Matches have been suspended since March 13 because of the coronavirus pandemic and are planned to resume in neutral grounds on June 12 to finish at the start of August.

The public’s ability to access matches for free via YouTube, which already has agreements with both Sky and BT Sport, has been demonstrated previously by 11 million people tuning in to watch last season’s Champions League final via BT’s YouTube account.

Of the 92 top-flight matches left, 47 were already planned to be shown live and most of those on Sky, which holds the majority of the rights. The other 45 would be split between Sky and BT and Amazon Prime, which is also a live rights holder even though they had no matches left to stream this season, based on the proportion of games they are contracted to show each year.

It is understood discussions would take place with the broadcasters and the government to finalise how many matches would be shown via the free-to-air outlets such as YouTube.

One source involved in the talks said: “The idea is that all the games would be available somewhere to watch as they are behind closed doors and YouTube is the obvious platform to show some games for free. Amazon would have the ability to get some games as they are a live broadcast licence holder as well.

“Both Sky and BT will be very unhappy if it is decided to scrap relegation. There are always some great relegation battles at this point in the season which are brilliant entertainment.

“For example Norwich have matches still to play against Watford, West Ham and Brighton. If there’s no relegation then they are meaningless.”
The Culture Secretary, Oliver Dowden, revealed two weeks ago he had raised the issue of TV coverage with the Premier League.

He said then: “It wouldn’t send the best signal if they were one of the first major sports to resume behind closed doors, and the public at large couldn’t have access to it.

“I don’t want to be in a position of issuing some blanket mandate or trying to change things round. But they do need to be mindful of that, and in fairness they are mindful of it.”
--------------------------------------------------------------------------------------------------------------------------------------------------------------------

If you wondering why the youtube channels of the operators for the free games it means
- they keep their programme advertising revenue
- they promote their own online channel which is also revenue producing
- rival broadcasters do not get the benefit of viewer share/advertising

and don't forget that even though the BBC get the opportunity to have more highlights programmes, they like the others have paid handsomely for the privilege - more than twice the amount that Amazon have for their 20 live games a season.

The inclusion of Amazon in airing some live games is an interesting one, they had the games they paid for before the disruption - and very cheaply to, essentially at cost of production. this would seem to be a sop to see if it can garner them more data to see if a much larger bid for rights can be obtained in the future

[Chester Perry]

I have been trying to piece together a post/series of posts looking at the impacts of the hiatus on the Premier League, our club and how we will find ourselves financially when we emerge from the great pause (and getting twisted up in the process). Central to my thinking was the issue of cash flow - only @SwissRamble has gone and beat me to the punch, shame he has only looked at the big six clubs - I think there is a huge amount to be interested in with the other 14 especially Southampton, Sheffield Utd, Brighton, Bournemouth and Palace.

https://twitter.com/SwissRamble/status/ ... 8615494656

@SwissRamble with part 2 of his analysis into the cashflows of the big 6 in the Premier League

https://twitter.com/SwissRamble/status/ ... 6985665536

not quite what I was hoping for - I would like to see this then being applied to the current environment to give a image of what the financial stress levels are the club clubs are currently facing

I outlined a few of the issues in this post yesterday on the "current season void or continue" thread which was responding to the @KieranMaguire/BBC article on next season's Premier League behind closed doors and the impact of not having any match day revenue.

I have been struggling (and mostly failing) over the last couple of days to put something together that looks at all this and how we sit amongst it - whilst the article is useful and presents a stark picture it is also far from complete - particularly around cash flows (something @SwissRamble has started looking at for the big six and he will give more detail on tomorrow). There are so many unknowns that everyone including the clubs are having to deal with though.

For a lot of clubs the May/June month ends are going to be critical, not only are there salaries to be paid - it is when most of the bonuses are paid also when those important clauses in transfer contracts are paid like the club staying in the Premier League and cumulative appearances, there will also be stage payments in previous transfers (our club typically pay transfer fees over 3 years according to a previous Garlick interview). All these are important under the football creditor rules - fail the payments and one of the first impacts is transfer embargo is put on you.

