Football's Magic Money Tree

[tiger76]

The Telegraph on the latest pressure from Football to get the government to allow fans back

Football launches fresh bid to force Government to allow return of crowds
TOM MORGAN OCTOBER 06, 2020

The Government is under mounting pressure to review its ban on sporting crowds as a petition raced towards 100,000 signatures in hours on Tuesday night after football's power brokers went public with their frustrations.

Richard Masters, the Premier League chief executive, and his contemporaries at the Football Association, the English Football League and Women’s Super League signed a letter telling fans they were ready to welcome fans back.

Anger is intensifying across the cash-strapped sporting sector after a host of major concert venues announced they would be welcoming almost 5,000 spectators within two months.

"It is positive progress that major arts and music venues have been told they can run socially-distanced events indoors," their letter says. "And now football should be allowed to do the same - in highly regulated and stewarded outdoor environments."

After the letter was published, the EFL shared a petition which gathered 85,000 signatures within the space of five hours. "This petition is to ask the government to reconsider their judgment on not letting football fans back into the stadiums and reconsider doing this with the right safety measures in place surrounding the Covid-19," the petition said. At 100,000 signatures, this petition will be considered for debate in Parliament.

Despite sporting crowds being forced potentially to stay away until April, the Royal Albert Hall and O2 arena are both open for Christmas. One source close to regular talks between the sporting governing bodies and Oliver Dowden, the Culture Secretary, said the apparent inconsistency was also being raised during crunch meetings.

Open Letter to Supporters: Together We Will Get Fans Safely Back into Grounds
The letter, meanwhile, was aimed to reassure supporters that governing bodies are doing all within their powers to get fans back. "We will continue to urge the relevant authorities to let us, together, use innovative ways to bring fans safely back into football grounds, starting with a return of the test event programme," it adds. "If we do so, then the benefits will be felt not just by fans but throughout society and the economy."

In contrast to the easing of rules for the arts, professional sport is facing a fight for life after being told it may not be allowed crowds until April due to what the Government has described as a risk of "mingling" before and after matches.

However, Mr Dowden last week raised a glimmer of hope that crowds may yet be able to return to stadiums thanks to "technological innovations". A so-called freedom pass involving on-day Covid testing and the German stadium system which tracks local infection rates over a seven day period are among those options.

The letter, which is also signed by Mark Bullingham, the FA chief executive, adds that the game is ready to use innovations now to get crowds back, and pilots should resume immediately where safe to do so.

"Stadium environments can be modified and carefully managed," the group say. "Measures could include screening spectators before they enter the ground, installing temperature checks, requiring masks to be worn, one-way systems and providing a code of conduct for all those attending on a matchday. This will all be bolstered by deep-cleaning practices to help further reduce the risk of virus transmission.

"Clubs want to be pro-active on this matter and willing to consider measures both in the stadium and on the approach that will allay any concerns as to fans’ safety. From a travel perspective, clubs will work closely with experts and local authorities to model solutions relevant for each stadium to ease pressure on public transport, while extra parking facilities could be available so a greater proportion of you can travel by private car or bicycle."

Well the said petition has passed the 100,000 mark, so it will have to be debated in the HOC.https://www.bbc.co.uk/sport/football/54439207

[Chester Perry]

Bloomberg with a report that the Premier League are suing PPTV for lost revenues

England’s Premier League Sues China Partner for $215.3 Million
By David Hellier and Jonathan Browning
7 October 2020, 09:48 BST Updated on 7 October 2020, 11:29 BST

- English league’s lawsuit says PPLive failed to make payment
- Contract for live match coverage was among league’s largest

England’s Premier League is suing a Chinese broadcaster for $215.3 million, saying the partner failed to make a payment for rights to show live matches from the world’s richest soccer league.

The league accuses PPLive Sports International Ltd., a subsidiary of Suning, of skipping a $210.3 million payment for live matches and another $5 million for highlight packages and interest, according to a filing in its British court case.

Sports around the world have been hurt by cancellations and restrictions on matches as governments restrict public gatherings to limit the pandemic. While the Premier League has some of the richest broadcast contracts, its clubs have suffered with empty stadiums and demands for rebates from broadcasters for re-arranged matches and schedules.

PPLive said in an Aug. 26 letter that it would break the agreements, and the league in its filing said there was no legal basis for the broadcaster to do so. The league has since signed a less lucrative deal in China with Tencent.

Kieran Maguire, lecturer in football finance at the University of Liverpool, said the Premier League had no option but to pursue the Chinese broadcaster through the courts.

“If they were seen to have taken no action, all the other operators around the world could have been tempted to take a similar approach to payment as soon as Covid-19 disrupted matches,” Maguire said.

Maguire said the loss of the deal was a “big hit to the Premier League,” costing individual teams as much as $10 million per season.

The Premier League declined to comment. A spokeswoman for PPLive didn’t respond to queries by email and WeChat during the Golden Week public holiday in China.

The Premier League’s revenue far outstrips rivals such as the Bundesliga or La Liga. But the cancellation of the contract, its largest, has been a big blow. It comes in addition to a loss of around 1 billion pounds ($1.3 billion) in sales last season because of Covid-19, according to Deloitte.

— With assistance by Tongjian Dong

[aggi]

Has anyone any idea whether it was just the Premier League deal that PPTV pulled out of or have there been others too? It looks like they have rights for a lot of European football.

[Chester Perry]

It appears that Tony Bloom has been doing what he can in terms of easing Brighton's interest paying debt burden in these cash flow sensitive times, remember Brighton are one of 2 clubs to have profited financially from the transfer window this far and lead that by a considerable margin

https://twitter.com/KieranMaguire/statu ... 3425343489

[Chester Perry]

Probably the most ruthless executive in football, Ferran Soriano calls for a restructure of the English pyramid - he wants B Teams (again) - to an Englishman that is just wrong on so many levels

https://www.fourfourtwo.com/news/manche ... 2076755000

[Chester Perry]

Has anyone any idea whether it was just the Premier League deal that PPTV pulled out of or have there been others too? It looks like they have rights for a lot of European football.

For now aggi it appears to be just the Premier League - they will have been seeking rebates on all other deals - it was obvious at the time that they had agreed a vastly inflated sum, it was just after the Chinese Leader had declared his intention for China to be a great football nation and had visited the Etihad campus with then Prime Minister Cameron - that alone tells how far away it was from the start of the cycle. A significant number of Chinese businesses then invested heavily in European football in all forms believing it would win favour with the Chinese government. Since then the nuance of the government's message and interpretation of it's desires have changed dramatically. This year saw the 2nd move, since the deal was agreed, of the Chinese government to block payments for what it saw as excessively priced overseas assets, that were not generating solid economic returns for Chinese GDP. The political stand-off between governments only served to ease the decision making process for PPTV.

[Chester Perry]

Reports coming out of Spain suggest that Barcelona are about to go through another round of Covid influenced pay-cuts - from the Dauly MAil

Barcelona 'are preparing ANOTHER round of pay-cuts' after announcing huge £88MILLION losses... but move 'would allow Lionel Messi and Co to rescind their contracts and walk away for FREE'
- Barcelona announced losses of £88m this week due to the Covid-19 pandemic
- The LaLiga giants have already had players take a pay-cut to ease their finances
- Reports in Spain suggest they now require the squad to take another reduction
- Should that come to pass, players could legally be able to rescind their contract
By NATHAN SALT FOR MAILONLINE

PUBLISHED: 23:02, 6 October 2020 | UPDATED: 00:52, 7 October 2020

Barcelona are reportedly on a collision course with their first team stars with the LaLiga giants needing players to take another pay-cut to ease their finances amid the coronavirus pandemic.

Players took a 70 per cent pay-cut back in March to ensure non-playing staff received all of their wages with the pandemic shutting down the sport.

But in a week where the club announced losses of £88million, Marca report the club are seeking another pay-cut from players although it remains unclear whether that would give the squad the power to rescind contracts and walk away for free.

The report details the club's plan for a 'substantial modification of the collective working contract'.

If successful, the plan will see playing and non-playing staff take wage cuts in the coming weeks and months.

One player will act as a representative for Ronald Koeman's squad when negotiating with the board at a meeting regarding the cuts.

Lionel Messi was key in handling the first round of cuts but with players, including the Argentine, currently away on international duty it remains difficult for the squad to select who will represent them.

The key issue the club need to iron out before pushing on with planned cuts is how another reduction would affect the Spanish Workers' Statute.

Marca's report makes the claim that judicial sources in Spain have indicated to them that players and employees may have the legal right to rescind their contract if deals are modified for financial reasons.

Messi, who filed a burofax to the club earlier this summer informing the of his desire to leave and secure a move to Manchester City, would no doubt be very interested in the potential to walk away for nothing.

He was eventually told he would not be sold unless his £630m release clause was met and having argued the clause was invalid, he was left with no choice but to accept another season at the Nou Camp.

It will take meetings with every player to ensure, from the club's side, that no squad member would go down the route of termination if and when further pay-cuts are put forward and agreed upon.

Barcelona's limited dealings in the transfer market was largely down to the financial armageddon the club are battling through.

Koeman made Lyon attacker Memphis Depay a top target but Barcelona were unable to finance a deal for the Dutchman on deadline day.

[Chester Perry]

The Esk with a look at the 2020 Summer transfer window - some fascinating general trends emerging

https://theesk.org/2020/10/07/the-2020- ... rspective/

[Royboyclaret]

The Esk with a look at the 2020 Summer transfer window - some fascinating general trends emerging

https://theesk.org/2020/10/07/the-2020- ... rspective/

First class analysis, as always, from The esk.

Perhaps Everton have turned the corner now both on and off the pitch, but I'll reserve judgement on that for a few months at least. Moshiri finally appears to be having a positive influence, perhaps something Burnley can draw confidence from.

[Chester Perry]

Following yesterdays opportunistic comments by Ferran Soriano about B teams in the pyramid the Telegraph today has a comment piece about how the Pyramid is broke and that B teams may be part of the solution

Football traditionalists have to accept the domestic game’s pyramid is broken
OLIVER BROWN OCTOBER 08, 2020

Only when the tide goes out, counsels Warren Buffett, do you learn who has been swimming naked. This piece of wisdom, dispensed by perhaps the shrewdest investor of them all, is one that English Football League clubs would do well to heed. For if we extend the Oracle of Omaha’s metaphor, and we watch the flood waters of easy money wash back through the domestic game’s broken pyramid, we discover not merely one or two skinny-dippers left exposed, but an entire nudist colony.

It is not a pretty sight: the fate of Macclesfield Town, wound up in the High Court last week after owing more than £500,000 to creditors, appears merely a precursor to the carnage to come. Grimsby Town have released nine of their players in light of the damage wrought by Covid-19, Bristol Rovers 11. Ian Evatt, manager of Bolton Wanderers, warns that even medium-term survival without crowds present is untenable. Once-venerable Oldham Athletic, FA Cup semi-finalists 26 years ago, are flailing helplessly under the ownership of Abdallah Lemsagam, sitting 90th of the 92 league teams, having already faced two winding-up petitions.

