tag:blogger.com,1999:blog-4874869606237835302024-03-16T19:52:32.011+01:00The Swiss RambleThe Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.comBlogger26416tag:blogger.com,1999:blog-487486960623783530.post-68122323783895822912017-01-31T08:13:00.000+01:002017-01-31T08:13:27.975+01:00Chelsea - The Band Wore Blue Shirts<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0UnQWIsFOO6tyVXTQUGgPjamGMNHTUcb5lZwkjziBc3rbS30UiT2rv0YhAvwEemaXctHiW5ZpHqpHxeFiLq1dbk5KGLyAjCZ8VR0bXBLXaDOEVsIkL1AKsYnLy4dgXDwkjyXXG8soBuqD/s1600/Victor+Moses.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0UnQWIsFOO6tyVXTQUGgPjamGMNHTUcb5lZwkjziBc3rbS30UiT2rv0YhAvwEemaXctHiW5ZpHqpHxeFiLq1dbk5KGLyAjCZ8VR0bXBLXaDOEVsIkL1AKsYnLy4dgXDwkjyXXG8soBuqD/s400/Victor+Moses.jpg" width="400" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">This season has seen a return to form for Chelsea following
the appointment of Antonio Conte. The former manager of Italy is famed for his
passion, but also possesses much tactical astuteness, as evidenced by
previously leading Juventus to three consecutive </span><i style="font-family: 'Trebuchet MS', sans-serif;">Serie A</i><span style="font-family: 'Trebuchet MS', sans-serif;"> titles. Under his guidance, Chelsea are currently setting
the pace and look a very good bet for the league title.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This demonstrates just how quickly things can change in
football, as the 2015/16 season was Chelsea’s worst in the Roman Abramovich era
with the club slumping to a disappointing tenth place in the Premier League,
thus failing to qualify for Europe for the first time in 20 years. This
inevitably resulted in the departure of José Mourinho, the self-proclaimed
“special one”, with the reins handed to Guus Hiddink until Conte’s arrival.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This dismal performance was matched off the pitch with the
2015/16 accounts revealing a £70 million pre-tax loss, around £49 million worse
than the previous season’s £21 million deficit.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHez4SpvaZtE3PwKB2lE7OWpfGAde2Qi2zsI9zudypiGhSbHHCZu5Doc65QpgrvMl1Y1Z0GxQdgZvRUmpX_7RzS2H5XYDmgzc91V4CVWMM61jBvN-k43ady1MuwrSJZFA4dW8rwrmZcDpm/s1600/1+Chelsea+P%2526L+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHez4SpvaZtE3PwKB2lE7OWpfGAde2Qi2zsI9zudypiGhSbHHCZu5Doc65QpgrvMl1Y1Z0GxQdgZvRUmpX_7RzS2H5XYDmgzc91V4CVWMM61jBvN-k43ady1MuwrSJZFA4dW8rwrmZcDpm/s640/1+Chelsea+P%2526L+2016.jpg" width="570" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">In fairness, this was predominately due to £75 million of
exceptional expenses, largely £67 million to terminate the Adidas kit supplier
contract in favour of a significantly more lucrative deal with Nike, plus £8
million compensation to Mourinho and his team. Without these exceptionals,
Chelsea would have reported a profit before tax of £5 million.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Revenue rose £15 million (5%) to a record level of £329
million, as commercial income increased by £9 million (8%) to £117 million
following the new shirt sponsorship with Yokohama Tyres.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Broadcasting income was also up £7 million (5%) at £143
million with the higher UEFA deal increasing Champions League distribution by
around £20 million, though this was partly offset by the £12 million reduction
in Premier League TV money due to the lower league finish. Gate receipts fell
slightly by £1 million to £70 million.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij5HPM5FTEDLEYTWKaCvl0UaN6whD6ha9itkLHh2Lu5lx0x3PDqIIqNpO1PnLm6ZnNKebuAmXaqu5_Up54RhOlP9NRKNr62azjdFcp7f7MmCrGlleRatjitdORkYrIRPFW17kKGTCJUw4L/s1600/Diego+Costa+2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij5HPM5FTEDLEYTWKaCvl0UaN6whD6ha9itkLHh2Lu5lx0x3PDqIIqNpO1PnLm6ZnNKebuAmXaqu5_Up54RhOlP9NRKNr62azjdFcp7f7MmCrGlleRatjitdORkYrIRPFW17kKGTCJUw4L/s320/Diego+Costa+2.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"U Got The Look"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In addition, profits on player sales increased by £8 million
to an impressive £49 million, principally due to the sales of Ramires to
Jiangsu Suring, Petr Cech to Arsenal, Mo Salah to Roma, Oriol Romeu to
Southampton and Stipe Perica to Udinese.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In contrast, the wage bill rose by £7 million (3%) to £222
million, while player amortisation also increased £2 million (2%) to £71
million, though other expenses were £11 million lower at £71 million.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It is also worth noting the enormous £29 million loss that
Chelsea made on cash flow hedges, as FX movements dramatically reduced the
value of their forward currency contracts, presumably due to Brexit. This took
their comprehensive loss to £99 million.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">For comparison, Manchester United reported a similar £38
million loss on cash flow hedges, while this was not yet an issue for Arsenal
or Manchester City, whose accounts closed on 31 May (i.e. pre-Brexit).<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmDNuW2k3Gwg2ViF9VtuOC92oRhtc55PDrXNljT9zbz4i5e0MOR5T2RmSm4wipJgMvu_kRRuQGtQYtEVGWc8cLzAGUWO78SfEtCldUN-FkkzbZFGgwHo9Z82pPU_hTQjuYwoNTTjO3DwAi/s1600/2+Chelsea+Profit+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmDNuW2k3Gwg2ViF9VtuOC92oRhtc55PDrXNljT9zbz4i5e0MOR5T2RmSm4wipJgMvu_kRRuQGtQYtEVGWc8cLzAGUWO78SfEtCldUN-FkkzbZFGgwHo9Z82pPU_hTQjuYwoNTTjO3DwAi/s640/2+Chelsea+Profit+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea’s £70 million loss is likely to be the worst
financial performances in England’s top flight in 2015/16. The only other club
to have announced a loss so far is Everton with £24 million.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In contrast, six of the eight Premier League clubs that have
published their accounts to date for last season have reported profits, the
largest being Manchester United £49 million, Manchester City £20 million and Norwich
City £13 million, followed by Arsenal £3 million, Stoke City £2 million and
West Bromwich Albion £1 million. <o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Although football clubs have traditionally lost money, the
increasing TV deals allied with Financial Fair Play (FFP) mean that the Premier
League these days is a largely profitable environment with only six clubs
losing money in 2014/15. This group largely comprised clubs that have been
badly run (Aston Villa, Sunderland and QPR), but also included Manchester
United, Everton and, yes, Chelsea.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6tRyYoEtO-vFbdBKSszswD5ynAWDC1hPnxSrSob1VIikvs1EAhtNMb6V3s8Nc_1D1SGnW0Jg_agecwDjeTGuKS5rJwoPtkQ9yOCTIFHAvY2IAatM5nklvWBak0ODNAtCmbD6PrFuUVzRw/s1600/3+Chelsea+Player+Sales+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6tRyYoEtO-vFbdBKSszswD5ynAWDC1hPnxSrSob1VIikvs1EAhtNMb6V3s8Nc_1D1SGnW0Jg_agecwDjeTGuKS5rJwoPtkQ9yOCTIFHAvY2IAatM5nklvWBak0ODNAtCmbD6PrFuUVzRw/s640/3+Chelsea+Player+Sales+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea’s loss would have been even higher without the
benefit of £49 million profit on player sales, which will certainly be one of
the highest in the Premier League in 2015/16, if not the highest.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Of course, Chelsea are no strangers to making losses in the
Abramovich era, as they have invested substantially to first build a squad
capable of winning trophies and then to keep them at the top of the pile.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipJsKK1uqNgiXdgji5fc_LSdLkPd2RpsS5enUZqgpGvf7ETB3zmITEy1ANJVTMxTTWDCR_u6X2S9puW2w1X5aBkXmSLSoIoLgcBqIKQi1EeZfJCtmOWKhyphenhyphenbSKfER000T7kHM2X7ZzRRaZ5/s1600/4+Chelsea+Profit+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipJsKK1uqNgiXdgji5fc_LSdLkPd2RpsS5enUZqgpGvf7ETB3zmITEy1ANJVTMxTTWDCR_u6X2S9puW2w1X5aBkXmSLSoIoLgcBqIKQi1EeZfJCtmOWKhyphenhyphenbSKfER000T7kHM2X7ZzRRaZ5/s640/4+Chelsea+Profit+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Since the Russian acquired the club in June 2003, it has
reported aggregate losses of £753 million, averaging £58 million a season,
though there has been some improvement since the spectacular £140 million loss
in 2005 with Chelsea posting profits in two of the last five years.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The first profit made under the Abramovich ownership was a
small £1 million surplus in 2012, though this did owe a lot to £18 million
profit arising from the cancellation of preference shares previously owned by
BSkyB, while they were also profitable in 2014.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Chairman Bruce Buck has consistently maintained that the
club’s objective is sustainability: “It has long been our aim for the business
to be stable independent of the team’s results and we continue to reinforce
that.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRpJcLA8BUori98SuInyl29KtIEzoogxQx2dv-F4vC8M1k9MUHXd4nGvCwpeeGCNUiTfutnNx0muRGowXmyniwTCP4YJ7mopufd3IdlQWeBLwGuCHeX47_L8QuuFFN2kk2YnYcQxQDHhQF/s1600/5+Chelsea+Exceptional+Items+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRpJcLA8BUori98SuInyl29KtIEzoogxQx2dv-F4vC8M1k9MUHXd4nGvCwpeeGCNUiTfutnNx0muRGowXmyniwTCP4YJ7mopufd3IdlQWeBLwGuCHeX47_L8QuuFFN2kk2YnYcQxQDHhQF/s640/5+Chelsea+Exceptional+Items+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea’s figures have consistently suffered from so-called
exceptional items, which have increased costs by an amazing £202 million since
2005.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Leading the way are two early terminations of shirt
sponsorship agreements £93 million and money paid as compensation paid to
dismissed managers £69 million, though the list also includes impairment of
player registrations £28 million, tax on image rights £6 million, impairment of
other fixed assets £5 million and loss on disposal of investments £1 million.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">On the bright side, Chelsea appear to be learning from their
mistakes, as the recent pay-off to Mourinho and his coaching team of £8 million
was around a third of the £23 million it cost in 2008.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It is not clear whether the £5 million reportedly paid to
former club doctor Eva Carneiro following an employment tribunal was included
in this year’s accounts or will only be booked next year.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLGhgp0xoQSBzAxiw7xF1xpWHRor3t9QtuPKF3JPueq8PMfjJzPoM9wuCFS0sTcR1kGVGQkS7LSKAyAfLxq_S_wMq3zFJWLt4pzTZS9GKdVYwfbnEq619q4eoC8JwRl4Wp-Tp547i3xOhW/s1600/6+Chelsea+Adj+Profit+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="412" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLGhgp0xoQSBzAxiw7xF1xpWHRor3t9QtuPKF3JPueq8PMfjJzPoM9wuCFS0sTcR1kGVGQkS7LSKAyAfLxq_S_wMq3zFJWLt4pzTZS9GKdVYwfbnEq619q4eoC8JwRl4Wp-Tp547i3xOhW/s640/6+Chelsea+Adj+Profit+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">However, it is profit from player sales that is having an
increasing influence on Chelsea’s figures. In the nine years between 2005 and
2013, Chelsea averaged £13 million profit from selling players, but this has
shot up to an average of £52 million in the three years since then.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Last year included the eye-catching £25 million sale of
Ramires to China, while previous seasons featured some other big money moves:
David Luiz (PSG) £40 million, Juan Mata (Manchester United) £32 million, Romelu
Lukaku (Everton) £28 million, André Schürrle (Wolfsburg) £22 million and Kevin
De Bruyne (Wolfsburg) £17 million.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It is notable how much more money Chelsea make from player
sales than their direct rivals, e.g. over the last three seasons Chelsea earned
£155 million, compared to just £38 million at Arsenal, £35 million at
Manchester City and £21 million at Manchester United. Although Tottenham,
Liverpool and Southampton also generate substantial sums from transfers, this
is more understandable, given their revenue shortfalls.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXhc1z3dU1WhikEP6oALzRVeIUh6OV8k9Bol6ztrzByeJvubdekxMrEpWpjDIWNvSlni4toNZokEy9dzH3B4s_YqFu_wo_SRnMgwVSoOoF6k6t8U2CL6FBs2r5kHQjuycoTMd9AeNafOTJ/s1600/Eden+Hazard.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXhc1z3dU1WhikEP6oALzRVeIUh6OV8k9Bol6ztrzByeJvubdekxMrEpWpjDIWNvSlni4toNZokEy9dzH3B4s_YqFu_wo_SRnMgwVSoOoF6k6t8U2CL6FBs2r5kHQjuycoTMd9AeNafOTJ/s320/Eden+Hazard.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Put on your dancing shoes"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Next year’s accounts will be more of the same following the £60
million sale of Oscar to Shanghai SIPG. This trend of players making lucrative
moves to China has clearly benefited the club financially, but it has not met
with Conte’s full approval, “We are talking about an amount of money which is
not right”, though fans of other clubs could be forgiven for thinking that this
is a bit rich, coming from a Chelsea manager.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Indeed, led by Marina Granovskaia, one of Abramovich’s
closest associates, Chelsea have perfected a model whereby they consistently
make money from player sales. As well as the big ticket deals already
mentioned, Chelsea have also made extensive use of the loan system with an
incredible 35 players currently listed as being out on loan (though I may well have lost count).<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Although the club argues that this strategy is simply aimed
at giving players experience, it is difficult not to believe that this is
primarily a money making exercise. Given that very few of these players have
succeeded in establishing themselves in Chelsea’s first team, it would appear
that the objective is to develop players for future (profitable) sales, while
effectively placing them in the shop window.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Oh, sit down, sit down next to me"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The most recent example is Patrick Bamford, signed for £1.5
million in 2012, and sold to Middlesbrough this month for a fee of £6 million,
potentially rising to £10 million with add-ons, even though he never appeared
for Chelsea’s first team. During the last five years the England U21
international has been loaned out no fewer than six times.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">From a financial perspective, this is a smart move that has
helped Chelsea meet the Financial Fair Play (FFP) regulations, though the moral
counterpoint was delivered by FIFA President Gianni Infantino, “It doesn’t feel
right for a club to just hoard the best young players and then to park them
left and right. It’s not good for the development of the player.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">However, even though some might complain that this policy smacks
of treating players like commodities (“buy low, sell high”), not to mention
ensuring that rival clubs cannot access promising talent, there are (currently)
no rules against it and other clubs, such as Udinese, have operated in a
similar way for many years without sanctions.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoph-jSnJALnN_4n8IjTVA322Gdj0fFn73HnonMmGKOD-qMRTvgp1iWKfq84GdaYf8lwkSdgdSUeKpjPv2WJKmDOVvLXZPH1X0KcTiFrV_BZsh7RRx_AJROnVwWFow_N1W5ZxGf6qxBVzH/s1600/7+Chelsea+EBITDA+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoph-jSnJALnN_4n8IjTVA322Gdj0fFn73HnonMmGKOD-qMRTvgp1iWKfq84GdaYf8lwkSdgdSUeKpjPv2WJKmDOVvLXZPH1X0KcTiFrV_BZsh7RRx_AJROnVwWFow_N1W5ZxGf6qxBVzH/s640/7+Chelsea+EBITDA+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">To get an idea of underlying profitability and how much cash
is generated, football clubs often look at EBITDA (Earnings Before Interest,
Depreciation and Amortisation), as this metric strips out player trading and
non-cash items.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">In Chelsea’s case this highlights their recent improvement,
as it is has been positive for the last four years, rising from £16 million in
2015 to £35 million in 2016, though still lower than the £51 million peak in
2014.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDulq550FNKBb2eCM_oObqYu5xrXIZ2R75ZN7BLYPUrFM-jpYxP0hg3fHw0SJxm6uv3ozbKrZ_spsvu3QuR3jWeHVS-xv91GJlQj9DmjQZeKcJ4PLPXovZTItC6oP5CU_e6BZcFmXnaxZj/s1600/8+Chelsea+EBITDA+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDulq550FNKBb2eCM_oObqYu5xrXIZ2R75ZN7BLYPUrFM-jpYxP0hg3fHw0SJxm6uv3ozbKrZ_spsvu3QuR3jWeHVS-xv91GJlQj9DmjQZeKcJ4PLPXovZTItC6oP5CU_e6BZcFmXnaxZj/s640/8+Chelsea+EBITDA+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">However, to place that into context, this is way behind
Manchester United £192 million, Manchester City £109 million and Arsenal £82
million. United’s amazing ability to generate cash means that their EBITDA (“cash
profit”) is more than five times as much as Chelsea and helps explain the
Blues’ focus on player sales.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_-bjnAFCMwV3o4-c6jte1Un71z_XQrc724uRd3nnuCFaN8unYV-F-wREOFVS2ZXVCKfNJxTynMk2QdxPJD-cJvEAUW3-rClKSCDjBuetbxxZOUCoDr0zdFyazZarR7ZpD35rwWuwP3ZJx/s1600/9+Chelsea+Revenue+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="444" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_-bjnAFCMwV3o4-c6jte1Un71z_XQrc724uRd3nnuCFaN8unYV-F-wREOFVS2ZXVCKfNJxTynMk2QdxPJD-cJvEAUW3-rClKSCDjBuetbxxZOUCoDr0zdFyazZarR7ZpD35rwWuwP3ZJx/s640/9+Chelsea+Revenue+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea have increased their revenue by 29% (£73 million) in
the last three years from £256 million to £329 million. The growth is split
pretty evenly between broadcasting income, which has increased 36% (£38
million) from £105 million to £143 million, thanks to new TV deals in both the
Premier League and the Champions League; and commercial income, which has
nearly gone up by nearly 50% from £80 million to £117 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Match day receipts have actually fallen slightly from £71
million to £70 million, which underlines why Chelsea are planning to expand
their stadium.<o:p></o:p></span></div>
<div class="MsoNormal">
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2IU8AQBBY8XUe5vgK0hBxg2MhebvAlNqeXbec6LQUk1kHyTly-FDvzDEK_rKT3kheLTZ9YltayrLVFnjkW21Sdg-4pEmxDMMeinGSez0pvvv83CR-HQ9dDgk_ucxU2kC-NMDYfSQAlXdL/s1600/10+Chelsea+Revenue+Growth+Top+5+Clubs+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="560" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2IU8AQBBY8XUe5vgK0hBxg2MhebvAlNqeXbec6LQUk1kHyTly-FDvzDEK_rKT3kheLTZ9YltayrLVFnjkW21Sdg-4pEmxDMMeinGSez0pvvv83CR-HQ9dDgk_ucxU2kC-NMDYfSQAlXdL/s640/10+Chelsea+Revenue+Growth+Top+5+Clubs+2016.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Although Chelsea’s £15 million (5%) revenue growth in
2015/16 took their revenue to a record level, it was not that good compared to
their major rivals. Admittedly, Manchester United’s £120 million (30%) growth
was influenced by their return to the Champions League, but the growth at
Manchester City £40 million (11%) and Arsenal £21 million (6%) was also higher
than Chelsea.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">That said, Chelsea’s revenue should grow in 2016/17, despite
a £60 million reduction from the lack of European competition, as they will
benefit from the new Premier League TV deal including a higher league position
(+£70 million) plus a new commercial deal with Carabao (+£10 million). That
should mean a net £20 million increase to around £350 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Furthermore, 2017/18 will be boosted by the £30 million
increment from the Nike kit deal. On the relatively safe assumption that Chelsea
qualify for the Champions League, the 2017/18 figures should be close to £450
million.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaClJxrvIhUbki2UfDGt0VNuia7_s3BFDLfyUauZ5FfRu4eUSZ3pGI0Sb8vEvl6vnx_9t2J2Pu2QmrY8PS75bMKEwirsSNLtjwShwo-qC0YTQ9lvF7Vo3qDEjbMWtCZ6KyienVkGf8s2mT/s1600/11+Chelsea+Revenue+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaClJxrvIhUbki2UfDGt0VNuia7_s3BFDLfyUauZ5FfRu4eUSZ3pGI0Sb8vEvl6vnx_9t2J2Pu2QmrY8PS75bMKEwirsSNLtjwShwo-qC0YTQ9lvF7Vo3qDEjbMWtCZ6KyienVkGf8s2mT/s640/11+Chelsea+Revenue+League+2016.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">As it stands, Chelsea’s revenue of £329 million was the
fourth highest in England in 2015/16, though nearly £200 million lower than United’s
£515 million. They were also a fair way behind Manchester City £392 million,
but quite close to Arsenal £351 million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Liverpool were within striking distance at £302 million, but
there was a significant gap to the remaining Premier League clubs: Tottenham
Hotspur £209 million, West Ham £144 million and Leicester City £129 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqlLqOV8qEJQSHSt0NrLabYKUT2obPsAxdiR2lVJPwYxZKUfSHQlBZF6M-u92eAYc8QOtsoJj0UmQ0BEpVTf4moa1vB4Wv-6wirf_yxLOIdAaq4w10_AlrIxQ7Qhq8XjT7Mpc2rJEIDtL6/s1600/12+Chelsea+Money+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="514" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqlLqOV8qEJQSHSt0NrLabYKUT2obPsAxdiR2lVJPwYxZKUfSHQlBZF6M-u92eAYc8QOtsoJj0UmQ0BEpVTf4moa1vB4Wv-6wirf_yxLOIdAaq4w10_AlrIxQ7Qhq8XjT7Mpc2rJEIDtL6/s640/12+Chelsea+Money+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea remained in eighth place in the Deloitte 2016 Money
League, only behind Manchester United, Real Madrid, Barcelona, Bayern Munich,
Manchester City, Paris Saint-Germain and Arsenal. This is obviously excellent,
but they face three major challenges here (in common with other English clubs):</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="font-family: 'Trebuchet MS', sans-serif;">The leading clubs continue to grow their revenue apace,
e.g. Real Madrid and Barcelona have reportedly agreed massive new kit supplier
deals worth north of £100 million a season.</span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif;">The weakening of the Pound since the Brexit vote means
that continental clubs will earn much more in Sterling terms, e.g. the latest
Money League was converted at €1.3371, while the current rate has slumped to
around €1.17. At that rate, the €620 million earned by Real Madrid and
Barcelona would be equivalent to £530 million, taking them above Manchester
United.</span></li>
<li><span style="font-family: 'Trebuchet MS', sans-serif;">The Money League highlights the increasingly competitive
nature of England’s top flight with no fewer than 12 Premier League clubs in
the top 30 – even before the lucrative new TV deal.</span></li>
</ul>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-CgVwUqhCbuuGF3FpyEZ4ty60tnldhvHcVwhcJQKzj6xmhrfRiqsG0T_gKx1cTl2p-3L7sRV86gtAJwdVY2vMVhutVQ6bCTbEMk7jyoyYNWPsg1pBhnnozeGGgEHcZKYYEw6n5o1hFNhD/s1600/13+Chelsea+Money+League+Chelsea+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-CgVwUqhCbuuGF3FpyEZ4ty60tnldhvHcVwhcJQKzj6xmhrfRiqsG0T_gKx1cTl2p-3L7sRV86gtAJwdVY2vMVhutVQ6bCTbEMk7jyoyYNWPsg1pBhnnozeGGgEHcZKYYEw6n5o1hFNhD/s640/13+Chelsea+Money+League+Chelsea+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Eagle-eyed observers will have noticed that the Money League
figure for Chelsea’s revenue of £335 million is £6 million higher than the £329
million reported by the football club. This is because they have used the
figure from the holding company, Fordstam Limited.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Although this company has not yet published its 2016
accounts, the £319.5 million reported in 2015 is exactly the same as the figure
in last year’s Money League. The difference is entirely in commercial income.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghFa8G_lkpx0h8IkvBkemOpNtM74biQLHhGwXzeOmVfTo-ub-JWL6Dt447qY75ulKd4Yxywy-ztHc_-AkgrkU5RF4luhlBinAthxn8gpsPgQUUvroMp967WaLNpjjN3HSck9EbDGO9LIRJ/s1600/14+Chelsea+Money+League+Top+10+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="570" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghFa8G_lkpx0h8IkvBkemOpNtM74biQLHhGwXzeOmVfTo-ub-JWL6Dt447qY75ulKd4Yxywy-ztHc_-AkgrkU5RF4luhlBinAthxn8gpsPgQUUvroMp967WaLNpjjN3HSck9EbDGO9LIRJ/s640/14+Chelsea+Money+League+Top+10+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">If we compare Chelsea’s revenue to that of the other nine
clubs in the Money League top ten, we can immediately see where their largest
problem lies, namely commercial income, where Chelsea are substantially lower
than their rivals that have traditionally been more successful in monetising
their brand: Manchester United £150 million, Bayern Munich £134 million (£244
million minus £113 million), Real Madrid £80 million and Barcelona £99 million.
The £106 million shortfall against PSG is largely due to the French club’s
“innovative” agreement with the Qatar Tourist Authority.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">On the plus side, Chelsea look to be fine on broadcasting
and not too bad on match day income, though there is room for improvement in
the latter category.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdEm7klTTVNThdb9YZc8PBNbuqIeUQ7xkLPOPLvBdv-M68tyK2K5ZEDbcGJaE8UGm2U9RGu3L9px5v-TRSOGOGxcCr2IRYpMLMY3eVku5ftTWkXrisOMdaAn8VzrqrPzgNETo2JMYx5wo_/s1600/15+Chelsea+Revenue+Mix+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="460" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdEm7klTTVNThdb9YZc8PBNbuqIeUQ7xkLPOPLvBdv-M68tyK2K5ZEDbcGJaE8UGm2U9RGu3L9px5v-TRSOGOGxcCr2IRYpMLMY3eVku5ftTWkXrisOMdaAn8VzrqrPzgNETo2JMYx5wo_/s640/15+Chelsea+Revenue+Mix+2016.jpg" width="640" /></a></div>
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<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">The growth in broadcasting income in 2015/16 means that this
now accounts for 43% of Chelsea’s total revenue, ahead of commercial income
35%, which has risen from 26% in 2009. As a consequence, the importance of match
day income has diminished from 36% to only 21% in the same period, once again
reiterating the rationale for the planned stadium expansion.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Chelsea’s share of the Premier League television money
dropped £12 million from £99 million to £87 million in 2015/16, largely due to
finishing tenth compared to winning the title the previous season.