For comparison we have a maximum outstanding transfer exposure of £29m (outstanding fees £22m plus £7m based on conditions being achieved) with £14m being owed to us (not all of either is due this summer) For Southampton it is different they are exposed to £116m of transfer debt (£90m fees and £26m conditional), £47m of those fees are due to be paid this summer, this summers liabilities on conditions is not publicly known).

Significantly May/June is the time when factored loans come due - these are the short to medium term loans taken out against future tv income or transfer stage payments and require full payment with interest. Every club bar Burnley (and possibly Manchester United) in the Premier League makes use of them. The sums in involved can range from £4m to £40m+ and are used by clubs to help cashflow, and are often (in case of the ones with TV rights as collateral) bounced from season to season in a spiral clubs struggle to escape from.

Of course if the season is cancelled there is a question over whether bonuses have to be paid (that may be dependent in contract wording and no doubt will fit into discussion of terminology used by the Premier League if the situation arises. Similar discussion will occur over the distribution of merit payments from the Premier League - though interestingly given the distribution criteria (especially the new ones for the overseas money) it is highly probable that should the season be curtailed and the overseas broadcasters demand refunds for the unplayed games there will not that much for merit payments/tv appearances and the gaps between highest and lowest earners will be the narrowest for a few years.

While our club is currently strong financially and can still pay our costs from cash holdings (I suspect at least 5 Premier League clubs will run out of cash this month) the longer this drags on the more difficult it gets as our owners are probably unable to put more than a couple of months operating costs into the club combined. In comparison West Ham are having a £30m rights issue, Villa owners have "invested" £170m + in share capital in the last 2 years. Though the fact we are one of the few smaller clubs not to have talk about furloughing, deferrals or cuts should stand us in good stead reputationally with players in the near future.

Things will be made a little easier for us in the short term if Sky and BT do pay the remaining monies whatever the outcome. Moreso, if it is confirmed that the new season will start late August/September - under those conditions we would be in a stronger position than many and be able to use that to our advantage if we chose to, though we may prefer to rebuild the cash position.

My one nagging doubt is over our new Chief Exec not because I know anything about him, I don't, but because of his relative in-experience within the game. Dave Baldwin proved a wonderful asset in growing our club, and is a big loss - Neil Hart is obviously well regarded (we nicked him from the clutches of Huddersfield) but his background does not seem to fit the snake pit that is the Premier League and one could question whether he has the capability to grow the club. It is a problem Everton are facing with Denise Barret-Baxendale she too ran the club's community foundation, is well regarded and very much in charge, but questions are starting to emerge from the fanbase and observers if she has the strategic capability to move the club to the next level

[Chester Perry]

EFL Chair Rick Parry has been speaking to the Parliamentary Digital, Culture, Media and Sport Committee this morning - I will post a link to the playback later - meanwhile some of the things he has had to say

https://twitter.com/RobHarris/status/12 ... 9805667328

[Chester Perry]

If you have nothing to do this Thursday webinar on the battle to restart the Premier League starts - 11 am

https://twitter.com/InSport_Edu/status/ ... 3031011329

you do have to register for it, though it is free https://www.crowdcast.io/e/pzmeyjfe/register

[Chester Perry]

Germany approves the return of football from the 15th of May - closed doors naturally

https://in.reuters.com/article/health-c ... NKBN22H07E

[TVC15]

Hopefully that’s correct Chester re German football as it will help the other leagues decide and also learn lessons etc.
However - as per the article it’s not been confirmed yet and it’s one of those “our sources understand” stories.

[Chester Perry]

The Guardian have started a week long special on How Football will Change - First up Peterborough Chairman Darragh MacAnthony - Hard choices in the EFL: 'Football is a trillion-dollar industry. It can't die'

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

This is exactly the argument I posted from one of MacAnthony's Video Blogs a few weeks ago and there are a number of holes in it,

first and very definitely the most Critical is that £170m is quite probably not enough to help clubs through the changes he is proposing - EFL clubs lose much more than that and the existing contracts of Championship would take 3 years to end in many cases.

I still find it somewhat ironic that he and his new chum Andy Pilley are campaigning for stricter rules when they have been prepared to play the overspend game for a number of years (I will give Peterborough credit for player development and trading though) - if they truly believed in it they would have taken of the approach of Accrington and Tranmere, invest in their infrastructural assets and not overspend on wages.