The game is approaching not just a reckoning but a rupture. It is in this climate of foreboding that Ferran Soriano, chief executive of Manchester City, has this week revived the oft-derided concept of Premier League B teams joining the lower tiers, describing the EFL’s financial model as “not sustainable enough”. This characterisation is hardly controversial, when even Rick Parry, the EFL’s chairman laments how the ludicrous wage bills at some Championship clubs can be as much as 107 per cent of turnover. What sticks in the craw for purists is the very notion of B teams themselves.

No sooner did Soriano offer his suggestion that it was painted as some dastardly City plot to sabotage the little guys. Darragh MacAnthony, owner of Peterborough United, succinctly labelled it as “f------ nonsense”. Nicola Palios at Tranmere Rovers went so far as to argue that she would rather not accept any financial assistance from the Premier League than acquiesce in the introduction of B teams further down the pyramid.

It was the type of rabble-rousing soundbite to delight Tranmere’s fanbase, although you do wonder what the club’s fate would be if Palios followed through on her principled stand. Oblivion, most likely. The premise that the Premier League must be expected to bail out EFL clubs, many of them reaping the consequences of their own woeful mismanagement, is not without presumptuousness. But the idea that this is all some altruistic enterprise, to be fulfilled without any conditions attached, is frankly delusional.

For all that Soriano’s career stumbled while running Spanair, a now-defunct airline, he has proved an astute businessman in football, turning a £66 million loss at Barcelona into an £80 million profit. As such, he is not a man wired to grant some vast charity package without a quid pro quo. A B team is his answer to what the lower orders can do for his club. It would be a hugely valuable one: City have 15 players out on loan, who could be far more usefully organised into a regular second string.

It is not as if Soriano’s ruse has been unsuccessful in his home country. Real Madrid’s reserves, the Castilla, have competed in the Spanish league since 1949, while Barcelona B have spent 23 seasons in Segunda Division. Granted, the Castilla have sometimes had too much talent for their own good, not least when conjuring the absurd scenario of playing Real’s first team in the 1980 final of the Copa del Rey. Since that day, B sides have no longer been permitted to enter cup competitions. But as means of allowing gifted young players priceless league experience, they have endured.

Here, any debate on the merits of replicating such a system is shut down before it even starts. Greg Dyke, the former Football Association chairman, floated B teams in 2014 but was laughed out of town. At an early stage in the pandemic, Brighton’s Dan Ashworth ventured that they should be put back on the table, such was the looming economic chaos. Now that Soriano has joined the fray, the ridicule is just the same, with the prevailing argument that the strength of the English pyramid is the envy of Europe and must be protected at all costs.

It is a stubborn view, this logic that “the 92” somehow constitute an inviolable English institution, supporting any number of struggling communities. That much is true to a point: as the pandemic bites, these clubs’ unifying power is needed more than ever. But the reality is brutal: several EFL clubs, locally cherished though they might be, have been economically illiterate for far too long. Charlton’s ownership is derided by fans as an “insulting sham”. Southend were placed under a transfer embargo in March courtesy of an unpaid tax bill of £668,000.

These clubs do not have a divine right to exist, any more than they can assume that financial irresponsibility comes without a price. There is an English obsession with the romance of lower-league football, with the sentimental value of a meat pie in an open stand as the nights draw in. The cavalier way many such clubs have been managed, though, is anything but wholesome. Winter is coming for the EFL. Soriano’s B-team brainwave is just one blueprint to mitigate the mayhem that awaits. If Covid-19 has taught us anything, it is that changes once unconscionable can happen in a heartbeat. The lower leagues’ refusal even to countenance such changes, to convince themselves that the traditional way is the only way, could yet be their gravest weakness of all.

[Chester Perry]

Accy Owner/Chairman (who has not managed to hold his promise of twitter silence for some weeks) is having none of it though - again in the Telegraph

The Premier League has broken the football pyramid but we must not let them destroy it
ANDY HOLT OCTOBER 08, 2020

The pyramid should not be protected as it is. Instead, it must be improved or repaired, because it has already been broken by the Premier League.

We have a £200million prize at the top of the Championship and then complain that everybody's gambling for that prize. It's like having a one-armed bandit with a £200million jackpot in the middle of Burnley, and then expressing shock that everyone in the town ends up skint.

The overriding issue is that this is the tail wagging the dog. It's not the Football Association that is calling the shots. It's the Premier League, and that's killing us. It's going to split the EFL up. There's already talk about a Championship breakaway.

It was back in May that the Government said the Premier League had to sort the problems out with the English Football League and put some cash into it. Since then it's been backwards and forwards arguing.

I can understand why the Premier League don't want to do the rescue package. It's not just about the cash. One major element is that there are billionaire owners in the Championship that shouldn't be bailed out by certain clubs that may actually be less wealthy. There is a moral hazard in this. I get that.

My problem with this all is that the Premier League effectively controls the pyramid as pay-master, but has no duty to protect it. As a result, this potential bail-out is effectively buying in further concessions to protect the top

The Premier League has never come up with a single suggestion that makes life easier running Accrington Stanley. Every suggestion that comes forward - such as the B-team idea - would make it even more difficult to survive.

What is the rationale for Manchester City's suggestion of B teams? It's designed to give them a bigger talent pool and is not designed to help our pyramid. They'd lock up more talent and it would ruin competition. We played Leeds in the EFL trophy the other week and beat them 7-1 because they decided not to play the under-23s. Instead they sent a load of kids over, some of whom may have still had satchels on their back. It's put other teams at a disadvantage because Leeds chose to effectively disrespect the competition.

The pyramid needs rebuilding and restabilising, with proper controls. Instead of the Premier League having control of the debate, it should be the FA or the Governmment. The sort of sums we are talking about as a grant is the slice you see an agent creaming off a big transfer. The Premier League just want to extract maximum benefit for themselves.

I don't actually want anything out of football. I just want to lead a club that can survive, that can go up and down the pyramid. Instead, what's happening now, is that struggling clubs are plunging into the abyss. We're spitting out zombies.

[Chester Perry]

This is a real Football's Magic Money Tree type story - from the Guardian

Stellar aims for the stars with $3bn of footballer contracts after ICM takeover
- Agency’s 800-plus clients include Gareth Bale and Jack Grealish
- ICM tie-up will help cultivate players’ brands, says owner

David Hytner Thu 8 Oct 2020 15.00 BST Last modified on Thu 8 Oct 2020 15.55 BST

Stellar Group, the London-based sports agency that represents more than 800 athletes, including Gareth Bale, and whose contracts are worth close to $3bn (£2.32bn), has been taken over by the US entertainment agency giant ICM partners.

The deal, which sees the creation of ICM Stellar Sports, reflects US confidence in English and European football in particular. Despite the Covid-19 pandemic, Premier League clubs have spent £1.45bn in permanent transfer fees this summer, according to the Guardian’s interactive. When the major leagues in Spain, Germany, Italy and France are factored in, the figure rises to £2.99bn.

Stellar Group, which was founded in 1992 by Jonathan Barnett and David Manasseh, is best known for its work and influence in football; the agency has seven members of the current England squad – Jordan Pickford, Nick Pope, Dean Henderson, Ben Chilwell, Mason Mount, Jack Grealish and James Ward-Prowse. But it has made inroads into many other sports, including American football in the NFL.

ICM Partners represent a host of A-list talent, including Samuel L Jackson, Chris Rock and Beyoncé, and Barnett says the tie-up will enable his existing Stellar Group clients to further their reach and crossover potential and to broaden their brands.

“Athletes are brands with global appeal across numerous off-the-field revenue streams, which ICM will help us cultivate and exploit,” Barnett said.

Barnett and Manasseh will run the day-to-day operations of the sports agency while all Stellar Group’s 130-plus employees will join ICM Stellar Sports and continue to operate the agency as before.

The deal follows the take over of Base Soccer by Creative Artists Agency – the US entertainment and sports company – in July of last year. Established by Leon Angel in 1997, Base have become one of the leading agencies in football.

[Chester Perry]

I have been saying for a while that the French Lique's new domestic broadcast deal with Mediapro was a risky affair - the season is only in it's second month of it's deal with it's new partner - who are having to start a presence from scratch in France and the y have failed to pay their 2nd instalment of fees, are in a legal fight with Canal+ over carriage rights and now want to renegotiate the deal because of Covid - from SportsProMedia

Mediapro misses Ligue 1 rights payment as it seeks to renegotiate fee
Agency’s CEO says Covid-19 is impacting value of €780m a year broadcast deal.

Posted: October 8 2020By: Tom Bassam

- Mediapro made first €172.3m rights payment back in August but has not paid 6th October instalment
- LFP refused to grant a delay in rights fee payment
- New Téléfoot network just weeks into first season as Ligue 1 and Ligue 2's main domestic broadcaster

Mediapro chief executive Jaume Roures has revealed that the rights agency is seeking to renegotiate its broadcast partnership with French soccer's Professional Football League (LFP).

Just months into its first season as the main domestic broadcaster for the top-flight Ligue 1 and second-tier Ligue 2, Mediapro is claiming the value of its deals is already being adversely impacted by the coronavirus pandemic.

Mediapro is paying €780 millio n (US$916.8 million) per season for its Ligue 1 contract and is also the lead partner alongside BeIN Sports in the €64 million (US$72.9 million) a year deal for Ligue 2 rights.

In August, Mediapro paid its first instalment of the season, worth €172.3 million (US$200.5 million), but Roures has now confirmed to L’Équipe that his company will not make its second payment, which was due on 5th October, and that it is looking to reduce its contribution.

“We have asked to speak about our contract this season because of Covid-19,” said Roures. “It is obvious that Covid is affecting a lot of aspects of our being able to exploit our rights. We want to talk about that.”

He added: “We want to renegotiate the contract for this season. It has been very affected by Covid-19, everyone knows because everyone is suffering through it. We are not questioning the project as it is. But the bars and restaurants are closed, advertising is down - these are things that everyone knows.”

The LFP released a statement confirming that Mediapro requested a payment delay for its 5th October Ligue 1 and Ligue 2 rights fee instalment on 24th September but that was rejected by the league body.

The LFP said it working to ensure payment to its club by 17th October.

Roures did not suggest a more suitable fee but also pointed out that the LFP has asked the French government for compensation as a result of the losses caused by the pandemic.

Seeking to strike an amiable tone, Roures insisted Mediapro is not seeking to cancel its contract.

“The contract was established in conditions that are completely different to the current situation,” he added. “That is obvious. We need to speak about it. Aside from that, we will see how it ends up. We are not putting into question the contract, but we are putting into question the current situation.”

[Chester Perry]

Still in France Olympic Lyonnais have revealed their 2019/20 financial results - from SportsProMedia

Lyon suffer €36.5m losses as 2019/20 finances ‘hard hit’ by Covid-19
Ligue 1 club also expect net loss for 2020/21 season due to public health restrictions.