Nevertheless, they earned more three clubs finishing above them (Southampton,
West Ham and Stoke City), as the smaller merit payment was more than offset by
higher facility fees for having more games broadcast live.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9Le5o08SA3lYORkVzG5NKVYzXBVPuD-pL8cfLQlwsmVAFiO9EGEGTrK9nTGO7aYd7c_G3DXgKu2_DNVKuxoWiUYrbPhOWOLz_V9RbcKim4cwXBJLXTDpgPd9C0b_HQ3RwYq59_t51jtxA/s1600/16+Chelsea+TV+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="464" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9Le5o08SA3lYORkVzG5NKVYzXBVPuD-pL8cfLQlwsmVAFiO9EGEGTrK9nTGO7aYd7c_G3DXgKu2_DNVKuxoWiUYrbPhOWOLz_V9RbcKim4cwXBJLXTDpgPd9C0b_HQ3RwYq59_t51jtxA/s640/16+Chelsea+TV+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">The mega Premier League TV deal in 2016/17 will deliver even
more money. Based on the contracted 70% increase in the domestic deal and an
estimated 40% increase in the overseas deals, the top four clubs will receive
£150-160 million, while even the bottom club will trouser around £100 million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Although this is clearly great news for Premier League
clubs, it is somewhat of a double-edged sword for the elite, as it makes it
more difficult (or at the very least more expensive) to persuade the mid-tier
clubs to sell their talent, thus increasing competition<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsLTfwnIzHGVdlBbwePTutYyO_jt8hOR_btKXyJuTPT4ngxKS7PJ-d0HCYqYHxySe8r-1NOZXugUExsRCz2_QU1OugT9XCLho06PhL2GlUcAcd5UZD3wfvgaLckNoyOYkOKidNi1EZD39u/s1600/17+Chelsea+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="622" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsLTfwnIzHGVdlBbwePTutYyO_jt8hOR_btKXyJuTPT4ngxKS7PJ-d0HCYqYHxySe8r-1NOZXugUExsRCz2_QU1OugT9XCLho06PhL2GlUcAcd5UZD3wfvgaLckNoyOYkOKidNi1EZD39u/s640/17+Chelsea+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">The other main element of broadcasting revenue is European
competition with Chelsea receiving €69 million for reaching the last 16 in the
Champions League, which was €30 million more than reaching the same stage the
previous season, partly influenced by the increase in the 2016 to 2018 cycle,
namely higher prize money plus significant growth in the TV (market) pool,
thanks to BT Sports paying more than Sky/ITV for live games.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">In fact, Chelsea actually earned the sixth highest in the
Champions League, more than semi-finalists Bayern Munich, because of how the TV
(market) pool works. Each country’s share of the market pool is based on the
value of the national TV deal, which means that English clubs have prospered
from the huge BT Sports deal, though it should be noted that around half of
this goes into the central pot, so they do not receive the full benefit.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj81eM7zWEi3AFGauTJDaX3phdF_5lmD7NcvN1FFGI3GgWd6dojPTQ94yfmZ9EVBVFYHr7IlhtFFXuu2Yn8SkgwielGvUnBuBcb_oK9pOjfSuJni8w3H_BIEqlgGPhjDp20V3rjNRa-L_sh/s1600/18+Chelsea+Market+Pool+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj81eM7zWEi3AFGauTJDaX3phdF_5lmD7NcvN1FFGI3GgWd6dojPTQ94yfmZ9EVBVFYHr7IlhtFFXuu2Yn8SkgwielGvUnBuBcb_oK9pOjfSuJni8w3H_BIEqlgGPhjDp20V3rjNRa-L_sh/s640/18+Chelsea+Market+Pool+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Half of the TV pool then depends on the position that a club
finished in the previous season’s domestic league: the team finishing first
receives 40%, the team finishing second 30%, third 20% and fourth 10%. As
Chelsea won the title in 2014/15, compared to finishing third the year before,
they received a higher percentage in 2015/16 for this element.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The other half of the TV pool depends on a club’s progress
in the current season’s Champions League, which is calculated based on the
number of games played (starting from the group stages). In this way, Manchester
City reaching the semi-final last season adversely impacted Chelsea’s share.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiMXtU3NATT-4zlsVNJKFfkmmt-R9NeB_QIUdyzGwpBpT9n4yyMGZCYxnVIO33ZLH_1vSOaxIIpMhnfec4xP4jYBXS6KTE52bIybrvIOC3KRGO7PLOLl2Wz2bRoFFyM49w_SFdELzhVwVh/s1600/19+Chelsea+Europe+Last+5+Years+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiMXtU3NATT-4zlsVNJKFfkmmt-R9NeB_QIUdyzGwpBpT9n4yyMGZCYxnVIO33ZLH_1vSOaxIIpMhnfec4xP4jYBXS6KTE52bIybrvIOC3KRGO7PLOLl2Wz2bRoFFyM49w_SFdELzhVwVh/s640/19+Chelsea+Europe+Last+5+Years+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Although some have played down the value of Champions League
qualification in light of the massive new Premier League TV deal, it is evident
that it is still financially beneficial.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It has clearly helped Chelsea, who have earned €253 million
from Europe in the last five seasons, more than any other English club. It has
thus become a major revenue differentiator against their domestic rivals with
Chelsea earning substantially more than them in this period: City €32 million,
Arsenal €77 million, United €95 million, Liverpool €176 million and Tottenham
€212 million.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZKKWvmHKmZ4WsySI1TNUOd56L8zmGXDadr-4c5TSSR-rLlSxf2hVBRTD5ihOBr8uudXyxy6j6noxPqvAk5jowbXktVVDQ9rMNhSlIzpUwbuL9wyHSUugcYcxAPTca4NjWb_lrI3zK9Eyg/s1600/20+Chelsea+Commercial+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZKKWvmHKmZ4WsySI1TNUOd56L8zmGXDadr-4c5TSSR-rLlSxf2hVBRTD5ihOBr8uudXyxy6j6noxPqvAk5jowbXktVVDQ9rMNhSlIzpUwbuL9wyHSUugcYcxAPTca4NjWb_lrI3zK9Eyg/s640/20+Chelsea+Commercial+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Commercial revenue rose by 8% (£9 million) to £117 million
in 2015/16, which was a little disappointing, given that this year included the
first year of the five-year shirt sponsorship deal with Yokohama Tyres. The
implication is that some of the commercial deals include success clauses, so
the lower league place and failure to qualify for Europe bit hard.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In fact, since 2014 Chelsea’s commercial growth of £8
million (7%) has been smaller than all their rivals, notably Manchester United
£79 million (42%) and Arsenal £30 million (39%).<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgo5vv08NLb7QqwxbT2FytILgUZnCIUfxxa42sUupm08DPrZLX8pKyaOTNR2QqkqhzWizXYcUB5oGxDewq3UAmD8qDMt0Vp745jcYPfYdYxD7e_khg3eB0AV2ZfMRvwglPpHMfX2gQLAqQY/s1600/21+Chelsea+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgo5vv08NLb7QqwxbT2FytILgUZnCIUfxxa42sUupm08DPrZLX8pKyaOTNR2QqkqhzWizXYcUB5oGxDewq3UAmD8qDMt0Vp745jcYPfYdYxD7e_khg3eB0AV2ZfMRvwglPpHMfX2gQLAqQY/s640/21+Chelsea+Commercial+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Currently, Chelsea’s £117 million is less than half of
United’s astonishing £268 million, £90 million below Manchester City’s £178
million and even behind Liverpool’s £120 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, Chelsea’s commercial revenue will increase substantially
in the next couple of years. First, they agreed a three-year deal worth £10
million a year with Carabao, a Thai energy drink company, to sponsor training
wear from 2016/17.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">They then signed “the largest commercial deal in the club’s
history” with Nike, which is worth £60 million a year (15-year deal for £900
million), i.e. twice as much as the current Adidas £30 million contract, from
2017/18.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkigBVU4CIgfjFcdCjkayaa2kj-QLfGAD7pPJQL8iFUfG7OzDbAEJXH68qdxR9vXuT1L_M0MF8tObaohXbfrMWOWyv6AoWwQvl3DGKfHNQt2DkvOXWvp2GUNuoKtQ_YLzl8pdJn3XRrWyP/s1600/David+Luiz.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkigBVU4CIgfjFcdCjkayaa2kj-QLfGAD7pPJQL8iFUfG7OzDbAEJXH68qdxR9vXuT1L_M0MF8tObaohXbfrMWOWyv6AoWwQvl3DGKfHNQt2DkvOXWvp2GUNuoKtQ_YLzl8pdJn3XRrWyP/s320/David+Luiz.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Boy from Brazil"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The Adidas deal was due to run to 2023, so the six years
from 2017 would have brought in £180 million, compared to £360 million from
Nike over the same period, meaning a £180 million increase. Although this is
reduced to £113 million after considering the £67 million termination fee, it still
represents a tidy improvement.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In addition, the Yokohama Tyres shirt sponsorship of £40
million a year is worth more than double the £18 million previously paid by
Samsung. All in all, these three kit deals will be worth £110 million per
annum, which is £62 million more than the previous £48 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRHi5ilULauQqxLpoxzMSm3H3mT4xBmLySoSrqX97RTUGfAMKwe2Hm1c0Vb74bcs1SHSCkcD9y1cCnSXGPuUVMj8YQfuUK2pO3psVhweTA6479g0X0FZybkqdVP8N1jTS8WmA4vO2hyKZ0/s1600/22+Chelsea+Shirt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="532" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRHi5ilULauQqxLpoxzMSm3H3mT4xBmLySoSrqX97RTUGfAMKwe2Hm1c0Vb74bcs1SHSCkcD9y1cCnSXGPuUVMj8YQfuUK2pO3psVhweTA6479g0X0FZybkqdVP8N1jTS8WmA4vO2hyKZ0/s640/22+Chelsea+Shirt+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">These deals will leave Chelsea only behind Manchester United
for the main shirt sponsorship and kit supplier deals – and it’s difficult to
compete with their massive agreements with Chevrolet £56 million (at the June
2016 USD exchange rate) and Adidas £75 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, the £40 million shirt sponsorship is well ahead of
Arsenal – Emirates £30 million, Liverpool – Standard Chartered £25 million,
Manchester City – Etihad £20 million and Tottenham Hotspur – AIA £16 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVdTE8YEyKJOuRpZtd0u0UX2jVf8Le1EWG0s7bbpLJMRyA9jwXOmWdxPPy_aUkPrtJWL6BUpbWgOy6FGcCTMsPZXw7qchlKy0DDdl6ZbDao-DkO2ewF9vY_5Qo0B4UfKzAZsbks0T0sqiO/s1600/23+Chelsea+Kit+Supplier+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVdTE8YEyKJOuRpZtd0u0UX2jVf8Le1EWG0s7bbpLJMRyA9jwXOmWdxPPy_aUkPrtJWL6BUpbWgOy6FGcCTMsPZXw7qchlKy0DDdl6ZbDao-DkO2ewF9vY_5Qo0B4UfKzAZsbks0T0sqiO/s640/23+Chelsea+Kit+Supplier+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Similarly, the £60 million Nike kit supplier deal will be
much better than those signed by Arsenal and Liverpool, respectively £30
million (PUMA) and £28 million (Warrior), though these will be up for
renegotiation before Chelsea.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Looking further afield new kit agreements reportedly signed
by Barcelona (Nike) and Real Madrid (Adidas) are worth £125 million and £115
million respectively (at the current exchange rate), so the bar is continually
being raised.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMDQxuB1GQq0Wxxdx0PNB5SxAUWI78V7UcpgpFBxv44uShAVMoA8wrap0wAPQG22DXNEV8odVHkx1s1XCcwE3fWgcTRFJu1bufW42Q-Sp0-fUxjCNsK4yZyMbsgk7dVIePQoVdgIsFaXyt/s1600/24+Chelsea+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMDQxuB1GQq0Wxxdx0PNB5SxAUWI78V7UcpgpFBxv44uShAVMoA8wrap0wAPQG22DXNEV8odVHkx1s1XCcwE3fWgcTRFJu1bufW42Q-Sp0-fUxjCNsK4yZyMbsgk7dVIePQoVdgIsFaXyt/s640/24+Chelsea+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Match day income was £1 million (2%) lower at £70 million,
partly due to only staging two domestic cup games, compared to three the
previous season. This revenue stream peaked at £78 million in 2011/12, thanks
to the victories in the Champions League and the FA Cup.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Chelsea’s match day revenue is at least £30 million lower
than Manchester United and Arsenal, though is still pretty good, considering
that their grounds are much larger.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEir9SV2KZ6Wn-iW76xn7-7Oqwh5mA7euZMreGn5CAsDHabgOzKcl3EtAToIlC7FGI47Ochz9ZKq-5Fa09Vj9LjRhmrqHdVaobvKLC-_p4ygak-wBSqgWWWsShvRGDMmKHlR6AAVZTqgl-bt/s1600/25+Chelsea+Attendances+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEir9SV2KZ6Wn-iW76xn7-7Oqwh5mA7euZMreGn5CAsDHabgOzKcl3EtAToIlC7FGI47Ochz9ZKq-5Fa09Vj9LjRhmrqHdVaobvKLC-_p4ygak-wBSqgWWWsShvRGDMmKHlR6AAVZTqgl-bt/s640/25+Chelsea+Attendances+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">This is reflected in the average attendances with Chelsea’s
41,500 miles behind United (75,000) and Arsenal (60,000). It is also lower than
Manchester City, Newcastle United, Liverpool and Sunderland.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The reason that Chelsea’s revenue is higher than clubs with
higher attendances is that they earn a healthy £2.8 million a game, compared
to, say, £2.0 million at Liverpool and £1.8 million at Manchester City. This is
partly due to their ticket prices, which, according to the BBC Price of
Football survey, are the third highest in England, only surpassed by Arsenal
and Tottenham. <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">That said, Chelsea have again held ticket prices at 2011/12 levels, which means that general admission prices have remained unchanged in nine of the past 11 years. In addition, supporters attending away games in the Premier League over the next three seasons will pay no more than £30 a ticket.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipekgF3wjnmiZJf9931rv92i4bcdNrPNBkOIfqLOUkp15eIHOGCvCEDW7d5GkjeToze6LOh3An-8IjVNQIGOC7SOLTSCDEselVieh8fbyMieOsCVYwGXNfK4do5hWjvY__Je-jN-roCtQX/s1600/26+Chelsea+Match+Day+Stats+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipekgF3wjnmiZJf9931rv92i4bcdNrPNBkOIfqLOUkp15eIHOGCvCEDW7d5GkjeToze6LOh3An-8IjVNQIGOC7SOLTSCDEselVieh8fbyMieOsCVYwGXNfK4do5hWjvY__Je-jN-roCtQX/s640/26+Chelsea+Match+Day+Stats+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Nevertheless, Chelsea’s revenue shortfall compared to
United, Arsenal, Real Madrid and Barcelona helps explain why the club has spent
so much time searching nearby locations for a new stadium.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">After a couple of false starts, including possible moves to
Battersea Power Station, Earls Court and White City, the good news is that
planning permission has recently been granted by Hammersmith and Fulham borough
council to build a new 60,000 capacity on the Stamford Bridge site.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This will be a complex build with the plan being to dig down
to lower the arena into the excavated ground, while the club will also need to
demolish Chelsea Village buildings that surround the ground and build walkways over
the two rail lines that flank the stadium.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The assumption is that Abramovich will cover the costs,
which have been estimated at £500 million, though it could be much higher, e.g.
Tottenham’s new stadium will reportedly cost £750 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTA0bQlXlOK6ePZJcH-_tzSv2vXXr8wJvezd2YcH7mnBETZh2vY_kQc8-ZXzlqtUVx9mIt5ZWd-TZfeVBkDaZtRLohXpAASp1OdiQ1ZxQ8cF1HIu2szWsz_A6Si92uD6PNo2-UTX1QX3Pz/s1600/Willian.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTA0bQlXlOK6ePZJcH-_tzSv2vXXr8wJvezd2YcH7mnBETZh2vY_kQc8-ZXzlqtUVx9mIt5ZWd-TZfeVBkDaZtRLohXpAASp1OdiQ1ZxQ8cF1HIu2szWsz_A6Si92uD6PNo2-UTX1QX3Pz/s320/Willian.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Hair, he goes, there he goes again"</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Chelsea Pitch Owners (CPO) still have to vote on whether to
grant Chelsea a longer lease on Stamford Bridge and to give them permission to
move away temporarily while the new stadium is constructed, but it would be
surprising if they did not give the green light.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The aim is to have the new stadium ready for the 2021/22
season, which would mean Chelsea having to find a temporary home for three
years. The club is in discussions with the Football Association to play at
Wembley (as are Tottenham), but nothing has been decided. This would cost up to
£15 million rent a year, though income might be higher if the crowds increased.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Chelsea have previously highlighted “the need to increase
stadium revenue to remain competitive with our major rivals, this revenue being
especially important under FFP rules.” In particular, the doubling of corporate
seating to 9,000 seats could deliver significant additional revenue with more potentially
coming from naming rights or other sponsorship opportunities.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoCkhlco-64gvyJkb7bi7GqH5U9QLLPgVIZqypDv3AWYkWADRvu5RHoXUXu17OPZC2DoVPiXzqcixQ_W5UZc1z3fp7KXcAYjOP3LWGvcv2_HH6obN6y1j_L8-IIz-t1VpnKL39q8LikEMk/s1600/27+Chelsea+Wages+to+Turnover+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoCkhlco-64gvyJkb7bi7GqH5U9QLLPgVIZqypDv3AWYkWADRvu5RHoXUXu17OPZC2DoVPiXzqcixQ_W5UZc1z3fp7KXcAYjOP3LWGvcv2_HH6obN6y1j_L8-IIz-t1VpnKL39q8LikEMk/s640/27+Chelsea+Wages+to+Turnover+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Wages rose by £7 million (3%) to £222 million, driven by a
massive increase in headcount, up 104 from 681 to 785. Playing staff, managers
and coaches increased by 45 to 137, while administration and commercial staff
were 59 higher at 648. The increase would have been even higher if bonuses had
been paid at the same level as the league-winning season in 2014/15.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">As a technical aside, note that these wage figures have been
corrected when they have included exceptional items, e.g. in 2013/14 the
reported staff costs of £190.6 million included a £2.1 million credit for the
release of a provision for compensation for first team management changes, so
the “clean” wage bill was £192.7 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglDiFjlPT9Sbo1rSHEcLKZynjUSgWZY1-XZ1dRL8P8l6rWeeRGjt1Oy-4514LZFfqbDJsh2Ff4UHK7KYhrWXLx5hhrJfz-Af0YsFMRA27GkVIOqldUCe-VAKNZR-Hf7HPa5MptT_L1zG7r/s1600/28+Chelsea+Wages+to+Turnover+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglDiFjlPT9Sbo1rSHEcLKZynjUSgWZY1-XZ1dRL8P8l6rWeeRGjt1Oy-4514LZFfqbDJsh2Ff4UHK7KYhrWXLx5hhrJfz-Af0YsFMRA27GkVIOqldUCe-VAKNZR-Hf7HPa5MptT_L1zG7r/s640/28+Chelsea+Wages+to+Turnover+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Following the revenue growth, the wages to turnover ratio
dropped from 69% to 68%, significantly better than the recent 82% peak in 2010.
Interestingly, since the start of the new Premier League TV deal in 2013/14,
revenue and wages growth is identical at 29%, implying a degree of control.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Nevertheless, Chelsea’s wages to turnover ratio is still the
highest of the elite clubs, with the other members of the “Sky Six” much lower:
Manchester United 45%, Manchester City 50%, Tottenham 51%, Arsenal 56% and
Liverpool 56%.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoS_VEPOH19Of9OxgtpGrVxbTb_RQK9b0w2TbSvqIxgtAhOHEQHIwmIoarKHhhKuwJFKqWjX_XvbXCSiwwgf1R_oaqTeJRZOH7olYNWidH6B2hF2_oX5ZWUHZcifFBq_8dx-lrybr-cBHD/s1600/29+Chelsea+Wages+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoS_VEPOH19Of9OxgtpGrVxbTb_RQK9b0w2TbSvqIxgtAhOHEQHIwmIoarKHhhKuwJFKqWjX_XvbXCSiwwgf1R_oaqTeJRZOH7olYNWidH6B2hF2_oX5ZWUHZcifFBq_8dx-lrybr-cBHD/s640/29+Chelsea+Wages+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">That said, Chelsea have been overtaken by Manchester United,
whose £232 million wage bill is once again the largest in the top flight.
However Chelsea remain a fair bit higher than Manchester City £198 million and
Arsenal £195 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">There is then a big gap to the other Premier League clubs
with the nearest challengers being Liverpool £166 million, Tottenham £101
million (both 2014/15 figures) and Everton £84 million.<o:p></o:p></span></div>
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<o:p><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></o:p></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjZGYiGFaT8zHM3fdrlt2VIhlY1rLXp0RCTaZspwahhzA_sgJuzI3yTxXkcVMW2Lcdt6bk9-cW5W69fmEVIQfrB2R6tfA9RWEhONlnWvVfmoNZOlPaNA9_8bYWjI9-QTyAVVWvkXglv1pv/s1600/30+Chelsea+Wages+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="450" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjZGYiGFaT8zHM3fdrlt2VIhlY1rLXp0RCTaZspwahhzA_sgJuzI3yTxXkcVMW2Lcdt6bk9-cW5W69fmEVIQfrB2R6tfA9RWEhONlnWvVfmoNZOlPaNA9_8bYWjI9-QTyAVVWvkXglv1pv/s640/30+Chelsea+Wages+Growth+2016.jpg" width="640" /></a></div>
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<o:p><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></o:p></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">This reflects Chelsea’s stated strategy: “In order to
attract the talent which will continue to win domestic and European trophies
and therefore drive increases in our revenue streams, the football club
continually invests in the playing staff by way of both transfers and wages.”</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In the last three seasons, Chelsea’s wages have increased by
£50 million, which is in line with Manchester United £52 million and Arsenal
£41 million. The anomaly is Manchester City, whose wage bill declined by £39
million in this period, partly due to a group restructure, whereby some staff
are now paid by group companies, which then charge the club for services
provided.<o:p></o:p></span></div>
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<o:p><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></o:p></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisT1kKZSfY4SJrIi6DEkiJVw31n1y6FYMGaGBcui8BsyZrftskgPnNRa2QBmArYeYLEMNr9Pt1uz99h2n2hAHs2hoixDfEdQ2YQTja1vf394BycFiBsQlr7OidYJqD6q1o9X-Ay5jMXW_9/s1600/31+Chelsea+Other+Expenses+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisT1kKZSfY4SJrIi6DEkiJVw31n1y6FYMGaGBcui8BsyZrftskgPnNRa2QBmArYeYLEMNr9Pt1uz99h2n2hAHs2hoixDfEdQ2YQTja1vf394BycFiBsQlr7OidYJqD6q1o9X-Ay5jMXW_9/s640/31+Chelsea+Other+Expenses+2016.jpg" width="640" /></a></div>
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<o:p><span style="font-family: Trebuchet MS, sans-serif;"><br /></span></o:p></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Although there is a natural focus on wages, other expenses
also account for a considerable part of the budget at leading clubs, though
there was an unexplained £11 million reduction at Chelsea in 2015/16 to £71
million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Other expenses exclude wages, depreciation, player
amortisation and exceptional items. They cover the costs of running the
stadium, staging home games, supporting commercial partnerships, travel,
medical expenses, insurance, retail costs, etc.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHRU-g1coLt_0bQ3TRY9YX-1avYAZxh2ippAM4oFHGOpTpAsYKUlhI6vjkA7O7EJqazZSLBcGa7c2g5_m8VKsKj9_7sb4-8BWTZhujRDeebtbk-xyWH2-U0lENxm3u7GEoFy4XAm4tGwj6/s1600/32+Chelsea+Other+Expenses+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHRU-g1coLt_0bQ3TRY9YX-1avYAZxh2ippAM4oFHGOpTpAsYKUlhI6vjkA7O7EJqazZSLBcGa7c2g5_m8VKsKj9_7sb4-8BWTZhujRDeebtbk-xyWH2-U0lENxm3u7GEoFy4XAm4tGwj6/s640/32+Chelsea+Other+Expenses+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">This means that Chelsea were also knocked off the top of this
particular league table, with both Manchester clubs now ahead: United £91
million, City £86 million.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXQDHNVvMyOMJTO6fPzyuXbtSw4XvI_CI3sgqAh2vLaq1Y7sjWD1ldT09-fBJD6jqU5Soik9GRbxqXNWuUWcuP6c_oIWDZhjgmOnuahIxacXSf0ASkOXh96_em3lh5v8ZdZw7hbspp9eIb/s1600/33+Chelsea+Player+Amortisation+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXQDHNVvMyOMJTO6fPzyuXbtSw4XvI_CI3sgqAh2vLaq1Y7sjWD1ldT09-fBJD6jqU5Soik9GRbxqXNWuUWcuP6c_oIWDZhjgmOnuahIxacXSf0ASkOXh96_em3lh5v8ZdZw7hbspp9eIb/s640/33+Chelsea+Player+Amortisation+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Another cost that has had a major impact on Chelsea’s profit
and loss account is player amortisation, reflecting the significant investment
in players. Chelsea’s initial wave of purchases under Abramovich saw player
amortisation shoot up to £83 million in 2005, before falling away to £38
million in 2010 in line with less frenetic transfer activity. As spending
kicked in again, player amortisation has steadily risen back to £71 million in 2016.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwzzD4nGb0ri2ELVC1SxNd1TVjuYPazSJGr_x2XAvKM0zriEaHNtKl3RapaaXlTIrqirQCG5YlvRZH9FZANIEg0N2ZK9CD_aKgkUb92jhwZxc2oq87FQyiRPUkU93y7W27vuOQe6c-IBMW/s1600/34+Chelsea+Player+Trading+Accounting+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwzzD4nGb0ri2ELVC1SxNd1TVjuYPazSJGr_x2XAvKM0zriEaHNtKl3RapaaXlTIrqirQCG5YlvRZH9FZANIEg0N2ZK9CD_aKgkUb92jhwZxc2oq87FQyiRPUkU93y7W27vuOQe6c-IBMW/s640/34+Chelsea+Player+Trading+Accounting+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The accounting for player trading is horribly technical, but
it is important to grasp how it works to really understand a football club’s
accounts. The fundamental point is that when a club purchases a player the transfer
fee is not fully expensed in the year of purchase, but the cost is written-off
evenly over the length of the player’s contract, e.g. midfield dynamo N’Golo
Kanté was reportedly bought from Leicester City for £32 million on a five-year
deal, so the annual amortisation in the accounts for him is £6.4 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This helps explain why clubs like Chelsea can spend so much
and still meet UEFA’s Financial Fair Play targets.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpnC825hK3qoN4DSceTtIzHRvzGD2WZgSm4YxU30_N59heKoTTmOJW5rKG4rckSMqpVS0ZSS4KDEVynkiKP98Ob6pnUvN07l0Bpr7IXUK2sh1XJlS5jic9kNEPCNreRJNRz5Dq9RNUIiZE/s1600/35+Chelsea+Player+Amortisation+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpnC825hK3qoN4DSceTtIzHRvzGD2WZgSm4YxU30_N59heKoTTmOJW5rKG4rckSMqpVS0ZSS4KDEVynkiKP98Ob6pnUvN07l0Bpr7IXUK2sh1XJlS5jic9kNEPCNreRJNRz5Dq9RNUIiZE/s640/35+Chelsea+Player+Amortisation+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Unsurprisingly, this is one of the highest player
amortisation charges in the Premier League, only surpassed by big spending
Manchester City £94 million and Manchester United £88 million.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The value of Chelsea’s squad on the balance sheet increased
to £241 million in 2016, though this understates how much they would fetch in
the transfer market, not least because homegrown players are ascribed no value
in the books. Chelsea are one of the few clubs to formally acknowledge this
factor in the accounts, as they have valued the playing staff at a cool £399
million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdeL5rChguA0Kc3xhky-ymCK3DTzw3JGgnpU7i5jN9uGYbkDz98fRK8yKqx74GbIOSfmvSIOflBi-431iuPxJxO91nIr4pc50jaqi4fmH5wDo4JNwO5cnaGa0xQeYJA6vluzXq5rH8JUqt/s1600/36+Chelsea+Player+Trading+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdeL5rChguA0Kc3xhky-ymCK3DTzw3JGgnpU7i5jN9uGYbkDz98fRK8yKqx74GbIOSfmvSIOflBi-431iuPxJxO91nIr4pc50jaqi4fmH5wDo4JNwO5cnaGa0xQeYJA6vluzXq5rH8JUqt/s640/36+Chelsea+Player+Trading+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea’s activity in the transfer market is interesting.
For the four years up to 2010 Chelsea’s average annual net spend was just £2
million, before rising to £67 million in the four years up to 2014, then
apparently dropping back to £41 million in the last three seasons (excluding
this January transfer window).</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, this is a little misleading, as it is partly a
result of the increased player sales. If we look at gross spend, it tells a
different story with Chelsea averaging around £100 million a season over the
last seven years. Last summer alone they splashed £119 million on recruiting
David Luiz, Michy Batshuayi, N’Golo Kanté and Marco Alonso.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGnTWadLnV5ZlvtduNJHX_r9R5a3AaGDL4JX2OWhn020bNrzCkUE-T_n51Vd3zTMyNViXrOSLfxHhK31LZg_xDykyP7PsJJC5xQZL5-EF6_whwkJ3ogfYTaD8kvws1FOL6JePAfbxVpJJ1/s1600/37+Chelsea+Transfer+Spend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="560" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGnTWadLnV5ZlvtduNJHX_r9R5a3AaGDL4JX2OWhn020bNrzCkUE-T_n51Vd3zTMyNViXrOSLfxHhK31LZg_xDykyP7PsJJC5xQZL5-EF6_whwkJ3ogfYTaD8kvws1FOL6JePAfbxVpJJ1/s640/37+Chelsea+Transfer+Spend+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Even so, their total net spend of £123 million in the last
three seasons was comfortably beaten by Manchester City £299 million,
Manchester United £275 million and (less predictably) Arsenal £165 million,
though it was still a fair way above champions Leicester City £84 million.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Chelsea have no financial debt in the football club, as this has all been converted into equity by issuing new shares. That said, the club’s holding company, Fordstam Limited, does have well over £1 billion of debt (£1,097 million as of June 2015) in the form of an interest-free loan from the owner, theoretically repayable on 18 months notice.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsrNA540l3NF1uCEiMWjvtKohD-VcR2ZActhd-ZvbKNCF4JHFipXzTfoACp3aJhcTDRoL8MgQvpA5q2glrljv4dMu7vnCyX0esSJYNf1mJWbZiZmv12DtL6PK4IXdydE_7KzUDq7pztYUN/s1600/38+Chelsea+Debt+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsrNA540l3NF1uCEiMWjvtKohD-VcR2ZActhd-ZvbKNCF4JHFipXzTfoACp3aJhcTDRoL8MgQvpA5q2glrljv4dMu7vnCyX0esSJYNf1mJWbZiZmv12DtL6PK4IXdydE_7KzUDq7pztYUN/s640/38+Chelsea+Debt+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">There were some minimal contingent liabilities of £2.4
million, reflecting the fact that Chelsea, unlike most football clubs, pay all
their transfer fees upfront, which must be an advantage in negotiations
compared to other clubs that have to pay in stages.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Other clubs have to carry the burden of sizeable debt,
notably Manchester United who still have £490 million of borrowings even after
all the Glazers’ various re-financings and Arsenal, whose £233 million debt
effectively comprises the “mortgage” on the Emirates stadium.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1zaD3MyaJR-ACjkw9LE_xS4XViQnugGvlaQMKMPemkqmA2uq4J0hTJLsxjRqHohtE9A3715XtIvFaKTqS4OYXtz_qgeo7VeYEtMJX0AUGm1SlqZ6mVz_84TRLAtlZ2ITkF_1VNVU22Y_C/s1600/39+Chelsea+Interest+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1zaD3MyaJR-ACjkw9LE_xS4XViQnugGvlaQMKMPemkqmA2uq4J0hTJLsxjRqHohtE9A3715XtIvFaKTqS4OYXtz_qgeo7VeYEtMJX0AUGm1SlqZ6mVz_84TRLAtlZ2ITkF_1VNVU22Y_C/s640/39+Chelsea+Interest+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The advantage of having a benefactor like Abramovich is
demonstrated by the annual interest payments at those clubs: £20 million for
United, £13 million for Arsenal. Since 2010 United have paid out more than £400
million in financing costs, while Arsenal have paid £275 million in interest
and loan repayments in that period. That is money that could have been spent on
transfers or player wages – if their owner had acted like Chelsea’s favourite
Russian.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_2BXnoMrRaXOj7tOxGY36BSqL9CZebFCO44AtOjIhkOMv8ElHDR-j8sl-DQjvHwnkLc2uD3nR1oBbwhXNLc2fSOr-1UoKpyz3-dKAIQhMc6Sn2oC7muWVXbVpOWQ-l-hyP_LgimRtu5Gi/s1600/40+Chelsea+Cash+Flow+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_2BXnoMrRaXOj7tOxGY36BSqL9CZebFCO44AtOjIhkOMv8ElHDR-j8sl-DQjvHwnkLc2uD3nR1oBbwhXNLc2fSOr-1UoKpyz3-dKAIQhMc6Sn2oC7muWVXbVpOWQ-l-hyP_LgimRtu5Gi/s640/40+Chelsea+Cash+Flow+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Although Chelsea’s cash flow from operating activities has
turned positive in the last four seasons (after adjusting for non-cash flow
items, such as player amortisation and depreciation, plus working capital
movements), they still require funding from the owner to cover player purchases
and investment in improving facilities at Stamford Bridge and the training
ground at Cobham.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">That amounted to £90 million in the last two years: £43
million in 2016 and £47 million in 2015. In fact, since Abramovich acquired the
club, he has put around £1 billion into the club, split between £620 million of
new loans and £350 million of share capital. In that period £685 million of
loans have been converted into share capital, including £12.5 million last
season.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQiDK6iwTYwO_Vu5YfbatDiS_BnNF9XmxHixxtAGWrle0dcMiMouRrTvGsAVfxt41L7_xnCMOYDEA_wIyo4O1wYV2BqEmO-qa50cBKTxCPZ2Bawec1d_tY-oBaVSYfcC-8TYkioq3PUGhJ/s1600/41+Chelsea+Use+of+Funds+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQiDK6iwTYwO_Vu5YfbatDiS_BnNF9XmxHixxtAGWrle0dcMiMouRrTvGsAVfxt41L7_xnCMOYDEA_wIyo4O1wYV2BqEmO-qa50cBKTxCPZ2Bawec1d_tY-oBaVSYfcC-8TYkioq3PUGhJ/s640/41+Chelsea+Use+of+Funds+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Most of this funding has been seen on the pitch with £753
million (77%) spent on net player recruitment, while another £140 million went
on infrastructure investment. A further £46 million was required to cover
operating losses with £12 million on interest payments, while the cash balance
has increased by £23 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Indeed, Chelsea now have healthy cash at bank of £27
million, though this is still a lot lower than United £229 million and Arsenal
£226 million. It’s a different approach: Abramovich puts his money into the
club, especially the team, while United and Arsenal have to rely on cash
generated from their own operating activities – though they do leave an awful
lot of it in their bank account.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2CpnRtOlXYJC_F7X_fQFf8cLJlY1j8pQDRVXnZuyAp4-1N-mNIYzA7FjlJPp3vbmPlkTyogls-7WgjK9EGM_5-1XbcWmclnINSiOCu5hW0Z87OOUTTbXH3hsT95pkYDuSJZuCB5KD1QUr/s1600/42+Chelsea+Cash+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2CpnRtOlXYJC_F7X_fQFf8cLJlY1j8pQDRVXnZuyAp4-1N-mNIYzA7FjlJPp3vbmPlkTyogls-7WgjK9EGM_5-1XbcWmclnINSiOCu5hW0Z87OOUTTbXH3hsT95pkYDuSJZuCB5KD1QUr/s640/42+Chelsea+Cash+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Given Chelsea’s several years of heavy financial losses,
many observers had believed that they would fall foul of FFP, but that has not
been the case with the accounts confirming that the club was compliant with
both UEFA FFP and Premier League financial regulations.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The club has taken advantage of some of the allowable
exclusions for UEFA’s break-even analysis, namely youth development,
infrastructure and (for the initial monitoring periods) the wages for players
signed before June 2010.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Even though Chelsea are compliant, it is clear that this
legislation has been at the forefront of the club’s thinking. The accounts
state: “FFP provides a significant challenge. The football club needs to
balance success on the field together with the financial imperatives of this
new regime.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFGpcvULoyADPHqXQdzoWv06bbBTBACIHLKw7KRPkQA7pqyMQ-fUwi0z5zj_TgQ5MGGsRDjqZmawGrMzRs80grbi0Pz4aiCtRNHPjKDjFBVvPPvm8HIabhXQpEaBItU9G9CnV-iEu2M1nD/s1600/Gary+Cahill.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFGpcvULoyADPHqXQdzoWv06bbBTBACIHLKw7KRPkQA7pqyMQ-fUwi0z5zj_TgQ5MGGsRDjqZmawGrMzRs80grbi0Pz4aiCtRNHPjKDjFBVvPPvm8HIabhXQpEaBItU9G9CnV-iEu2M1nD/s320/Gary+Cahill.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Points of Authority"</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Specifically, Chelsea will need to consider the Premier
League’s Short Term Cost controls, which restrict the annual player wage cost
increases to £7 million a year for the three years up to 2018/19 – except if
funded by increases in revenue from sources other than Premier League
broadcasting contracts, e.g. gate receipts, commercial income and profits on
player sales.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Sound familiar? That’s pretty much been Chelsea’s strategy
over the last few years.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It obviously helps if you have an owner with pockets as deep
as Abramovich, but that is no longer enough in a football world full of
financial regulations, so Chelsea have had to follow a different path.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">It might sound a little strange to say this after Chelsea just announced a
£70 million loss, but there’s no doubt that there are some clever people at
Stamford Bridge, who have found several ways to grow income and thus meet the
demands of FFP. At the same time, they have </span><span style="font-family: 'Trebuchet MS', sans-serif;"> </span><span style="font-family: 'Trebuchet MS', sans-serif;">managed to put together a squad that is not
only challenging for major honours, but is a good bet to win the Premier League for
the second time in three seasons.</span></div>
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<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com11tag:blogger.com,1999:blog-487486960623783530.post-43679325439741018342017-01-24T07:28:00.000+01:002017-01-24T07:28:46.252+01:00Ipswich Town - Stuck In A Moment<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizZbZls-ImzBAcF6qerilXQZzbuAz637GTzqc4hmS_lH9_CG1qE69NYb-mYn_CQ1Aa-Rg17ek2dvTUBkTNkY4KCeDDUy2-CxLrKk2Zs8zxtOq5vKhexN192B4QdtSdKia2fFZ4_oBwCUOo/s1600/Adam+Webster+2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizZbZls-ImzBAcF6qerilXQZzbuAz637GTzqc4hmS_lH9_CG1qE69NYb-mYn_CQ1Aa-Rg17ek2dvTUBkTNkY4KCeDDUy2-CxLrKk2Zs8zxtOq5vKhexN192B4QdtSdKia2fFZ4_oBwCUOo/s400/Adam+Webster+2.jpg" width="400" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">This has been a challenging season for Ipswich Town, as they
have been poor in the league and recently suffered a humiliating, televised
defeat in the FA Cup against non-league Lincoln City. Manager Mick McCarthy
appears to retain the support of the board for the time being, but he has clearly
lost many of the fans.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This feels a little harsh on the experienced Yorkshire man,
who has arguably enabled Ipswich to punch above their weight during his tenure.