Oh and Football is not a Trillion Dollar industry (well not American ones) It has not generated that amount in it's entire history

EDIT I should also add that the salary cap based as a percentage of turnover exists in Leagues 1 and 2, it is the owners themselves that made it possible to effectively ignore it by pumping additional monies in

Next in the series, due tomorrow, is Mark Palios the Tranmere owner a strong advocate for the abolishment of Parachute Payments wanting those moneys added to the solidarity payments and distributed throughput the EFL

Part 2 from Mark Palios - Player wages and contracts will bankrupt EFL clubs: it's time for the PFA to act

https://www.theguardian.com/football/20 ... pfa-to-act

Rick Parry talked about a lot of this to the DCMS Committee this morning

[Chester Perry]

EFL Chair Rick Parry has been speaking to the Parliamentary Digital, Culture, Media and Sport Committee this morning - I will post a link to the playback later - meanwhile some of the things he has had to say

https://twitter.com/RobHarris/status/12 ... 9805667328

you can watch Rick Parry speak to the DCMS here from 09:33:00 to 10:16:20 - I recommend that you do

https://parliamentlive.tv/Event/Index/0 ... 484cf25b69

some interesting stuff - though he should look at the camera - reports on this have been focusing on the estimated £200m loss

https://www.bbc.co.uk/sport/football/52543735

other things he had to say - parachute payments etc has had a positive impact on some

https://twitter.com/AndyhHolt/status/12 ... 3670760448

https://twitter.com/AndyhHolt/status/12 ... 1240663040

what Parry said that made Holt so happy https://twitter.com/RobHarris/status/12 ... 3754954752

[Chester Perry]

It is useful for the EFL and credible for Rick Parry to describe Parachute Payments as "an evil that needs to be eradicated" , as they were never a feature of his time in charge of the Premier League - they were not introduced until the 2006/07 season. This article from last year gives some history from a Premier League perspective

https://www.goal.com/en/news/what-premi ... gn3p7jlbuo

while this article from 2 years ago highlights the distortions they create

https://www.independent.co.uk/sport/foo ... 55976.html

[Chester Perry]

If Parry gets his way it seems that there are a new bunch "investors" ready to take over Championship clubs

"Our view is that the EFL will change its governance and tighten its financial procedures and oversights. That will lead to an increase in attraction for new owners to move into the EFL.

'We have a big pool of owners who are looking into buying into EFL clubs right now. We are doing analysis on 14 clubs. The second thing is with the Premier League we have a significant number of interested parties.

'What we have seen in the Premier League and sport in general is a shift from private individuals to companies who want to invest in football clubs. An example of a company is City Football Group or Fenway Sports.

'But we are CVC’s advisor in rugby and institutional investment is now looking at football clubs right across the board in Europe, including the Premier League.'

It might be a crisis, and the game might be looking on with fear. But take a closer look and opportunities abound."

that was Andrew Umbers of Oakwell Sports Advisory (https://oakwellsports.com/) speaking to the Mail in this article

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

I said the Vultures were lurking.

[Chester Perry]

Germany approves the return of football from the 15th of May - closed doors naturally

https://in.reuters.com/article/health-c ... NKBN22H07E

another positive test - this time whole team put into isolation - how does that work in restart

https://www.dailymail.co.uk/sport/sport ... -test.html

[Chester Perry]

Rory Smith on why teams in Leagues outside Europe's big 4 (France is different) are looking at the financial problems in the Premier League, La Liga, Bundesliga and Serie A and are getting very afraid - Transfer fees are more important to them than TV rights - from the New York Times

Soccer’s River of Money Isn’t Flowing, Worrying Teams Downstream
Outside Europe’s big five leagues, selling talent to bigger clubs helps balance the books. But with the game on hold, uncertainty is compounded by an awareness that they are not in control of their fate.

By Rory Smith May 5, 2020, 1:00 a.m. ET

Jonathan David was already thinking about what might come next. He had been in Belgium for almost two years, his first taste of professional soccer in Europe since moving from Canada. He had met every target that had been set for him: He was K.A.A. Gent’s leading goal scorer in his first season and the joint top scorer for the whole Belgian league in his second.