Posted: October 7 2020 By: Sam Carp

- Lyon total revenue down 12% to €271.6m after being up 19% at end of March
- Ticketing income drops 6.3% to €35.5m following curtailment of Ligue 1 season
- Champions League semifinalists reiterate that LFP ‘bear responsibility’ for estimated €117m losses

Top-flight French soccer club Olympique Lyonnais said their finances have been ‘hard hit’ by the Covid-19 pandemic as they announced losses of €36.5 million (US$42.6 million) for the 2019/20 financial year, compared to a profit of €6.2 million (US$7.2 million) the previous season.

The Ligue 1 club’s revenue was up 19 per cent on 2018/19 at the end of March, while they also posted a first-half record of €61.8 million (US$72.1 million) in December, but the onset of the health crisis saw their accounts for the year ending 30th June 2020 stand at a total of €271.6 million (US$317 million), representing a drop of 12 per cent on the prior 12-month period.

Ticketing revenue fell from €41.8 million (US$48.7 million) to €35.5 million (US$41.4 million) as Lyon were unable to play six home games following the premature end of the 2019/20 Ligue 1 season, which meant the team finished in seventh place, outside of the qualification places for Uefa’s European club competitions.

Lyon’s main revenue stream for the 2019/20 campaign was media rights, which brought in €97.6 million (US$113.9 million), down from €122 million (US$142.4 million) for 2018/19. The decline was both due to the team’s lower final position in Ligue 1 and because the league’s domestic broadcasters Canal+ and BeIN paid only part of their rights fees for the season.

Sponsorship income fell 4.2 per cent to €27.2 million (US$31.7 million), while brand-related revenue was down 2.4 per cent to €13.6 million (US$15.8 million), with the club also generating €6.7 million (US$7.8 million) from its events business.

Lyon, who reached the semifinals of last season’s Uefa Champions League, European club soccer’s premier tournament, reiterated in their financial statement that they believe the Professional Football League (LFP), which governs Ligue 1, and the French government ‘bear responsibility’ for estimated losses of €117 million (US$136.5 million) as a result of the curtailment.

It was revealed in September that Lyon were claiming that amount in compensation from the LFP for damages suffered as a result of the early termination of last season.

Lyon said they expect to post a net loss again for the 2020/21 financial year due to significant public health restrictions, which currently mean only 1,000 fans can attend Ligue 1 games.

Despite the ongoing financial impact of Covid-19, Lyon added that they were ‘confident’ of achieving their objectives between now and the 2023/24 season, based on the assumption that the health crisis is ‘resolved in the short term’.

Those targets include reaching total revenue between €420 million (US$490 million) and €440 million (US$513 million), as well as earnings before interest, taxes, depreciation and amortisation (Ebitda) of €100 million (US$116 million).

[Chester Perry]

I have been trawling back through historical podcasts, at Unofficial Partner and came across this with Alex Flynn who initially came up with the concept that became the Premier League (he wanted a proper pyramid not a single distinct entity) he also came up with the idea that was watered down as the Champions League but which in it's purer form is what the ECA and Andrea Angelli wants to implement - It is a fascinating podcast and a real insight into history and how intentions are distorted

https://blubrry.com/unofficialpartnerpo ... alex-fynn/

[Chester Perry]

The Telegraph with what it calls a special report into a potential financial castastrpphe in English Football but is actually a series of arguments for an independent regulator of the game

Special report: What next for English football as it faces financial catastrophe?
TOM MORGAN OCTOBER 09, 2020

Jamie Vardy's party was still in full swing in May 2016 when one top-six chief executive offered up a niche view of the Premier League's greatest miracle.

"It's a disaster for us," was his cynical assessment of Leicester City's title triumph during an off-record coffee meeting at his plush office with a Daily Telegraph correspondent. No time for praise from a club chief preoccupied by potential damage to his campaign to get the richest teams a bigger slice of the TV billions.

Four years on and competing agendas of inevitable self-interest over solidarity linger close to the surface again while football faces its worst financial catastrophe.

"It's a perfect storm," was the description of one chairman who believes the pyramid is being pulled apart by competing agendas.

With bail-out talks locked over a potential rescue package between the Premier League and cash-strapped English Football League, several clubs in the top two tiers appear instead determined not to let a good crisis go to waste.

Telegraph Sport has learned of two leading club executives privately mooting the prospect of a European Super League breakaway post Covid. It also emerged this week that a rebel group of Championship chief executives met in secret amid fears they are growing increasingly disenfranchised with the EFL.

Manchester City, meanwhile, risked the wrath Leagues One and Two by suggesting they should be allowed to field B-teams to prop up the lower tiers. Such an idea was previously raised in 2014 as part of a review to safeguard the pyramid led by Greg Dyke, the former Football Association chairman. Speaking on Thursday night, he told Telegraph Sport his reforms have gone down like a "bucket of cold sick".

Instead, Dyke says the only long-term solution for the game is an independent regulator - detached from the FA - to safeguard the entire pyramid. He adds that tackling the "foreign takeover" in football, as well as getting the EFL to agree to B-teams, could then be key elements in helping long-term. "We'll see what the FA does to the Premier League clubs in terms of foreign players, but my guess is they haven't got the b------s to do it," he added.

As part of negotiations surrounding a bail-out, the Premier League is pushing for support for plans to loosen the homegrown player quota. Dyke said the pyramid is currently paying for mistakes the FA made in not tackling inequalities in football during the formation of the modern league 1992.

"My view of football overall these days, is that you need a proper regulator, and that the FA can't do that for lots of reasons, one of which is it relies on the Premier League clubs for its players, and basically for its money," he added. "It needs players to play in the England team, and for the teams to play in the FA Cup."

Government sources told Telegraph Sport on Thursday that ministers were "too busy keeping sport alive" during Covid to consider major new regulation within football.

However, Dyke is not the first former FA chairman to identify the need for a major overhaul. David Bernstein is understood to be in talks with other football administrators about potential new safeguards for the game.

One option previously disclosed by Telegraph Sport is a single club licensing structure, similar to the NFL in America, with radical regulatory power to set common rules on investment, ownership and wage-to-revenue spending.

Such a system was previously recommended by the Digital, Culture, Media and Sport Select Committee, which reported evidence of “failings at every level of football governance” following their inquiry.

Damian Collins, the former chairman of the committee, says the immediate launch of a financial regulator could agree loans to avoid clubs becoming increasingly beholden to the Premier League's current demands.

Clubs, he said, have already contacted him to say they could "bleed to death" within weeks. Some executives say they already cannot afford payroll this month, while others are unable to fulfil their tax obligations, he added.

"If you're an EFL club, you may not want to borrow money from the Premier League," he added. "I think If we had an independent body now, where clubs could go to privately, they could arrange the whole financial package to support them, and with that would come the scrutiny that is needed to make sure the club is run sustainably and that ultimately the money could be repaid."

Collins said "time is running out" for the game to find solutions for a black hole which is likely to reach almost £2billion by next April. "Leagues could just collapse - it's not just clubs going bust," he added. "The time for talking has run out," he said of a perceived lack of a coherent crisis strategy.

An independent regulator would not necessarily be dismissed out of hand at Premier League HQ, which feels it has been unfairly burdened after the Government piled pressure on the division to show "solidarity" with the EFL. "Amazon hasn't been asked to bail out the High Street," was the point made by one senior executive.

The EFL, in turn, is likely to call for greater help from ministers with a host of clubs angry at the prospect of handing over more power. "Instead of the Premier League having control of the debate, it should be the FA or the Government," Andy Holt, chairman at League One Accrington says. "The Premier League just want to extract maximum benefit for themselves."

Dyke, Collins and Holt believe the Premier League will attack so many conditions to a potential £150million offer - including a grant of just £40milion - that the Government will be forced to step in. In the longer term, however, Dyke is calling on the EFL to side with the FA in having a higher homegrown player quotas.

"If you look at the Premier League, it's a cartel - 20 clubs coming together to sell their television rights," he added. "By anybody's standards that's a cartel. It needs proper regulation. I don't think anyone's going to do it. But that's what it needs." To unlock this mess, football needs a miracle of Leicester proportions.

[Chester Perry]

The Mail with a piece on how agents are still raking it in (well some are) - I am expecting some form of condemnation spread about vital money draining from the game from them down the line. There are a few tables in the piece so linking rather than transcribing

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

[Chester Perry]

Hull City release their 2019/20 accounts - the Allam family may well be guilty of a number of sins at the club, but they don't wait forever to release their accounts - by way of contrast Derby and Sheffield Wednesday have still to release their 2018/19 accounts - which is scandalous. @KieranMaguire has a peek

https://twitter.com/KieranMaguire/statu ... 9294896128

you can find the full accounts here https://find-and-update.company-informa ... ng-history

the chaps at Vysyble with their own distinct take on the results - https://twitter.com/vysyble/status/1314514867735326726

[Chester Perry]

The Chaps at Vysyble have a new blog article for us - Game Aid - it is pretty powerful stuff

Vysyble Blog - Game Aid

8th October 2020

Netflix is currently running an excellent mini-series about the NASA Challenger space shuttle disaster of January 1986 when, shortly after take-off, the spacecraft exploded resulting in the tragic deaths of all seven crew members including the first ‘ordinary’ citizen in space, schoolteacher Christa McAuliffe.

Due to weather and technical difficulties, the launch was delayed but eventually took place in the coldest temperatures ever recorded up to that point during a shuttle launch sequence. The resulting investigation found that the rubber rings (O-rings) which sealed the joints between the various sections of the booster rockets became brittle at low temperatures and did not return to their original levels of elasticity when subsequently warmed. Consequently, a deadly escape of solid rocket fuel ignited and thus violently disabled the spacecraft.

The shocking element in all of this, apart from the deaths of seven very capable individuals, is that the problem with the O-rings was not new nor unknown. Indeed, the manufacturer of the booster rockets and NASA held a conference call the night before the fateful launch to debate whether or not to send the vehicle and crew into space as the outside temperature dropped. Concerns from the booster manufacturer were raised about the O-rings and the cold but NASA pushed back on these concerns, mindful of a failing launch schedule and the potential PR issues if another delay or cancellation were to occur. Perhaps an example of the “sunk cost effect” affecting the overall decision-making process?

The process NASA deployed to reach the fateful decision to launch was not wholly based on an assessment of what could go wrong and the associated risks but mainly on what was going right and the associated benefits. In other words, if it hadn’t happened before, why should it happen now? And the consensus in the ‘room’ was that there was just not enough hard evidence or data to say that there would be a catastrophic failure.

The rest is, unfortunately, history.

This kind of thinking is not that unusual. If you consider your car, it is the sum of many moving parts, some of which will be operating at less than optimal performance due to wear and tear and perhaps a sub-standard manufacturing process depending on the type and origin of the part(s) in question, but the important thing is that your car still runs and gets you from A to B. There is not enough hard evidence from the current performance of your car to tell you that it will fail but there is a very manageable risk that it might.