When he replaced Paul Jewell in November 2012, Ipswich were bottom of the
Championship, but McCarthy successfully guided the club out of the relegation
zone to finish in a comfortable 14th place.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Since then he has registered three successive top ten
finishes. His first full season in 2013/14 ended in a respectable ninth place,
before he led them to the play-offs in 2014/15. Last season Ipswich came a
somewhat disappointing seventh, but this was still ahead of many wealthier
clubs.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">As McCarthy pointed out, “This is the first year that it’s
been a struggle.” To an extent, he has been a victim of his own success, as he
reached the play-offs on a shoestring budget, getting the most out of a fairly
average squad.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5Ccfm14k8fmPQTddthH2n8muhhCqd5UoWUvpZ-fa-OE1dnXBjr5EwWFQd3eBBmQkv9A7FkfxX37gff8gUuXjKYVNWMpEXNrWQl2ysdj1YE9Vz-tqeA9zd8K0vd9dqa4FGNvk2P3UVP3-x/s1600/Tom+Lawrence.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5Ccfm14k8fmPQTddthH2n8muhhCqd5UoWUvpZ-fa-OE1dnXBjr5EwWFQd3eBBmQkv9A7FkfxX37gff8gUuXjKYVNWMpEXNrWQl2ysdj1YE9Vz-tqeA9zd8K0vd9dqa4FGNvk2P3UVP3-x/s320/Tom+Lawrence.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Merry Christmas, Mr. Lawrence"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This reinforced the cautious approach of Marcus Evans, who
has frequently spoken of his determination to take Ipswich to the Premier
League since he bought 87.5% of the club in December 2007, but has equally
often been accused of lacking the ambition to do so.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Evans summarised his philosophy last month: “My view, based on
the finances available to us compared to those with parachute budgets and the
small group with, often short term, huge owner investment, is for the club to
maintain a sustainable and consistent strategy, which I firmly believe provides
a foundation each season for a promotion challenge.”<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">He then outlined the key elements of his strategy, “In
summary, a focus on the Academy; a competitive wage structure; careful use of
our transfer budget on developing players and a stable management team are
factors which I believe provide us with the best chance of promotion out of the
Championship, which is one of the toughest - and getting even tougher - leagues
in the world.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Managing director Ian Milne was singing from the same song
sheet: “Marcus has gone for sustainability and Mick understands that. You can
achieve good things through getting the right people in your club and working
as a team from top to bottom.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjk6W5vRVGX7OoNcgI5zBehIOHoAfVcbbDmys0mbgkBFdv0uuaHocj0iRo5kufiQq0l6EAn8Wl0dTgoI540RC-Lb86TF6TFqWcylDbMXaqu0SHmr99p6XDjNIGVTpUwM9jtv8zDExBg0dO4/s1600/Grant+Ward.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjk6W5vRVGX7OoNcgI5zBehIOHoAfVcbbDmys0mbgkBFdv0uuaHocj0iRo5kufiQq0l6EAn8Wl0dTgoI540RC-Lb86TF6TFqWcylDbMXaqu0SHmr99p6XDjNIGVTpUwM9jtv8zDExBg0dO4/s320/Grant+Ward.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"A Grant don't come for free"</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">While all this is undoubtedly true, the concern is that this
conservative stance will mean a continuation of the 15-year groundhog day
existence that Ipswich have held in the Championship (or equivalent) since
relegation from the top flight in 2002. To paraphrase U2, it feels like Ipswich
are “stuck in a moment – and they can’t get out of it.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Initially, Evans provided his managers with enough funding
to be competitive in the transfer market, but this did not achieve the desired
objective, as first Roy Keane, then Jewell essentially wasted the owners’ cash
with a series of poor choices. Not only did these expensive purchases not
deliver on the pitch, but they ended up being offloaded for peanuts, leading to
large financial losses arising from misplaced recruitment.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Having had his fingers burnt, Evans opted for a change in
strategy: “I wanted to work with a manager who was going to try to and coach
and make our players better, rather than give the manager the opportunity (to
simply buy players).”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoVvxow7-3GlOsn-86qqK5LWuU6hYM4apS1P4hWLGuXnK_XexuFsfIVjOFtyfEqkaCUYwsqYBmlLUlgzekTTiJIFbgHS47uHQNB6S_AFVSRvFhffrJtTN0crKenzEWfjpxAbGJF9Yii8Zj/s1600/Luke+Chambers.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoVvxow7-3GlOsn-86qqK5LWuU6hYM4apS1P4hWLGuXnK_XexuFsfIVjOFtyfEqkaCUYwsqYBmlLUlgzekTTiJIFbgHS47uHQNB6S_AFVSRvFhffrJtTN0crKenzEWfjpxAbGJF9Yii8Zj/s320/Luke+Chambers.jpg" width="320" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Don't Luke back in anger"</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The owner explained: “You would have hoped that money had
resulted in better things, but look at Nottingham Forest – they lost £25
million last year and got nowhere. There are a lot of clubs out there that
spent a lot more than Ipswich did and who ended up in exactly the same
situation.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The drive to more sensible cost management was also
influenced by the introduction of the Financial Fair Play rules, which
essentially aim to force clubs to live within their means.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">As a result, in the past few years Ipswich have focused on
free transfers, loans and swap deals, while trying to bring through young
players from the Academy into the first team. As Milne explained, “We do have a
very good scouting network and that enables us to get players at the minimum
transfer fee.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXNuQZT0x020A2-WSze8sGa1IfPkUkyaZjwxbw2vFQ1qZtawPxMvxHtc0GJrKoqcVynuXziGwp4mbRao60BN8U6E9IDdAluApKGI6dHYVhl5AJvLSOlvjwdcApp0Vg-e6eJJdObLaXQj1I/s1600/1+Ipswich+Player+Trading+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="414" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXNuQZT0x020A2-WSze8sGa1IfPkUkyaZjwxbw2vFQ1qZtawPxMvxHtc0GJrKoqcVynuXziGwp4mbRao60BN8U6E9IDdAluApKGI6dHYVhl5AJvLSOlvjwdcApp0Vg-e6eJJdObLaXQj1I/s640/1+Ipswich+Player+Trading+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Consequently, Ipswich have averaged annual gross spend of
only £0.5 million in the last four seasons (though the January 2017 transfer
window has not yet closed), compared to £5.6 million a season in the first
three years of the Evans era. In the same periods, average net spend of £4
million has flipped to average net sales of £4 million, an £8 million reduction.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Last summer’s spending was a good example of Ipswich’s
policy: two promising young players were acquired in the shape of Grant Ward
from Tottenham Hotspur and Adam Webster from Portsmouth at a combined cost of
£1.4 million, while there were a couple of free transfers, including the
veteran journeyman Leon Best from Rotherham United.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Evans argued that there was also money splashed out on loan
fees and wages needed to tempt Premier League clubs to release players,
including Welsh internationals Tom Lawrence (from Leicester City) and Jonny
Williams (from Crystal Palace) and Conor Grant (from Everton), but Ipswich
supporters would justifiably point out that the club failed to replace forward
Daryl Murphy, who was sold to Newcastle United.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg01qJmq1JdakdQ-qvIe5BIuD8FURGYknWF9oMYA90d6KEZaLdDp2FdXGLtL5rSdnjxn_H3U9Bv94oOSbJZbdrWJw41v1LVtGdzhGQ3PVWucRwnY83Js4OxrxJ_mPwRTgE15FhEL5PZYLo3/s1600/2+Ipswich+Transfer+Spend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="604" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg01qJmq1JdakdQ-qvIe5BIuD8FURGYknWF9oMYA90d6KEZaLdDp2FdXGLtL5rSdnjxn_H3U9Bv94oOSbJZbdrWJw41v1LVtGdzhGQ3PVWucRwnY83Js4OxrxJ_mPwRTgE15FhEL5PZYLo3/s640/2+Ipswich+Transfer+Spend+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Ipswich’s parsimony can be seen by looking at the gross
spend of Championship clubs this season, when only six clubs spent less than
the Tractor Boys. These included two clubs with transfer embargoes (Blackburn
Rovers and Nottingham Forest) plus a few “minnows”, i.e. Preston North End,
Burton Albion, Rotherham United and Wigan Athletic.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The more meaningful comparison is with clubs seeking
promotion, as Evans himself noted, “Newcastle and Norwich spent more than £100
million between them on transfer fees in the August window as they chase an
immediate return to the Premier League.” Although this was actually factually
incorrect, his point was still valid as Newcastle and Aston Villa have spent
£55 million and £52 million respectively. Other big spenders include Fulham £22
million, Derby County £14 million, Wolverhampton Wanderers £11 million and
Bristol City £11 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Many managers would use this low spending as an excuse for
not meeting their objectives, but McCarthy is made of sterner stuff, saying
that he won’t “stamp his feet” over the restricted transfer budget given to him
by Evans. Instead, he sees it as his job to get more out of the players he’s
got.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">That said, he would like his achievements to be recognised:
“I’ve done a bloody good job under the terms and conditions. I’ve sold Murphy,
I’ve sold Mings, and others, and we’ve stayed competitive.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEib3vZ1wT9-NW60rCGAcni49o2BcdjDT2XIpvpLlToIY-Ba6ScUkpln89gIlpdDZOEYpZBmOjHQVlFRrzmzPeEwp6jKUurak1B2hdzjZzpe1aXIJQLM1A2Mt0aBsSB3b_0chbbANCYesjcQ/s1600/3+Ipswich+P%2526L+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEib3vZ1wT9-NW60rCGAcni49o2BcdjDT2XIpvpLlToIY-Ba6ScUkpln89gIlpdDZOEYpZBmOjHQVlFRrzmzPeEwp6jKUurak1B2hdzjZzpe1aXIJQLM1A2Mt0aBsSB3b_0chbbANCYesjcQ/s640/3+Ipswich+P%2526L+2016.jpg" width="584" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Despite this prudent policy, Ipswich reported a £6.6 million
loss in 2015/16, a £12.1 million deterioration from the previous year’s £5.5
million profit, though this was almost entirely due to a £11.5 million
reduction in profits on player sales. These dropped from £12.2 million in
2014/15, due to the sales of Tyrone Mings to Bournemouth and Aaron Creswell to
West Ham, to only £0.6 million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The wage bill rose by £0.6 million (4%) from £16.0 million
to £16.6 million as “further funds were invested in the squad to challenge for
the play-off positions.” Other expenses also increased by £0.3 million (6%) to
£5.4 million, but player amortisation dropped by £0.5 million (74%) to just
£0.2 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Revenue slightly decreased by £0.1 million (1%), mainly due
to a £0.4 million (9%) reduction in commercial income to £4.4 million, offset
by broadcasting income rising by £0.3 million (6%) to £5.4 million. Gate
receipts were unchanged at £6.5 million, as the club’s share of receipts from
the League Cup tie against Manchester United at Old Trafford compensated for a
fall in attendances and the money from the previous season’s play-off
appearance.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOeGD_ZgvtR0h18pfB54iMNyA4w-TucDSGvRcEzuHpl22hMqg1VVnU59xhXqDx8WjTjyxbucjnMVtz55e0WvFA9y1EG8vrShfEoB9QBMwcrWJ9_xzBq0CZUCz7ncWytCEcX9ND-WTp8zI_/s1600/4+Ipswich+Profit+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOeGD_ZgvtR0h18pfB54iMNyA4w-TucDSGvRcEzuHpl22hMqg1VVnU59xhXqDx8WjTjyxbucjnMVtz55e0WvFA9y1EG8vrShfEoB9QBMwcrWJ9_xzBq0CZUCz7ncWytCEcX9ND-WTp8zI_/s640/4+Ipswich+Profit+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Although a £7 million loss might not sound</span><span style="font-family: 'Trebuchet MS', sans-serif;"> </span><span style="font-family: 'Trebuchet MS', sans-serif;">overly impressive, it has to be assessed in
the context of England’s second tier, where the harsh reality is that most
clubs are loss-making, largely as a result of their natural desire to reach the
lucrative Premier League.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">In this way, none of the Championship clubs that have so far
published their 2015/16 accounts has been profitable with some reporting hefty
losses: Brighton and Hove Albion £26 million, Hull City £21 million, Reading
£15 million and Bristol City £15 million. As Evans lamented, “Wouldn’t it be
nice… if you could turn a profit in the Championship, but I’m afraid that’s not
the case.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih582mDyGIN-THwpR2WdRdj8R7T0jZ6WDlGSs7pI4KT3jhuob6J_ay7dFh8F93N6dudZLh5CpPCtpJozvcIJ8zokGcz0drC3Kl-4Vewps1fKUhidlSHbUlIll2e8RzCs_PJwouKKaVpGdE/s1600/5+Ipswich+Player+Sales+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="624" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih582mDyGIN-THwpR2WdRdj8R7T0jZ6WDlGSs7pI4KT3jhuob6J_ay7dFh8F93N6dudZLh5CpPCtpJozvcIJ8zokGcz0drC3Kl-4Vewps1fKUhidlSHbUlIll2e8RzCs_PJwouKKaVpGdE/s640/5+Ipswich+Player+Sales+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">One way a football club can compensate for operating losses
is via player sales, but Championship clubs have struggled to make big money
sales with the highest amount reported so far last season being Hull City’s £13
million – and they had Premier League players to offload following relegation
in 2015.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">However, Ipswich’s profit on player sales of £0.6 million
was one of the lowest in the division – in contrast to 2014/15 when their £12.1
million profit was only surpassed by Norwich City’s £14 million. Of course, next
year’s accounts will be boosted by the £3 million sale of Daryl Murphy to
Newcastle.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaXVblch07e-26cD0Iep05tjWqPlcQJWGOD4_P5afbkqufvGEKuigz22X0j_uMLd9wxncdQb-pmQ3rlylaqmja0DnoaCdKnnu3Pc-eVv3tluv2siGEYQOjJrkJY_tBZdiT9cYOQhPqhuwq/s1600/6+Ipswich+Profit+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaXVblch07e-26cD0Iep05tjWqPlcQJWGOD4_P5afbkqufvGEKuigz22X0j_uMLd9wxncdQb-pmQ3rlylaqmja0DnoaCdKnnu3Pc-eVv3tluv2siGEYQOjJrkJY_tBZdiT9cYOQhPqhuwq/s640/6+Ipswich+Profit+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Ipswich have only reported a profit once in the Evans era,
the £5 million in 2014/15, losing money in the other eight years. However, it
is noticeable that the losses have been reducing, effectively capped at £7
million in the past three seasons.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">As Milne explained, “In 2012 the annual losses peaked at £16
million and we started to go down a slightly different route.” That was
actually the third worst loss in the Championship that year and served as a
major wake-up call. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The reason for this large deficit were given by finance
director Mark Andrews, “We brought in some experienced players in the 2011/12
season, Paul Jewell’s first season in charge, which kept the playing squad
costs high.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3AkMiBfFTA6TZb_TycC8NaVnMeboHpD0mYCW7-a-65LT8IYLK5LfDkBqpISFAsGv8RNUxLh9Yk4NCjBLBBoWVvMY2TiFYAGUs3KJiYxjd6F_BioVTzApekknticSahTE81QFAhXvxEZtE/s1600/7+Ipswich+Adj+Profit+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="472" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3AkMiBfFTA6TZb_TycC8NaVnMeboHpD0mYCW7-a-65LT8IYLK5LfDkBqpISFAsGv8RNUxLh9Yk4NCjBLBBoWVvMY2TiFYAGUs3KJiYxjd6F_BioVTzApekknticSahTE81QFAhXvxEZtE/s640/7+Ipswich+Adj+Profit+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">However, Ipswich’s best results in recent times have been
boosted by large profits on player sales, as seen in 2014/15. Without the sales
of Mings and Cresswell, the reported profit of £5.5 million would have been a
loss of £6.7 million, i.e. in line with the £7 million losses in 2013/14 and
2015/16.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">It was a similar story in 2011/12 when this activity contributed
£10.8 million, largely due to the transfers of Connor Wickham to Sunderland for
£8 million and Jon Walters to Stoke City for £2.75 million. Without these
sales, Ipswich would have registered another big loss of £14 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">The owner has said that his funding “would eventually be
unsustainable without the benefits of transfer revenues from time to time to
offset the club’s running costs.” Interestingly, the club has made more money
from cheap, young players rather than experienced professionals. This was acknowledged
by Evans: “We lost some good players in the past who were out of contract”,
i.e. could leave for very little or even nothing.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4K70Hlzhvk_0SIEMVFBlOKRHlZIbgVMg4yB1mlh8FpigppV2d2gYAIRX40Gtq39JYK8PcN1AbShh_tXgGmiE6nHxHE7HJz1ebFmclwQYDlfHpVDZXk78j-Wik5sEK-2gdBav2TpgD5ZKY/s1600/8+Ipswich+EBITDA+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4K70Hlzhvk_0SIEMVFBlOKRHlZIbgVMg4yB1mlh8FpigppV2d2gYAIRX40Gtq39JYK8PcN1AbShh_tXgGmiE6nHxHE7HJz1ebFmclwQYDlfHpVDZXk78j-Wik5sEK-2gdBav2TpgD5ZKY/s640/8+Ipswich+EBITDA+2016.jpg" width="640" /></a></div>
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<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">To get an idea of underlying profitability and how much cash
is generated, football clubs often look at EBITDA (Earnings Before Interest,
Depreciation and Amortisation), as this metric strips out player trading and
non-cash items. In Ipswich’s case this highlights the changed strategy after
2012, as EBITDA has improved from</span><span style="font-family: 'Trebuchet MS', sans-serif;"> </span><span style="font-family: 'Trebuchet MS', sans-serif;">minus
£9 million in 2012 to minus £6 million in 2016 (though this was a million worse
than the previous year).</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4OzUwvtNLhLepB56xRl3tLEGKi53UrasyLpGBcQe7kMCTxT-pJJICGPITt3O2zqeD1id2ilMpYrZLZJPDNd8yyo_EluGA3R256CINBwDr1H17jZXTtoFyP6M11V2vsWpauINSCVybX1_t/s1600/9+Ipswich+EBITDA+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4OzUwvtNLhLepB56xRl3tLEGKi53UrasyLpGBcQe7kMCTxT-pJJICGPITt3O2zqeD1id2ilMpYrZLZJPDNd8yyo_EluGA3R256CINBwDr1H17jZXTtoFyP6M11V2vsWpauINSCVybX1_t/s640/9+Ipswich+EBITDA+League+2016.jpg" width="640" /></a></div>
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<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">This might not sound overly impressive, as it is still
negative, but it has to be put into the context of the Championship, where very
few clubs manage to generate cash. Apart from Blackpool with their “unique”
approach to running a football club, no Championship has reported EBITDA higher
than £1.5 million in the last two seasons (in stark contrast to the Premier
League where in the same period every club enjoyed positive EBITDA, except the basket
case that is QPR).</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinKK0KjozvPx0-4yOV-C77-gI3Ujk5rtEcIDEtxqlC-j3fxGnv86FePcx6O2fCLECjFzBgR8YBCuyvyEK-5f-l_iDH1Ay3ynxfxYj3PXBeUQYeg2fF42AyqN8dTOuW-NU2vLtJZtoGiWWp/s1600/10+Ipswich+Revenue+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinKK0KjozvPx0-4yOV-C77-gI3Ujk5rtEcIDEtxqlC-j3fxGnv86FePcx6O2fCLECjFzBgR8YBCuyvyEK-5f-l_iDH1Ay3ynxfxYj3PXBeUQYeg2fF42AyqN8dTOuW-NU2vLtJZtoGiWWp/s640/10+Ipswich+Revenue+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Revenue has fallen by £1 million (6%) from the recent £17.2
million peak in 2011, which was boosted by reaching the Carling Cup the
semi-final and a profitable FA Cup match at Chelsea.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">All revenue streams have fallen since then, especially
commercial income, which is 13% (£0.7 million) lower, though this is partly due
to a decision to outsource catering (and thus only including net royalty
payments in revenue). Gate receipts have rebounded, even though attendances
have fallen, partly due to ticket price increases.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPnviciCgWk6Yp4xEy069uTfiZLfHTmd4Cz7NxWFAaHEtwm7vAsg7pUObTGNJRhPvccMOmZWh94IS0cUW49nvFwbFWNuqhB2Lx_jKrDk4058isSA8vWNMDoNa87Pv3J4zAmb0ABbOS1LdP/s1600/11+Ipswich+Revenue+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPnviciCgWk6Yp4xEy069uTfiZLfHTmd4Cz7NxWFAaHEtwm7vAsg7pUObTGNJRhPvccMOmZWh94IS0cUW49nvFwbFWNuqhB2Lx_jKrDk4058isSA8vWNMDoNa87Pv3J4zAmb0ABbOS1LdP/s640/11+Ipswich+Revenue+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Following the slight reduction in 2015/16, Ipswich’s revenue
of £16 million remains firmly in the bottom half of the Championship, a long
way behind the top three clubs, who all earned more than £40 million. Of
course, to a large extent, this only demonstrates the importance of parachute
payments for those clubs relegated from the Premier League.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">This is clearly a sore point for Evans, “The average
parachute club starts with a £20 million per season head start over the rest of
us.” He added, “The lack of parity in the game certainly makes it harder to
compete. This season there were nine clubs benefiting from parachute payments
and there will be something similar next year. That gives them a massive
financial advantage.”<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">If these parachute payments were to be excluded, the gap
would obviously reduce, but Ipswich’s £16 million would still be a fair way
behind many other clubs, e.g. Brighton £25 million, Leeds United £24 million
and Derby County £21 million. Given these stats, Ipswich’s performance in the
last three seasons is worthy of some praise.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOgpw1qx07zKu-q-ZS87gVZVpogyb6sbpZOVI_OdhSj6lsGIK_RI6TJSe31RQnjrd27Sl2ZTW6g9h29HqKrEO3Bl95-hipnwUP0CwIXJOIiNmwcr8-LRirDaHP0wyT0drEWPWunkLOw0zv/s1600/13+Ipswich+Revenue+Mix+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="460" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOgpw1qx07zKu-q-ZS87gVZVpogyb6sbpZOVI_OdhSj6lsGIK_RI6TJSe31RQnjrd27Sl2ZTW6g9h29HqKrEO3Bl95-hipnwUP0CwIXJOIiNmwcr8-LRirDaHP0wyT0drEWPWunkLOw0zv/s640/13+Ipswich+Revenue+Mix+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The mix of Ipswich’s revenue has changed over the years with
broadcasting rising from 13% in 2009 to 33% in 2016 and commercial falling from
41% to 27%. However, match day remains the most important revenue stream at
40%, even though it has declined from 46%.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZFW9XbqVzB-Vt9BXUQHkKsRNVvmVHTzK3zWVUH9RmXhD6og9_1OLYMRWkLJsOhBVpR25cmOz2Q_EaZjc5OHzTrdfbFr09HrBm2CzVnryyseuUMbBsR04lVqpgtZQRXsXzW5tRnWIW0UHJ/s1600/14+Ipswich+Reliance+on+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="574" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZFW9XbqVzB-Vt9BXUQHkKsRNVvmVHTzK3zWVUH9RmXhD6og9_1OLYMRWkLJsOhBVpR25cmOz2Q_EaZjc5OHzTrdfbFr09HrBm2CzVnryyseuUMbBsR04lVqpgtZQRXsXzW5tRnWIW0UHJ/s640/14+Ipswich+Reliance+on+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Unsurprisingly, this means that Ipswich are one of the
Championship clubs most reliant on gate receipts. In percentage terms only four
clubs had a higher dependency in 2014/15: Nottingham Forest, Charlton Athletic,
Brighton and Millwall.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjstUBwTCwRTZGzsi5vuswWVZ-N8QK9NJCVSpn8tNcz_pAV8JGOQccle7znraIfXK2Q927LsPY6R3c0hFmcxyRwcK6L_wq1P8NIG7F0zeozDN_F8LWVrTOXO1Da8I596Hmx2HsGSTLdhPVC/s1600/15+Ipswich+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjstUBwTCwRTZGzsi5vuswWVZ-N8QK9NJCVSpn8tNcz_pAV8JGOQccle7znraIfXK2Q927LsPY6R3c0hFmcxyRwcK6L_wq1P8NIG7F0zeozDN_F8LWVrTOXO1Da8I596Hmx2HsGSTLdhPVC/s640/15+Ipswich+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Gate receipts were flat at £6.5 million in 2015/16, even
though average attendance fell by 644 (3%), as this was offset by one
additional home cup game. Nevertheless, Ipswich’s match day revenue is the 9th
highest in the Championship, though still around £3 million lower than Brighton
£9.4 million and Leeds United £9.2 million.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Ipswich’s average attendance of 18,959 was actually the 8th
best in last season’s Championship, but a fair way behind clubs like Derby
County (29,663), Brighton (25,583) and Middlesbrough (24,627).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-oUvmbOJ-BlY67tYZIR0PPCG0vOj6AjuCizNt5-el_weIf4Y5DbLHFdKzklkbQMr8CFu6NRTBLi2isO051qArKLCVTetkhWllW4k4Ba6f4T0-vumTqFFCOST0HmNbSyDkHmIuJKgR8Ryb/s1600/16+Ipswich+Attendances+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="590" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-oUvmbOJ-BlY67tYZIR0PPCG0vOj6AjuCizNt5-el_weIf4Y5DbLHFdKzklkbQMr8CFu6NRTBLi2isO051qArKLCVTetkhWllW4k4Ba6f4T0-vumTqFFCOST0HmNbSyDkHmIuJKgR8Ryb/s640/16+Ipswich+Attendances+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Ipswich’s attendances had been on a declining trend for a
number of years, but the charge to the play-offs resulted in an upswing in
2014/15. However, they have started to fall again since then with a further
slump this season to 16,789, which means that Ipswich have lost a third of
their crowd since the recent 25,651 peak in 2004/05.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Evans is acutely aware of the reduction in spectators: “We
can’t deny that attendances have been falling away somewhat this season – an
indication of the disappointing results we have had this year.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJUkIB_Q1tmVNH0RvJ2LmRrwfykLk2Fgcfpp8A3fUal6O5BxAyZ0a27HUV_tSC36yOS9qheckr44v21s3k3hx5PkSeIUCE1SJEGglJmI8UkIQ73_mchuRMjvQhQgLrZANqKolC4B-Cbnr5/s1600/17+Ipswich+Attendances+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="340" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJUkIB_Q1tmVNH0RvJ2LmRrwfykLk2Fgcfpp8A3fUal6O5BxAyZ0a27HUV_tSC36yOS9qheckr44v21s3k3hx5PkSeIUCE1SJEGglJmI8UkIQ73_mchuRMjvQhQgLrZANqKolC4B-Cbnr5/s640/17+Ipswich+Attendances+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">He said that the club was “looking at creative ways of
getting supporters back to Portman Road.” These include low prices for
youngsters (e.g. the season ticket for under-11s has been held at just £10 for
nine successive years), interest-free direct debit monthly payment scheme and
discounts with local businesses. If Ipswich are promoted to the Premier League,
the season ticket will be upgraded at no extra price plus the holder will be
given a free season ticket.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, fundamentally Ipswich’s ticket prices are among the
most expensive in the second tier. According to the BBC’s Price of Football
survey, no other fans in the Championship pay more for the most expensive
season ticket, while Town’s prices for the cheapest season ticket are only
surpassed by three clubs (Brighton, Newcastle and Norwich City).<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">From 2003 to 2013 season ticket prices had remained frozen
for seven out of the 11 years. However, prices have gone up every year since 2014/15,
including a 1.5% increase for the 2017/18 season (in line with the retail price
index).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYnPd6XKCUgij27eWcPkWKZDv9fj8Lrq9dT1Rj9isghkjkumgPd0z_r_Gz8QF5gfuocUHiMxdOAxxKT9dsIX3d14cJWqrBdWF8TJI__CoU89YwXiWo6rZAJABYumEWm3gupZxgSr22-5aj/s1600/18+Ipswich+TV+Championship+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="620" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYnPd6XKCUgij27eWcPkWKZDv9fj8Lrq9dT1Rj9isghkjkumgPd0z_r_Gz8QF5gfuocUHiMxdOAxxKT9dsIX3d14cJWqrBdWF8TJI__CoU89YwXiWo6rZAJABYumEWm3gupZxgSr22-5aj/s640/18+Ipswich+TV+Championship+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Ipswich’s broadcasting revenue rose 6% (£0.3 million) to
£5.4 million in 2015/16, which was attributed to an increase in the Football
League basic distribution. In the Championship most clubs receive the same
annual sum for TV, regardless of where they finish in the league, amounting to
around £4 million of central distributions: £2.1 million from the Football League
pool and a £2.3 million solidarity payment from the Premier League. There are
also payments for each live TV game: £100,000 home; £10,000 away.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, the clear importance of parachute payments is once
again highlighted in this revenue stream, greatly influencing the top nine
earners in 2014/15. Nevertheless, it should be noted that these payments are
not necessarily a panacea, e.g. Middlesbrough secured promotion last season,
even though their broadcasting income of £6 million was less than half the size
of those clubs boosted by parachutes.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1EjjTFqxvZlZqXARD4Riv7-V1acK7M8iu5R2jq8jhy_n44GxSBF3W4ufzqbWfokt1a4QtqzAoZeUtm-FFFwLvf0JRsVe99RTy4L5DwM7lKipQshkrMk030r0ytrZUSf4-NbFsPCOele2b/s1600/19+Ipswich+TV+Premier+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1EjjTFqxvZlZqXARD4Riv7-V1acK7M8iu5R2jq8jhy_n44GxSBF3W4ufzqbWfokt1a4QtqzAoZeUtm-FFFwLvf0JRsVe99RTy4L5DwM7lKipQshkrMk030r0ytrZUSf4-NbFsPCOele2b/s640/19+Ipswich+TV+Premier+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Looking at the television distributions in the top flight,
the massive financial chasm between England’s top two leagues becomes evident
with Premier League clubs receiving between £67 million and £101 million in 2015/16,
compared to the £4 million in the Championship. In other words, it would take a
Championship club more than 15 years to earn the same amount as the bottom
placed club in the Premier League.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The size of the prize goes a long way towards explaining the
loss-making behaviour of many Championship clubs. This is even more the case
with the new TV deal that started in 2016/17, which will be worth an additional
£35-60 million a year to each club depending on where they finish in the table.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQxFvRNlB9D1aULQ5oHwKj1h1YsVoqpPkBG-CNshIrAPeUwnmj8rzOflLb7pSVWvkQ4AO6htJuDoMVKSzvHB-D-SrFfkrtNU6eYc7_cCHrSU3Q0vN3H5tj25dCDBMfVrBgcz61aYdSLgUB/s1600/20+Ipswich+Promotion+Impact+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="624" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQxFvRNlB9D1aULQ5oHwKj1h1YsVoqpPkBG-CNshIrAPeUwnmj8rzOflLb7pSVWvkQ4AO6htJuDoMVKSzvHB-D-SrFfkrtNU6eYc7_cCHrSU3Q0vN3H5tj25dCDBMfVrBgcz61aYdSLgUB/s640/20+Ipswich+Promotion+Impact+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Even if a club were to finish last in their first season in
the top flight and go straight back down, their TV revenue would increase by an
amazing £95 million. They would also receive a further £71 million in parachute
payments, giving additional funds of around £166 million. If they survived
another season, you could throw in another £120 million.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Of course, if they did go up, Ipswich would also have to
spend more to strengthen their playing squad, but the net impact on the club’s
finances would undoubtedly be positive, as evidenced by the improvement in the
bottom line for those clubs promoted in the past few seasons.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6wpsIOxPI6MLm6_e43doZ74VnbinyxtxOuDivUSujySn9a-yU56MZ39KR0B1lZL6LfNxt8gTwOdYp5fW2cyjzO6TxoR6G11i3FPxiGA0m1rq2a8r-a753VfZ3bUDWfntHWN5JclaYpmEs/s1600/21+Ipswich+Parachute+Payments+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="510" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6wpsIOxPI6MLm6_e43doZ74VnbinyxtxOuDivUSujySn9a-yU56MZ39KR0B1lZL6LfNxt8gTwOdYp5fW2cyjzO6TxoR6G11i3FPxiGA0m1rq2a8r-a753VfZ3bUDWfntHWN5JclaYpmEs/s640/21+Ipswich+Parachute+Payments+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">As we have seen, parachute payments make a significant
difference to a club’s revenue and therefore its spending power in the
Championship. From this season, these will be even higher, though clubs will
only receive parachute payments for three seasons after relegation. My estimate
is £83 million, based on the percentages advised by the Premier League (year 1
– 55%, year 2 – 45% and year 3 – 20%), including around £40 million in the
first year. However, if a club is relegated after only one season in the
Premier League, it will only benefit from parachute payments for two years.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">There are some arguments in favour of these payments, namely
that it encourages clubs promoted to the Premier League to invest to compete,
safe in the knowledge that if the worst happens and they do end up relegated at
the end of the season, then there is a safety net. However, they do undoubtedly
create a significant revenue disadvantage in the Championship for clubs like
Ipswich, as Evans has often stated.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">It is worth noting that if Ipswich were to be promoted, then
they are contractually bound to make additional payments to players, coaches,
staff, players’ former clubs, season ticket holders and certain convertible
loan note holders. This is not quantified in the latest accounts, but was given
as £8.2 million in 2013.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpQpXNB1PlmUQy-psxZSKfRkEfYLcbTd38ecVogzvxEuumQzPsCoEmuWeohxP97gaZYvuxfjusGAuQbZG-F055ZHAEiIM1y2_sotmj8VrV6V0hJkxK8SdKV4soDUpZS8tIQuvAQSgsoyOg/s1600/22+Ipswich+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhpQpXNB1PlmUQy-psxZSKfRkEfYLcbTd38ecVogzvxEuumQzPsCoEmuWeohxP97gaZYvuxfjusGAuQbZG-F055ZHAEiIM1y2_sotmj8VrV6V0hJkxK8SdKV4soDUpZS8tIQuvAQSgsoyOg/s640/22+Ipswich+Commercial+2016.jpg" width="640" /></a></div>
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<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">Commercial income fell by 4% (£0.4 million) to £4.4 million
in 2015/16, though this is a little misleading, as the match day public
catering operation was outsourced whereby the club now receives a royalty based
on turnover.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Corporate sales and sponsorship were also slightly down on
last year, however merchandise sales exceeded 2014/15, further building on the
success of the change of kit supplier to Adidas in 2014 (a four-year deal).