“Gent asked him last year to stick around and confirm the potential he had shown,” his agent, Nick Mavromaras, said. “He has done that. He proved it is time for him to move to the next level.”

The wheels were turning. David had caught the eye of a host of Europe’s most prestigious clubs. They pored over his data, studied video of his play, dispatched scouts to watch him in the flesh. He checked plenty of boxes: He had only just turned 20; he played as a striker for Canada, but a little deeper for Gent, a sign of precious versatility; his scoring numbers were impressive.

As Michel Louwagie, Gent’s managing director, said, it was clear David was “the No. 1 young player in Belgium.” That tends to mean only one thing: a scramble for his signature. Belgium is the sort of place where the big spenders from the big leagues come to cast their nets. By common consent, this year, David was the biggest fish in the pool.

Before Christmas, the inquiries were flooding in. Gent, though, stood firm. It wanted to keep David through January, and if at all possible, in the summer, too. “I always just said no,” Louwagie said. “The plan would normally be for him to stay one more year. You always have to take the player’s wishes into account, but we do not need the cash.”

Mavromaras and his agency, Axía Sports Management, meanwhile, were researching each of the various candidates, trying to find the ideal suitor for David. If an offer came that was right for Gent, it had to be right for their client, too. They needed the coach, the system and, most of all, the opportunity to fit.

“He is conscious this is only his second season as a professional,” Mavromaras said. “He needs to play. That is the primary factor.” They had, he said, already identified a few clubs that fit the bill.

And then, of course, everything stopped.

Quite what the effect of European soccer’s indefinite shutdown in the face of the pandemic will be remains unclear. Clubs across Europe do not yet know when, or if, they will be able to play again. Until they do, they can only guess how much revenue will be lost in ticket sales and merchandise and television revenue. They can only guess at the scale of the damage.

For many outside the continent’s big five leagues, though, that uncertainty is compounded by an awareness that they are not in control of their fate, that a second crisis hangs on the horizon. For these clubs and leagues, financial health depends not only on their own return to action, whenever that may be, but on what happens far above them in the food chain.

Much of the economy of global soccer depends on the transfer market, and the transfer market is driven by the largess of Europe’s rich elite. Soccer’s entire delicate ecosystem functions, outside of Europe’s major leagues, as a monument to trickle-down economics, money flowing down from Germany and Spain and, in particular, England, through places like Belgium and on, out into the world.

According to figures provided by the CIES Football Observatory, it is scarcely possible to overestimate just how much the money from the Premier League — or, more precisely, the Premier League’s television deals — makes soccer’s world go around.

Since 2015, for example, English clubs have sent more than a billion dollars in transfer fees to teams in France alone. About $464 million of that has gone to just one club: A.S. Monaco. Another billion has ended up in the pockets of just five clubs: Juventus, Borussia Dortmund, Roma, Barcelona and Sporting Lisbon.

The figures are slightly smaller in Belgium, but, if anything, the dependence is greater. K.R.C. Genk has sold players for $88 million to the Premier League in the last four years: more than the league as a whole made in television revenue in 2017. Club Brugge — the team that was crowned champion when the Belgian season was canceled in March — made $61 million by selling three players to English teams last summer.

“There are two business models in international soccer,” said Vincent Mannaert, the Club Brugge chief executive. “One, in the major leagues at the top of the pyramid, the most important revenue stream is media rights. In medium and small leagues, there is another model, which has mainly to do with being important suppliers of player transfers to the big leagues.”

In Mannaert’s eyes, soccer’s transfer market functions as a “solidarity mechanism,” transferring the money made by the most popular competitions — and particularly the staggering wealth available to English clubs — to the rest of the game.

Some of the money Brugge raised last year remained in Belgium, of course, helping the club pay its salaries and retain its players, but some of it percolated elsewhere, too. “Typically, we spend between a third and a half of what we make on transfers,” Mannaert said.

Brugge has certain markets it focuses on. It has had success in recent years, Mannaert said, in Scandinavia, the former Soviet bloc, Australia and the “smaller nations in South America.” Shopping in Argentina and Brazil, for a Belgian team, is often too expensive, but Colombia and Uruguay can offer rich pickings. Africa is of increasing importance, and the club tries to shop locally, too.

