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Football Finance

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Buyers Wait For Fire Sale at Liverpool FC

Co-owners of Liverpool Tom Hicks and George Gillett, who were the subject of a fans' demonstration yesterday, have hit a brick wall in their attempts to sell the club. Several potential investors think that it makes better sense to wait for the club to be sold at a knockdown price rather than inject money now. There is a strong feeling that Liverpool are heading towards a financial crisis of their own making that will force the owners to sell.

Top Clubs Fend Off Recession

Premiership clubs have kept their fans and in some cases increased attendances since the start of the season, providing further evidence of football's ability to withstand recession, according to Deloitte. The first six weeks of the season have seen clubs using 91 per cent of their stadium capacity, in line with previous seasons. Blackburn Rovers and Manchester City have increased attendances by 10 per cent.

Hyde United On Edge of Abyss

Blue Square North outfit Hyde United face liquidation tomorrow. On Wednesday Hyde were wound up by the High Court with debts of £123,000. The gates of their Ewen Fields ground have been padlocked shut with the insurance on the stadium now invalid. They have got seven days to appeal the decision but they need to come up with all the money they owe HM Revenue and Customs to get the winding up order rescinded. Hyde United have collected £67,000 and the local council have pledged £23,000 in sponsorship, but when legal costs are added in, that leaves them £35,000 short.

The Credit Crunch and Football

How will the credit crunch hit football? The financial storm is not over yet, but at the moment, within the Premiership at least, the top clubs are sitting pretty, while smaller clubs in less prosperous areas are having to be more innovative in their response. Watching football at the top level either live or on television isn't cheap at a time when incomes are being squeezed. A Sky package costs around £400 a year and season tickets have gone up by almost 800 per cent since the Premiership was set up.

Liverpool FC renegotiates its debt with RBS

Liverpool which owes two banks £350m has renegotiated its debt with the Royal Bank of Scotland. Although Liverpool fans will be relieved that a deal has been done, after fears that the loans might be called in, the sequence of events does nothing to reassure them that the American co-owners, Tom Hicks and George Gillett, have the financial clout the football club needs, particularly to build the Stanley Park stadium.

How will Real Madrid pay for Ronaldo?

Real Madrid have said that they have a €300m transfer budget his summer, but €68m went on Kaká followed by €92m on Ronaldo. It is understood that €100m will come from cash in hand, €100m from additional revenues hopefully generated by new players and €100m from bank loans. The Spanish economy may be in dire straits, with banks not lending to anyone, but they have been prepared to give Real Madrid a four year €300m facility.

Will Banks Take Their Ball Away

Football was a banker's playground for much of the last decade. But have banks now reached a point where they will take their ball away and end the game? Banks have done well out of deals with Russian oligarchs, Middle Eastern royalty and American hedge funds. Banking consortia were put together to fund the takeovers of Manchester United and Liverpool, and the stadium financing for Arsenal.

Serie A The Fastest Growing League

Serie A was the fastest growing league in Europe in the 2007/8 season reveals the latest Deloitte Football Finance report. Total revenue increased by €357m (34 per cent) to €1.4 billion. The change of mix of clubs in Serie A for 2007/08, notably Juventus' return, contributed two-thirds of the increase. The other clubs increased revemues by c. €120m aided by new broadcasting contracts. La Liga recorded a 8 per cent (€112m) growth in revenue to €1.4 billion, placing it joint second with the Bundesliga which grew by 4 per cent (€59m).

Championship Revenues Show Steady Growth

The Championship has resumed its path of steady growth, according to Deloitte's Football Finance report. It has achieved annual revenue growth of almost 12 per cent, while Leagues 1 and 2 have grown at around 10 per cent. 'In almost any other industry this would be lauded as outstanding,' the report notes. Championship revenues increased by about 2 per cent to £336m in 2007/08. Total revenues of the Football League clubs exceeded £500m for the first time.

Premiership Revenue Tops £2 Billion

The publication of the authoritative and comprehensive Deloitte report on football finance is always one of the highlights of the year for those of us interested in the business side of football. We will be providing further analysis from this year's report over the next few days. It shows that the new television rights deal sent the revenue of Premiership clubs soaring to £1.932m in 2007/8 and revenues are estimated to have reaching £2bn in 2008/9.