This was the first time Ipswich had worked with the German supplier since the
glory days 35 years ago when they won the FA Cup and UEFA Cup under Bobby
Robson.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The shirt sponsorship is with the Marcus Evans Group, who
originally signed a five-year deal in 2008 worth a reported £4 million in total
and have subsequently extended this each season.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">There is clearly room for improvement in the commercial area,
though to be fair only two Championship clubs (QPR and Leeds United) generate
more than £10 million a season. This is basically down to results, as Evans
admitted: “We work very hard maximising revenues for the club on a commercial
basis, but ultimately our product is about what the team delivers on the pitch.
And, like any business, if your product is of good quality, you’ll make more
money and sell more of your product.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHHItFDuh96aOh7oakM30wyX-rZzshqOi35EkX7ISa3e3egH0z8zl9lOpbFmxLZUnwUbphhUITgZoDYd6DLYaM_0H6cRQfqDdqCKzoU3xYAitkIwG6Ezusmfvm9psYazIHsOBUAyBZB6Aj/s1600/23+Ipswich+Wages+to+Turnover+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="412" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHHItFDuh96aOh7oakM30wyX-rZzshqOi35EkX7ISa3e3egH0z8zl9lOpbFmxLZUnwUbphhUITgZoDYd6DLYaM_0H6cRQfqDdqCKzoU3xYAitkIwG6Ezusmfvm9psYazIHsOBUAyBZB6Aj/s640/23+Ipswich+Wages+to+Turnover+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Ipswich’s wage bill increased by 4% (£0.6 million) to £16.6
million, as full-time headcount was up from 142 to 149, leading to the wages to
turnover ratio rising from 97% to 102%.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">This was the second year in a row that wages have climbed, a
necessary evil for Town, as explained by Ian Milne when commenting on the
2014/15 figures: “The wage bill has gone up this season quite appreciably. People
say ‘where has the Tyrone Mings and Aaron Cresswell money gone?’ Well that’s
where it is being ploughed into.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Nevertheless, wages are still 8% below the £18.0 million
peak in 2012, when the wages to turnover ratio was as high as 119%. Milne
again: “We’re not paying under the market value, but the important thing is
that we’re not paying over the market value either – which is something we have
done in the past. Back in 2012 (when the club made a loss of £16m) we were
paying some very high salaries.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3W8osiURyDWf3nVbDCBCAQU3FeugBiiiZc6UjibvFMeVa669nkUDFOP_DyE7jKEN5AAF-K54SujRpU6c9qwznDYIVDKT0DywdTGiiJnMP0imBslvzHViU0xIErBXTFHOd9M0Sz6OgSxi9/s1600/24+Ipswich+Wages+to+Turnover+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3W8osiURyDWf3nVbDCBCAQU3FeugBiiiZc6UjibvFMeVa669nkUDFOP_DyE7jKEN5AAF-K54SujRpU6c9qwznDYIVDKT0DywdTGiiJnMP0imBslvzHViU0xIErBXTFHOd9M0Sz6OgSxi9/s640/24+Ipswich+Wages+to+Turnover+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Clearly, the business model is still not ideal if revenue is
not sufficient to cover the wage bill, let alone any other expenses, but almost
every club in the Championship has a dreadful wages to turnover ratio with over
half of them being more than 100%. In fact, Ipswich’s 102% looks positively
reasonable compared to clubs like Brentford 178%, Nottingham Forest 170% and
Blackburn Rovers 134%.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">The £17 million wage bill was also firmly in the bottom half
of the league, underlining the challenge in reaching the play-offs. In
particular, it was significantly lower than the likes of Cardiff City, Fulham, Reading,
Hull City, Blackburn Rovers and Nottingham Forest, whose wages were all above
£30 million. This season it will be even worse with the arrival of big spending
Newcastle United and Aston Villa in the Championship.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAItt4a0cH6gAt7xNVU8IZDKrri6IzG1ffvqstkUwdb9bsqu696bH8LVhrPezOoLQ8QVqcc9nk6g6aXHVUHdfdjLWS6UBduvrqCsIiiFhjA7xyJg8Ot6pYnjUKhNMjUMKAqu0FGIDx4QtJ/s1600/25+Ipswich+Wages+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAItt4a0cH6gAt7xNVU8IZDKrri6IzG1ffvqstkUwdb9bsqu696bH8LVhrPezOoLQ8QVqcc9nk6g6aXHVUHdfdjLWS6UBduvrqCsIiiFhjA7xyJg8Ot6pYnjUKhNMjUMKAqu0FGIDx4QtJ/s640/25+Ipswich+Wages+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">As Milne observed, “We certainly aren’t the highest spenders
in terms of wages. We are paying more than we were, but I suspect it is still
quite a bit less than some of the clubs that surround us.”</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Of course, a high wage bill is no guarantee of success and
it is also true that clubs have been promoted with a low wage bill, e.g.
Burnley, but Ipswich’s relatively low wages certainly do not make it any
easier.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDgDaW-zFmho_XT-uSZYTvCVoZpxG0mrJh02JMO4DUPjK6RVlIDXvpJX7_0dfElUmVePfcI12CyhbOmEQUDcn3gcmEnfdivyNEEIm4GgBp9xcc-Q7ENxoM3J_QhM-GjGptBOWgoYAY2p92/s1600/26+Ipswich+Other+Expenses+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDgDaW-zFmho_XT-uSZYTvCVoZpxG0mrJh02JMO4DUPjK6RVlIDXvpJX7_0dfElUmVePfcI12CyhbOmEQUDcn3gcmEnfdivyNEEIm4GgBp9xcc-Q7ENxoM3J_QhM-GjGptBOWgoYAY2p92/s640/26+Ipswich+Other+Expenses+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Other expenses rose by £0.3 million (6%) to £5.4 million in
2015/16, largely as a result of a restatement of the Football League pension
fund deficit (in accordance with Financial Reporting Standard FRS102) and
general cost increases, but this was still on the low side, compared to clubs
like Brighton £16.0 million, Fulham £13.4 million and Leeds United £12.6
million.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgayeO2kpI3s4YBVBOlXUpJXYbRCLoVnd1g_k22v6GL3eK8zT6EQEJAZFUgrnRXVYxVYN68848oG8-X5WipJkQeP34iz0YBwwH-SX1Ye6UfCoPNa3q3Jyb2zSydQYwtJ1CQ2JIfJtX_5ihj/s1600/27+Ipswich+Player+Amortisation+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="394" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgayeO2kpI3s4YBVBOlXUpJXYbRCLoVnd1g_k22v6GL3eK8zT6EQEJAZFUgrnRXVYxVYN68848oG8-X5WipJkQeP34iz0YBwwH-SX1Ye6UfCoPNa3q3Jyb2zSydQYwtJ1CQ2JIfJtX_5ihj/s640/27+Ipswich+Player+Amortisation+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The recent lack of spending in the transfer market has been
reflected in Ipswich’s profit and loss account via player amortisation, which
has fallen from £5.1 million in 2009/10 to just £0.2 million in 2015/16.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In the same way, the lack of big money buys from other clubs
has impacted the balance sheet with the value of player (intangible) assets
decreasing from £6.4 million in 2010 to £0.3 million in 2016.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9SrAdeQ1Y0z3p9N8sa5vLN00BC3s0N8756wyRlgJjP3PX3J-i3b6rvnrfki5hla8mba5Dpt4QBA8op0UA2aU4ZQvcZ90rzeaclPVBWF4rBULXN0_6FFGPYXkLVrH2kxap_1LdIdUXy5QR/s1600/28+Ipswich+Player+Trading+Accounting+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9SrAdeQ1Y0z3p9N8sa5vLN00BC3s0N8756wyRlgJjP3PX3J-i3b6rvnrfki5hla8mba5Dpt4QBA8op0UA2aU4ZQvcZ90rzeaclPVBWF4rBULXN0_6FFGPYXkLVrH2kxap_1LdIdUXy5QR/s640/28+Ipswich+Player+Trading+Accounting+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The accounting for player trading is fairly technical, but
it is important to grasp how it works to really understand a football club’s
accounts. The fundamental point is that when a club purchases a player the
transfer fee is not fully expensed in the year of purchase, but the cost is
written-off evenly over the length of the player’s contract, e.g. Grant Ward
was bought from Tottenham for a reported £600,00 on a three-year deal, so the
annual amortisation in the accounts for him is £200,000.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbV4yqFd1xdnIsdMgwYGqiulvtGmS6GPD-typkCOfLsqm8goRnGDMMhaRsq2kfunVH_8OY3ghaZcYvBLchtHYQsbevuY5GVuhgLLkEP0tAFYgqgqE6at24VGBiEJs6kWAtUjnBcquFX7A_/s1600/29+Ipswich+Player+Amortisation+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="624" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbV4yqFd1xdnIsdMgwYGqiulvtGmS6GPD-typkCOfLsqm8goRnGDMMhaRsq2kfunVH_8OY3ghaZcYvBLchtHYQsbevuY5GVuhgLLkEP0tAFYgqgqE6at24VGBiEJs6kWAtUjnBcquFX7A_/s640/29+Ipswich+Player+Amortisation+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">To place this into perspective, Ipswich’s player
amortisation of £0.2 million is one of the lowest in the Championship, only
ahead of Rotherham United. The highest player amortisation is obviously found
at clubs recently relegated from the Premier League, namely Hull City £21
million, QPR £16 million, Cardiff City £11 million and Fulham £11 million.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWLfpyLg_58YUA-hRpJjWloNS-V1K-p5064FSDQtWNRlc4qNknjQQP1h5kMi7UZbd8jQ-dH9HAxGvckD8AQUy9WekIINDT6z4M7xoVJ_XRYCt6hrbKWiGZzvYUZYkslIBvrzrofrHzv1p3/s1600/30+Ipswich+Debt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWLfpyLg_58YUA-hRpJjWloNS-V1K-p5064FSDQtWNRlc4qNknjQQP1h5kMi7UZbd8jQ-dH9HAxGvckD8AQUy9WekIINDT6z4M7xoVJ_XRYCt6hrbKWiGZzvYUZYkslIBvrzrofrHzv1p3/s640/30+Ipswich+Debt+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Net debt fell by £0.7 million from £87.2 million to £86.5
million, as gross debt was reduced by £1.6 million from £88.2 million to £86.6
million, but cash also dropped by £0.9 million from £1.0 million to £0.1
million. Nevertheless, debt has shot up from the £36 million in 2008, which was
largely taken on by Evans when he bought the club.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Almost all the debt is owed to various Marcus Evans’
companies, mainly through a mixture of loans and convertible loan notes. There
are also £8 million of preference shares, which pay a fixed dividend of 7% per
annum (provided there are profits available for distribution). To date, the
club has accrued £4.8 million for these dividends. Against that, interest has
not been charged on the Loan Notes 2026 from July 2014.</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Of course, many clubs in the Championship have built up substantial
debt, but Ipswich’s £87 million is only surpassed by five other clubs: QPR £194
million, Brighton £171 million, Cardiff City £116 million, Blackburn Rovers
£104 million and Hull City £101 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUX5HXf1DgtDHfdqU_EqaEOHrtvGvZjA8Z3Gh8LvEtFIqPZJ4dOBsFXesaruXfg-P7CjR2CKagOlddn4B-ykDeLzyC9Vxdctnyvr6moyDhBI6HYibOzxNHzCegJRCtWPjAu_Vq3jmHFQAP/s1600/31+Ipswich+Debt+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="630" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUX5HXf1DgtDHfdqU_EqaEOHrtvGvZjA8Z3Gh8LvEtFIqPZJ4dOBsFXesaruXfg-P7CjR2CKagOlddn4B-ykDeLzyC9Vxdctnyvr6moyDhBI6HYibOzxNHzCegJRCtWPjAu_Vq3jmHFQAP/s640/31+Ipswich+Debt+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">The club has emphasised that it is not in debt to any
financial institution, as explained by finance director Mark Andrews, “''Most
Championship clubs are carrying debt but the majority of debt carried at
Ipswich Town is not external, it is owed to the Marcus Evans Group.”</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Milne added, “Marcus is very happy with the debt level –
it’s all owed to him, none of it is owed to banks or anything like that. He,
like a number of owners, doesn’t expect to get any of it back unless we get in
the Premier League.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">This is indeed true, but there is still a degree of risk
associated with such an arrangement, as the annual accounts noted: “the club
remains dependent upon ongoing financial support from its principal
shareholder.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHP1fXpuBcas030UnNXIJVJdwnGPYFPOANhQ1gzK0uWIz43o_fm4SmzqGA_FuwWdmAQ5YrTofsrX7OA6tFy1bAH2L6mSbH0PruqeGywV191CsvrZ0e-PC-AjN84N_Odc3E99KLN28vhZRO/s1600/32+Ipswich+Cash+Flow+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="284" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHP1fXpuBcas030UnNXIJVJdwnGPYFPOANhQ1gzK0uWIz43o_fm4SmzqGA_FuwWdmAQ5YrTofsrX7OA6tFy1bAH2L6mSbH0PruqeGywV191CsvrZ0e-PC-AjN84N_Odc3E99KLN28vhZRO/s640/32+Ipswich+Cash+Flow+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">From a cash perspective Ipswich basically balance the books,
but only because Evans increases his loan each year, as the cash flow from
operating activities remains stubbornly negative. In the last decade Evans has
provided £46.3 million via £32.8 million of loans and a £13.5 million increase
in share capital. Financing has also come from £7.4 million of net player sales
and a £1.5 million reduction in the cash balance.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">However, the lack of investment over the last eight years is
striking with just £0.2 million being spent on infrastructure improvements in
the Evans era, i.e. virtually nothing on the stadium. Instead, almost all of
the funding has been used to simply cover the club’s operating losses.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWqZABoK7WXjaYR4eU53cyTdhgQjXml8bEj7hh9oCGyO7Qo71NKgIp8q2E9qdB9zRgz-Xd31G8J1dYHl0LtIcHa3muZWZGGcSdx9qc3HwyFiLTfuyy6Ug1k1_kis8239jKpn5LK7mJ2_xz/s1600/33+Ipswich+Use+of+Funds+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="472" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWqZABoK7WXjaYR4eU53cyTdhgQjXml8bEj7hh9oCGyO7Qo71NKgIp8q2E9qdB9zRgz-Xd31G8J1dYHl0LtIcHa3muZWZGGcSdx9qc3HwyFiLTfuyy6Ug1k1_kis8239jKpn5LK7mJ2_xz/s640/33+Ipswich+Use+of+Funds+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Former chief executive Simon Clegg explained Ipswich’s
dependency on the owner a few years ago, “We only survive because Marcus Evans
can afford to put in £4 million or £5 million of his own money every year to
keep the club afloat”, while Evans repeated the mantra last December, “I am
committing sums of £5 million and more per annum, at the start of each season
towards the annual budget.”</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">That was certainly true in the past, but the cash flow
statement shows that only around £400,000 of additional loans were received by
the club in each of the last two seasons (net £250,000 after loan repayments),
as the difference was largely compensated by player sales. <o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">That may have changed this season, but Milne noted in a
slightly worrying statement that, “You can’t keep expecting the owner to keep
throwing money at things.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg79yPH9zcrn2K-Wm7ZZ7ZOrf-JpOh5g1U_bEDCDpDq9ukQQPfoM_xK5cuMSZpgBE-JR1Z_MaQIvSrumAmb1pv6beWi07c9V-K04LkQtcdyCqhccaodId01UmHUoq_Qslp0Ng6TPw2fWK-x/s1600/34+Ipswich+Cash+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="624" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg79yPH9zcrn2K-Wm7ZZ7ZOrf-JpOh5g1U_bEDCDpDq9ukQQPfoM_xK5cuMSZpgBE-JR1Z_MaQIvSrumAmb1pv6beWi07c9V-K04LkQtcdyCqhccaodId01UmHUoq_Qslp0Ng6TPw2fWK-x/s640/34+Ipswich+Cash+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: 'Trebuchet MS', sans-serif;">Either way, Ipswich’s cash balance as at 30 June 2016 was
down to just £91,000, one of the lowest in the Championship, though in fairness
none of the clubs is sitting on a cash mountain.</span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">One accusation against Evans’ ownership is that there has
been a lack of transparency around the club’s affairs, epitomised by HMRC
issuing a winding-up order in February 2016 for non-payment of tax, though this
was subsequently dismissed – and described by Milne as “a storm in a tea cup”.<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Yet the main charge is that the owner lacks ambition. The
man himself has argued that this is not the case, effectively laying the blame
at the feet of Lady Luck: “When I took over here I was hoping we would get to
the Premier League in five years. I never had a firm expectation though. I
realised that in football there are so many factors outside of your control.”<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;">In fairness, Evans’ cautious approach has to be considered
preferable to that applied by some owners (Bolton Wanderers, for example),
especially for a club like Ipswich Town that experienced administration in the
not too distant past.<o:p></o:p></span></div>
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<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Hard to Berra"</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">In any case, he cannot simply buy success, as Ipswich need
to comply with the Financial Fair Play (FFP) regulations. Evans had been a keen
supporter of this initiative, “It is a key objective of the Board to reduce
ongoing losses in order to meet the Football League’s FFP rules.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">However, he has become increasingly disillusioned, “FFP,
which was brought in to level an increasingly uneven playing field hasn’t
worked.” This is not just due to the advantage that parachute payments bring to
clubs facing a cap on losses, but the application of the regulations.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Evans again, “At the moment it appears to be a total farce.
However, let’s wait and see if the Football League does its job. I appreciate
that legal wheels sometimes grind very slowly.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Under the new rules, losses will be calculated over a
rolling three-year period up to a maximum of £39 million, i.e. an annual
average of £13 million, assuming that any losses in excess of £5 million are
covered by owners injecting equity. A higher loss one year can be compensated
in later years, e.g. via player sales, or might even become irrelevant (if the
club is promoted).<o:p></o:p></span></div>
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<span style="font-family: Trebuchet MS, sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
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<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"No Tears for Sears"</span></div>
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<br /></div>
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<span style="font-family: Trebuchet MS, sans-serif;">Basically, the allowable losses have increased, which is
likely to encourage Ipswich’s rivals to spend even more, making the division
even more competitive. For Ipswich to challenge, Evans would have to inject
equity to maximise allowable losses.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">It should be noted that FFP losses are not the same as the
published accounts, as clubs are permitted to exclude some costs, such as
depreciation, youth development, community schemes and any promotion-related
bonuses.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">These barriers help explain Ipswich’s focus on youth
development, as explained by Evans: “I am 100% committed to the Academy and
have recently invested over £1 million in new infrastructure and additional
staffing. I believe our efforts of the last years are starting to pay off.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Despite failing to secure the coveted Category One status, a
number of talented players have emerged from the Academy over the last couple
of years, e.g. Andre Dozzell, Teddy Bishop, Josh Emmanuel and Myles Kenlock.
Furthermore, Town had three players in the England squad at last summer’s U17
European Championship.<o:p></o:p></span></div>
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<div class="MsoNormal" style="text-align: center;">
<span style="font-family: Trebuchet MS, sans-serif; font-size: xx-small;">"Teddy Picker"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">Evans recently underlined his commitment, to Ipswich Town “I
will continue to do everything I can to ensure that the success we want is just
around the corner and that we are promoted.” However, he put his finger on the
main issue in the very same statement, “There are those that feel my investment
plan has no chance of success.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Trebuchet MS, sans-serif;">This is a reference to the feeling that it is unlikely that
a club like Ipswich could be promoted to the Premier League without the benefit
of substantial investment, particularly in a world of ever more lucrative
parachute payments to clubs relegated from the top flight.</span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif;">It would indeed be a major surprise if Ipswich were to go
up, especially given their current lowly position. Stranger things have
happened, but not too often.</span></div>
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<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com13tag:blogger.com,1999:blog-487486960623783530.post-1277630679080802372017-01-16T07:20:00.000+01:002017-02-24T19:32:47.629+01:00Everton - Pressure Drop<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFvxNjvCgmq6JCkqEhx8KGUHWz6uRSKAUvTBm_13aIPzsDYGpY67TSmrEn-Dd1JIvptNKt4-PrJFQLEvBNhZeOW9i94JxJWDvDXqQTiwxCUdSSLwh2zKO-JfHmduUK8nrb-ee3jN6Ur9Eo/s1600/Ross+Barkley.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="212" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFvxNjvCgmq6JCkqEhx8KGUHWz6uRSKAUvTBm_13aIPzsDYGpY67TSmrEn-Dd1JIvptNKt4-PrJFQLEvBNhZeOW9i94JxJWDvDXqQTiwxCUdSSLwh2zKO-JfHmduUK8nrb-ee3jN6Ur9Eo/s400/Ross+Barkley.jpg" width="400" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Although Everton reached two domestic cup semi-finals in
2015/16 (something the club had not done since 1984), their performances were
disappointing in the Premier League, as they finished 11th for the second
successive season. As chairman Bill Kenwright observed, “Ultimately, our final
league positions over the last two seasons were not good enough.”</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This culminated in the decision to sack manager Roberto
Martinez, replacing him with former Dutch international Ronald Koeman, who was
tempted to leave Southampton for the project at Everton.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This was a clear statement of intent by new majority owner,
Farhad Moshiri, an Iranian billionaire, who bought a 49.9% stake in the club
for a reported £85 million in February 2016 after selling his Arsenal
shareholding to business partner Alisher Usmanov.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Moshiri explained his managerial choice thus, “For our club
to compete in the north-west of England, which is the new Hollywood of football
with Guardiola, Mourinho, Klopp, we needed a star to stand on the touchline, so
I got Koeman.”<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The club also brought in a new director of football in the
shape of Steve Walsh, who had been responsible for some astute player
recruitment at surprise champions Leicester City by scouting the likes of Riyad
Mahrez, N’Golo Kanté and Jamie Vardy.<o:p></o:p></span></div>
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<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Rom, if you want to"</span></div>
<div class="MsoNormal">
<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Everton had been looking to secure new investment for many
years, but Kenwright is convinced that he has found the perfect investor: “I’m
more positive now about the future of our great club than I’ve been during my
time as Chairman. I have absolutely no doubt that in Farhad Moshiri we have
found someone not only with the wherewithal - and we all know how important
that is these days - but also with a deep understanding of the game and a
growing appreciation of all things Everton.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This new investment is key to Everton’s future prospects and
should represent a substantial change after years of caution and thrift.