Arguably, we encountered a similar thought process with the EFL in 2017 when we warned of impending club failures as a result of our analysis based primarily on an extended sequence of club economic profit data. Of course, we could not say when clubs would fail but we did say that clubs will fail, which some have sadly done so since. Indeed, the public response from the EFL was that no club had been through an insolvency process for several years. Therefore, the EFL had erroneously decided that as nothing was going wrong, by inference, that must mean that everything is going right.

Of course, we knew back then that plenty was going wrong and even more so presently as crowds continue to be banned from football matches. As a result clubs are pleading poverty. Indeed, the current impasse between the Premier League, the EFL and its clubs and the Government is intriguing but worrying.

There is no shortage of theories and suggestions regarding what should be done. The common consensus is that the lower leagues in the EFL, ie Leagues One and Two, do need some form of financial assistance if the current ban on crowds is to remain for the foreseeable future particularly against the backdrop of a rising national infection rate and more deaths due to Covid-19.

In addition, the problem is somewhat confused by an increasing number of Championship clubs spending more in salaries than they receive in revenues (14 in 2018-19). Here too recent reports in the media point to increasing financial distress and calls for assistance. Amongst the Championship club owners is the Coates family which is behind one of the most successful and profitable betting set-ups on the planet. A few other billionaires can also be found in England’s second tier of football…

The Government and the Parliamentary committee for Digital, Communications, Media and Sport believe that the Premier League clubs should redistribute some of their ‘wealth’ to those clubs in need. On one level this is a laudable notion but unfortunately this is the same Premier League that has achieved economic losses of over £2.7bn since 2009 and achieved a pre- COVID-19 record economic loss in 2018-19 of £599.54m. When viewed through that lens – where is the wealth to distribute?

More recently, the Government has been under pressure to do ‘something’ by various groups and talking heads given the increasing reliance of the smaller football clubs on a matchday revenue stream that for now no longer exists due to actions taken by the same Government. One highly prominent and vocal figure in this chain of demands is Damian Collins MP who just so happens to be the former Chair of the Digital, Communications, Media and Sports Select Committee.

When Mr Collins was Chair of said committee, we wrote to him in 2017 and again in 2018 to express our concerns about the state of the game and the strong warning signals that our data was giving regarding the health of clubs and their leagues. We did not receive a reply in either case. Yet he has emerged, and in our view somewhat opportunistically, bemoaning the intransigence of the current Government in the matter of football’s financial plight.

If he had engaged with us when he had the chance, he could have perhaps set the wheels in motion for reform ahead of time. But we take the lack of response to be a strong indicator that nothing was going wrong in the minds of the politicians regarding football at that time. Only in 2019 when Bury and Bolton Wanderers had already endured their respective financial difficulties did Mr Collins enter the field of play. By then, of course, it was way too late.

The Government, it would appear, does not care for the minutiae of football financials given its direct approach in dealing with the Premier League. Indeed, Project Restart (the initiative to restart the 2019-20 season without crowds but with free-to-air TV broadcasts) was conditional on the Premier League providing support to clubs in the lower divisions. Months later and a number of leaks and comments are only just starting to filter out regarding potential caveats and conditions for providing such funds. No such thing as a free transfer of money.

Is it a coincidence that on the day that the international summer transfer window closed with £1.2bn in purchases and £419m in player sales resulting in the second-highest net spend ever of £805m by Premier League clubs was also the day that an open letter was published by the Premier League, the EFL and other football bodies imploring the Government to rescind the crowd-banning order?

Be under no illusion that there is a PR battle of wits taking place with arguably the Premier League presenting itself as an unwilling victim whilst at the same time hoovering up talent at some cost.

For those more cynically minded, one might think that it would suit the Premier League clubs to do nothing thereby forcing some of the lower league clubs to enter administration. For those that do survive, one inevitable step is an EFL-wide salary cap. This plays directly into the Premier League’s hands in that the clubs will not have to offer such large pay deals to up and coming talent from the lower leagues.

The second step is that the longer the distress lasts, the more likely talent will be for sale at a lower price. Do keep an eye on the domestic transfer window up to 16th October as those Premier League clubs still active in the market will be driving down prices with their impoverished lower league counterparts, which will no doubt see a sale as a temporary but welcome relief.

And yet there is more pressure on the lower leagues from the senior division. Very recently, a senior figure from Manchester City suggested that the way forward for further Premier League investment/funding is the dreaded B-Team scheme whereby a Premier League club takes a controlling share in a lower league club in order to nurture and provide talent for the senior-level operation.

With this type of structure in place, out go the traditions of the original entity and along with it any notion of a competitive and able footballing ethos. The lower leagues will become a subsidiary layer in the organograms of sporting holding companies such as City Football Group and investment houses seeking to get a piece of the action as asset prices continue to fall.

In our view, the debate about B-Teams would be largley irrelevant if the EFL had been allowed to regulate its clubs to a minimum financial break-even point on an annual basis. As it is, Championship clubs have achieved economic losses of -£1.5bn from a revenue of £3.3bn between 2015-19. Masters of misfortune par excellence, non?

However, the end-result is very likely to be that the local leagues simply become nurseries for what will inevitably be the Euro Super League sides.

In 2018, we announced that the demise of the Premier League had already started.

American investors had already made their mark at Arsenal, Liverpool and Manchester United. It seemed obvious (and still is) to us that the increasing Americanisation of football would continue, leading to a structural shift towards something more familiar to them rather than us.

The Premier League’s domestic TV rights are American owned with the exception of BT, although that too is rumoured to be in the sights of a number of US-based telco and investment companies.

The Premier League has the same number of American-owned clubs as it does UK-owned (5) although Burnley, as we understand it, is presently undergoing a sale to the American investement house ALK Capital. That would reduce the UK contingent to 4 – Brighton & Hove Albion, Newcastle United, Tottenham Hotspur and West Ham United – and increase the number of American-owned clubs to 6 – Arsenal, Burnley, Crystal Palace, Fulham, Liverpool and Manchester United.

Little wonder, then, that the traditions of English football can be so easily cast aside amidst the debate about B-Teams when the senior division is becoming increasingly international in make-up and outlook.

The Premier League clubs are not immune to the current financial pressures exerted by Covid-19 but they could have better insulated themselves by adopting a more focussed and value-based approach to overall strategy and financial management. Even so, there is a sense that the changes which we envisaged a few years as directed by the economic profit data are starting to happen and not in a good way. We never said that the process and outcome would be a pleasant one.

Time is not on anyone’s side here apart from, perhaps, the Premier League itself. The Championship clubs are rumoured to be taking a tax holiday in protest at the Government’s failure to provide funding, which did drop our jaws when you consider that HMRC is the most prolific originator of investigations and winding-up orders concerning football clubs. Obviously, provocation does not compute in the mind of a Championship club owner.

Returning to our initial theme, the evidence from our perspective was always there in that something would eventually go wrong. Whether football will react appropriately and change its ways remains to be seen but in adversity there is opportunity.

As the late Christa McAuliffe once said, ‘Reach for it. Push yourself as far as you can.’

[Chester Perry]

A thread looking at the biggest boot deals in football

https://twitter.com/Lu_Class_/status/13 ... 6595216387

[Chester Perry]

Forest Green Rover's new major sponsor including Stadium name falls into the social media trap when it launched a poll for the a name for the stadium name - it's got Boaty McBoatface written all over it - are the really "Innocent" in all this - or is it a clever ploy for additional media coverage

https://fcbusiness.co.uk/news/kevin-lea ... dium-name/

[Chester Perry]

FIFA publishes it's snapshot of the International transfer market from the summer window

press briefing https://www.fifa.com/who-we-are/news/fi ... t-snapshot

the report https://img.fifa.com/image/upload/liiao ... 7e6aux.pdf

[GodIsADeeJay81]

Kevin?

[Chester Perry]

The Financial Times talks to Super Agent Jonathan Barnett whose Stellar Group has been sold to ICM

Football super-agent Jonathan Barnett’s Stellar Group sold to ICM
MURAD AHMED OCTOBER 08, 2020

Jonathan Barnett, the super-agent behind star players such as Gareth Bale, is a man who knows his standing in the lucrative world of football.

“I was voted the world’s most powerful agent by Forbes last year,” he said, speaking to the Financial Times on completing his biggest deal yet: the sale of Stellar Group — his London-based company that represents 800 top athletes across the world — to Hollywood talent agency ICM Partners.

“We’ve done a lot of big deals, the sort of money you have to make to become the number one agent . . . This [sale to ICM] was a very nice one as well.”

While declining to reveal the value of the deal — “They gave me the money. And I said: ‘Thank you.’” — the sale caps a remarkable rise for a company founded in 1992 from a kitchen table alongside business partner David Manasseh.

Stellar has a lengthy list of football clients, from Atlético Madrid’s Saul Niguez to Aston Villa’s Jack Grealish. Mr Barnett is best-known for arranging his biggest deal: Bale’s transfer from Tottenham to Real Madrid in 2013, for a then world-record fee of £85m. Last month, he facilitated Bale’s return to Tottenham Hotspur on a loan deal.

For Los Angeles-based ICM, whose clients include actor Samuel L Jackson and singer Beyoncé Knowles-Carter, the acquisition represents its first move into sports. It also follows a concerted effort by the largest US entertainment agencies to break into the world’s favourite game.

Base Soccer, a UK agency that represents the likes of Manchester City’s Kyle Walker and Tottenham’s Dele Alli, was snapped up by Creative Artists Agency for an undisclosed sum in 2019. Over the past two years, Roc Nation, a New York agency founded by rapper Jay-Z, added to its roster of musicians and US sports stars by signing high-profile European footballers, including Manchester United’s Marcus Rashford and Inter Milan’s Romelu Lukaku.

The pandemic has hit the entertainment and sports industries hard and with concerts and film production being delayed, ICM has cut jobs.

“There has been some pain and that is unfortunate,” said Chris Silbermann, ICM chief executive, but the acquisition of Stellar was required to “emerge from this period stronger than we went into it”.

As well as footballers, Mr Barnett represents athletes in North America’s National Football League as well as in international cricket and rugby. He and Mr Manasseh will become executive chairmen of a new division, ICM Stellar Sports, tasked with signing clients across US sports, including American football and basketball.

. . . now he will part of ICM, an agency whose clients include Beyoncé, and turn his attention to US sports © Larry Busacca/Getty/Coachella
Stellar’s core business is under pressure, however. Football agents principally make money through commissions from player transfer fees, which have fallen in value during the pandemic, with European clubs facing significant shortfalls due to empty stadiums. Even before coronavirus, Mr Barnett’s agency suffered a £10m drop in revenues to £29.2m in 2019, while pre-tax profits were £4.8m, down from £11.5m a year earlier.

Mr Barnett said his agency had proven resilient, however, by operating at the top of the market where there remains strong interest in leading players. As well as facilitating Bale’s loan deal with Tottenham, Stellar secured Ben Chilwell’s £50m move from Leicester City to Chelsea in August.

“Without being blasé, I think the cream comes to the top,” he said. “We have the cream of the players, we have fantastic young players . . . I think we would have done even better had there not been a pandemic. But we did OK during it.”