“We are all part of a chain,” he said. “We get money from the big leagues, and teams in smaller leagues get money from us.” When the money stops flowing, when the chain breaks, the effect ripples from England to Belgium and then into every corner of the globe.

“People say to stop transfers, that the amounts of money are obscene, but it is a source of very important income for smaller teams,” Mannaert said. “It is the only way medium-size clubs can earn more money to invest in academies, in players. It is a form of solidarity.”

For now, though, the transfer market has frozen. Aside from Germany — which, despite its eagerness, still cannot say for certain when it will resume — the major leagues remain unclear when they will be able to play again. Until they know — and even when they do, depending on when that is — teams across the world must deal with the possibility that the money from the top will dry up.

Mannaert is confident Brugge could ride that out, the consequence of such a lucrative summer last year. Gent, too, remains adamant that it should not be thought of as easy pickings. The market for David has not collapsed completely: while, in normal circumstances, Louwagie would have expected 10 to 15 clubs to be competing for his signature, now he expects it to be three or four. The club still hopes to keep him for another year.

But for many others, the consequences could be severe. It is why, to Mannaert, the most effective intervention available to FIFA and UEFA is — counterintuitive though it sounds — to limit the black holes on the books of clubs in the major leagues.

He would like to see the two bodies act, essentially, as soccer’s Federal Reserve, either pumping money directly into the “engines of the industry,” the clubs, or using the broadcast rights to the World Cup, the European Championship and the Champions League as bargaining chips to help assuage broadcasters left with contracts and airtime unfulfilled.

If not, if the wounds run too deep, the damage could be severe. Not, perhaps, for those at the top of the tree, who are rich enough and strong enough to absorb the blow. For everyone else, for those clubs dependent on their money, for those who need the money to flow downward, there is fear that trouble is coming the same way.

[Chester Perry]

It has been posted on the Current Season of Void thread, and I have commented about it on that thread but I will also put it on here for continuity @KieranMaguire Premier League 2020-21 without fans? Eight charts on the impact

https://www.bbc.co.uk/sport/football/52529679

which reminds me of this post from Sunday

@Vysyble have produced a breakdown of there initial report on Premier league match Day loss forecast - as I have been saying - it is quite horrific for some to lose so much

https://twitter.com/vysyble/status/1256649746548170752

That Vysyble analysis has made it into this article in the Mail

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

The article only begins to touch on the core point - Next season as current revenue and cost models stand only around 3 (Wolves, Watford and Burnley) stand to make any sign of a profit and many stand to make astronomical losses and run huge negative cash balances.

[Chester Perry]

Any one else think this

Gordon Taylor muckying the water with suggestions that the new games will have halves lasting less than 45 mins

https://www.bbc.co.uk/sport/football/52542756

which is news to some clubs

https://twitter.com/Matt_Law_DT/status/ ... 7644942337

was an attempt to deflect from that DCMS hearing this morning - a complete fail really as Rick Parry has stolen all the headlines and possibly even set the course for debate

[Chester Perry]

FIFA is expecting to join the rest of the sporting world and end up banning a number of Russian footballers for doping offences

https://apnews.com/f286b1834f7312a928730e080d40eb5d

[Chester Perry]

Part 3 of the Guardian's Football Future series on how coronavirus will change football, looks at TV rights, sponsorship and corporate hospitality

https://www.theguardian.com/football/20 ... any-months

[Chester Perry]

Interesting interview here with @GarethBalch, CEO of @TwoCirclesSport who says sports which innovate and are creative are those which will survive the current existential threat.

https://www.sportbusiness.com/2020/05/g ... -pandemic/

A lot of this applies to clubs, ours have been slow in this area for years - some of what we do is very good but there is little that has gone viral beyond the core support in the way that say this did

https://www.youtube.com/watch?v=OYygb_snNEw

[Chester Perry]