Certainly, Moshiri is talking a good match: “The way to compete is to build a
big stadium, to increase our merchandising and commercial income. That is what
we will do.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">He added, “We needed a strong balance sheet, so I paid off
the debts. We are now very flexible financially. We have no restrictions to
spend.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Before his departure, the ebullient Martinez said, “financially
we can compete against anyone in world football”, which seemed a bit
over-the-top, but for the first time in ages Everton do appear to have a solid
plan. As part of the new strategy, Moshiri will clearly make funds available to
strengthen the squad, which will give the Blues a fighting chance on the pitch.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The need for new investment was highlighted by the
publication of Everton’s financial results for the 2015/16 season, which
included a hefty loss of £24.3 million, considerably higher than the previous
season’s £4.6 million, though the bottom line was adversely impacted by a
significant </span><span style="font-family: "trebuchet ms" , sans-serif;"> </span><span style="font-family: "trebuchet ms" , sans-serif;">£11.3 million exceptional
payment “to former employees and other costs in relation to the change in
coaching staff in the year”.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><span style="mso-spacerun: yes;"> </span>This obviously
included paying out the remainder of Martinez’s contract. It is not clear
whether the reported £5 million compensation paid to Southampton to secure
Koeman’s services is also included, but my guess would be that will only be
reflected in next year’s figures, given that the Dutchman signed his Everton
contract on 14 June, i.e. after the 2015/16 accounts were closed. Furthermore,
Martinez’s pay-off was reported in the media to be in the region of £10-12
million.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Revenue fell £4 million (3%) to £121.5 million from a record
£125.6 million in 2014/15, when Everton reached the last 16 in the Europa
League. This contributed to commercial income decreasing by £4.6 million (18%)
to £21.4 million, as the club “missed out on performance bonuses from its
partners and commercial revenues from UEFA.”<o:p></o:p></span></div>
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<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Have I told you, Leighton?"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The absence of European football also meant that gate
receipts were £0.3 million (2%) lower, though this was largely offset by
reaching the semi-finals of the FA Cup and Capital One Cup. Broadcasting income
was slightly higher at £82.5 million, due to Everton being shown live one more
time.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Costs continued to grow with the wage bill rising £6.5
million (8%) to £84 million and player amortisation up £3.3 million (17%) to
£22.4 million. Other expenses also increased by £1.5 million to £30.4 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In contrast, profit on player sales rose £4.5 million to
£7.8 million, while net interest payable was £2.7 million lower at £3.7
million. It should be noted that the 2014/15 interest was restated following
the transition to Financial Reporting Standard 102.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">These financials were noting to write home about, as
confirmed by chief executive Robert Elstone, “The results reflect a challenging
year for the club. Performance on the pitch directly impacted commercial income
with key deals reduced as a result of the club’s finishing position.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Traditionally, football clubs have lost money, but the
environment has largely changed in the Premier League these days, thanks to the
combination of surging TV money and Financial Fair Play regulations, which has
meant that top-flight English clubs have never been richer.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In fact, Everton are one of only two clubs that have so far published
2015/16 accounts that have reported a loss. The other one is Chelsea, and they
would also have been profitable without £75 million of exceptional payments
(mainly the termination fee for their shirt sponsorship deal).<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">At the other end of the spectrum, we find the two Manchester
clubs with United and City announcing healthy pre-tax profits of £49 million
and £20 million respectively. The other Premier League clubs that have released
2015/16 accounts to date were also profitable: Norwich City £13 million,
Arsenal £3 million and Stoke City £2 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This continues the trend of the 2014/15 season, when only
six of the 20 Premier League clubs made losses. This group largely comprised
clubs that have been badly run (Aston Villa, Sunderland and QPR), but also
included Chelsea, Manchester United and, yes, Everton.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In fairness, one of the drivers for Everton’s poor financial
performance has been the lack of profits from player sales. This activity can
have a major influence on a football club’s bottom line, as shown in 2014/15 by
Liverpool (£56 million) and in 2015/16 by Chelsea (£49 million).</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In contrast, Everton only generated £8 million of profit
from this activity, mainly due to the transfer of Steven Naismith To Norwich
City, though this was higher than the £3 million reported in 2014/15.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBRMMdMSP0xgmIMjVUMnn5A07g4t_6fApS1p99tbhoqWoLVtVKaaFmw8dxaEzhvNRTEJ4n3raWijJyOriKU1XQEO_XOQGKutxIFU19Z71ea9uNqt8VuRDgFcoNO2RRjih-rxM4Clz6wQMg/s1600/4+Everton+Profit+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBRMMdMSP0xgmIMjVUMnn5A07g4t_6fApS1p99tbhoqWoLVtVKaaFmw8dxaEzhvNRTEJ4n3raWijJyOriKU1XQEO_XOQGKutxIFU19Z71ea9uNqt8VuRDgFcoNO2RRjih-rxM4Clz6wQMg/s640/4+Everton+Profit+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Of course, Everton have more often than not lost money,
reporting losses in eight of the last 11 years. They were consistently
loss-making between 2006 and 2012 (with a cumulative £45 million loss in those
seven years), though they did at least restrict their annual losses to
manageable levels. There was then some improvement in 2013 and 2014 before a
return to losses in 2015 and 2016.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, this is partly due to the declining impact
of player sales in the last two seasons. Indeed, the £28 million profit in 2014
was almost entirely down to the sale of Marouane Fellaini to Manchester United.
It is fair to say that in many years Everton have effectively subsidised their
underlying deficit with the sale of a major player, despite Kenwright claiming
that Everton are “not a selling club.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuwrxcp64TfzxqPtOs8zxUSCyuZS2lArxf9KsIxiUwCYTe6TL5_3Vyx_q1Acwy7-Oqke79vXeIdehT-JDtdsjiq4Zb8iXLnuYd15jbAGVnvCHC-Yf-Pr8D4OCpb4Nxdq8cDeTt9gcKQgxu/s1600/5+Everton+Adj+Profit+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="432" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuwrxcp64TfzxqPtOs8zxUSCyuZS2lArxf9KsIxiUwCYTe6TL5_3Vyx_q1Acwy7-Oqke79vXeIdehT-JDtdsjiq4Zb8iXLnuYd15jbAGVnvCHC-Yf-Pr8D4OCpb4Nxdq8cDeTt9gcKQgxu/s640/5+Everton+Adj+Profit+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Over the last decade, Everton’s aggregate loss before tax
was £33 million, but this would have been significantly worse without £113
million of profits from player sales in the same period.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Next year’s accounts will benefit from the £47.5 million
sale of defender John Stones to Manchester City, which will help Everton swing
back into the black (along with the additional money from the new TV deal).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The club has noted that the balance sheet “substantially
undervalues” players such as Romelu Lukaku and Ross Barkley, especially as no
cost is ascribed to home grown players. Of course, Everton would almost
certainly want to retain such talent, but they would boost their profits if
they were to sell.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf7tLh9tz1GJzI0ZRXrKYInL2IMcyr1f3do5nbU5rXGF00dMKPPsPFuiS0V2oqKIjCJ5qFtjk51ixrkkpIoduyrFvMl1hKo1PKsfH54qzK0wBdSPz4kC7G0RilbAUPiG2jyOO72LAzUEF_/s1600/6+Everton+EBITDA+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf7tLh9tz1GJzI0ZRXrKYInL2IMcyr1f3do5nbU5rXGF00dMKPPsPFuiS0V2oqKIjCJ5qFtjk51ixrkkpIoduyrFvMl1hKo1PKsfH54qzK0wBdSPz4kC7G0RilbAUPiG2jyOO72LAzUEF_/s640/6+Everton+EBITDA+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">To get an idea of underlying profitability and how much cash
is generated, football clubs often look at EBITDA (Earnings Before Interest,
Depreciation and Amortisation), as this metric strips out player trading and
non-cash items.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In Everton’s case this highlights their operational
difficulties in the past two seasons, as their EBITDA has fallen from £25
million in 2013/14 to just £7 million in 2015/16 (excluding exceptional
payments). The major improvement in 2014, following many seasons of cash
break-even, was largely due to the first year of that Premier League TV deal
three-year cycle, so we could anticipate a similar jump in 2016/17 with the new
TV deal – at least £9 million based on the operating profit projection at
Everton’s AGM.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgE2TREGsQ0TxbimUYnrmbG3S4TVl2gHpsMLTjJZ5OkPc6-kPJ5SOCDJkk7xwIA6TDMTbCVsvxa9EYSGUu22WsXQPf8akJhSH-PCmDCGB0IWWordAvlMDEM_ZjKmH7G08lt-BYAT-ksmq9s/s1600/7+Everton+EBITDA+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgE2TREGsQ0TxbimUYnrmbG3S4TVl2gHpsMLTjJZ5OkPc6-kPJ5SOCDJkk7xwIA6TDMTbCVsvxa9EYSGUu22WsXQPf8akJhSH-PCmDCGB0IWWordAvlMDEM_ZjKmH7G08lt-BYAT-ksmq9s/s640/7+Everton+EBITDA+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is much-needed if we look at EBITDA in the Premier
League, which shows that Everton are a long way behind the elite with Manchester
United leading the way with an astonishing £192 million, followed by Manchester
City £109 million and Arsenal £82 million. In other words, United’s cash profit
is an incredible 27 times as much as Everton’s.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The only Premier League clubs with lower EBITDA than Everton
were Stoke City, Sunderland, Swansea City and Aston Villa, which is a shocking
state of affairs for a club of Everton’s history. No wonder that Moshiri has
been welcomed with open arms, as he will definitely grow the club’s revenue.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidsNWb0xy0NMgd170y9JK6UBNOSpYq8sp1CFqBOWhIikWovlmq6Au2euWfSbFSA1O7JRAt9QjjOEa8YOf6cuqhaxgXCjZtXM3-vLuOuJnzXJ3H5JoZ9nHoRi-qKGyOxaRX2ZbzZtIEBBJl/s1600/8+Everton+Revenue+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidsNWb0xy0NMgd170y9JK6UBNOSpYq8sp1CFqBOWhIikWovlmq6Au2euWfSbFSA1O7JRAt9QjjOEa8YOf6cuqhaxgXCjZtXM3-vLuOuJnzXJ3H5JoZ9nHoRi-qKGyOxaRX2ZbzZtIEBBJl/s640/8+Everton+Revenue+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Everton made great play of the fact that 2015/16 was the
“third successive year we posted turnover in excess of £120 million.” That’s
one way of looking at it, but another less charitable view would be that
revenue has essentially been flat for the last three seasons.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Since 2013 revenue has grown by £35 million (41%), though
most of this is down to the increasing TV deal (£27 million), which is thanks
to the central Premier League negotiating team, as opposed to the club’s board.
In fairness, commercial revenue has grown by £8 million in this period, while
gate receipts were unchanged at just under £18 million (though this is a bit
misleading, as it does not take into consideration the club’s restatement of
the revenue categories in 2014).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">At the recent AGM Everton projected revenue of £172.5
million in 2016/17, a year-on-year increase of £51 million, almost all of which
is driven by the new Premier League broadcast deal. The club’s challenge has
been to differentiate itself from other clubs by growing commercial income.
Although they have been unsuccessful in the past, Moshiri will surely change
that for the better.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJz3lYTmDi2HUO5bKi6zNAcLSokBVJJOHMnqj3idzkWEVoF1K64KjSQOsm0ug_NyV22F5JHxccS5kTZU4C4rpGHDLg_svYHWqMTRfET01mJSi3TIE8UiM00pAy7Ev2Hgo28V0-Y_QNxlFi/s1600/9+Everton+Revenue+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJz3lYTmDi2HUO5bKi6zNAcLSokBVJJOHMnqj3idzkWEVoF1K64KjSQOsm0ug_NyV22F5JHxccS5kTZU4C4rpGHDLg_svYHWqMTRfET01mJSi3TIE8UiM00pAy7Ev2Hgo28V0-Y_QNxlFi/s640/9+Everton+Revenue+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The importance of revenue growth is clear when we compare Everton’s
£122 million to the Premier League elite, e.g. Manchester United earned more
than half a billion, which is almost £400 million higher than the Blues. That’s
an enormous financial advantage – every season.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In fact, the top four clubs all earn well above £300
million: United £515 million, Manchester City £392 million, Arsenal £351
million and Chelsea £329 million, while Liverpool and Tottenham generated £298
million and £196 million respectively in 2014/15. Little wonder that Moshiri
referred to “a mini league emerging this year of six clubs”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Although it could be argued that Everton are not doing too badly
in revenue terms, as they are the 8th highest in the Premier League, there is a
distinct bunching of clubs in the £100-120 million range. In other words,
Everton’s financial advantage over the other clubs is nowhere near as much as
their disadvantage compared to the top six.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Moshiri acknowledged this when speaking about Koeman’s
objectives: “He achieved eighth and seventh with Southampton. He needs to
improve on that, but it is a very difficult landscape now.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">One point worth noting is that Everton’s revenue would be
around £8 million higher if the gross revenue from the outsourced catering and
kit deals were to be added back.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDPMPHF900E7mNUhzfK09RA8lkNWVUdl9TwksmtvTMXof3gizLW7458yqAeqxe0yRvmJD5fdrgwD9jLvebo5SC2TuNY4s50tEGJ840zYrhBZQOSsIyNgHAonLNub-sc3hpiljcYNSBmJhyphenhyphen/s1600/10+Everton+Money+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="534" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDPMPHF900E7mNUhzfK09RA8lkNWVUdl9TwksmtvTMXof3gizLW7458yqAeqxe0yRvmJD5fdrgwD9jLvebo5SC2TuNY4s50tEGJ840zYrhBZQOSsIyNgHAonLNub-sc3hpiljcYNSBmJhyphenhyphen/s640/10+Everton+Money+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">On the bright side, Everton had the 18th highest revenue in
the world in 2014/15, which represented the club’s joint highest position in
the Deloitte Money League. That’s obviously a fine accomplishment, but it does
not really help Everton much domestically, as no fewer than 17 Premier League
clubs feature in the top 30 clubs worldwide by revenue.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As Deloitte observed, “This is again testament to the
phenomenal broadcast success of the English Premier League and the relative
equality of its distributions, giving its non-Champions League clubs
particularly a considerable advantage internationally.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge7yC8MZFN1ZrHqTlzGhWqPcp4RqnqDQkUl9s4BElqFGJWPWKw2hPM1ZK7bzsH_yZrgo906nFqdxZ8WusNdSgUQ3HtvhS4ReV_082hHn4ubLGk5zH4mIcpvXFKQKLT_AgAqp2uR5yRvNhK/s1600/11+Everton+Money+League+Classification+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEge7yC8MZFN1ZrHqTlzGhWqPcp4RqnqDQkUl9s4BElqFGJWPWKw2hPM1ZK7bzsH_yZrgo906nFqdxZ8WusNdSgUQ3HtvhS4ReV_082hHn4ubLGk5zH4mIcpvXFKQKLT_AgAqp2uR5yRvNhK/s640/11+Everton+Money+League+Classification+2016.jpg" width="580" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">One technical aside: Everton include the commercial elements
of TV deals within commercial income, even though most other clubs classify it
as broadcasting income, and Deloitte have duly reduced commercial and increased
broadcasting (though the total revenue is the same).</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhg2mwsziRznZKOw6Ua3v95dLCUjh1m_ltGXw3rPloVPjaZubgMF92NHgon42mc7qMQuj02vP5mokbws6eFLyBJezgAGF5X8qeypgggj5LMQ9T7KeQD746kNOjxmSSBTAqSSEkULo254GA9/s1600/12+Everton+Revenue+Mix+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="530" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhg2mwsziRznZKOw6Ua3v95dLCUjh1m_ltGXw3rPloVPjaZubgMF92NHgon42mc7qMQuj02vP5mokbws6eFLyBJezgAGF5X8qeypgggj5LMQ9T7KeQD746kNOjxmSSBTAqSSEkULo254GA9/s640/12+Everton+Revenue+Mix+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">All these reclassifications make it difficult to analyse
Everton’s revenue mix, but a couple of things are clear. First, match day has
become progressively less important with only 15% of total revenue coming from
this stream. Second, like so many Premier League clubs, there is huge reliance
on TV money, which generates just under 70% of their turnover.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4UobivDcw7paoNrbdZ4GzltWj7rPOZCuEwK5z5ZHHdDhEwgb6ZRwN0LXL10GodE-LVkD_fapkW18c9EBiEWNLTa1LivrwIK-jN0NRzKZobwHl4iMpvg_GUKaMLIGbUUolViEh16BkqaBL/s1600/13+Everton+Reliance+on+TV+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="520" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4UobivDcw7paoNrbdZ4GzltWj7rPOZCuEwK5z5ZHHdDhEwgb6ZRwN0LXL10GodE-LVkD_fapkW18c9EBiEWNLTa1LivrwIK-jN0NRzKZobwHl4iMpvg_GUKaMLIGbUUolViEh16BkqaBL/s640/13+Everton+Reliance+on+TV+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">That might sound a little concerning, but it is fairly
common business model in the Premier League. For example, in 2014/15 nine clubs
actually had a greater reliance on TV money than Everton, with three of them
(Burnley, Swansea City and WBA) earning 80-85% from broadcasting. This
dependency will further increase with the blockbuster 2016/17 deal.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In 2015/16 Everton’s share of the Premier League TV money
rose 3% (£2 million) from £81 million to £83 million, due to being broadcast
live on one more occasion (18 vs. 17). The distribution of these funds is based
on a fairly equitable methodology with the top club (Arsenal) receiving £101
million, while the bottom club (Aston Villa) got £67 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqXtQ0g9DexLx7xs1nEdSO38tgm0ivpZ3HhMrv7wnfrlfA32gMSqjC-RJjlbYxNLz5c-h-_01DIQu0wsgNY4B8yn78z8vot7r3loPPcyo2GKo7BjzZCSH6DBzvfryuaG7iytdHPnPT1XCX/s1600/14+Everton+TV+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="464" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqXtQ0g9DexLx7xs1nEdSO38tgm0ivpZ3HhMrv7wnfrlfA32gMSqjC-RJjlbYxNLz5c-h-_01DIQu0wsgNY4B8yn78z8vot7r3loPPcyo2GKo7BjzZCSH6DBzvfryuaG7iytdHPnPT1XCX/s640/14+Everton+TV+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Most of the money is allocated equally to each club, which
means 50% of the domestic rights (£21.9 million in 2015/16) and 100% of the
overseas rights (£29.4 million). Merit payments (25% of domestic rights) are
worth £1.2 million per place in the league table and facility fees (25% of
domestic rights) depend on how many times each club is broadcast live.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">There was also £4.5 million of commercial revenue awarded to
all Premier League clubs, though I suspect that Everton might have reported
this within commercial income, even though most other clubs classify it as
broadcasting income. This would help explain why Everton’s total broadcasting
income in the accounts was only £82.5 million, even though their Premier League
distribution was £83.0 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSkYbGRrgwBrhNCuMem2DVV7x_oFszK09BEAzYT1fGjUT3cJi-FNwYBeISnZ_4MFRDprOwPoTqNra3TF0ApiFJvxQo1NUIoGR2gMQC0XnHhtsvZuwVNMABwlX5tMC7S1RGg6hz8fNngPHo/s1600/Mason+Holgate.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSkYbGRrgwBrhNCuMem2DVV7x_oFszK09BEAzYT1fGjUT3cJi-FNwYBeISnZ_4MFRDprOwPoTqNra3TF0ApiFJvxQo1NUIoGR2gMQC0XnHhtsvZuwVNMABwlX5tMC7S1RGg6hz8fNngPHo/s320/Mason+Holgate.jpg" width="320" /></a></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"The Liberty of Mason Holgate"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Either way, Elstone was right to draw attention to the new
TV deal stating in 2016/17: “We are also benefiting from the increased revenues
under the significant new broadcast deal” The AGM projected an increase in
broadcasting income to more than £130 million, based on 55% growth in the
Premier League deal (70% domestic and 40% overseas). The importance of success
on the pitch was also emphasised, as each league place under the new deal would
be worth an additional £1.9 million, compared to £1.2 million for the previous
deal.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Former Everton manager Roberto Martinez welcomed the new TV
deal, as he believed that it would give the middle-tier clubs greater chance of
success: “The new television contract has given an opportunity to every club to
do something different. They can look at themselves, thinking this is the first
time that we have been able to spend a certain amount of money, and suddenly
you develop a belief that allows you to be competitive.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Another way of looking at this is that Everton earned more
from broadcasting in 2014/15 than Bayern Munich, Borussia Dortmund, Atletico
Madrid, Roma, Milan and Paris Saint-Germain – even before the £45-50 million
increase in 2016/17.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoY9_Kh27aVtZeefygTwnL1YqpsPBA9ZitBEljNSi7s_pTnjxr2m9id1emyzg_VHIYlpXy6WKfMLD3GLAUr3xihaI3JUyNJWS_2RaHBDybJYk0uvZCRPp36KxteVy2FQjU91Ovdp8SGJSW/s1600/15+Everton+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="502" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoY9_Kh27aVtZeefygTwnL1YqpsPBA9ZitBEljNSi7s_pTnjxr2m9id1emyzg_VHIYlpXy6WKfMLD3GLAUr3xihaI3JUyNJWS_2RaHBDybJYk0uvZCRPp36KxteVy2FQjU91Ovdp8SGJSW/s640/15+Everton+Europe+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton have only qualified once for Europe in recent years,
earning €7.5 million from the Europa League in 2014/15. This was a lot less
than the €20.9 million that Tottenham received for reaching the same stage the
following season.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Not only did the new UEFA television deal deliver 38% more
money in 2015/16, but a greater proportion was allocated to the Europa League,
so that prize money for this competition shot up by 71% (even though the
rewards are still much higher in the Champions League).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjK4XIYjjvivMDfEaHdz8-mh6e0FCpNigu5wuEjG2eRl7j34niF23vfFmPX_SXnwktoXXdlQeBwQPNplol9_lAIxwSLlR7vWAxVXk3Of9bQQw5e_Q3dURDrvVfHGJEE0XiGVN-mv0WYML3t/s1600/16+Everton+Europe+Last+5+Years+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjK4XIYjjvivMDfEaHdz8-mh6e0FCpNigu5wuEjG2eRl7j34niF23vfFmPX_SXnwktoXXdlQeBwQPNplol9_lAIxwSLlR7vWAxVXk3Of9bQQw5e_Q3dURDrvVfHGJEE0XiGVN-mv0WYML3t/s640/16+Everton+Europe+Last+5+Years+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Regular qualification for Europe would be highly beneficial
for Everton, as can be seen by the money earned by English clubs over the last
season. Chelsea lead the way with €253 million, largely thanks to their
Champions League triumph in 2012, but maybe a better comparative would be
Liverpool, who earned €77 million in this period, i.e. €69 million more than
Everton.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This only relates to the broadcasting income, but additional
revenue would also come from more gate receipts and higher commercial income
via success clauses in commercial deals.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSXdaLcXkzFroU92ImLQeWnQ8W3IewkKSEA2cF7JtpfygFLFHy3ZrazzjD0HXKnBOEG5e_DZxqoQ4FzM2DLhsFcFUjg-TurvJRu1ECCG1387niTPp6ikwM0VSebX2WuVmcZ9tyMKvW9JPF/s1600/17+Everton+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSXdaLcXkzFroU92ImLQeWnQ8W3IewkKSEA2cF7JtpfygFLFHy3ZrazzjD0HXKnBOEG5e_DZxqoQ4FzM2DLhsFcFUjg-TurvJRu1ECCG1387niTPp6ikwM0VSebX2WuVmcZ9tyMKvW9JPF/s640/17+Everton+Match+Day+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s gate receipts fell by £0.3 million (2%) from £17.9
million to £17.6 million in 2015/16, largely due to the absence of European
competition, though the impact of this lost revenue was reduced by increased
revenue form reaching the semi-final of both domestic cup competitions compared
to third round exits in 2014/15.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The average attendance fell slightly to 38,132, though this
was only the second time in 20 years that consecutive seasons posted averages
above 38,000. Moreover, this season attendances have rebounded above 39,000,
which would be the highest attendance since 2003/04.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPKYLLMwbfu6VA4WGCqCN5xr_QAtztkGTx7hmf9VLkjKcKJeM0L9aomhPNX0jufiiT05y5RUic8Y4FwU9HHOWDflQ8514TuHdbP40LUtY_d-qRDAXDvRcgls4I-1vkSwzLBZ7z2Vcz3tg/s1600/18+Everton+Attendances+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhPKYLLMwbfu6VA4WGCqCN5xr_QAtztkGTx7hmf9VLkjKcKJeM0L9aomhPNX0jufiiT05y5RUic8Y4FwU9HHOWDflQ8514TuHdbP40LUtY_d-qRDAXDvRcgls4I-1vkSwzLBZ7z2Vcz3tg/s640/18+Everton+Attendances+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Elstone commented, “We’re delighted to be projecting an
average gate in excess of 39,000. We look set to be full for every game in
2016/17. Of course, the reason we’re full is almost 32,000 season ticket
holders.”</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This is partly due to Everton’s admirable commitment to
affordable pricing. The club froze ticket prices in 2015/16, while they
actually reduced all season ticket prices by 5% for the 2016/17 season,
representing a free game compared to the previous season.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">They have continued this trend by announcing that all season
ticket prices will be reduced or frozen for the 2017/18 season and have
introduced a 12-month payment option. The maximum season ticket price is £565,
ensuring that no adult will pay more than £30 a game. There is also a new £380
season ticket for 22-24 year olds, so youngsters will only pay £20 a game.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFuNXgWZ49unjH03Pi_3-wCeDq-j0mHp_GPmRtQKGeWNcWBFPHuKX5e4rzdPZFlH9jjZQRimhyphenhyphennGo8hBOtsFM8HOPjy_yQe-7IXKDBazYZkAlcLAy3fuR383Q8UuTNP8Z3bgpFwLtcjuQ2/s1600/19+Everton+Attendances+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFuNXgWZ49unjH03Pi_3-wCeDq-j0mHp_GPmRtQKGeWNcWBFPHuKX5e4rzdPZFlH9jjZQRimhyphenhyphennGo8hBOtsFM8HOPjy_yQe-7IXKDBazYZkAlcLAy3fuR383Q8UuTNP8Z3bgpFwLtcjuQ2/s640/19+Everton+Attendances+Trend+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Elstone explained the club’s philosophy: “We feel confident
that our current pricing structure represents great value for money and holds
up well when compared to our rivals. Most importantly, it makes football at
Goodison affordable for young fans.”</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As a result of these pricing initiatives, Everton’s match
day revenue of £18 million will continue to lag behind the top six clubs:
Manchester United £107 million, Arsenal £100 million, Chelsea £70 million, Liverpool
£59 million, Manchester City £53 million and Tottenham £41 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Elstone confirmed the impact on the financials, “The outcome
of this affordable pricing strategy is a significant drop in what we generate
from each seat for each game”. However, he added, “We were conscious of the
substantial uplift in the value of our media rights next season.”<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9q80PS3qfi0DSy6ZfINCd9eNWkNHvJQYEFC6xFgsvJZsZjT57t2HpE2t_GP6TqPestA3hAR7JCzHskIQyOlI4ziAhJ1156MPntncIWKXpzRBo3D15T0mS_1VZBHAbs-f9RHL1VoWDfZSj/s1600/Yannick+Bolasie.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9q80PS3qfi0DSy6ZfINCd9eNWkNHvJQYEFC6xFgsvJZsZjT57t2HpE2t_GP6TqPestA3hAR7JCzHskIQyOlI4ziAhJ1156MPntncIWKXpzRBo3D15T0mS_1VZBHAbs-f9RHL1VoWDfZSj/s320/Yannick+Bolasie.jpg" width="320" /></a></div>
<div style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Working for the Yannick Dollar"</span></div>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Of course, a new stadium would be a game changer for
Everton. It would be a wrench to leave Goodison Park, one of the most
atmospheric grounds in England, but it is simply not fit-for-purpose in the
modern era with its limited capacity and inadequate facilities.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As Moshiri said, the club needs a new stadium that “rewards
the loyalty and passion of our fans.” He continued, “We need a big stadium, no
question about it. We have done the hard bit, because the club was restricted
to move or expand Goodison by banking covenants, but I have paid the debts, so
we are free to do what we want and we have the finances to do it.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">There have been a few false dawns with three other proposed
stadium moves coming to nothing: first King’s Dock in 2003, then “Destination
Kirkby” in 2009, most recently Walton Hall. However, it now feels like it could
really happen.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC2jluZCu4PnEMdQy3oGLQlkt5aAyGn_9y6IgplkMDh8WsBheXxnGFErm9duF124TsB-QxTUNTT5AvBPbggGrF9P94_lkNZPu-yk9ndLQAwwweJB6_phZBLZ3GZ9JL9LdwQ2gHj-edAzcP/s1600/idrissa+gueye.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC2jluZCu4PnEMdQy3oGLQlkt5aAyGn_9y6IgplkMDh8WsBheXxnGFErm9duF124TsB-QxTUNTT5AvBPbggGrF9P94_lkNZPu-yk9ndLQAwwweJB6_phZBLZ3GZ9JL9LdwQ2gHj-edAzcP/s320/idrissa+gueye.jpg" width="320" /></a></div>
<div style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Enola Gueye"</span></div>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">There are two potential sites: Bramley Moore Dock and Stonebridge
Cross in Croxteth. The dock site is clearly the club’s preferred option, as
confirmed by Mayor Joe Anderson at Everton’s AGM, “Everybody in this room wants
the waterfront site. This is the most exciting opportunity this club has had in
decades.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Elstone also favoured this site, though he did sound a note
of caution: “The opportunities are much greater at that site, but so are the
costs. We have to find answers to some of the uncertainties and risks, because
it is the biggest decision the club will ever make.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">He continued, “(There has been) solid progress on many
fronts, most encouragingly in our partnership with Liverpool City Council and
its desire to support our efforts to find the money to make the stadium viable.