Another threat to earnings comes from Fifa, international football’s governing body, which is seeking to introduce new regulations for player transfers, including caps on agent fees. Such measures would limit the multimillion-euro commissions earned from big transfers.

English Premier League clubs paid a combined £263m to agents and intermediaries in the 12 months to January 31 2020, according to the Football Association, the national governing body.

Mr Barnett has joined a group of other leading football agents, including Jorge Mendes and Mino Raiola, to mount a legal challenge against proposed regulations which he described as “ill founded and a disgrace”.

“It’s going to take a huge fight,” he added. “It’s going to take years. We’re geared up for it. we’re financially prepared for it.”

Mr Barnett said measures designed to prevent agents taking huge sums out of the game stemmed from a misunderstanding of his profession. The rise of football agents over the past three decades, he said, had ensured the majority of wealth in the sport flowed towards the players.

“I’ve seen guys who are retired, who have been with me since they were kids, becoming extremely rich and wealthy men,” said Mr Barnett. “Don’t put me down as a saint, because I'm not. But I get a kick out of that.”

[Chester Perry]

It is being suggested that the Premier League have a plan for broadcasting all behind closed door games - it just won't be on TV - from the Sun and being repeated by the Times - personally think leads into the hands of the big clubs as they will use the data gathered to argue that their share should increase - it is a very slippery road the game is on at the moment as the EFL tribulations with ifollow show (even in it's current modified revenue distribution period)

APPY DAYS Premier League to show every single match – but the extra games will only be available on Sky and BT apps and NOT on TV
EXCLUSIVE
Martin Lipton 9 Oct 2020, 11:03Updated: 9 Oct 2020, 12:27

PREM clubs are today poised to agree to non-televised matches being available to all fans.

But the games will NOT be on TV and supporters will have to access matches on their personal devices through BT and Sky apps.

Ever since the Prem’s restart in June, all matches have been available through one of the Prem’s four broadcast partners - Sky, BT, Amazon prime and the BBC.

With fans locked out, the clubs felt they had no option to ensure supporters were able to watch their teams in action.

But there are concerns that the two main broadcasters’ patience over the loss of their prized exclusivity is not boundless and that there could be a knock-on impact with the companies demanding a further rebate.

Prem clubs already face having to pay back £330m over the next two seasons as a result of the pandemic and a further cut in income would be a savage blow.

Frustration with the Government over its refusal to sanction a re-opening of turnstiles has grown in recent weeks.

And now the clubs are set to decide to take things into their own hands by agreeing a new, short-term, broadcast model.

A meeting of the 20 “shareholder” clubs to discuss the proposed solution will be held this morning.

SunSport can reveal the idea, backed by the Big Six and which is understood to have been accepted by the necessary 14 club majority of clubs.

Last week, Prem chiefs announced that five matches in each of the three remaining October fixture weekends would be moved for TV purposes, screened on Sky and BT.

But that left the other five games still nominally due to be played in the traditional Saturday 3pm slot.

While some clubs wanted to use their own in-house websites and TV channels to make the matches available to season ticket holders only, other clubs felt that this would be seen as divisive.

Instead, the likely compromise being discussed around the virtual table will see all fans wanting to watch being able to pay to access the games - as if they were paying at the gate.

It is not yet entirely clear how the new system will work and Prem sources dismissed the belief of some clubs that a special app was being created to provide the service.

But more details and clarity are due to emerge after today’s meeting.

There is the expectation that a detailed fixture schedule and explanations of how to watch the games that are not on BT or Sky will then be available by the start of next week.

[aggi]

Was wondering if there was any inkling on the revenue split for these new PPV games? Could potentially be a hefty new revenue stream for some of the big clubs.

[aggi]

Forest Green Rover's new major sponsor including Stadium name falls into the social media trap when it launched a poll for the a name for the stadium name - it's got Boaty McBoatface written all over it - are the really "Innocent" in all this - or is it a clever ploy for additional media coverage

https://fcbusiness.co.uk/news/kevin-lea ... dium-name/

On Forest Green I noticed that Hector Bellerin has bought shares in them. Seems a little strange that a current player can buy into another club.

[Royboyclaret]

Hull City release their 2019/20 accounts - the Allam family may well be guilty of a number of sins at the club, but they don't wait forever to release their accounts - by way of contrast Derby and Sheffield Wednesday have still to release their 2018/19 accounts - which is scandalous. @KieranMaguire has a peek

https://twitter.com/KieranMaguire/statu ... 9294896128

you can find the full accounts here https://find-and-update.company-informa ... ng-history

the chaps at Vysyble with their own distinct take on the results - https://twitter.com/vysyble/status/1314514867735326726

Been of the opinion for some time now that Hull City are on the edge of a cliff, clinging on by their fingertips, both from a football and financial perspective. Now they really are at the crossroads and perhaps their experience should act as a salutary warning to us at Burnley of how quickly things can go badly wrong.

Was it the 2014/15 season they were relegated from the PL with us and promoted again the following season?.....Just a few short years but since then our paths have been in the opposite direction, as we bask in our fifth successive PL season whilst Hull contemplate a visit to Fleetwood later this evening for a League One fixture.

In terms of their financial accounts, the bottom line for the last two seasons has looked reasonable enough but on closer inspection all might not be so healthy. In 2019 they made a Net Profit of £2.9m but to achieve that they relied heavily on a final year parachute payment of £37.2m. Similarly in these latest 2020 accounts the bottom line is a Net Profit of £2.8m but that included the Profit on Sale of Jarrod Bowen of some £22.8m. Both of those sources of Income will now have effectively dried up as parachute payments have ended and their saleable assets no longer exist.

Hard to believe that the fortunes of our respective clubs can have moved in such an opposite direction in such a short period of time. Certainly something for our people at Burnley to be aware of with the prospect of a massive financial loss awaiting Hull in their 2021 accounts as they contemplate another season in League One.

[Chester Perry]

On Forest Green I noticed that Hector Bellerin has bought shares in them. Seems a little strange that a current player can buy into another club.

significantly less than 10%, he really looked into it and spent months talking to the the owner about it - it fits in with a lot of his social media activity - he is definitely a guy who puts his money where his mouth is

[Royboyclaret]

Fleetwood 4 Hull City 1.

[Terry Cochrane]

"If you look at the Premier League, it's a cartel - 20 clubs coming together to sell their television rights," he added. "By anybody's standards that's a cartel. It needs proper regulation. I don't think anyone's going to do it. But that's what it needs." To unlock this mess, football needs a miracle of Leicester proportions”

Funnily enough Leicester are the only PL club to vote against the new PPV system announced yesterday.

[Chester Perry]

Remember all that talk about Blank cheque companies or SPAC's (Special Purpose Acquisition Companies) and the hoohaa of one in particular becasue of it's huge over-subscribe IPO in New York and the names involved - well it seems (and it is hardly a surprise) that Redball Acquistion Corp and FSG (Owners of Liverpool FC and Boston Reds Sox are to come together and Float the whole FSG shebang - from the Financial Times

Liverpool FC owner looks at stock market listing
SARA GERMANO OCTOBER 10, 2020

John Henry, owner of Liverpool FC and Boston Red Sox, is in talks to publicly list his sports holdings in a merger with a blank-cheque company, two people familiar with the matter said.

The move would value his company at $8bn in a proposed tie-up with Billy Beane, the US baseball executive depicted by Brad Pitt in the film Moneyball.

A listing of Fenway Sports Group LLC, the holding company for the reigning English Premier League football champions and the 2018 World Series baseball champions, would be one of the most high-profile sports offerings on the stock market in recent years.

RedBall Acquisition Corp, a special purpose acquisition company, or Spac, set up by Mr Beane and Gerry Cardinale, founder of the private equity firm Redbird Capital Partners, raised $575m in August with the aim of acquiring a sports franchise. The shell company said it would use data analytics, made famous by Mr Beane through his management of the Oakland Athletics baseball club, to improve on-field and revenue performance at the target it acquired.

RedBall plans to acquire a 25 per cent stake in Fenway, said two people briefed about the talks. As part of the discussion, Redball will raise a further $1bn in addition to the $575m it has already attracted through its Spac to complete the transaction, said those people.

The talks are at an early stage and there is no guarantee they will lead to a transaction but one person said Fenway’s principal backer, Mr Henry, is keen to get a deal done and take his sports empire into the public markets.

If a deal was reached, the listed vehicle could be used to acquire other teams across Europe, said one person briefed on the matter.

RedBall declined to comment. Representatives for Fenway Sports Group did not immediately respond to a request for comment.

The potential for a public listing comes as sports leagues and franchises are grappling with the effects of the coronavirus pandemic, leading to substantial losses this season and the search for creative financing. The Red Sox are projected to lose $338m this year from the loss of ticket sales alone, according to analysis from Team Marketing Report.

A consortium of UK sports leagues, including the Premier League, have written to Prime Minister Boris Johnson in recent weeks seeking a bailout for pandemic-imposed revenue shortfalls.

While many top-tier European clubs, including England’s Manchester United and Italy’s Juventus, list shares on open markets, few US clubs have public ownership. The Atlanta Braves baseball club is wholly owned by Liberty Media Group, the publicly listed conglomerate founded by John Malone.

Most US sports franchises have private ownership whose ranks form a rarefied club of financiers, celebrities and other power players. Steven Cohen, the hedge fund titan, recently agreed to buy the New York Mets for more than $2bn, subject to approval by other league owners, a prolonged process involving layers of vetting.

Basketball star LeBron James has been a minority owner of Liverpool since 2011.

Mr Cardinale, a former Goldman Sachs banker, recently acquired Toulouse FC, a club that was relegated into the French second division. Earlier this year Mr Cardinale held talks with AS Roma to buy the Italian Serie A team but the discussions did not lead to a deal.

Since launching the Spac with Mr Beane, who owns a minority stake in the English second-tier team Barnsley FC, the duo have been on a hunt to acquire a European club. Condoleezza Rice and Robert Gates, two former officials in the George W Bush administration, are advising RedBall on the transaction.

Spacs, which promise companies a faster and less onerous route to public markets than traditional initial public offerings, have raised a record $51.1bn so far this year, quadrupling last year’s volume. The blank-cheque vehicles raise money on the stock market with the aim of acquiring a private company, thereby taking it public through a so-called reverse merger.

News of the talks was earlier reported by The Wall Street Journal.