This is an interesting move from Comcast owner of Sky and NBC Sports who between them pay the Premier League well over a £1.3 billion per year for broadcasting rights - They are talking to the American sports/Leagues about rights relief so that it can be passed on to subscribers who have not been getting discounts or payment holidays during the pause. Part of this is the model of long contracts in the US where 7 - 9 year rights deals are common so the broadcasters have to wait years for a value reset - in Europe the 3 year cycle is seen to offer ultimate flexibility to both sides, consequently they have no current plan or need for Sky to follow suit with the Premier League

https://www.sportbusiness.com/news/comc ... e%20relief

[Chester Perry]

You may be aware that Crystal Palace recently came out with the claim that they are the oldest league club in the world and intended to market themselves as such - though the FA flatly rejected the claim. Here Spikesly.com have produced a lengthy document that they believe totally repudiates the Palace claim with a mountain of evidence.

https://spiksley.com/crystal-palace-fc-1861-or-1905/

[Chester Perry]

Vysyble have done a matchday loss calculation for the Championship to match the one they did for the Premier League

https://twitter.com/vysyble/status/1257 ... 93/photo/2

[Chester Perry]

The potential financial losses continue to mount for Premier League clubs - neutral grounds mean you lose a lot of your sponsor/advertiser pitches and effectively breach contract on "home" games

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

[Chester Perry]

More Vultures are at the door - CVC Capital (former shareholders of F! and now involved in the six nations rugby) are, along with Blackstone, in talks to buy part of Serie A - CVC apparently offering Euro 2 Billion for a 20% stake

https://twitter.com/muradahmed/status/1 ... 0489522177

[Chester Perry]

It is useful for the EFL and credible for Rick Parry to describe Parachute Payments as "an evil that needs to be eradicated" , as they were never a feature of his time in charge of the Premier League - they were not introduced until the 2006/07 season. This article from last year gives some history from a Premier League perspective

https://www.goal.com/en/news/what-premi ... gn3p7jlbuo

while this article from 2 years ago highlights the distortions they create

https://www.independent.co.uk/sport/foo ... 55976.html

The Premier League got a kick in the proverbial's yesterday and it has made some believe again, particularly that Parry has already tried to get the Premier League to change it's stance on the Parachute payment, the "evil" being used as a symbol of frustration and cry for external regulation to change the Premier Leagues in transient position

https://twitter.com/AndyhHolt/status/12 ... 3816024064

for now the Premier League are still fighting their corner

https://www.skysports.com/football/news ... ated-clubs

It is interesting because half the Premier League have been in the Championship in the last decade, so know full well the advantages/disadvantages of the Parachute Payments. Especially those that have managed to get there without them. The numbers are stark

https://twitter.com/AndyhHolt/status/12 ... 8893658113

the reasoning for the Premier Leagues stance is possibly best summed up this

https://twitter.com/AgainstLeague3/stat ... 6864691201

[TVC15]

They are stark numbers Chester
Very easy to see why so many fans have fallen out of love with the game.
Take teams like Leeds, Forest, Birmingham, Derby etc - have these ever had parachute payments ? Feels a long time since they were in the top league so probably not. These are big historical clubs in big cities. It’s so hard for them to compete and it’s takes years of huge losses to even try.
Leeds look like they’ve managed it at last but look at what the club have been through to get there - quite a bit of it self inflicted I accept.

[Chester Perry]

is it just me that finds this nonsensical = the possibility of a 23 team Premier League next season -

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

it would mean:
a substantial drop in tv revenues per team as there would be no additional TV money - that is likely to £300+ to go the 3 additional teams
greater player costs like additional bonuses for appearances, goals, wins, clean sheets etc
all that on top of no match day income - for Spurs, Utd and Arsenal that is £100m+ Chelsea, Liverpool and City £60m - £90m
and questions over the commercial sponsorship income remaining stable
then there is the probability of 6 teams being relegated
which necessitates the much increased number of parachute payments over the following 3 years - that is at least £210m+ of which around £140m is paid in the first season down

Can any of you see the big six giving away that much when most of their players are on long term contracts, that do not account for such losses of income
Oh and the issues with travel could take away their European Income as well (which including matchdays is £50m - £120m income lost for the big clubs)

This excellent thread explains why the French and English game cannot/will not treat a cancelled season in the same way and then tears apart the above plan for the Premier League to have 23 teams next season - by @DaleJohnsonESPN

https://twitter.com/DaleJohnsonESPN/sta ... 4007297025