We are optimistic about the new stadium prospects. It’s an optimism tempered by
some significant issues that need to be resolved before we can move forward.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The final word (for now) on the new stadium goes to Moshiri,
which is fair enough, as he may well end up funding most of the required £350
million plus: “In our mind, we know where we want to go. We are committed.”<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGBs0CHrTD997_u5BR9xNuByroYIDXQyIZIal-PzzasV6rGfm0U6-e_NAFn_Gc4JYNxG3Wqn4_rQQR_mSb2e2VI8q-QyWJsSpRU09ou12Lnjy4YiErRR9zN5LJdtGaIINmUPJHEEqCpv1m/s1600/20+Everton+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGBs0CHrTD997_u5BR9xNuByroYIDXQyIZIal-PzzasV6rGfm0U6-e_NAFn_Gc4JYNxG3Wqn4_rQQR_mSb2e2VI8q-QyWJsSpRU09ou12Lnjy4YiErRR9zN5LJdtGaIINmUPJHEEqCpv1m/s640/20+Everton+Commercial+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s reported commercial income dropped 18% (£4.6
million) from £26.0 million to £21.4 million in 2015/16, comprising £9.3
million for sponsorship, advertising and merchandising plus £12.1 million for
other commercial activities. The fall was due to the absence of commercial
revenue from the Europa League.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As we saw earlier, it is not completely clear what the club
has included within commercial income and the Deloitte like-for-like figure for
2014/15 was adjusted downwards to £20.1 million, as they excluded the
“commercial” element of broadcasting income. This meant that Everton had the
lowest commercial revenue of any club in the Money League Top 20.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That said, the comparisons are a bit misleading, as Everton
have outsourced their catering and kit deals. If they were to report these
revenues gross (like most other clubs), their commercial income would rise by
£8 million.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_ATRuC35Z2CLhHIojo7Wa1zEGHAHZlXxprbtNCILShG8253NanSvCR-hnCh6moLcS9sg0vgx7NDCF2KElfTyZv3CcSxgzDHAtgd0RGr3E23_prjO30h8U9nvM116_LtyDnDImJaNqlv7l/s1600/Ramiro+Funes+Mori.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="179" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_ATRuC35Z2CLhHIojo7Wa1zEGHAHZlXxprbtNCILShG8253NanSvCR-hnCh6moLcS9sg0vgx7NDCF2KElfTyZv3CcSxgzDHAtgd0RGr3E23_prjO30h8U9nvM116_LtyDnDImJaNqlv7l/s320/Ramiro+Funes+Mori.jpg" width="320" /></a></div>
<div style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Don't cry for me, Argentina"</span></div>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Whatever it consists of, Everton’s commercial income of £21
million pales into insignificance compared to heavyweights such as Manchester
United, who generate an amazing £268 million from this activity. That
comparison might be a little unfair, but it is worth noting that Tottenham
earned £60 million (in the 2014/15 season).<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It is clear that Everton need to address their commercial
shortcomings, as Elstone acknowledged, “We will continue to look for growth in
all areas, in particular, as we approach the mid-point of the final year of the
current Chang partnership, with a clear focus on our main sponsor opportunity.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It is therefore very encouraging (“great news” per Elstone)
that the club has “signed up £75 million in new revenues” in the past few
weeks. The chief executive noted that the two deals already finalised will run
over a five-year period, implying £15 million a year.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Elstone spoke of “a 300% increase in the value of our shirt
sponsors”, which would suggest that the new deal would be worth £21.2 million a
year, given that the current deal with Thai beer producer Chang is worth £5.3
million a year (£16 million over three years).<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYzgi0Wkn7bflbIpkS_gkt2dGOoOEjES2G_Mg7B573paJTrwmzpqk447Rc-6830Pj36WdDZzVDR6okMP8ZocOEffGxSbc9Ag43oiQ35bPSrjHhwiO_Wfln6BdPcmt3fEQ8-I43BuRqDF8x/s1600/21+Everton+Shirt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="530" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYzgi0Wkn7bflbIpkS_gkt2dGOoOEjES2G_Mg7B573paJTrwmzpqk447Rc-6830Pj36WdDZzVDR6okMP8ZocOEffGxSbc9Ag43oiQ35bPSrjHhwiO_Wfln6BdPcmt3fEQ8-I43BuRqDF8x/s640/21+Everton+Shirt+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That would represent a notable increase, but there have been
some suggestions that Elstone’s comments could have been misconstrued, e.g. if
the 300% increase referred to the total value of the deal, that would imply £64
million over five years, meaning an annual value of £12.8 million. My guess is
that the increase refers to the combined value of the front of shirt and
additional sleeve sponsorship, but we should soon know.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Either way, it’s solid progress on the commercial front with
talk of Kenyan online sports betting firm SportPesa being the new shirt
sponsor. One possibility for a more lucrative deal would be to give the new
partner first refusal on stadium naming rights.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Encouraging stuff, but to place this into perspective, the
leading clubs have secured much higher shirt deals: Manchester United
(Chevrolet) £56 million, Chelsea (Yokahama) £40 million, Arsenal (Emirates) £30
million, Liverpool (Standard Chartered) £25 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The club has also announced a significant new sponsorship
deal for the Finch Farm training ground and academy. This is with USM Holdings,
the holding company of Alisher Usmanov, Moshiri’s business partner. The fact
that Usmanov is helping out his mate has raised some eyebrows, as the Russian
remains an Arsenal shareholder, and it is likely that the deal would be reviewed
for “fair value” by UEFA (assuming it is deemed a “related party” transaction)
if Everton qualify for Europe.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIcKbNmbFk42Ih6QC6MCp9Po4nfmvF0eYXqpZ2OqzGr08eoqjsYAJwhlBRPIhWL0AxGxQWkrQAuEyZRkdJ28BPfH9NlrR5UGolZFgxqH2Nsfx0Rr1DanUsowaeVdl7NrDDN_Eg91oa1rFb/s1600/22+Everton+Kit+Supplier+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIcKbNmbFk42Ih6QC6MCp9Po4nfmvF0eYXqpZ2OqzGr08eoqjsYAJwhlBRPIhWL0AxGxQWkrQAuEyZRkdJ28BPfH9NlrR5UGolZFgxqH2Nsfx0Rr1DanUsowaeVdl7NrDDN_Eg91oa1rFb/s640/22+Everton+Kit+Supplier+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s kit supplier deal with Umbro was described as a
club record and is reportedly worth £6 million a season, which would be twice
as much as the previous Nike contract, though the accounts suggest that it
might not be so high in reality.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This is again a long way behind the deals at other clubs,
e.g. Manchester United (Adidas) £75 million, Chelsea (Nike) £60 million,
Arsenal (Puma) £30 million, Liverpool (New Balance) £28 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It will also be interesting to see if Moshiri reviews the
10-year Kitbag deal, which provides a guaranteed £3 million a year plus
royalties for running the retail operation. Elstone has described this as a
good arrangement that “de-risks Everton in a notoriously difficult business
sector”, but it does betray a lack of ambition.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM5KDFCiDui3Rv2bn5b7XRRSV6yXN1gY_FnCFhtNc1aIhmZ2w31TjYoC27TPu8yB4lVM11EoeLkbkByBqRZio11t7hyphenhyphenwKRURHCIZXLyQN1amXCtJieZpEugTfJYAf2dSTP8aoyJ-03LPZk/s1600/23+Everton+Wages+to+Turnover+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM5KDFCiDui3Rv2bn5b7XRRSV6yXN1gY_FnCFhtNc1aIhmZ2w31TjYoC27TPu8yB4lVM11EoeLkbkByBqRZio11t7hyphenhyphenwKRURHCIZXLyQN1amXCtJieZpEugTfJYAf2dSTP8aoyJ-03LPZk/s640/23+Everton+Wages+to+Turnover+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s wage bill rose 8% (£6.5 million) to £84 million,
following continued investment in the squad, with the additions of Tom
Cleverley, Aaron Lennon, Ramiro Funes Mori, Gerard Deulofeu and Mason Holgate.
In addition, new contracts were awarded to James McCarthy, Kevin Mirallas, Mo
Besic, Brendan Galloway and Bryan Oviedo.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Furthermore, the average number of employees increased from
274 to 315, including playing, training and management up from 98 to 108, youth
academy up from 38 to 47, marketing and media up from 32 to 41 and management
and administration up from 71 to 81.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfk0JG8_xCsvXffg_ruyjvwOtytPs0gSk3yLv_BRRVMKr4D5V-ZV6Fa8oy4I4Ci8e9eIhxQ60WFXgQolKlMqlA7ap5dViBJZGGfMlc4Rfhh_PDqH2qUh1XFeKFCbtOSo-j8a3ZQiJHkkKs/s1600/24+Everton+Wages+to+Turnover+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfk0JG8_xCsvXffg_ruyjvwOtytPs0gSk3yLv_BRRVMKr4D5V-ZV6Fa8oy4I4Ci8e9eIhxQ60WFXgQolKlMqlA7ap5dViBJZGGfMlc4Rfhh_PDqH2qUh1XFeKFCbtOSo-j8a3ZQiJHkkKs/s640/24+Everton+Wages+to+Turnover+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<span style="font-family: "trebuchet ms" , sans-serif;">The wage growth increased the wages to turnover ratio from
62% to 69%. Elstone said that this was still “below the Premier League
average”, which does not seem to be the case based on reported figures, though
it is accurate if we add back the outsourced commercial revenue, which reduces
Everton’s ratio to 65%.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Following last season’s growth Everton’s wage bill is
essentially “best of the rest”, i.e. the highest of those clubs outside the top
six. However, it is still dwarfed by the elite clubs: Manchester United £232
million, Chelsea £222 million, Manchester City £198 million and Arsenal £195
million.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJsPhqHDoQ53dRyz3nZy5s61MoL2ieNYp9uot3TkocuAxdoUcWpjoHXfrSUhT4BTz2oQWZny5nLGmrPvnp1OzRFJqtRY8RN1kphTNzLA6sFpz9OqtrTFeyZ7PXTlkqXQ9nKAUU5DaNMvgN/s1600/25+Everton+Wages+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJsPhqHDoQ53dRyz3nZy5s61MoL2ieNYp9uot3TkocuAxdoUcWpjoHXfrSUhT4BTz2oQWZny5nLGmrPvnp1OzRFJqtRY8RN1kphTNzLA6sFpz9OqtrTFeyZ7PXTlkqXQ9nKAUU5DaNMvgN/s640/25+Everton+Wages+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This disparity was noted by Koeman: “We have a lot of
ambition and we like to do the best that is possible. But you have to look to
the big clubs with the possibilities and the players they have. Nobody expected
Leicester to win last season, but that will not happen again.”</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Clearly, Moshiri will try to increase the wage bill to
better compete. Indeed, Elstone has already advised, “Projected wages are set
to increase significantly in the current season, reflecting a further
commitment to player recruitment and new contracts for existing players.” The
AGM forecast a wage bill of £111 million for 2016/17, an increase of £27
million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, Everton will need to consider the Premier League’s
Short Term Cost controls, which restrict the annual player wage cost increases
to £7 million a year for the three years up to 2018/19 – except if funded by
increases in revenue from sources other than Premier League broadcasting
contracts, e.g. gate receipts, commercial income and profits on player sales.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisRG2uCStxpOwrz62U0CPbJl9RFDERy2lvff8vWZJJ8NqBjnZORFJ9BYMl3SPdk1S6sa-sXCud_bWTI6trnpJVXt_4Pess0P_ZPVLcJ0g7ofNvHvB7_K6w3ZMeCcSw8Oy07e7EyLM-JXTL/s1600/26+Everton+Other+Expenses+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisRG2uCStxpOwrz62U0CPbJl9RFDERy2lvff8vWZJJ8NqBjnZORFJ9BYMl3SPdk1S6sa-sXCud_bWTI6trnpJVXt_4Pess0P_ZPVLcJ0g7ofNvHvB7_K6w3ZMeCcSw8Oy07e7EyLM-JXTL/s640/26+Everton+Other+Expenses+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">One thing that is quite striking in Everton’s accounts is
the growth in other operating costs, rising from £22 million to £30 million in
the last three years without any substantial explanation.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3ebGJIrNRPx-WT7Kn8LJ1bJInFT7hGAOGR3wzBLK8Jla4gpjGRNs7ICp6_VDTl-efmoNUPJE-MbvxZR5KJI3gADxw87mlD9H4v7HSRslTDUnQouhdn_PkD0p5mvOUNgPfoqGpRTA9ZyaF/s1600/27+Everton+Other+Expenses+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3ebGJIrNRPx-WT7Kn8LJ1bJInFT7hGAOGR3wzBLK8Jla4gpjGRNs7ICp6_VDTl-efmoNUPJE-MbvxZR5KJI3gADxw87mlD9H4v7HSRslTDUnQouhdn_PkD0p5mvOUNgPfoqGpRTA9ZyaF/s640/27+Everton+Other+Expenses+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This seems quite high for a club of Everton’s size,
especially as the retail and catering businesses have been outsourced, which
means that other operating costs should be lower than other clubs (as net
profits are reported in revenue).</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixWMuyzP_PiFr6ifomo-i0la293s8zNXQRdYekM24CgFBCW_zk635lD_QaEgQ0pBqMTUUNgvDY-PE_jCns7JJX0hryQj0s-D9vj7jxtBHLWk198M6CYRD9a6sXGMhV83rSOJNyqNpkpELH/s1600/28+Everton+Player+Amortisation+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="422" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixWMuyzP_PiFr6ifomo-i0la293s8zNXQRdYekM24CgFBCW_zk635lD_QaEgQ0pBqMTUUNgvDY-PE_jCns7JJX0hryQj0s-D9vj7jxtBHLWk198M6CYRD9a6sXGMhV83rSOJNyqNpkpELH/s640/28+Everton+Player+Amortisation+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span>
<span style="font-family: "trebuchet ms" , sans-serif;"><span style="font-family: "trebuchet ms" , sans-serif;">Another cost that can have a major impact on the profit and
loss account is player amortisation, which reflects investment in transfers.
Basically the more that a club spends, the higher its player amortisation. In
this way, Everton’s player amortisation has doubled from just £11 million in
2013 to a £22 million peak in 2016, reflecting increased spending in the
transfer market.</span></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbZ8yJZDkN4ABkX3rfJny4yVO8UeDpjyfcQ_hvsDPNHVBZCfvWYIUinIBje4ovy1WRanfEbeshuT9_4db7SWcJsH_70rBkpWHjCQZQipnQauQGhOpjMm2cgUSjRGQa68qn7IuWxuF1W5i6/s1600/29+Everton+Player+Trading+Accounting+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbZ8yJZDkN4ABkX3rfJny4yVO8UeDpjyfcQ_hvsDPNHVBZCfvWYIUinIBje4ovy1WRanfEbeshuT9_4db7SWcJsH_70rBkpWHjCQZQipnQauQGhOpjMm2cgUSjRGQa68qn7IuWxuF1W5i6/s640/29+Everton+Player+Trading+Accounting+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The accounting for player trading is fairly technical, but
it is important to grasp how it works to really understand a football club’s
accounts. The fundamental point is that when a club purchases a player the
transfer fee is not fully expensed in the year of purchase, but the cost is
written-off evenly over the length of the player’s contract, e.g. Romelu Lukaku
was bought for a reported £28 million on a five-year deal, so the annual
amortisation in the accounts for him is £5.6 million.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4Ax1Uh-Z-VnjtyoAfS7_KWi4eWvcx98CUzc9QhDGYLRXpByaE7vqaFsIC39OGQXAPN4msqNvjvjkAEzXBaIQDvvR1TfeJH3yKEK5BYHzXhITniYBw1_v3HMEuOi5rO1CVkXDgALbb1_wn/s1600/30+Everton+Player+Amortisation+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4Ax1Uh-Z-VnjtyoAfS7_KWi4eWvcx98CUzc9QhDGYLRXpByaE7vqaFsIC39OGQXAPN4msqNvjvjkAEzXBaIQDvvR1TfeJH3yKEK5BYHzXhITniYBw1_v3HMEuOi5rO1CVkXDgALbb1_wn/s640/30+Everton+Player+Amortisation+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Nevertheless, Everton’s player amortisation of £22 million
is not that high for the Premier League and is obviously miles behind the
really big spenders like Manchester City (£94 million), Manchester United (£88
million) and Chelsea (£71 million), though it should further increase next year
following this summer’s acquisitions.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivnTUZzosxiNF_0pCPcpHZmwEuUMsmlVjgEn4we-Ptpod1fB7Pms3LMIPDFTj0yj1D433rzjOqDLdcine3GEFpIHPpagtzdK6JWEDFs4e3ZYup5i18GR0kmmsbO4s2fim2w7Ai0uVBsKS9/s1600/31+Everton+Player+Trading+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivnTUZzosxiNF_0pCPcpHZmwEuUMsmlVjgEn4we-Ptpod1fB7Pms3LMIPDFTj0yj1D433rzjOqDLdcine3GEFpIHPpagtzdK6JWEDFs4e3ZYup5i18GR0kmmsbO4s2fim2w7Ai0uVBsKS9/s640/31+Everton+Player+Trading+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">For the period between 2009 and 2014, despite Kenwright’s
protestations, Everton were a selling club, averaging annual net sales of £7
million. However, the last three seasons have seen a return to spending, with
average net spend of £21 million, including the club’s record purchase of
Lukaku from Chelsea.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Last summer Everton splashed out £45 million to bring in
Yannick Bolasie, Ashley Williams, Idrissa Gueye and Maarten Stekelenburg,
though they recouped the outlay in one fell swoop by selling John Stones to
Manchester City. As Kenwright put it, “While we may not have finally done the
amount of business in the summer transfer window we would have liked, we still
added considerable strength and experience to our squad.”<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlZlBLhbiCgoJeoyb5lY4MPs8qP092uNh3yNKs9U2x3vcQL0KWUM0WNVwU2Ii9_nYE75OTYTfH-Co9QgbvFKmSHRDZv_VWTw3UNQA98ZSUQfwWQlWbALgumGhPM3DSPHLOMgc4b-BZ71b6/s1600/32+Everton+Transfer+Spend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="562" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlZlBLhbiCgoJeoyb5lY4MPs8qP092uNh3yNKs9U2x3vcQL0KWUM0WNVwU2Ii9_nYE75OTYTfH-Co9QgbvFKmSHRDZv_VWTw3UNQA98ZSUQfwWQlWbALgumGhPM3DSPHLOMgc4b-BZ71b6/s640/32+Everton+Transfer+Spend+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Despite the higher spending over the last three seasons,
Everton’s net spend is still mid-table in the Premier League, a long way below
the two Manchester clubs (City £299 million and United £275 million), though it
was higher than Liverpool £55 million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, Everton have been one of the most active clubs in
the January transfer window, already purchasing midfielder Morgan Schneiderlin
from Manchester United for a fee rising to £24 million and 19-year-old forward
Ademola Lookman from Charlton for £11 million. They have also reportedly made
offers for Standard Liege forward Ishak Belfodil and Atalanta midfielder Franck
Kessié.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVcuT8rZc_V_uErE1AFrjW_J9EIXHEZjAwX5tvw0YI0TwOD7LBxIjzVo34-GXYzbjCq4DS5eWiJVGbrW0PL4-EKtwC8T_Amzv-umXQfvlmMaUB6ujzYfA372pcOYCEFIbzKh9LFQPBDIAV/s1600/33+Everton+Debt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="510" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVcuT8rZc_V_uErE1AFrjW_J9EIXHEZjAwX5tvw0YI0TwOD7LBxIjzVo34-GXYzbjCq4DS5eWiJVGbrW0PL4-EKtwC8T_Amzv-umXQfvlmMaUB6ujzYfA372pcOYCEFIbzKh9LFQPBDIAV/s640/33+Everton+Debt+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s net debt rose by £23.5 million from £31.3 million
to £54.8 million with gross debt increasing by £17.6 million from £40.0 million
to £57.6 million and cash falling by £5.9 million from £8.7 million to £2.8
million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">At the time of the accounts, the debt comprised three
elements: (a) 25-year loan of £20 million with Prudential, which bears a high
interest rate of 7.79%, leading to annual payments of £2.8 million; (b) a
short-term loan of £35 million with Rights and Media Funds Limited (formerly JG
Funding), securitised on Premier League TV money, at a 5.2% interest rate; (c)
overdraft with Barclays of £2.7 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This is all irrelevant now, as Moshiri provided an
interest-free loan of £80 million with no agreed repayment data after the
account were published. This was used to repay all of the external loans and to
pay the exceptional items.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbbE_00yw4-qeq4m_BehuSs9u2QopETTUutyeqry7Vty1rqDpjN88wR3c2tKHB-2B69zMxCEt59dcnAamj2my0NBfN5l4gCQNFGhDH63NIq5OiQMjVR-eoPgdt1e4z9pOuxqE1PiGNFYio/s1600/34+Everton+Debt+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbbE_00yw4-qeq4m_BehuSs9u2QopETTUutyeqry7Vty1rqDpjN88wR3c2tKHB-2B69zMxCEt59dcnAamj2my0NBfN5l4gCQNFGhDH63NIq5OiQMjVR-eoPgdt1e4z9pOuxqE1PiGNFYio/s640/34+Everton+Debt+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Hopefully, this will bring to an end Everton’s use of opaque
loans taken out with mysterious offshore corporations that started with Vibrac,
who are based in the British Virgin Islands, though the accounts did note that
the club had secured similar funding via a facility repayable on 14 July 2017.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton’s debt is by no means one of the highest in the
Premier League with four clubs having debt above £100 million, namely
Manchester United £490 million, Arsenal £233 million, Sunderland £141 million
and Newcastle United £129 million. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Everton also have contingent liabilities of £35 million (£18
million dependent on future appearances and £17 million loyalty bonuses if
certain players are still with the club on specific dates), up from £20 million
the previous season.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRZeSSjaeap8XuP0HTO5qAHJgyL0Cd8GoPAs95Qc0YtBgPQhHr-XXN8YZF6ariwGY2TRGkJUf_MzCkGe2t3JAijTE-M5SLXZudu_oR9e9HoGlLustLv0_H6OyUomGqVVyyDXU_2z_JUL8B/s1600/35+Everton+Interest+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRZeSSjaeap8XuP0HTO5qAHJgyL0Cd8GoPAs95Qc0YtBgPQhHr-XXN8YZF6ariwGY2TRGkJUf_MzCkGe2t3JAijTE-M5SLXZudu_oR9e9HoGlLustLv0_H6OyUomGqVVyyDXU_2z_JUL8B/s640/35+Everton+Interest+League+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The high interest rate on Everton’s loans has meant that
their financing costs have been among the largest in the Premier League.
Although nowhere near as much as the interest paid by the likes of Manchester
United and Arsenal, this has certainly not helped the club’s finances. The good
news is that Moshiri’s interest-free loan should save them around £5 million a
season.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQhe0kSWJ8zp3E5Ut905U9CI1WwLoutyrR3Lr68YRHd0HEXHqZRBOorlRn0o4vGnBFH7l-TxrUXVylBfOYIMPFyqUkO58k738xSsbVKvSlfIa8MAVd1rMUCZ6AfJxsEd6c02A8imjHtsbC/s1600/36+Everton+Cash+Flow+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQhe0kSWJ8zp3E5Ut905U9CI1WwLoutyrR3Lr68YRHd0HEXHqZRBOorlRn0o4vGnBFH7l-TxrUXVylBfOYIMPFyqUkO58k738xSsbVKvSlfIa8MAVd1rMUCZ6AfJxsEd6c02A8imjHtsbC/s640/36+Everton+Cash+Flow+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This unwelcome burden is emphasised even more when reviewing
the cash flow over the last eight years. In that period, Everton generated £84
million of cash, mainly from operating activities £56 million, though this was
supplemented by additional loans (net) £18 million and the sale of the old
training ground £9 million.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJCZ-Hq2zE1mSqOK6FXwh7gg-b-AhyvVtLVruCVdy9knZQEvSiYpNa0LMNA7mDISOkKUHouqMJELKmNOi5LBHzKBC3_XrWpUwEAAYbKStb8XYJsrSMyqJdh0CZ3a8hO-_s9ci5eccnAHTe/s1600/37+Everton+Use+of+Funds+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJCZ-Hq2zE1mSqOK6FXwh7gg-b-AhyvVtLVruCVdy9knZQEvSiYpNa0LMNA7mDISOkKUHouqMJELKmNOi5LBHzKBC3_XrWpUwEAAYbKStb8XYJsrSMyqJdh0CZ3a8hO-_s9ci5eccnAHTe/s640/37+Everton+Use+of+Funds+2016.jpg" width="640" /></a></div>
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Around 40% of this cash (£34 million) was required for
interest payments, which was only £7 million lower than the £41 million (net)
spent on players, leaving only £10 million on infrastructure investment.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Looking ahead, there is a sense of optimism around Everton’s
future following Moshiri’s investment. Obviously money is no guarantee of
success, but it does make it more likely.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">There are still some issues with Moshiri pointing out that
the club will be somewhat restricted by FFP: “It is not the same as when
Chelsea and Manchester City began their projects, which was before Financial
Fair Play.” It’s also still not clear whether the Iranian will ultimately
become the outright owner of the club.<o:p></o:p></span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC4f52Hi5Clg7M71qaVoEeCORa4n9LxPayNvXMRWzO0ifLZ3PhmL-vluRCbbC34gxXxYZ7EAm2ps-NL4gjzmzQo3JnQloCdl1gYicutl-dst0rGNTtTxipSb2lti_telUIJ1xVB0m96-Ck/s1600/Ashley+Williams.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC4f52Hi5Clg7M71qaVoEeCORa4n9LxPayNvXMRWzO0ifLZ3PhmL-vluRCbbC34gxXxYZ7EAm2ps-NL4gjzmzQo3JnQloCdl1gYicutl-dst0rGNTtTxipSb2lti_telUIJ1xVB0m96-Ck/s320/Ashley+Williams.jpg" width="320" /></a></div>
<div style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Williams, it was really nothing"</span></div>
</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, at least the club now has stronger backing, whereas
for the past few years Everton have struggled to compete due to a lack of
financial resources. In the shape of Moshiri, they evidently have a man with a
plan, including reduction of external debt, increased commercial income and, of
course, a new stadium.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Let’s leave the last word to him: “Bill and previous
managers kept the club close to the elite for many years, but now we need to
look at a sustainable base to be among the elite. It takes time, but we are
committed, that’s why we’re here.”</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<span style="font-family: "trebuchet ms" , sans-serif;">He added, “It’s not enough to say you are a special club –
we don’t want to be a museum. We need to be competitive and to win.”</span></div>
<div class="MsoNormal">
<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com1tag:blogger.com,1999:blog-487486960623783530.post-38211544656370234122016-12-12T07:21:00.000+01:002016-12-12T19:21:04.213+01:00Brighton and Hove Albion - Knockin' On Heaven's Door<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGIwM-pU2RwhHPChVe7rUeHCcOeoVqK7usffsjzJv5GEl89RDaUMFJHIfpG6DCws0BbcOlTm46Rud9vBb4DVCcOEWbWksh-hABt13aegdG0OH-MDeoM6veUJv_W6n-OArjFtj-E2OrTZ6Q/s1600/Lewis+Dunk.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="268" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGIwM-pU2RwhHPChVe7rUeHCcOeoVqK7usffsjzJv5GEl89RDaUMFJHIfpG6DCws0BbcOlTm46Rud9vBb4DVCcOEWbWksh-hABt13aegdG0OH-MDeoM6veUJv_W6n-OArjFtj-E2OrTZ6Q/s400/Lewis+Dunk.jpg" width="400" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It was another case of “so near, yet so far” for Brighton
and Hove Albion last season, as the Seagulls missed out on automatic promotion
to the Premier League only on goal difference, while a spate of untimely
injuries led to defeat in the play-off semi-finals by Sheffield Wednesday, who
had finished a full 15 points behind them in the league table.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Chairman Tony Bloom captured the feelings of the Albion
fans: “The 2015/16 season was one of the most remarkable and exciting in my 40
years as a Brighton and Hove Albion supporter. The team, under Chris Hughton’s
astute leadership, gave us a season to savour – and although we twice missed
out on taking that final step to the Premier League, it has laid the foundation
for our current season.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This is the third time in the last four seasons that
Brighton have reached the Championship play-offs, only to fall in the semis.