[Chester Perry]

It appears that Hillsborough has been mortgaged, you know the ground that Sheffield Wednesday sold to the another of it's owners companies without any cash changing hands, just promissory notes. I suspect it is about raising monies to help through these straightened times

https://twitter.com/KieranMaguire/statu ... 3156712449

More detail on that Hillsborough mortgage - £6.4m to be repaid in a years time - you have to wonder if it is to raise funds for the club or if it is so the owner can make the scheduled IOU to the club from the sale of the ground to him

https://twitter.com/mikemccarthy/status ... 9876639744

[Chester Perry]

Birmingham City have a new minor but significant shareholder - some intriguing clauses in the deal it would seem - the boys at Vysyble are a little curious - I have to say it does not look good when someone can (subject to promotion and profit's) can take so much out over such a short time for such a small outlay - the liabilities incurred are interesting too. this is just another form of gambling (and if rumours are to be believed ) look what a mess that made of Wigan - and yes this sounds different, but still seem strange.

https://twitter.com/vysyble/status/1314917272507555840

[Chester Perry]

It is being suggested that the Premier League have a plan for broadcasting all behind closed door games - it just won't be on TV - from the Sun and being repeated by the Times - personally think leads into the hands of the big clubs as they will use the data gathered to argue that their share should increase - it is a very slippery road the game is on at the moment as the EFL tribulations with ifollow show (even in it's current modified revenue distribution period)

APPY DAYS Premier League to show every single match – but the extra games will only be available on Sky and BT apps and NOT on TV
EXCLUSIVE
Martin Lipton 9 Oct 2020, 11:03Updated: 9 Oct 2020, 12:27

PREM clubs are today poised to agree to non-televised matches being available to all fans.

But the games will NOT be on TV and supporters will have to access matches on their personal devices through BT and Sky apps.

Ever since the Prem’s restart in June, all matches have been available through one of the Prem’s four broadcast partners - Sky, BT, Amazon prime and the BBC.

With fans locked out, the clubs felt they had no option to ensure supporters were able to watch their teams in action.

But there are concerns that the two main broadcasters’ patience over the loss of their prized exclusivity is not boundless and that there could be a knock-on impact with the companies demanding a further rebate.

Prem clubs already face having to pay back £330m over the next two seasons as a result of the pandemic and a further cut in income would be a savage blow.

Frustration with the Government over its refusal to sanction a re-opening of turnstiles has grown in recent weeks.

And now the clubs are set to decide to take things into their own hands by agreeing a new, short-term, broadcast model.

A meeting of the 20 “shareholder” clubs to discuss the proposed solution will be held this morning.

SunSport can reveal the idea, backed by the Big Six and which is understood to have been accepted by the necessary 14 club majority of clubs.

Last week, Prem chiefs announced that five matches in each of the three remaining October fixture weekends would be moved for TV purposes, screened on Sky and BT.

But that left the other five games still nominally due to be played in the traditional Saturday 3pm slot.

While some clubs wanted to use their own in-house websites and TV channels to make the matches available to season ticket holders only, other clubs felt that this would be seen as divisive.

Instead, the likely compromise being discussed around the virtual table will see all fans wanting to watch being able to pay to access the games - as if they were paying at the gate.

It is not yet entirely clear how the new system will work and Prem sources dismissed the belief of some clubs that a special app was being created to provide the service.

But more details and clarity are due to emerge after today’s meeting.

There is the expectation that a detailed fixture schedule and explanations of how to watch the games that are not on BT or Sky will then be available by the start of next week.

Following yesterday's news on the behind closed door games no longer being free to air in the domestic market and the PPV pricing of £14.95 per game which has upset an awful lot of fans - here is an interesting thread on how the competition authorities conspired unwittingly to dive up the value of Premier League broadcast packages and how that PPV price is at a level where it should avoid serious scrutiny by those authorities now

https://twitter.com/LegalManFlan/status ... 5491812354

what was it that Greg Dyke said yesterday

"If you look at the Premier League, it's a cartel - 20 clubs coming together to sell their television rights," he added. "By anybody's standards that's a cartel. It needs proper regulation. I don't think anyone's going to do it. But that's what it needs." To unlock this mess, football needs a miracle of Leicester proportions”

That paper referred to in the thread - http://usir.salford.ac.uk/id/eprint/213 ... _james.pdf

[Chester Perry]

Lars-Christer Olsson is to step down from his roles at the head of the European Leagues and UEFA's Executive committee early next year - it will be very interesting to see who replaces this this shrewd operator in these roles as discussions on the post 2024 calendar come to a head in the next 18 months. - from the Associated Press

Veteran UEFA soccer executive Olsson to step down
yesterday

STOCKHOLM, Sweden (AP) — Veteran soccer executive Lars-Christer Olsson will step down in March and relinquish his place as a member of the UEFA executive committee, the Swede said Friday.

Olsson helped modernize the Champions League from 2000-07 as a senior UEFA official and then its general secretary under then-president Lennart Johansson.

As chairman of the 29-nation European Leagues group, Olsson has helped resist moves led by top clubs to limit entry paths to the Champions League.

“I do not think you should sit for too long in different positions,” Olsson said in a statement, “but it is good with rotation and new blood at regular intervals.”

Olsson returned to international soccer politics in 2016 to lead the network of European leagues. Two years later, he joined the UEFA executive committee when a seat was allocated to the leagues.

Olsson’s mandate at UEFA expires in March, when he would be 71 and beyond the European soccer body’s age limit of 70 for election or re-election to the top committee.

In his final months in office, Olsson is due to take part in talks UEFA will re-open to examine possible changes for its club competitions. They would take effect in the 2024-25 season.

Olsson has argued for teams earning entry to the Champions League only by a high placing in a national league, or by winning a UEFA competition, and that places should remain open to mid- and lower-ranked leagues.

[GodIsADeeJay81]

Jump to navigation
World exclusive: Man Utd and Liverpool driving 'Project Big Picture' - football’s biggest shake-up in a generation
18-team Premier League, increased EFL funding and axing of League Cup among raft of proposals in 'Revitalisation' document seen by Telegraph

By
Sam Wallace,
CHIEF FOOTBALL WRITER
11 October 2020 • 11:45am
Under radical new proposals, the Premier League would be reduced to 18 teams

Manchester United and Liverpool are the driving force behind the biggest changes to English football in a generation and an extraordinary overhaul of the Premier League, The Daily Telegraph can reveal.

The two clubs have worked together on a radical set of proposals – called “Project Big Picture” - that will reshape the finances of the game. The Premier League, the most lucrative sports league in the world, would see a reduction to 18 teams, and controlling power in the hands of the biggest clubs.

In return for tearing up many of the rules that have governed the game since the Premier League’s inception in 1992 there will be £250 million rescue package to the Football League to see them through the Covid crisis.

The Daily Telegraph can reveal the details of the working document “Revitalisation” authored by Liverpool’s American ownership Fenway Sports Group with support from United. It anticipates the backing of the other members of the so-called big six, Manchester City, Arsenal, Chelsea and Tottenham Hotspur.

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In a remarkable set of proposals, which will send shockwaves through the game, 25 per cent of the Premier League’s annual revenue will go to the EFL clubs with £250 million paid up front to see them through the current crisis. There would also be a gift of £100 million to sustain the Football Association.

However, there would be an abolition of the one-club, one-vote principle that has sustained the Premier League since its inception as well as the abolition of the threshold of 14 votes to pass any decision or regulation change.

Under the new proposals, the Community Shield would be abolished
Under the new proposals, the Community Shield would be abolished CREDIT: Shutterstock
Under the new proposals, the League Cup and the Community Shield would be abolished. There have been additional discussions that the League Cup would survive but without the participation of the clubs in Europe.

There would be two automatic promotion places for Championship clubs, but the third, fourth and fifth placed clubs would be in a play-off tournament with the 16th placed Premier League club.

The nine clubs who have been in the Premier League for the longest - which includes the big six - would dictate its running in every aspect and would be free to play more games in the expanded Champions League that is anticipated from the 2024-2025 season onwards.

As well as the Premier League dropping from 20 clubs to 18, there would be 24 in each of the Championship, League One and League Two making a total of 90.

The plan is supported by the EFL chairman Rick Parry who has held talks with Liverpool’s principal owner, the American investor John W Henry, and shareholder and director Mike Gordon. In addition, Parry has spoken to the Glazer family, who own United.

The plan is supported by the EFL chairman Rick Parry
The plan is supported by the EFL chairman Rick Parry CREDIT: AP
The talks began in 2017 but have been accelerated since the coronavirus pandemic has thrust football into the grip of crisis with no fans in stadiums until March at the earliest. Liverpool and United are prepared for a fierce debate over their proposals but they want them implemented as soon as possible.

The Revitalisation document calls for immediate action to cut dramatically what it calls the “revenue chasm” in earnings from television contracts between the Premier League and the EFL. In order to discourage Championship clubs from gambling recklessly on promotion, the parachute payments system would be abolished in favour of the 25 per cent share of Premier League revenue being shared more equitably among EFL clubs.

Under proposals for the new model of distribution of television revenue in the Premier League, Fenway, the driving force behind the document, insist there would be no greater share for the top six. Their stated aim is to eliminate the huge gap in earnings between Premier League and EFL clubs while in return having a greater control of the decisions made by the Premier League.

The document says: “A reset of the economics and governance of the English football pyramid is long overdue”.

The proposals also rewrite the Premier League’s 20-club democracy in favour of placing huge power in the hands of the nine clubs with the longest continual stay in the division. As things stand that is the big six, as well as Everton, Southampton and West Ham. Those nine clubs afforded “long-term shareholder status” would have unprecedented power, with the votes of just six of them required to make sweeping changes. These clubs would even be able to veto a new owner taking over a rival club.

The power would move into the hands of the nine clubs with the longest continual stay in the division - which includes West Ham CREDIT: Getty Images
In an exclusive interview with The Daily Telegraph, Parry said that he had the support of many of his 72 members, many currently facing financial ruin, to go ahead with the plan. He said: “What do we do? Leave it exactly as it is and allow the smaller clubs to wither? Or do we do something about it? And you can’t do something about it without something changing. And the view of our clubs is if the [big] six get some benefits but the 72 also do, we are up for it.”

He accepted there would be opposition from the Premier League clubs outside the big six who would see it as detrimental to their financial prospects with less money and two fewer places in the top flight.

“It is definitely going to be challenging and it is an enormous change so that won’t be without some pain,” Parry said: “Do I genuinely think it’s for the greater good of the game as a whole? Absolutely. And if the [big] six are deriving some benefit then why shouldn’t they. Why wouldn’t they put their names to this otherwise?”

The proposals include:

£250 million immediately to the EFL to compensate its clubs for lost matchday revenue, deducted from future television revenue earnings and financed by a loan taken out by the Premier League
Special status for the nine longest serving clubs – and the vote of only six of those “long-term shareholders” required to make major changes, including amending rules and regulations, agreeing contracts, removal of the chief executive, and a wide-ranging veto including on club ownership
Premier League to go to 18 clubs from 20
£100 million one-off gift to the FA to cover its coronavirus losses, the non-league game, the women’s game, the grassroots
8.5 per cent of annual net Premier League revenue to go on operating costs and “good causes” including the FA
From the remainder, 25 per cent of all combined Premier League and Football League revenues to go to the EFL clubs
Six per cent of Premier League gross revenues to pay for stadium improvements across the top four divisions, calculated at £100 per seat
New rules for the distribution of Premier League television income, overseas and domestic, including proposals that base one portion on performance over three years in the league
The abolition of the League Cup and the Community Shield
24 clubs each in the Championship, League One and League Two reducing the professional game overall from 92 clubs to 90
A women's professional league independent of the Premier League or the FA
Two sides automatically relegated from the Premier League every season and the top two Championship teams promoted. The 16th place Premier League club in a play-off tournament with the Championship’s third, fourth and fifth placed teams.
Financial fair play regulations in line with Uefa, and full access for Premier League executive to club accounts
A fan charter including capping of away tickets at £20, away travel subsidised, a focus on a return to safe standing, a minimum away allocation of eight per cent capacity
Later Premier League start in August to give greater scope for pre-season friendlies, and requirement for all clubs to compete once every five years in a summer Premier League tournament
Huge changes to loan system allowing clubs to have 15 players out on loan domestically at any one time and up to four at a single club in England

[randomclaret2]

Good to see West Ham potentially being given a bigger say in the running of the game that their tremendously succesful history fully merits.

