The Month in Soccer Business: February 2012

A monthly compilation of interesting business news related to soccer. February 2012. Continue reading “The Month in Soccer Business: February 2012”

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The Month in Soccer Business: February 2012

The Month in Soccer Business: November 2011

A monthly compilation of interesting business news related to soccer. November 2011.

Hearts owner Vladimir Romanov open to sale – November 6th

Owner Vladimir Romanov insists he will continue to support Hearts financially but admits he is now open to selling the Edinburgh club.

Players were paid on Friday, following an 18-day wait for overdue wages, and Romanov recently Continue reading “The Month in Soccer Business: November 2011”

The Month in Soccer Business: November 2011

The Week in Soccer Business: August 12, 2011

A weekly compilation of interesting business news related to soccer.

Italian Soccer Clubs Docked Points, 10 Players Banned for Fixing Matches – August 9th

Newly promoted Serie A club Atalanta received a six-point deduction and two of its players were suspended for alleged match-fixing, the Italian soccer federation said on its website

Benevento also received Continue reading “The Week in Soccer Business: August 12, 2011”

The Week in Soccer Business: August 12, 2011

The Numbers: £209,869.42

£209,869.42

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 We are starting a new segment at Footy Finance!  Every Wednesday ‘The Numbers’ will highlight one figure that has relevance for the crossroads of Football/Soccer and Business.

Our number today is £209,869.42.  This is the accrued cost of the ongoing administration proceedings at Portsmouth, as disclosed in the Administrator’s Report to Creditors released last week (1).  The sum applies to the period between February 26 and April 12,  and includes billable hours by the administrator and his firm, supply reimbursements, and travel costs.  Billable hours represent 95% of the sum.  As Portsmouth clearly has not exited administration, the cost continues to grow.

Administration is viewed by many supporters as a way to ‘wipe clear’ a club’s debts and essentially give it a fresh start.  This number should be a stark reminder that there is a large and very real cost of financial instability.  To put the figure in perspective, consider that Portsmouth’s total Matchday Revenues for 2009 (draft figures) were approximately £11.4m, the administration costs currently represent 1.8% of that figure after only 45 days.  Just to re-emphasize again, this money is not building club facilities, paying players, or the cost of pies; it is money going out of the club door just to find someone to buy the club or, if it comes to it, to determine how much that door is worth in a liquidation.

The longer it goes on the smaller the pie gets for everyone, and considering the long list of creditors looking for a slice the pie is already far too small.

The only reason that the cost of administration has been ignored is that they are glossed over as soon as a newly minted millionaire comes in to rescue a club.  All things are forgiven and the cycle begins again.

(1) Administrator’s Report to Creditors – PFC 4/19/2010

The Numbers: £209,869.42

Administration Watch: Pompey Not the Last

Avram Grant was recently quoted on the topic of Portsmouth’s troubles and administration in the Premier League:

“It will not be the last time,” Grant said. “There are other teams in debt. What will they do with them?

“The Premier League need to check their rules about who can buy a football club, because sometimes when you point the finger at someone else, you need to ask what did you did wrong.”

He may be more correct than he knows.  Several clubs look to be in the danger zone, and that financial instability will be doubly compounded should they be relegated.

Those with the best chances of getting hit by the double whammy?  Burnley, Hull, and Wigan. (West Ham has been excluded because their new owners seem to be minted).

Those who look to have staved off relegation this year, but could still use some financial sorting?  Bolton and Blackburn.

Administration Watch: Pompey Not the Last

Administration and Football Clubs

….go together like peas & carrots.

The more you look the more it holds true.   This is Pop has a wonderful summary of football clubs and administration statistics from the last 25 years. My favorite quote:

The problem is that we can’t treat football clubs as other businesses – the emotional bonds mean that some lifelong fan is almost always willing to step in at the last moment and take on the £300,000 tax debt run up by the previous administration rather than let the ‘essence’ of the club die.

Given the number of club blowups (implosions?) it is hard not to come to the conclusion that football clubs are either very poorly run, exploited for personal gain at the expense of the supporters, or simply bad business models.  Surely the truth lies somewhere in a combination of all three forces.

But it brings up a worrying point, the first two (untalented or greedy management) are able to be regulated, the third is not.  Our dilemma then is the recurring theme of this blog, how do we balance business with entertainment?  What is the solution to allowing clubs to have flexibility in their operations but to fail without injuring supporters who have devoted themselves to the cause? When I come up with the solution I will let you know.

Comments? Ideas?

Administration and Football Clubs

Administration Watch: Crystal Palace

It is rumoured that Crystal Palace have gone into Administration.

Looking for more info…

EDIT: Crystal Palace in Administration being reported on SkySportsNews now.

Administration Watch: Crystal Palace