This consistency on the pitch is all the more impressive, as it has been
achieved under different managers: Guy Poyet in 2013; Oscar Garcia in 2014; and
Hughton last year. The only blip came in 2015, when the club slipped back under
the far-from-flying Finn Sami Hyypia.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7jhGlsyCHWUcgv4OWAAhffFol7aMurzBZf12AL-55Rnugz2CFSsshDcttMTDtaj52DuspGksbskfrmDocc_oc7aw9_oNedLUfl_A0yWPWZxPYjDf5AY_i65wNjXE9k4jbJ9HYJt1wz6rz/s1600/Steve+Sidwell.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7jhGlsyCHWUcgv4OWAAhffFol7aMurzBZf12AL-55Rnugz2CFSsshDcttMTDtaj52DuspGksbskfrmDocc_oc7aw9_oNedLUfl_A0yWPWZxPYjDf5AY_i65wNjXE9k4jbJ9HYJt1wz6rz/s320/Steve+Sidwell.jpg" width="320" /></a></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Many Happy Returns"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Of course, for those with longer memories it is great news
that Brighton are still around to mount a challenge, given that they only
avoided dropping out of the Football League to the Conference by the skin of
their teeth in 1997 with a final day 1-1 draw at Hereford United.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">There then followed years of struggle, exacerbated by the
problems of finding a suitable ground after the Goldstone was sold to property
developers, leading to exile in Kent and a ground share with Gillingham. The
club returned to Brighton two years later to the Withdean, an old council-owned
athletics stadium where the facilities were far from ideal.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It took 12 years, but finally Brighton moved to the magnificent
new Amex stadium in 2011, coinciding with promotion to the Championship. The
major investment required to build the stadium (and indeed a superb new
training centre) was funded by Bloom, a lifelong fan who became chairman.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">He has continued to finance the club, as can be seen by the
2015/16 accounts, which revealed a massive £25.9 million loss, £15.4 million
worse than the previous season’s £10.4 million loss. To put that into
perspective, that means that Brighton lost more than £2 million a month or
around £500,000 every week.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6RQwvSpI9xrgttSbhen5l1lc9p1y_BTLkysTGux0J0DzIst4Kw2xqWXbikiIUuFxv_h8sjNDDHlxteyPUxwLexUfzbqP0vohYnfp1hWBLfdbMpwZXXYJ3xdOtREfCSNjGIV6PMIZ1m10m/s1600/1+Brighton+P%2526L+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6RQwvSpI9xrgttSbhen5l1lc9p1y_BTLkysTGux0J0DzIst4Kw2xqWXbikiIUuFxv_h8sjNDDHlxteyPUxwLexUfzbqP0vohYnfp1hWBLfdbMpwZXXYJ3xdOtREfCSNjGIV6PMIZ1m10m/s640/1+Brighton+P%2526L+2016.jpg" width="530" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The club said that this underlined Bloom’s commitment and in
particular the ambition to reach the Premier League, while the chairman himself
explained the strategy: “Our increased losses result directly from an ongoing
and growing investment in our playing squad.”</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This explains the main reasons for the higher loss, as wages
shot up £6.7 million (33%) from £20.6 million to £27.4 million, while player
amortisation (the annual cost of transfer fees) also rose £1.4 million (60%)
from £2.4 million to £3.8 million. Moreover, the desire to retain players meant
that profit from player sales fell £7.5 million from £8.7 million to just £1.2
million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In addition, other expenses also increased by £1.1 million
(7%) from £15.0 million to £16.0 million, largely due to higher costs
associated with running the stadium.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The sizeable cost growth more than offset the £1.0 million
(4%) increase in revenue from £23.7 million to £24.6 million, mainly due to
broadcasting income rising £0.9 million (18%) to £5.9 million, though
commercial income was also up £0.5 million (8%) to £9.4 million, driven by
catering and events. On the other hand, gate receipts fell £0.4 million (4%) to
£9.4 million, primarily due to no home cup ties.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Other operating income was up £0.4 million, thanks to other grants
received.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkDmrNCrMXu8GvSJ8b6b_HCa90v7m8feIbHGn-Jkl99baQWmazmf7n-ldgxGj5Qyfv-0rtplLu0kvhfRV2m0eLeOe70uhg9k93vEGU65_-ywtRSuOqZwH8QNmes0lOUngZF_B7QXdoeTaO/s1600/2+Brighton+Profit+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkDmrNCrMXu8GvSJ8b6b_HCa90v7m8feIbHGn-Jkl99baQWmazmf7n-ldgxGj5Qyfv-0rtplLu0kvhfRV2m0eLeOe70uhg9k93vEGU65_-ywtRSuOqZwH8QNmes0lOUngZF_B7QXdoeTaO/s640/2+Brighton+Profit+League+2016.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In fairness to Brighton, almost all clubs in the
Championship lose money and are reliant on owners’ funding. In 2014/15, the
last season where all clubs have published their accounts, losses were reported
by 18 of the 24 clubs – in stark contrast to the Premier League where the new
TV deal, allied with wage controls, has led to a surge in profitability.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The club that made most money in the Championship that
season were Blackpool – and their model is not one to be recommended, as it
culminated in relegation to League One. As Bloom noted, “Any Championship club without
parachute payments wishing to compete for promotion will inevitably make
significant losses.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That said, Brighton’s loss of £26 million in 2015/16 is
likely to be one of the highest in the division. Only two clubs reported higher
deficits in 2014/15: Bournemouth £39 million, though their loss was inflated by
£9 million promotion payments and an £8 million fine for failing Financial Fair
Play (FFP); and Fulham £27 million, but this was impacted by £11 million of
exceptional impairment charges.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglwlC161Otd8FUlcGlx8b-Lqbp5ACvES3QYv4SZHUWZnNBo_41cTyMaNF-44LsZ3JN583p-LyJo4RkoLmsP8fqiKHrEqm0LBahPLCSfPT4lCQjjM-jDtC0gtt6RimyiFT3QV441RXUKa6F/s1600/3+Brighton+Player+Sales+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglwlC161Otd8FUlcGlx8b-Lqbp5ACvES3QYv4SZHUWZnNBo_41cTyMaNF-44LsZ3JN583p-LyJo4RkoLmsP8fqiKHrEqm0LBahPLCSfPT4lCQjjM-jDtC0gtt6RimyiFT3QV441RXUKa6F/s640/3+Brighton+Player+Sales+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton could have reduced their loss by accepting some of
the lucrative offers received for their top talents, but Bloom noted that the
club made a conscious decision “to retain our key players” and “not to cash in
on our key assets”.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Consequently, there were no significant player disposals in
the 2015/16 season, leading to only £1.2 million profits, probably driven by
additional clauses from earlier player sales, as the contingent receivables on
transfers have fallen from £2.1 million to £0.8 million in the latest accounts.
In comparison, £8.7 million was booked in the previous season, mainly from the
sales of Leo Ulloa to Leicester City and Will Buckley to Sunderland.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Although Championship clubs rarely sell players for big
bucks, at least compared to the Premier League, this was a useful money-spinner
for Brighton in 2014/15 with only four clubs generating more money from this
activity. In contrast, the 2015/16 profit of just over £1 million is likely to
be one of the smallest in the division.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilncxejYkgDHFxtmmfoCdZ8MvKADKUj4WcATMEVbCnUnEGt6uFvLMnIWxCzHrZ3Zqzdqf_sQc0wlQPXA4rzJQuY5nBvgBCME2Y94S2ruvUDO0NIBgtbx8MrDA8oa3znYNlfw3JwPpMRas8/s1600/4+Brighton+Profit+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilncxejYkgDHFxtmmfoCdZ8MvKADKUj4WcATMEVbCnUnEGt6uFvLMnIWxCzHrZ3Zqzdqf_sQc0wlQPXA4rzJQuY5nBvgBCME2Y94S2ruvUDO0NIBgtbx8MrDA8oa3znYNlfw3JwPpMRas8/s640/4+Brighton+Profit+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Of course, losses are nothing new for Brighton. In fact, the
last time that they made a profit was back in 2007/08 – and that was less than
£1 million and only arose because of a £3.6 million exceptional credit, due to
a change in the accounting for the Falmer stadium expenses. Since then, the
club has made cumulative losses of £88 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Moreover, the losses have been growing. Since promotion to
the Championship, Brighton’s total losses have amounted to £71 million, averaging
£14 million a season. As finance and operations director David Jones confirmed,
“We’ve lost money every year we’ve been (at the Amex).”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Jones added, “While we’re getting a competitive team on the
pitch, we’re going to continue to lose money with the revenue streams that
we’ve got.” The difference with the top flight is colossal. Jones again, “If we
were in the Premier League, we would be able to be a sustainable business that
makes an annual profit.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhikyIVgahCmn6EcIfv-xZnkPwC3fs7MSW8ytz8QV4tUBzvxl7pEeOcGLwz3l7OmuA7PcRCb1gOi8csLQ3eCI6uHRweir0T_ZYKZzvRGas3C1DyILiGLumYPpdejDgpabBpTjigRC3yqKey/s1600/5+Brighton+Adj+Profit+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="450" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhikyIVgahCmn6EcIfv-xZnkPwC3fs7MSW8ytz8QV4tUBzvxl7pEeOcGLwz3l7OmuA7PcRCb1gOi8csLQ3eCI6uHRweir0T_ZYKZzvRGas3C1DyILiGLumYPpdejDgpabBpTjigRC3yqKey/s640/5+Brighton+Adj+Profit+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">If they are not promoted, it will be interesting to see what
the board decides regarding player sales. Traditionally Brighton have made very
little from the transfer market , though there was a change in stance in
2013/14 when the club sold Liam Bridcutt to Sunderland and Ashley Barnes to
Burnley, followed by the even more profitable sales in 2014/15.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This summer Brighton could have made a lot of money if they
had accepted all the offers they received, e.g. Dale Stephens (Burnley), Lewis
Dunk (Fulham) and Anthony Knockaert (Newcastle United). That could have brought
in £15-20 million, though obviously would have damaged Brighton’s prospects of
promotion.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The current strategy is to “speculate to accumulate”, but as
Bloom has admitted, “It would be ridiculous for me or any owner to say that a
player is never for sale. There’s always a price for any player.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMIQIEvlKdLYDa4xQwK7fRjx4WgxeDq7gJHDBVHCVha0mGuZZXjIVYA383m_N9Fk7Igp6bkRaISjoVqG73zxH4YpxCIf9JME7aD6NDoMhhKg6NIuFZ-fddvNAHGK6nj4qDwdLPRX93bcTR/s1600/6+Brighton+Football+Costs+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="560" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMIQIEvlKdLYDa4xQwK7fRjx4WgxeDq7gJHDBVHCVha0mGuZZXjIVYA383m_N9Fk7Igp6bkRaISjoVqG73zxH4YpxCIf9JME7aD6NDoMhhKg6NIuFZ-fddvNAHGK6nj4qDwdLPRX93bcTR/s640/6+Brighton+Football+Costs+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s strategy is more clearly seen by the club’s
alternative presentation of the profit and loss account, which highlights the
29% (£7 million) increase in the football budget in 2015/16.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Chief executive Paul Barber, who has overseen a “pretty
radical and dramatic programme of reducing our costs” explained the approach as
follows “It gives us more opportunity to put more into the football budget,
which should improve our chances of promotion.”<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In this way, administrative and operational costs have been
cut by 22% since 2012, which has meant that Brighton’s different managers have
benefited from a significant increase in the football budget over this period
of around 134%, as it has grown from £13 million to £31 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4HIBlD7To33aIIr5YQ0EPC3z3H7TSuB48KOGe9sH7frQ280jOhAmp58dsAnqc9LekByrSbbkHWQKw1IPV5RKCdVIQippt4LtsNPzNoOMgH-1DOhcdFGK6UXwi47vImerW6U74kB2dhe_V/s1600/7+Brighton+EBITDA+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="392" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4HIBlD7To33aIIr5YQ0EPC3z3H7TSuB48KOGe9sH7frQ280jOhAmp58dsAnqc9LekByrSbbkHWQKw1IPV5RKCdVIQippt4LtsNPzNoOMgH-1DOhcdFGK6UXwi47vImerW6U74kB2dhe_V/s640/7+Brighton+EBITDA+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bloom praised his team for “ensuring we remain operationally
efficient”, but the reality is that Brighton’s underlying profitability has
still been getting worse, as seen by the reduction in EBITDA (Earnings Before
Interest, Depreciation and Amortisation).</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This metric is considered to be an indicator of financial
health, as it strips out once-off profits from player trading and non-cash
items. It has been consistently negative at Brighton, but has declined in the
last eight years from minus £3 million in 2008 to minus £18 million in 2016.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9bBj9P_EPajEKUQgB0RPG7opwIreG5w3lvQf0QQdU4-VOn0tunEixF_NGg2Fig-hNWDzccLQp2VE93JdzLaV_kbZeQXLMma3glRtk1XsFiCvPhp02GHiSJ29z377B5T1jaX1lig481Dsc/s1600/8+Brighton+EBITDA+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9bBj9P_EPajEKUQgB0RPG7opwIreG5w3lvQf0QQdU4-VOn0tunEixF_NGg2Fig-hNWDzccLQp2VE93JdzLaV_kbZeQXLMma3glRtk1XsFiCvPhp02GHiSJ29z377B5T1jaX1lig481Dsc/s640/8+Brighton+EBITDA+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Unsurprisingly, a negative EBITDA is far from uncommon in
the Championship with 21 clubs generating cash losses, though only Nottingham
Forest have worse underlying figures than Brighton. In stark contrast, in the
Premier League only one club reported a negative EBITDA, which is again
testament to the earning power in the top flight.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s revenue surged from £7.5 million in 2011 to £24.6
million in 2016 following promotion from League One to the Championship,
exacerbated by what can be described as the "Amex effect" with gate receipts
being more than four<span style="mso-spacerun: yes;"> </span>times as much as Withdean,
increasing from £2.3 million to £9.4 million.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBO4aS7nnRYQM0tJr2KADCcjofyOTwcZbUlPdJzyS13v40wsI6ZQzIQvHCNiv7wCcmF2mLKYWnTBS1fdgjtwRRvzW62Zp8h4j6_1Q2bOaOnBbeepF-bFdT3Fjw-a01T8v1U_Ba9gCW2X4d/s1600/9+Brighton+Revenue+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="510" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBO4aS7nnRYQM0tJr2KADCcjofyOTwcZbUlPdJzyS13v40wsI6ZQzIQvHCNiv7wCcmF2mLKYWnTBS1fdgjtwRRvzW62Zp8h4j6_1Q2bOaOnBbeepF-bFdT3Fjw-a01T8v1U_Ba9gCW2X4d/s640/9+Brighton+Revenue+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In addition, the new stadium has brought more commercial
opportunities, leading to income climbing from £3.1 million to £9.4 million.
The club could negotiate better deals with sponsors in the higher division (up
from £0.8 million to £5.5 million), increase retail sales, e.g. from the
stadium megastore (up from £0.5 million to £1.3 million) and make more from
catering, i.e. pies and the famous Harveys beer (up from £35k to £1.3 million).</span></div>
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<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, the growth since the first season back in the
Championship in 2012 is less impressive, amounting to just 11% (£2.5 million)
in four years. The fact is that it is difficult to substantially grow revenue
streams without another promotion to the top flight.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim6lYPzIZNzZW59GpKkQZfNftn5pLB9w5_ud0ErZaVvd26pRAOspMue7fer3e2FYYUIPnn0ScntQESd3lOcExEBRaoLabNjsiOlmK21qJ2t9A2E39all90DdGH_RnrGe3wTyXvbv9pEyxO/s1600/10+Brighton+Revenue+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim6lYPzIZNzZW59GpKkQZfNftn5pLB9w5_ud0ErZaVvd26pRAOspMue7fer3e2FYYUIPnn0ScntQESd3lOcExEBRaoLabNjsiOlmK21qJ2t9A2E39all90DdGH_RnrGe3wTyXvbv9pEyxO/s640/10+Brighton+Revenue+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s revenue of £25 million places them around 7th
highest in the Championship, but the clubs with the three highest revenues in
2014/15 (Norwich City, Fulham and Cardiff City ) were more than 60% higher with
£40-52 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bloom is acutely aware of the challenge this poses: “Our
player budget is the highest it has ever been, so we have certainly invested,
but we absolutely can't compete financially with relegated clubs like QPR,
Burnley and Hull with their parachute payments.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">He’s not wrong, as two of the three clubs he named were
promoted back to the Premier League last season, once again proving that money
talks in football. Jones reiterated his chairman’s message, noting that this factor
“presents difficulties when trying to assemble a playing staff that can compete
with clubs coming down from the Premier League, whose TV parachute payments can
inflate their revenue to around £40 million.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Excluding the impact of the parachute payments made to those
clubs relegated from the Premier League (£26 million in first year after
relegation) Brighton’s revenue would be one of the highest in the Championship.
This season the disparity between “the haves and the have nots” will be even
larger, as the relegated clubs include Newcastle United and Aston Villa.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Even Chris Hughton has commented on this hurdle, when
discussing Newcastle: “They’ve come down with parachute payments, they are a
massive club and they are doing their very best to make sure they go straight back
up again.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgn8Rw4uh4QX2wg7If_vUgC7qDTkZGXS5IZWPVkLMFGQrjStnu_GUCUHH2Qnk7MDWJeJQ531jQioJ8VHYJfGBLgh4CY95WfI_8Q4AMsUh7LnKnDbEx59s0IWO6riAddZXjvp1aWwpUt26pf/s1600/12+Brighton+Revenue+Mix+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="472" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgn8Rw4uh4QX2wg7If_vUgC7qDTkZGXS5IZWPVkLMFGQrjStnu_GUCUHH2Qnk7MDWJeJQ531jQioJ8VHYJfGBLgh4CY95WfI_8Q4AMsUh7LnKnDbEx59s0IWO6riAddZXjvp1aWwpUt26pf/s640/12+Brighton+Revenue+Mix+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The majority of Brighton’s revenue comes from the stadium
with gate receipts contributing 38%, up from 30% at Withdean, though this
is only just ahead of commercial income 38%, following the relatively higher
growth rate in the last few seasons. Broadcasting is up to 24%, though this is
much lower than the Premier League, where TV money accounts for 70-85% of total
revenue at half the clubs.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJcUOPKphCjHgjldjxjq2ogwIMuu6P-sDy7RXWciueJ-wS9oSVrv8h1Y1O10w63r7nV7ySsZfxqWBq1zZA86H2lvl7DrVlEtGeFAcojqEVf7Oa1PVs332AC-8E0kcAOZ2cLCJbg0nWPaK3/s1600/13+Brighton+Importance+of+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="580" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJcUOPKphCjHgjldjxjq2ogwIMuu6P-sDy7RXWciueJ-wS9oSVrv8h1Y1O10w63r7nV7ySsZfxqWBq1zZA86H2lvl7DrVlEtGeFAcojqEVf7Oa1PVs332AC-8E0kcAOZ2cLCJbg0nWPaK3/s640/13+Brighton+Importance+of+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Clearly, Brighton are more reliant on match day income than
most. In fact, in 2014/15 only two clubs were more dependent on this revenue
stream: Nottingham Forest and Charlton Athletic.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhS4_kKTEIU88dexq9dq5dBelz2eh71IChmBeGOELAcG9_rgPij8HCCxxdOG7dFcuF6Vh9uopXPHE-24vc1H7SOzf6SkZHWmv0-N1LXG3Hta8GahlpmaK-ZdZQGXXeQ-CxD-MleHA2bivU_/s1600/14+Brighton+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhS4_kKTEIU88dexq9dq5dBelz2eh71IChmBeGOELAcG9_rgPij8HCCxxdOG7dFcuF6Vh9uopXPHE-24vc1H7SOzf6SkZHWmv0-N1LXG3Hta8GahlpmaK-ZdZQGXXeQ-CxD-MleHA2bivU_/s640/14+Brighton+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Despite improved results on the pitch, gate receipts fell
for a second consecutive season, decreasing 4% (£0.4 million) from £9.8 million
to £9.4 million, largely due to a lack of home cup ties.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Nevertheless, this is still likely to be the highest match
day revenue in the Championship in 2015/16, as the only team ahead of them in
2014/15 was Norwich City, who were promoted to the Premier League last season. It
will be another story this year, due to the arrival in the second tier of
Newcastle and Villa with their large crowds.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-46DJW16-zVpZeAJ4f5OvgVMWkWZFEXdmQqUFjOqnpz_B7RVujd8hyphenhyphenVBuRjHIAeofM6ppl5QxEuEcGi18GKNfZzJvC7t3frtjpefQemDPgitqJJ7ZcY09fCQnsZyu1roW7hmDhH1r_jOe/s1600/15+Brighton+Attendances+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="590" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-46DJW16-zVpZeAJ4f5OvgVMWkWZFEXdmQqUFjOqnpz_B7RVujd8hyphenhyphenVBuRjHIAeofM6ppl5QxEuEcGi18GKNfZzJvC7t3frtjpefQemDPgitqJJ7ZcY09fCQnsZyu1roW7hmDhH1r_jOe/s640/15+Brighton+Attendances+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Average attendance slipped slightly from 25,640 to 25,583,
partly due to the knock-on impact of the disappointing 2014/15 season, but this
was still the second highest in the Championship, only surpassed by Derby
County 29,663, though ahead of all three promoted clubs: Middlesbrough 24,627,
Hull City 17,199 and Burnley 16,709.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Since the move to the Amex, attendances had been steadily
rising from the 7,352 at Withdean, as the new stadium finally met latent local
demand for tickets. Brighton’s potential has been highlighted this season by
three games selling out (Norwich, Villa and Fulham). In fact, the club has in
excess of 22,000 season ticket holders and 1901 Club members.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh0vWlSvm7Zf73UqMOJED_JZtnY4Kr6s2pL5JOI7d-jdEuX_kKJfprGw8WsF2i0DBplax-PJ2WkKE2fv-jX4Ep__97KevkqjqBeeRoD0jUnMV-a2rJhGfr5LhcYWz9c9fvgzix9-PtEz6l/s1600/16+Brighton+Attendances+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh0vWlSvm7Zf73UqMOJED_JZtnY4Kr6s2pL5JOI7d-jdEuX_kKJfprGw8WsF2i0DBplax-PJ2WkKE2fv-jX4Ep__97KevkqjqBeeRoD0jUnMV-a2rJhGfr5LhcYWz9c9fvgzix9-PtEz6l/s640/16+Brighton+Attendances+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Ticket prices are among the highest in the Championship.
According to the BBC’s Price of Football survey, Brighton has the second
highest cheapest season ticket (only below Norwich) and the third highest most
expensive season ticket (behind Ipswich and Fulham). However, the survey did
note that tickets include a travel subsidy to and from the ground for fans by
public transport or use of the park-and-ride option, valued at £4 per game for
adults.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">It is also worth mentioning that Brighton supporters are
happier with their match day experience than any others according to a Football
League study, partly due to the magnificent facilities that are second to none,
including free wi-fi and VIP padded seats. The club is also good to away fans,
lighting the concourse in their colours and having their local beer on tap. The
only fly in the ointment is the appalling “service” from the dreaded Southern
Rail.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The good news is that the club froze most ticket prices in
2015/16 and have restricted price rises in 2016/17 to no more than a couple of
pounds per match. Barber said this was to reward fans for “the ongoing loyalty
and support they’ve shown to the club.”</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6O37gQbOnJdYx69p3DFS57DezyHBVf_Jdeqc5Q6a5f_DGElIM6V4kfXxbK75T4Raf1Nnsw3TunlTjBZXsdyqvArExYpkvYmWX_1DuYzUERQ32FWw6J-FlMC7zmrPcrz2sV-lHLUf56CcO/s1600/17+Brighton+TV+Championship+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="620" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6O37gQbOnJdYx69p3DFS57DezyHBVf_Jdeqc5Q6a5f_DGElIM6V4kfXxbK75T4Raf1Nnsw3TunlTjBZXsdyqvArExYpkvYmWX_1DuYzUERQ32FWw6J-FlMC7zmrPcrz2sV-lHLUf56CcO/s640/17+Brighton+TV+Championship+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s broadcasting revenue rose 19% (£0.9 million) from
£4.9 million to £5.9 million in 2015/16, which was attributed to an increase in
the Football League basic distribution plus the club being shown more times on
live TV.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In the Championship most clubs receive the same annual sum
for TV, regardless of where they finish in the league, amounting to around £4
million of central distributions: £2.1 million from the Football League pool
and a £2.3 million solidarity payment from the Premier League. There are also
payments for each live TV game: £100,000 home; £10,000 away.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This might not sound much, but Barber argued, “TV income is
extremely important for all clubs, including ours”, adding, “without revenue
from Sky TV, ticket prices would go up.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, the clear importance of parachute payments is once
again highlighted in this revenue stream, greatly influencing the top nine
earners in 2014/15. Nevertheless, it should be noted that these payments are
not necessarily a panacea, e.g. Middlesbrough secured promotion last season,
even though their broadcasting income of £6 million was less than half the size
of those clubs boosted by parachutes.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqhm87FKEXTYdZVGgcjt9jmLeleE-nz-Q_Ic95QalmV8tUEGKhWbCdVM1nYMp38HgNQ-Ta3wQFAT_-Qu75PDujAiVyMPxt6F03heQ2G8H5Yz_r6Cnzfb9znaeGBP826Dau5lo1kAiUAzcG/s1600/18+Brighton+TV+Premier+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="534" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqhm87FKEXTYdZVGgcjt9jmLeleE-nz-Q_Ic95QalmV8tUEGKhWbCdVM1nYMp38HgNQ-Ta3wQFAT_-Qu75PDujAiVyMPxt6F03heQ2G8H5Yz_r6Cnzfb9znaeGBP826Dau5lo1kAiUAzcG/s640/18+Brighton+TV+Premier+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Looking at the television distributions in the top flight,
the massive financial chasm between England’s top two leagues becomes evident
with Premier League clubs receiving between £67 million and £101 million in
2015/16, compared to the £4 million in the Championship. In other words, it
would take a Championship club more than 15 years to earn the same amount as
the bottom placed club in the Premier League.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The size of the prize goes a long way towards explaining the
loss-making behaviour of many Championship clubs. This is even more the case
with the new TV deal that started in 2016/17, which Barber described as
“astonishing”. This will be worth an additional £35-60 million a year to each
club depending on where they finish in the table.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgATGNIbf6cIUU9_hegY9fXIKRcWoSpb2wC8Q8zIW5LbNW5GQdk7JstKjo3vUFCqs8scZAJhXReIBY5m2L5QS5sHkGLKyZibtAP4AP5hdhqN5NiiwtRS-ZZJJzkkLRnNWyzEZ6av7b6Ef1V/s1600/19+Brighton+Promotion+Impact+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="630" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgATGNIbf6cIUU9_hegY9fXIKRcWoSpb2wC8Q8zIW5LbNW5GQdk7JstKjo3vUFCqs8scZAJhXReIBY5m2L5QS5sHkGLKyZibtAP4AP5hdhqN5NiiwtRS-ZZJJzkkLRnNWyzEZ6av7b6Ef1V/s640/19+Brighton+Promotion+Impact+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Even if a club were to finish last in their first season in
the top flight and go straight back down, their TV revenue would increase by an
amazing £95 million. They would also receive a further £71 million in parachute
payments, giving additional funds of around £166 million. If they survived
another season, you could throw in another £120 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Of course, if they did go up, Brighton would also have to
spend more to strengthen their playing squad, but the net impact on the club’s
finances would undoubtedly be positive, as evidenced by the improvement in the
bottom line for those clubs promoted in the past few seasons.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyYZt-iz2pzvhVbDIU4NKTMU_5CGaBnY677okG59DLdXz6WXLmVmoNnLb-pMPFB2w0idPRs9AX0MwJIhO98bZULv69HoddPEGRxgIzeYSuBuGLRs-fkCoMcaUsNf5iFfTwXdQtmoDGDQW9/s1600/20+Brighton+Parachute+Payments+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="510" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyYZt-iz2pzvhVbDIU4NKTMU_5CGaBnY677okG59DLdXz6WXLmVmoNnLb-pMPFB2w0idPRs9AX0MwJIhO98bZULv69HoddPEGRxgIzeYSuBuGLRs-fkCoMcaUsNf5iFfTwXdQtmoDGDQW9/s640/20+Brighton+Parachute+Payments+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, parachute payments make a significant
difference to a club’s revenue and therefore its spending power in the
Championship. From this season, these will be even higher, though clubs will
only receive parachute payments for three seasons after relegation. My estimate
is £83 million, based on the percentages advised by the Premier League: year 1 –
55%, year 2 – 45% and year 3 – 20%.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The other point worth emphasising is that if a club is
relegated after only one season in the Premier League, it will only benefit
from parachute payments for two years.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">There are some arguments in favour of these payments, namely
that it encourages clubs promoted to the Premier League to invest to compete,
safe in the knowledge that if the worst happens and they do end up relegated at
the end of the season, then there is a safety net. However, they do undoubtedly
create a significant revenue disadvantage in the Championship for clubs like
Brighton.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIEko7rN_mxYIDiUrW-xFEXKCow9r5nNwR9-bswWmY2uFSXQIne5Zg3fyy5HkEp2oA6SwdsH-WDW-6S_RDXJwdfYyPz4StuuQb3y22EvChp94NrsGaiM2s-foTD8GPBla1OD5Gk4oxOhvs/s1600/21+Brighton+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgIEko7rN_mxYIDiUrW-xFEXKCow9r5nNwR9-bswWmY2uFSXQIne5Zg3fyy5HkEp2oA6SwdsH-WDW-6S_RDXJwdfYyPz4StuuQb3y22EvChp94NrsGaiM2s-foTD8GPBla1OD5Gk4oxOhvs/s640/21+Brighton+Commercial+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Commercial income grew by 5% (£0.5 million) from £8.9
million to £9.4 million, comprising commercial sponsorship and advertising £5.5
million, catering and events £1.3 million, retail £1.3 million, academy grant
£0.9 million, other income £0.3 million and women and girls £0.1 million. The
main driver for the growth was a £0.4 million increase in catering and events,
primarily as a result of the Rugby World Cup matches hosted at the Amex.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In the new world of FFP, Bloom has said that the club “had
to adapt and move quickly to establish a sharper commercial focus. We had to
focus on the inherent value of our brand.” The club’s success in this area is
reflected by Brighton having one of the highest commercial revenues in the
Championship, only behind Norwich City and Leeds United in 2014/15.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is despite the fact that Brighton now only report the
net catering commission in revenue, whereas in previous seasons all the gross
revenue was included in revenue with the expenses shown in costs.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9DRftJg_XHcCkxvd0KyLsPCRe-xCGIKMsUm5dh-4s2XkBsfEIbG4MAsbgrxP8WlWumaZmtlnruZ6jUmglWT_rU4hjSew7-I6Tj-p3GP2D7_yv3tcXtBoSR8WFawCoySQ2id7aTOZ8mhh_/s1600/Shane+Duffy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9DRftJg_XHcCkxvd0KyLsPCRe-xCGIKMsUm5dh-4s2XkBsfEIbG4MAsbgrxP8WlWumaZmtlnruZ6jUmglWT_rU4hjSew7-I6Tj-p3GP2D7_yv3tcXtBoSR8WFawCoySQ2id7aTOZ8mhh_/s320/Shane+Duffy.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Back on the Shane gang"</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">What has been particularly impressive in recent years is the
increase in sponsorship, though it remained static in 2015/16, largely due to
the contractual cycles. American Express are not only shirt sponsors, but also
naming rights partner for the stadium and the training ground. This multi-year
agreement, signed in March 2013, was described by Barber as “the biggest in the
club’s history.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Similarly, Barber said that the 2014/15 Nike deal, replacing
Errea after 15 years as the club’s kit supplier, represented “a significant
increase on our existing commercial arrangement.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Interestingly, the club has applied for planning permission
for a 150 room hotel alongside the stadium, though the City Council has to date
rejected the application. Barber said that this “would have been a valuable
addition to our non-matchday revenue.” They remain “hopeful of a successful
outcome”, which is just as well as they have to date spent over £2 million on
this development.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s wage bill shot up by 33% (£6.7 million) from
£20.6 million to £27.4 million in 2015/16, “in order to be as competitive