[Stevie2112]

Some of the proposals are fine,others as random says are just ludicrous.

[GodIsADeeJay81]

I'm surprised they didn't include Leeds, maybe at the end of the season if they avoid relegation.

[TVC15]

Might explain why Dyche was against the proposal of helping out the lower leagues. Maybe he knew about the rest of the proposals.
Any truth in this and it’s the beginning of the end or the end of the beginning !

[Royboyclaret]

Radical changes, indeed, but frankly no great surprise. This has been coming for some time.

Crazy as it sounds we are not that far outside the "big nine" as some people might think. Certainly ahead of the likes of Villa, Fulham, Brighton, Leeds, Newcastle, Sheff Utd, West Brom & Wolves.

[Goalposts]

What’s needed is a govt oversight to put the prem in its place with the integrity of the pyramid structure as the number 1 priority.

If the big six under this proposal wanted to play 10 games a season in Asia the states are were ever they want they can,

It’s self interest of the highest order

[AndrewJB]

It’s just the franchisation of football. As soon as Liverpool or Man Utd won fans outside of the country, they ceased to belong solely to the places they were founded in. Contrast that approach with the thoughts of Arsène Wenger:

https://www.theguardian.com/football/20 ... r-football

[claretblue]

https://www.bbc.co.uk/sport/football/54499998

[Chester Perry]

No surprise that the American owners are behind this plan - read the Vysyble blog piece I posted earlier in the week (it is something they have been predicting for a while) - also interesting to note that 18 teams was the original number in the Alex Flynn plan (that became the Premier League) from the early 80's.

The cash distribution to the EFL is also close to what the Premier League started with in 1992 and shared negotiation of EFL and Premier League rights is what the EFL turned down in around 1997

On the subject of American owners and Alex Flynn plans, there has been significant American investment in the Italian and French Leagues to, don't be surprised to see the post 2024 UEFA competition's coming under greater pressure from the ECA, into more of a League format (for qualification) at the Top end (Champions League) which will be closer to the Alex Flynn concept from the late 80's

I will also add the sop to Everton, West Ham and Southampton is all about getting votes or at least not getting out-voted by the necessary 14 votes for the big 6.

[Chester Perry]

The Telegraph with a section highlighting the key elements of project "Big Picture"

Project Big Picture: The key proposals of Premier League overhaul revealed
JEREMY WILSON OCTOBER 11, 2020
Rescue Fund
An immediate rescue fund of £350,000,000 to the English Football League and Football Association for lost revenues of 2019/20 and 2020/21

For the EFL:

£50,000,000 to cover 2019/20 EFL matchday losses;

Up to £200,000,000 available to cover 2020/21 EFL matchday losses;

Money will be advanced to the EFL from increased future revenues.

For the FA:

£100,000,000 in grants, made up of £55,000,000 to cover operational losses, £25,000,000 for clubs below the EFL, £10,000,000 for the Women’s Super League and Championship, £10,000,000 for grassroots

Funds to be made available by the Premier League through loans guaranteed by the clubs.

Infrastructure Plan
Infrastructure funding of 6% of Premier League gross revenues to be distributed annually to the top four divisions.

Each club will receive £100 per seat annually.

Infrastructure funding can only be used for stadia and fan experiences.

Fan Charter
A cap of £20 on Premier League away ticketing (adjusted every 3 years for inflation)

Subsidised Premier League away travel

Safe-standing sections at the discretion of each club, subject to government permission.

Away sections must provide at least 3,000 or 8% of capacity, whichever is higher.

Annual Good Causes
An increase of 66% in annual contributions to good causes in England.

A total of 5% of Premier League gross income to be contributed annually to good causes and grassroots football, to include focus on combatting racism and discrimination.

Redistribution of Media & Sponsorship Revenues (three possible options)
Option A: 50% equal, 25% current-year merit, 25% previous 3-year merit

A greater emphasis will be placed on merit in both the Premier League and the Championship with half of payments reflecting positions over the past four years.

Option B: Current Premier League distribution scheme (50% equal, 25% by merit and 25% by facility fees) but newly promoted clubs must holdback £25m of first two years in the Premier League to mitigate risk of relegation.

Option C: Current Premier League distribution scheme, but newly promoted clubs receive 25% of their allocated Facility Fees for first 3 years in league.

For all above options:
Excluding parachute payments and including new infrastructure payments, solidarity from the Premier League to the English Football League would increase from 4% to 25%.

Premier League and English Football League domestic and international media rights will be collectively sold by the Premier League.

Compensation payments to The EFL and FA, infrastructure monies and related borrowings are deducted prior to determination of distributable revenues.

Pyramid structure
The Premier League, originally formed to house 18 clubs,would be reduced from 20 to 18 clubs.

This would free up the calendar and, with fewer teams and an end to parachute payments, provide additional resources to the EFL.

Reduction from 38 to 34 rounds of matches will also aid the national team.

Championships, League One and League Two to all be made up of 24 clubs

Promotion and relegation
Premier League relegation: At least two clubs automatically relegated annually

Championship promotion: 1st and 2nd automatically promoted.

Club finishing 16th in the Premier League to join four-team Championship play-off tournament for final Premier League place, with teams who finish 3rd, 4th and 5th in the Championships. Semi-finals would be 16th place Premier League team vs 5th place Championship team and 3rd place Championship team vs 4th place Championship team.

Championship: Relegation of three clubs

League One: Promotion of three clubs. Relegation of four clubs

League Two: Promotion of four clubs. Relegation of four clubs

Club media
All Premier League clubs have the exclusive rights to sell eight live matches a season directly to fans via their own digital platforms in all international territories.

All Premier League and Championship clubs allowed to show limited in-match highlights on their own digital platforms.

No more than 27 games per club will be shown live in UK per season

Saturday 3pm broadcast blackouts remain to help protect EFL attendance

Other competitions
League Cup and Community Shield discontinued;

Establishment of a new independent league for the Women’s professional game, not to be owned by the Premier League or The Football Association;

FA Cup replays retained but there will be no replays in the winter break;

Premier League begins later in August and pre-season friendlies extended;

No more than two weeks between the end of the Premier League and the Champions League final;

Premier League clubs must participate at least once every five years in the Premier League summer tournament.

Other structural changes
Elite Player Performance Plan funding is included in the revenue received by EFL clubs;

Clubs in League One and below are no longer required to have an academy;

Clubs permitted to have up to 15 players out on loan domestically at any time, including up to four in a single English club. Introduction of one month loans for players under 23, an ability to recall loanees in the event of managerial change, incentivise loanee clubs through payments based on future performance or sale of loaned players;

Remove the scholarship clause permitting players to terminate at any stage;

No restrictions on loans in;

Player contracts: Lump sums permitted to be payable from the start of employment. Force majeure provisions to be added to protect against clubs' insolvency.

Cost Controls & Related Party Income
Financial Fair Play rules that align with Uefa to ensure English clubs are not at a disadvantage in Europe;

A £50 million cap per annum on all related party transactions and a more stringent ‘related party’ definition;

Premier League executive provided with full access to clubs accounting information to investigate cost control

A joint Premier League and Championship body will monitor cost controls.

The English Football League will introduce hard salary caps.

Governance
All material matters relating to the business of the Premier League will require shareholder approval, except that the Board will decide whether to approve a new owner;

All votes will require more than two-thirds majority to be approved;

All other votes for the operation of the Premier League will be one-club, one-vote except those provided for under ‘Special Voting Rights’

Special Voting Rights
Each of the nine clubs who, at any time of determination, have been members of the Premier League continuously for more seasons than other clubs will be considered a ‘Long-Term Shareholder’.

Two-thirds of the long-term shareholders can cause to be adopted without approval from the other clubs:

i) the election or removal of the CEO and/or a member of the board;

ii) amendments to cost control rules and regulations;

iii) contracts for the sale of league broadcasting and media rights

Two-thirds of the long-term shareholders can prevent from being adopted resolutions to:

i) change the distribution rights of the sponsorship, commercial and broadcasting rights sold

centrally;

ii) change the distribution to clubs from other PL centralised rights or assets

c) alter in a material way the nature of the competition

Two-thirds of the long-term shareholders can veto the Premier League board’s approval of a proposed new owner.

[Chester Perry]

The Telegraph with an interview with EFL Chair Rick Parry talking about project Big Picture - It was Parry (then Chief Exec at the Premier League) who offered to negotiate broadcast deals for the EFL in the late 90's

Rick Parry exclusive interview: 'New proposals will finally bridge financial gap between Premier League and Championship'
SAM WALLACE OCTOBER 11, 2020

He was the chief executive of the Premier League when its breakaway from the Football League reshaped English football in the early 1990s, and now Rick Parry is adamant that fundamental change is necessary again to save the professional game gripped by the coronavirus crisis.

Speaking exclusively to The Telegraph, Parry, now chairman of the Football League (EFL), said that new changes proposed in a radical document authored and endorsed Liverpool and Manchester United were “as big as the formation of the Premier League”.

The proposals would, Parry said, finally bridge the financial gap between the Premier League and the Championship and discourage reckless spending by clubs seeking promotion. He believes the proposals will also save the EFL from the looming financial oblivion that is being hastened by the Covid crisis.

On the other side of the fence now from the Premier League, Parry has been working on a plan with Liverpool and United for the last three years - even before he took up his role at the EFL. His ambition is to close what he sees as the “unbridgeable gap” between the Premier League and the EFL but he also knows that in order to do so concessions will have to be offered to the game’s most powerful clubs.

A former chief executive of Liverpool, Parry says that his 72 EFL clubs will only have a future under these new plans and that many of them who have been sounded out support them wholeheartedly.

The details, revealed today by The Telegraph, are startling. A £250 million bailout of the EFL and 25 per cent of all annual Premier League future revenues paid to the EFL. A £100 million one-off gift to the Football Association. A reduction of the number of top-flight clubs from 20 to 18. Sweeping changes to the governance of the Premier League that would see power concentrated in the longest-serving, and biggest clubs. Potentially the end of the League Cup. Changes to the three-up, three down promotion and relegation structure.

Parry said that the changes were crucial for the long-term health of the professional game in England and would have been so even without the pandemic that has prevented clubs from having paying fans in stadiums. He has the backing of the owners of both Liverpool and United. Parry will be the public face of the new proposals that will face fierce competition from many quarters – especially the Premier League itself and the 14 clubs outside the so-called big six.

For United and Liverpool, the pay-off is not a greater share of the revenue from the Premier League’s television deal – they are insistent that will not happen. Instead they want the power, along with the other members of the elite - Manchester City, Chelsea, Arsenal and Tottenham Hotspur – to shape the rules of the league and also to have more matchdays to compete in a potentially expanded Champions League.

Under the new rules the nine longest-serving clubs in the division would have huge powers. With just a two-thirds majority, they could remove the Premier League chief executive, change regulations governing cost controls and approve television rights contracts. They could change the distribution model of sponsorship and commercial rights and even the rules of the competition. Remarkably they would also be able to block new owners from buying clubs.

Parry said: “The fact that our two greatest clubs are showing leadership at a time when the game is crying out for it is fantastic. For me that’s a great part of the story. We should be looking at our great clubs at times like this and they should be stepping up to the plate. They are. Clearly I have had an input because all of this will come as something as a surprise to our clubs [in the EFL]. I am hoping they will be receptive but it is subject to their approval.”

“For me this addresses the three biggest challenges the EFL faces. This started pre-Covid – it addressed the gulf between top and bottom and the long-term survival of our smaller clubs. You cannot do this without a major rethink. It is as big as the formation of the Premier League. It is a coming-together and clearly it’s a great story for all of our 72 [EFL] clubs.”

On the question of what leverage the likes of Liverpool and United would have to force change, Parry said they would be “bitterly disappointed” if the proposals were rejected. He maintained that the new proposals had to be implemented swiftly to save those EFL clubs who were on the financial precipice without gate receipts. He added that the “toing and froing and nickel and dimeing” with the Premier League had not moved the EFL clubs any closer to the bailout they needed.

Parry said: “They [Liverpool and United] are not making threats about European super leagues as far as I know. In the event it doesn’t happen and they are bitterly disappointed then as to what might then happen anybody can speculate. At the moment it is presented for what it is a really genuinely bold plan for the future of English football.

“Yes, there are bits that people won’t like. All your points about the 14 [other clubs] and about competitive balance are absolutely valid. What do we do? Leave it exactly as it is and allow the smaller clubs to wither? Recognise we have an enormous gap, recognise we have a structure that depends [in the EFL] on owner funding? Or do we do something about it? And you can’t do something about it without something changing. And the view of our clubs is if the [big] six get some benefits but the 72 also do, then we are up for it.”

Parry said that the proposals, chiefly authored by Liverpool’s American ownership group Fenway Sports, based in Boston, were a work in progress. They are already on their 17th draft. He said that as things stand the League Cup, a cornerstone of the EFL, will be abolished but that there had been some discussion about keeping it – albeit without the participation of clubs in Europe.

The likelihood is that there will be huge changes by Uefa or others to the Champions League and Europa League after 2024 when current broadcast contracts expire. A radical expansion is being pushed by leading European clubs, led by the Juventus chairman Andrea Agnelli, and the Premier League’s top clubs want more matchdays free for greater participation in Europe.

Parry said: “Who knows what changes will be to European competition after 2024 and obviously we are anticipating there will be a major shift in games. We are realistic. We know that things have to give. We know that second domestic cup competitions [League Cup] are an anathema to Uefa. It’s only us and France [who have one] and we know theirs is going. Even in the last few days clubs in the big six are ‘Saying why are you getting rid of it [the League Cup]? If you know clubs in Europe aren’t going to take part then why shouldn’t we keep it?’”

The current model in the EFL is unsustainable, Parry says, with owners funding £380 million from their own pocket in the Championship alone last season, at an average of £16 million a club. That total of owner funding rises to £440 million throughout the totality of the EFL. The parachute payments, he says, which came in under his watch at the Premier League are no longer sustainable and distort competition. Last season parachute payments made up 30 per cent of the total turnover of the Championship despite being paid to just seven clubs.

As EFL chairman, Parry wants an end to the huge difference in earnings between clubs relegated back to the Championship, and the beneficiaries of parachute payments, and those who are already there subsisting on much more meagre resources. “The fact that two seasons ago you have Huddersfield earning £97 million and Leeds £8 million – it’s not bridgeable,” Parry said. “You have heard my views on parachute payments and the massive distorting impact they have [to a Parliamentary select group hearing]. [Owning a Championship club] is the most expensive lottery ticket on the planet. It’s nonsensical. It can’t be right.

“That is not the right structure going forwards. Why do you need parachute payments, you only need them because of the size of the gap [between the Premier League and the Championship] … it’s a total distortion.”

Asked what the reaction of Liverpool and United might be to a rejection of their proposals, Parry said: “I would phrase it diplomatically in that, ‘Isn’t this the thing that’s going to prevent them from doing that [leaving the Premier League] and make it more likely they are committed to the future of English football?’ They have thrown their lot in with a very bold plan to save the English pyramid.”

He said that the era in which all Premier League clubs had one-vote and a majority of 14 was needed for any major rule changes had served the league “brilliantly” but that change was now required. He said Liverpool and Manchester United had been particularly frustrated that the interim rule to allow five substitutes last season had been voted down for this season. Premier League clubs voted 11-9 against it. The rest of Uefa had adopted it permanently.

Parry said: “[Under these proposals] They [big clubs] have more space and the calendar isn’t that cluttered. That is a major benefit for them. There are governance changes in there where they want a greater say. They are frustrated that they get outvoted ... how can Huddersfield have the same vote as Man United? How can Blackpool come up and abuse their one stay in the Premier League [and yet] have the same vote as Man United and Liverpool.”

The big losers will undoubtedly be those clubs outside the big six of the Premier League who will have two fewer places and less revenue. Persuading them will be the greatest challenge facing Parry as well as Liverpool and United. Parry claims that those clubs are in an “arms race” with one another for the same players. He says the 14 spend more collectively on salaries than the total wage bills of either the Bundesliga, Spain’s Liga or Italy’s Serie A.

Asked whether the new proposals would affect the competitiveness of those 14 clubs, Parry argued they could assemble the same squads on a lower budget. “It’s all about the supply of money,” he said. “The money goes to the players and less money will go to the same group of players. I don’t think, for example, Brighton’s squad will be any different. It means Brighton’s players will be earning a bit less.

“I don’t have an issue with our top clubs being successful in Europe and hiring the best players in the world because they generate the revenues. To have them winning Champions Leagues and bringing in the best talent on the planet is best for English football and great for media values. We want them competing with Real Madrid and others. There is no problem at all with that. The challenge we have is the imbalance between frankly the 14 and our clubs [in the EFL].”

Parry said that under the new proposals, the Premier League would continue to run the top division but taking charge of all negotiations for television rights for the Football League as well as its own. From that total, 25 per cent would go to the EFL. Currently the 14 Premier League clubs outside the top six are in receipt of what Parry estimates is 11 times the television revenue of the 24 Championship clubs. They earn around £8 million each with £5 million of that a solidarity payment from the Premier League. “How is that right? How is that fair?” Parry said.

“This isn’t about throwing money at player wages,” he said, “it is absolutely about making all of our clubs sustainable. This is a plan for the next 25 years. A fundamental reset. The thing that has to shine through is the passion that Liverpool and Manchester United have shown for preserving the pyramid and the relevance if Leagues One and League Two is for the most rewarding aspect of all of this.”

[GodIsADeeJay81]

An end to parachute payments and clubs to hold money in the bank incase of relegation?
Interesting.

So I assume as and when West ham get relegated again, for example, another club takes their place in the group of 9?

[Chester Perry]

This article for Forbes.com over 2 years ago outlines much of what Vysyble saw and they put in their 3rd Edition of "we're so Rich it's unbelievable" that year report

Aug 7, 2018,05:53am EDT
Why A Soccer European Super League Is 'Closer Than Ever'
Robert Kidd

This article is more than 2 years old.

Increasing influence from US investors and uncertainty over future TV rights deals mean a breakaway European Super League in soccer is “closer than ever”.

That is the verdict of Vysyble, a consultancy that examines the financial performance of soccer clubs.

“Three of the top 6 clubs by revenue in the Premier League are owned by US individuals and their investment vehicles (Manchester United, Liverpool and Arsenal). All three also own sporting franchises within the US,” Vysyble’s Roger Bell and John Purcell told me.

“The American thread that is increasingly running through the fabric of the English game and into Europe will change the top echelons of European club football (soccer) into a mirror image of what is familiar and what has been proven to work.”

Their comments come as American Stan Kroenke, the 183rd richest person in the world, launches a £1.8 billion ($2.3b) bid to take full control of Arsenal.

Bell and Purcell pointed to growing interest from US investors and media companies in the third edition of their annual report analyzing the financial performance of English Premier League clubs, “We’re So Rich It’s Unbelievable!”. They suggested this would hasten the arrival of an “NFL-style European Super League”, where the continent’s top clubs play each other weekly and teams cannot be relegated.

“It is clear to us that American thinking has generated significant levels of success for franchise owners across a number of sports i.e. NFL, NHL, NBA, MLB, etcetera. Unfortunately, the conservative and cautious European football model has hitherto been less successful,” Bell and Purcell said.

A European Super League has long been talked about as a way for the biggest clubs to maximize television revenue. The Premier League’s “top six” – Manchester United, Manchester City, Liverpool, Tottenham Hotspur, Arsenal and Chelsea – have already successfully argued for a bigger share of international TV rights.

In May, former Arsenal manager Arsene Wenger said the demands of big clubs for an even larger share would make a European Super League “inevitable”, with Premier League matches moving to midweek.

Premier League clubs generated collective revenue of £26.1 billion ($33.8b) between 2009-17, but achieved economic losses of £1.9 billion ($2.4b), according to Vysyble. Their calculations are based on the “economic profit” measure, a more demanding accounting principle preferred by some economists as a way of judging performance.

Based on operating profit (profit before deducting interest and taxed), Premier League clubs made more than £1 billion ($1.3b) from a record £4.5 billion ($5.8b) revenue in 2016/17, according to Deloitte.

“The EPL (English Premier League) retains the gambler’s main enemy – risk. The top six clubs are dominating proceedings in a way that points towards a desire to further reduce their risk, to the point of dispensing with the current EPL altogether,” Bell said.

“In any other industry, such consistent economic losses would result in structural change, mergers and acquisitions. In English football, the process as we see it has already started.”

The next Premier League UK broadcast deal, covering 2019-2022, was sold for £4.4 billion ($5.7b), a drop of £5.1 billion ($6.6b) from the previous deal. Vysyble believe that, as the domestic TV market becomes less lucrative for top clubs, a Super League naturally becomes more appealing.

“What is certain is that we are closer to it happening than ever before,” Bell and Purcell said.

“An NFL-type management structure with caps on player costs and a revamped player transfer system would be an attractive proposition for club owners as a way of increasing revenues and reducing costs and which also provides for a more competitive and evenly matched competition.

“To put it simply, there has to be a better way to make a profit.”

Robert Kidd