possible and give ourselves the best possible chance of success on the pitch.” This
would have included high wages for the returning Bobby Zamora, even though he
arrived on a free transfer.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">It is worth noting that since 2012, the first year back in
the Championship, the wage bill has grown by £12.7 million (87%), while revenue
has only increased by £2.5 million (11%).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is all seen on the pitch, given the significant
reduction in administrative and operational expenses. For example, in 2015/16
the number of players rose from 61 to 73, while other staff were flat at 197.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Despite this growth, Brighton’s £27 million wage bill is
still only the eighth highest in the Championship, so promotion would indeed be
a fine achievement. As a comparative, the top three in the Championship in
2014/15 were Norwich City £51 million, Cardiff City £42 million and Fulham £37
million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Barber understands this challenge: “We haven’t got anywhere
near the biggest budget in the division. We’re probably 10th or 11th. So we’ve
had to spend wisely, and eke out every ounce of value from every deal.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">That said, it would be no surprise if Brighton’s wage bill
further rose this season, as they have been extending contracts for a number of
important individuals, including Hughton, Beram Kayel, Solly March and Conor
Goldson, though this will ensure a decent price if they are sold.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The remuneration for the highest paid director, who is not
named, but is surely Paul Barber, has increased from £558k to £578k. This is a
lot of money, but <span style="mso-spacerun: yes;"> </span>Barber is really a
Premier League level chief executive, who has been pretty successful in cutting
operational expenses and renegotiating many of the sponsorships.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgp-ohjVXdT_0grwOhz17mWA-PzWgI0iEumuSUE3W4UjV0aplPAhdgPzmblNQLTuTROZqORQh5Yvuhw8V29Wh-TgsJZD9k2tZHxQoW0p2CVUd0E6fDgq4BrkCli30fIqDEevsAriXBgDx9P/s1600/24+Brighton+Wages+to+Turnover+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgp-ohjVXdT_0grwOhz17mWA-PzWgI0iEumuSUE3W4UjV0aplPAhdgPzmblNQLTuTROZqORQh5Yvuhw8V29Wh-TgsJZD9k2tZHxQoW0p2CVUd0E6fDgq4BrkCli30fIqDEevsAriXBgDx9P/s640/24+Brighton+Wages+to+Turnover+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s wages to turnover ratio increased (worsened) from
87% to 111%, the highest since 2009 when the club was in League One. This is
not exactly great, but it is by no means one of the highest in the
Championship. In 2014/15 no fewer than 11 clubs “boasted” a wages to turnover
ratio above 100% with the worst offenders being Bournemouth 237%, Brentford
178% and Nottingham Forest 170%.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The (relatively) prudent approach is evidently the one that
Brighton want to follow, especially in a FFP world, as noted by Bloom: “While
we do want to play at the highest level, we cannot simply open our cheque book
and start spending without care or attention.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvVw-aOAio_7oAHOr5iiW6lT0IC72n8avVJYYKqppYAciMT-nLV8OQ7K-JoDDX4AUBk27d0uHa2K06q5YZZqfkdmXt5ILZCwtCmFAA236m85aujUkqgnFbSNrlc-izv0BlyLfVMTMMYfoS/s1600/25+Brighton+Other+Expenses+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvVw-aOAio_7oAHOr5iiW6lT0IC72n8avVJYYKqppYAciMT-nLV8OQ7K-JoDDX4AUBk27d0uHa2K06q5YZZqfkdmXt5ILZCwtCmFAA236m85aujUkqgnFbSNrlc-izv0BlyLfVMTMMYfoS/s640/25+Brighton+Other+Expenses+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Other expenses rose by 7% (£1.1 million) from £15.0 million
to £16.0 million, which is by far the highest in the Championship, ahead of
Fulham £13.4 million and Leeds United £12.6 million.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is the other side of the coin of moving to the Amex, as
this year’s increase was largely due to stadium expenses: maintenance, running
costs and security. There are also some costs that are exclusive to Brighton,
as Barber note, “The contribution that the club makes to the cost of travel has
grown, meaning that we have a large seven-figure transport bill that other
clubs don’t have.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTFJRP1nkmRNG-uYH6zW_di3ZcLqGYk8pEmHvkznq42loii7K8CqSdkGG9tnD-h-g1PdIEmLqGJlq7HAG7ghBDvb38veEa_jeiOJxzy3H4Pw7zOMUDHTgzu1R-LUUgcjBTYe-tcj5xe7jz/s1600/26+Brighton+Player+Amortisation+%2526+Depreciation+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="430" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTFJRP1nkmRNG-uYH6zW_di3ZcLqGYk8pEmHvkznq42loii7K8CqSdkGG9tnD-h-g1PdIEmLqGJlq7HAG7ghBDvb38veEa_jeiOJxzy3H4Pw7zOMUDHTgzu1R-LUUgcjBTYe-tcj5xe7jz/s640/26+Brighton+Player+Amortisation+%2526+Depreciation+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Non-cash expenses have also been on the rise with
depreciation and player amortisation increasing from just £237k in 2009 to £8.7
million in 2016, reflecting the club’s investment in infrastructure and the
playing squad.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVP0lrIglIzomIM5BBrT6rK4fIDTg0R75wBrwWvvq6iV77YiS4y0LlKT1voxn63py_OneT_w66KSYDt9n9Mb5rxLrUw4o6lm24UOQBdYCnDtl3zHY59_Se68ZZjI5XRQ0GY96-5_1rTMdC/s1600/27+Brighton+Depreciation+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVP0lrIglIzomIM5BBrT6rK4fIDTg0R75wBrwWvvq6iV77YiS4y0LlKT1voxn63py_OneT_w66KSYDt9n9Mb5rxLrUw4o6lm24UOQBdYCnDtl3zHY59_Se68ZZjI5XRQ0GY96-5_1rTMdC/s640/27+Brighton+Depreciation+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In 2015/16 depreciation was unchanged at £4.9 million, which
is more than twice as much as any other club in the Championship, the next
highest being Derby County £2.1 million. This represents the annual charge of
writing-off the cost of the stadium and the training ground. These are
depreciated over 50 years, i.e. 2% of cost per annum.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguCo6vql-9ny-DQlXQ_vmXERBEUodEWjBkDE9NnU-7p9MPA4zD7-kT9JTn-k5pLkIBmIcWM7rYFJ0sz7Wko_ACpUr6k1SmV-IkCWYbmYQT1nuSZqt-bCxKqX2REsd5ndQVCD-oKPbLrCgy/s1600/28+Brighton+Player+Amortisation+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguCo6vql-9ny-DQlXQ_vmXERBEUodEWjBkDE9NnU-7p9MPA4zD7-kT9JTn-k5pLkIBmIcWM7rYFJ0sz7Wko_ACpUr6k1SmV-IkCWYbmYQT1nuSZqt-bCxKqX2REsd5ndQVCD-oKPbLrCgy/s640/28+Brighton+Player+Amortisation+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Player amortisation was 60% (£1.4 million) higher at £3.8
million, following the strengthening of the squad, but this not out of the norm
in the Championship. The highest player amortisation in 2014/15 was found at
clubs recently relegated from the Premier League, namely Norwich £13 million,
Cardiff £11 million and Fulham £11 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, to place this into perspective, even these clubs
are miles behind the really big spenders in the top tier like Manchester City
(£94 million) and Manchester United (£88 million). This is partly because there
is no amortisation required for those players who have been developed at the
Academy, e.g. Dunk and March in Albion’s case.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_vIUTTzHV27C6rNmJq4u22NKh7dj3sWQrBgEmdma21Qe7_HyL1elZMRjNlYybyH2p7vDs-LsYw4-jKgdQ0QwpD1KffTHXwi9PgCiochBx8YOunbs99ZbEvFFxTWnrh276EFC3OHicg0wA/s1600/29+Brighton+Player+Trading+Accounting+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_vIUTTzHV27C6rNmJq4u22NKh7dj3sWQrBgEmdma21Qe7_HyL1elZMRjNlYybyH2p7vDs-LsYw4-jKgdQ0QwpD1KffTHXwi9PgCiochBx8YOunbs99ZbEvFFxTWnrh276EFC3OHicg0wA/s640/29+Brighton+Player+Trading+Accounting+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The accounting for player trading is fairly technical, but
it is important to grasp how it works to really understand a football club’s
accounts. The fundamental point is that when a club purchases a player the
transfer fee is not fully expensed in the year of purchase, but the cost is
written-off evenly over the length of the player’s contract, e.g. Irish
international defender Shane Duffy was bought from Blackburn Rovers for a
reported £4 million on a four-year deal, so the annual amortisation in the accounts
for him is £1 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Over the years, Brighton have not been a big player in the
transfer market, often registering net sales, though they have increased their
gross spend recently, averaging £5.6 million in the last two seasons, compared
to just £0.9 million over the previous nine seasons.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjelrV4G1qXKr9eXkAWedYyEXvZ5ylz4ZUmRi9BtZAKVjd2Ah2vBGgIy0qv7sDb5UR1LuMEp7tQKBi_-kKT6-_GhkJd1kKUqLVVIkhjzDKS7BlcLLXCZuoFwfP_bYO9Lx3H6DqRmeRr00id/s1600/30+Brighton+Player+Trading+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="450" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjelrV4G1qXKr9eXkAWedYyEXvZ5ylz4ZUmRi9BtZAKVjd2Ah2vBGgIy0qv7sDb5UR1LuMEp7tQKBi_-kKT6-_GhkJd1kKUqLVVIkhjzDKS7BlcLLXCZuoFwfP_bYO9Lx3H6DqRmeRr00id/s640/30+Brighton+Player+Trading+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">It is striking that there have been no meaningful sales in
this period, as Barber explained, “Our key objective this summer was to retain
our best players which, despite a lot interest and a number of offers for different
players in our squad, we have managed to do.”</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">They also wanted to strengthen the squad in key areas this
summer, so recruited Shane Duffy and Oliver Norwood, who made a good impression
at the Euros with the Republic of Ireland and Northern Ireland, and the
returning Steve Sidwell. They have also made good use of the loan market,
bringing in prolific goal scorer Glenn Murray from Bournemouth and full-back
Sebastien Pocognoli from West Brom.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOdEKgmoZcIB968RXEKB0nTuWak-5eeP0BOsL71efo1ymzNtGOf6oLADAakzQkxxwemYp2igG-obCrprGuhupJiu8Q1bKtU4g1q8kor04hWcaINQbfDvBYHtK58vRMAPBpWw1kLhI_PvZ9/s1600/Anthony+Knockaert.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOdEKgmoZcIB968RXEKB0nTuWak-5eeP0BOsL71efo1ymzNtGOf6oLADAakzQkxxwemYp2igG-obCrprGuhupJiu8Q1bKtU4g1q8kor04hWcaINQbfDvBYHtK58vRMAPBpWw1kLhI_PvZ9/s320/Anthony+Knockaert.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"A French Kiss in the Chaos"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Last season they also bought well with Anthony Knockaert,
Tomer Hemed, Jiri Skalak, Conor Goldson, Liam Rosenior, Jamie Murphy, Gaetan
Bong and Uwe Hünemeier all making decent contributions.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, it is apparent that Brighton have not gone
overboard in terms of spending, especially compared to some of their principal
rivals who are really “going for it”. To illustrate this, in the last two
seasons Brighton had net spend of 11 million, while they were comfortably outspent
by Derby County £26 million, Norwich City £23 million and Sheffield Wednesday
£21 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Not to mention Aston Villa and Newcastle United who have
somehow found themselves in the Championship despite substantial net spend of
£47 million and £43 million respectively. As Hughton said, “There are big
spenders in this division. We can’t compete with what Newcastle and Aston Villa
are doing. What we have done has been sensible.”</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Therefore, Brighton have to box clever, as Bloom explained:
“There are other clubs in the division who have spent significantly more than
us. So we just have to make sure we recruit smarter and that the team dynamic
overcomes the financial disadvantage we've got against certain other clubs.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOTWpM9fnocX5GfMU0Q199ZNrK6AxFXU478tgPepZ7ZcxRF9xC0St4vvmeig0Qzae5VV8uXDk3_ehWZ-Fmo9b_A4y3GpMz9v8UjJPjCIe0MtFtsODy_3q3h-d_ks8PNptT9Rp7n0gWYEPn/s1600/32+Brighton+Debt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOTWpM9fnocX5GfMU0Q199ZNrK6AxFXU478tgPepZ7ZcxRF9xC0St4vvmeig0Qzae5VV8uXDk3_ehWZ-Fmo9b_A4y3GpMz9v8UjJPjCIe0MtFtsODy_3q3h-d_ks8PNptT9Rp7n0gWYEPn/s640/32+Brighton+Debt+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Although holding onto players was clearly the strategy for this season, Bloom recently indicated at a fans’ forum that things might be different next season, so this may well be Brighton’s best opportunity to get promotion.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s net debt rose by £25.6 million from £140.5
million to £166.1 million with the £23.0 million increase in gross debt to
£170.6 million compounded by cash falling by £2.6 million to £4.5 million.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwFvk0esoP6dDAtJbvr-pbXbMTkwHqMeY0kFEoEhm67J13RHOGB821cex5RoJukF-UOkEymJPnBJXFf64n5vQgDat-0Nceg0MAlyQ4z-6HfQaBTBI11bX6oBGCJCe3I5gLIfcusqOIb_TJ/s1600/33+Brighton+Debt+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="612" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwFvk0esoP6dDAtJbvr-pbXbMTkwHqMeY0kFEoEhm67J13RHOGB821cex5RoJukF-UOkEymJPnBJXFf64n5vQgDat-0Nceg0MAlyQ4z-6HfQaBTBI11bX6oBGCJCe3I5gLIfcusqOIb_TJ/s640/33+Brighton+Debt+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Debt has been rising over the past few years, so much so
that Brighton now have the largest debt in the Championship, substantially more
than other clubs, e.g. Cardiff City £116 million, Blackburn Rovers £104 million
and Ipswich Town £88 million. However, it is entirely owed to Bloom, is
interest-free and can be regarded as the friendliest of debt.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The cash flow statement reveals that Bloom has also
converted £22 million of loans into share capital, including £11 million in
2015/16, which means that Bloom actually stumped up £34 million last season. Furthermore,
since the accounts were published, he converted an additional £8 million of
loans into shares, i.e. a running total of £30 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Adding the £80 million that Bloom has funded via share
capital (including the debt conversions) to the £171 million of debt means that
Bloom has put in a total of £251 million – that’s a cool quarter of a billion.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Just pause to let that sink in for a moment. One. Quarter.
Of. A. Billion. Pounds.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As David Jones commented, “That’s a massive amount of money
for an owner to have to subsidise a club for. And when you consider we’ve got
one of the highest two or three attendances in the Championship, some of the
best sponsorship deals, we’re still needing the owner to help us with that kind
of subsidy. It’s substantial.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjovS_7qS5KpmWX82dxnPAxe5-k6dFxO8FZunZOAKQ8V2uQxv1fmNimDjWHwZ3RYV9VJAZhoPG7N8kNAqQpV7PMn-RZGBIwzfHjGrfOJHI344ZtqZRdSQhnwLxgWM5Hg9YSQSGYb1WH6GOT/s1600/35+Brighton+Use+of+Funds+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="470" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjovS_7qS5KpmWX82dxnPAxe5-k6dFxO8FZunZOAKQ8V2uQxv1fmNimDjWHwZ3RYV9VJAZhoPG7N8kNAqQpV7PMn-RZGBIwzfHjGrfOJHI344ZtqZRdSQhnwLxgWM5Hg9YSQSGYb1WH6GOT/s640/35+Brighton+Use+of+Funds+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Looking at how Brighton have used these funds since Bloom
took charge, the majority (£155 million) has gone on investment into
infrastructure (including £103 million on the stadium and £32 million on the
training centre), while £83 million has been used to bankroll operating losses.
Hardly any money was spent on new players in this period with a net outlay of
less than £5 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">There were a couple of interesting corporate actions after
the accounts closed. Authorised share capital was doubled from £100 million to
£200 million – potentially paving the way for a significant debt conversion? In
addition, the club created £40 million of Convertible Unsecured Loan Notes.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Being so dependent on one individual can be a concern, but
Bloom comes from a family of Brighton supporters: “I have absolutely no
intention of selling. I think I will be here for many years to come.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO8lpo_Vejg9retBwOoWoVaKwjWjToaJijLbCwPq-arOv7Kj8x7WZdSS1c_V_g0d53c6nu3ZENfInE7KU9XbE6EWx2U2NgCHmd704AB5byHXhxf1I40okq-PwWsnAhbVv6bXZ5_xXzS7Oe/s1600/Glenn+Murray.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO8lpo_Vejg9retBwOoWoVaKwjWjToaJijLbCwPq-arOv7Kj8x7WZdSS1c_V_g0d53c6nu3ZENfInE7KU9XbE6EWx2U2NgCHmd704AB5byHXhxf1I40okq-PwWsnAhbVv6bXZ5_xXzS7Oe/s320/Glenn+Murray.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Hands Held High"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">He continued: “Our ambition remains for the club’s teams,
both men and women, to play at the highest level possible – and as chairman
(and a lifelong supporter of the club) I will do everything I possibly can to
achieve that and I remain fully committed to that goal.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bloom is seriously wealthy from his property and investment
portfolio (plus money earned from poker and other forms of gambling), but
Brighton are very fortunate to have such a generous benefactor.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As Jones said, “If you’re an ambitious Championship club and
you don’t have the benefit of parachute payments, then you’re going to need an
owner that’s prepared to subsidise you substantially.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJRYzQ1z_CVyu9aDVhRmfFSheuEtzY9AM5qHpKt8C3AW3Sn5qEtennbeOQpoX2jDKedl43SMQGqbYDlQLUXds1qrylb6xTT2aKHDoUpJB1DLQoj1KK4WNqitzHTBTyScCJnewB2K2c-20p/s1600/Jiri+Skalak.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJRYzQ1z_CVyu9aDVhRmfFSheuEtzY9AM5qHpKt8C3AW3Sn5qEtennbeOQpoX2jDKedl43SMQGqbYDlQLUXds1qrylb6xTT2aKHDoUpJB1DLQoj1KK4WNqitzHTBTyScCJnewB2K2c-20p/s320/Jiri+Skalak.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Sound Czech"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, Bloom would not be able to simply buy success, even
if he wanted to, as Brighton need to follow the Football League’s FFP
regulations. Under the new rules, losses will be calculated over a rolling
three-year period up to a maximum of £39 million, i.e. an annual average of £13
million, assuming that any losses in excess of £5 million are covered by owners
injecting equity (hence the £8 million debt conversion in July 2016).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">These limits are much higher than the previous £6 million a
season, so are likely to encourage clubs to spend even more, making the division
even more competitive.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton have confirmed that they will comply with these
rules in 2015/16 (“as we have done each season”), which might seem strange, given that the
reported £26 million loss was twice the £13 million limit.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuk5h4bS3Xf06iZRy-UoPYsZfrHZd5vZM2lTlUmuWlGckWKXyqc01l3h3gg5A_dHdJbWitrQCh1pw67YqJDOm-TMBnanaW0bQw3TY6-nHAc2Qm7RMpETg7Cq6Bx5LQ6kRL97L5CZt8AVPn/s1600/Dale+Stephens.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuk5h4bS3Xf06iZRy-UoPYsZfrHZd5vZM2lTlUmuWlGckWKXyqc01l3h3gg5A_dHdJbWitrQCh1pw67YqJDOm-TMBnanaW0bQw3TY6-nHAc2Qm7RMpETg7Cq6Bx5LQ6kRL97L5CZt8AVPn/s320/Dale+Stephens.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Another Dale in my heart"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is because FFP losses are not the same as the published
accounts, as clubs are permitted to exclude some costs, such as depreciation, youth
development, community schemes and any promotion-related bonuses.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Brighton’s depreciation was £5 million, which implies that
they have spent £8 million on their academy and the community in order that the
FFP loss was lower than the £13 million limit in 2015/16. Even though these
activities represent a major investment for the Albion, it seems unlikely that
the expenditure would be that high, but it is difficult to see how else the club could have complied.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Going forward, the assessment is calculated over a three-year period, which means that a higher loss one year can
be compensated in later years, e.g. via player sales, or might even become
irrelevant (if the club is promoted).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Either way, Bloom was right when he said it is “a delicate
balancing act for the board, as we strive to achieve our ultimate aim.”<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid3HRc6I5MSxp81CUqUwOInRkq_DQ8VMBjiL-T6AdtFvZTDA0zeqmT1uPAH2NaiVcbOAVZ3eOVhgqI7lRDVuzW-NFDAoXgrC3XRAeGo72uyBJNNYTUSGoXIMYE3k_GKnvCe3A4Umxekx3N/s1600/Bruno.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid3HRc6I5MSxp81CUqUwOInRkq_DQ8VMBjiL-T6AdtFvZTDA0zeqmT1uPAH2NaiVcbOAVZ3eOVhgqI7lRDVuzW-NFDAoXgrC3XRAeGo72uyBJNNYTUSGoXIMYE3k_GKnvCe3A4Umxekx3N/s320/Bruno.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Spanish Steps"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The last time Brighton were in the top flight was way back
in 1983, but this club is clearly ready for the Premier League. As Bloom said,
“That’s what we built the stadium for, that’s what we built our magnificent
training ground for.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bloom appears just as happy with the situation on the pitch:
“To compete at the top end of the Championship, it’s important to have a manager
who knows how to win at this level and to possess a strong group of quality
players. We have both, and while this doe not guarantee promotion, it gives us
an excellent chance.”</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Given what happened last season, nobody at the Amex is
taking anything for granted. Barber spoke for everyone: “We’ve made a really
strong start. But we also know that this is the toughest division in the world
and that nothing has been achieved at this point.”</span></div>
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<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com6tag:blogger.com,1999:blog-487486960623783530.post-84999711161148342282016-12-06T07:47:00.000+01:002016-12-08T06:50:51.025+01:00Bayern Munich - Elevation<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFFxPLvrVewS1_8U283Vakl0NoM8HnLcVfmssO1h0p_IT_Zik6iewmkXhtNW5iN20hIUTnCHMogYz_s7FlARKX1g8mCtMALKPVpDDakC5apAU5GC2Om0YTDr1HkD2WXdAddRFXg2UkEstF/s1600/Robert+Lewandoski.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjFFxPLvrVewS1_8U283Vakl0NoM8HnLcVfmssO1h0p_IT_Zik6iewmkXhtNW5iN20hIUTnCHMogYz_s7FlARKX1g8mCtMALKPVpDDakC5apAU5GC2Om0YTDr1HkD2WXdAddRFXg2UkEstF/s400/Robert+Lewandoski.jpg" width="400" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern Munich won the double of the Bundesliga and the
German Cup in 2015/16, obviously a fine feat, but not that surprising for
Germany’s most successful club. In total, the Bavarians have won the league no
fewer than 26 times and the cup on 18 occasions, though Karl-Heinz Rummenigge
said that it was still a “historic achievement” to top the Bundesliga four
years in a row.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The Bayern chairman was impressed: “If I were to assign
grades for the 2015/16 season, I’d give the coach and the team an A. Even in
our greatest eras we were lucky to win the championship three times on the
bounce at the most.” He added, “The days of FC Hollywood are over – and that’s
good. We make headlines on the pitch now.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The story was almost as good in Europe. Rummenigge again,
this time on the Champions League: “We’ve advanced to the last four for the
fifth time in a row. That too is unprecedented in terms of continuity at FC
Bayern.” Indeed, in that period Bayern have reached the final twice and won the
trophy in 2012/13 by beating Borussia Dortmund at Wembley.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, the traditional giants are showing some signs of
vulnerability this season after Pep Guardiola departed for a new challenge with
Manchester City in the Premier League to be replaced by experienced Italian
manager, Carlo Ancelotti. Guardiola won seven trophies in his three years in
Germany, including two doubles, but Ancelotti’s team has not had things all
their own way this season.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">They currently sit behind newly promoted RB Leipzig in the
Bundesliga and have failed to top their Champions League group following an
embarrassing 3-2 defeat at Russian minnows FC Rostov. As Rummenigge admitted,
“A new era is about to begin. Everyone has chased us over the last few years.
Now we’re doing the chasing!”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Radio, Radio"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Off the pitch, Bayern’s dominance remains unchallenged, as
they have just announced record profits and revenue for the 2015/16 season. Profit
before tax shot up by €23 million (72%) from €31 million to €54 million, though
profit after tax “only” rose by €9 million (39%) from €24 million to €33
million, due to a higher €21 million tax charge.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Revenue increased by a massive €118 million (25%) from €474
million to €592 million, just shy of the €600 million threshold. All revenue
streams grew, though commercial income led the way, increasing by €65 million
(23%) from €278 million to €343 million, driven by sponsorship, up €56 million
(49%) to €170 million, and merchandising, up €6 million (6%) to €108 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Broadcasting income actually rose more in percentage terms
(39%) or by €42 million from €106 million to €148 million with the growth split
fairly evenly between the Bundesliga (€21 million) and the Champions League (€16
million). Match day income was up €12 million (13%) to go above €100 million
for the first time (€102 million).<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTrE6mEPhsZk0Hk7rob36Haez1rmL531oIaqLTJug4iTuRT7v8Muc8c_pJTQl6JHdJWTiXl3je2Ex_Slr0x2OkGqtQW05bYnAEHx3NB4SkLtqc9YRYyO3a-wKDF9r2woq_9ArqDF99omrE/s1600/1+Bayern+Munich+P%2526L+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTrE6mEPhsZk0Hk7rob36Haez1rmL531oIaqLTJug4iTuRT7v8Muc8c_pJTQl6JHdJWTiXl3je2Ex_Slr0x2OkGqtQW05bYnAEHx3NB4SkLtqc9YRYyO3a-wKDF9r2woq_9ArqDF99omrE/s640/1+Bayern+Munich+P%2526L+2016.jpg" width="520" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, much of the revenue growth was eaten up by a rise
in expenses. Wages increased by €33 million (15%) from €227 million to €260
million, while other expenses rose €39 million (25%) from €185 million to €224
million and player amortisation was up €9 million (15%) to €70 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Player sales also fell €15 million from €50 million to €35
million. Incidentally, I am using the Deloitte definition of revenue here in
order to facilitate comparisons with other European clubs, so have excluded this
€35 million of transfer income. Adding this to my revenue of €592 million gives
the €627 million announced in Bayern’s press release.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As another technical aside, note that these are the
consolidated group accounts for FC Bayern München AG, which include the Allianz
Arena München Stadion GmbH and other subsidiaries.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Whichever way you look at it, deputy chairman Jan-Christian Dreesen
was justifiably proud of these results: “The 2015/16 fiscal year has been
fantastic for FC Bayern, in terms of both sports and finances.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJRmR_302Bd1ZySAuRxCN-o8EAe8rT9Ka8ztYbvcF0RZh6F_aMZS4H_zlfsylFiZB8By_w-Sjr4w5K1T8BKxp4ZN2ubQbMJvuregBd6lS9pl63bYGLa2jxLFHgE4r7qVrQMj37fLy1bryw/s1600/2+Bayern+Munich+Profit+Trend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="432" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJRmR_302Bd1ZySAuRxCN-o8EAe8rT9Ka8ztYbvcF0RZh6F_aMZS4H_zlfsylFiZB8By_w-Sjr4w5K1T8BKxp4ZN2ubQbMJvuregBd6lS9pl63bYGLa2jxLFHgE4r7qVrQMj37fLy1bryw/s640/2+Bayern+Munich+Profit+Trend+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Of course, making money is nothing new to Bayern Munich, as
this is the 24th year in a row that they have been profitable.
Traditionally, the club invests almost all of its profits into the squad or
stadium development, but their profits have been steadily rising recently,
averaging €37 million over the last three years (before tax).</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Rummenigge boasted, “This combination is what makes FCB
unique. We have the greatest success in our sporting endeavours, and we pay for
it all by ourselves.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVwo9W2xfztcjNvA93JxE0YtxpLF0TGLLa_YSO_u6OF37__ZpVVDdOsrB81U-ss93rv8VCVas4v3tgR74lQPPXVq3C6Khrw_7V-GmpUEc21yHPqPBBpf98qNZMQficA294onicfc-7lxKm/s1600/3+Bayern+Munich+Profit+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhVwo9W2xfztcjNvA93JxE0YtxpLF0TGLLa_YSO_u6OF37__ZpVVDdOsrB81U-ss93rv8VCVas4v3tgR74lQPPXVq3C6Khrw_7V-GmpUEc21yHPqPBBpf98qNZMQficA294onicfc-7lxKm/s640/3+Bayern+Munich+Profit+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">That’s very impressive, though it should be noted that it is
far from unusual for German clubs to make profits. In fact, 11 out of 18
Bundesliga clubs were in the black in 2014/15 (with 13 of 18 profitable in the
preceding season).</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Indeed, many of Bayern’s rivals across Europe have also
posted large profits in recent times, e.g. in 2015/16 Manchester United
reported a pre-tax profit of €59 million (at a Euro exchange rate of 1.20),
Real Madrid €43 million and Barcelona €36 million. Moreover, these are not
necessarily “flash in the pan” performances, as Real Madrid and Arsenal have
been profitable since 2002, while Barcelona have reported profits the last five
years.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyWOXn0eKDazOfTHUEvnEH9fuGzZXIG2_zDyAgFkMHc5xCOUUuAB6bOROWYToXz_qff37sTNJ4RfLaBxVGVWkkiKDiKLhbmTroAVA-BUuL5YXB1n_VTJ3AdeyP-uVOZZ4ILgOuzyLFaxdW/s1600/4+Bayern+Munich+Adj+Profit+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="430" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyWOXn0eKDazOfTHUEvnEH9fuGzZXIG2_zDyAgFkMHc5xCOUUuAB6bOROWYToXz_qff37sTNJ4RfLaBxVGVWkkiKDiKLhbmTroAVA-BUuL5YXB1n_VTJ3AdeyP-uVOZZ4ILgOuzyLFaxdW/s640/4+Bayern+Munich+Adj+Profit+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">One factor behind Bayern’s growing profits is that they now
make more money from player sales, averaging €42 million in the last three
seasons, compared to just a €13 million average in the previous seven seasons.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The 2015/16 player sales of €35 million included the sale of
Xherdan Shaqiri to Inter €15 million, Sebastian Rode to Dortmund €12 million,
Bastian Schweinsteiger to Manchester United €9 million and Dante to Wolfsburg
€4.5 million. The previous season was even better at €50 million, thanks to
selling Toni Kroos to Real Madrid €30 million and Mario Mandzukic to Atletico
Madrid €22 million.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Next year’s accounts should also include a reasonable
contribution from player sales following Mario Götze’s €22 million return to
Dortmund plus Pierre-Emile Hojberg’s move to Southampton €15 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg34MqK-aTGjVN97a2CqOYal_5BEHC2l-W8IK91aF_H4AqTDSQNWfvYJuMWB6UAK7WGErpe1VX4-CdybaWyvhEEhznRGFo8na8DJ57ns4ZzLYaYdbNggzJtZ-cxCnO6eGkgDQYVwo3SfKcI/s1600/5+Bayern+Munich+EBITDA+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg34MqK-aTGjVN97a2CqOYal_5BEHC2l-W8IK91aF_H4AqTDSQNWfvYJuMWB6UAK7WGErpe1VX4-CdybaWyvhEEhznRGFo8na8DJ57ns4ZzLYaYdbNggzJtZ-cxCnO6eGkgDQYVwo3SfKcI/s640/5+Bayern+Munich+EBITDA+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern highlighted the growth in EBITDA (Earnings Before
Interest, Taxation, Depreciation and Amortisation), which rose by €31 million
(28%) from €111 million to €143 million. This has more than doubled from the
recent low of €69 million in 2011.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It should be noted that Bayern’s definition includes
transfer income, but the growth was even better using the more generally
accepted definition of recurring income, i.e. excluding lumpy profits from
player sales. This metric improved by €46 million (75%) from €62 million to
€108 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">That’s very good, but to place it into perspective,
Manchester United announced 2015/16 EBITDA of €230 million, i.e. more than
twice as much, so it’s not surprising that they could pay so much money for
Schweinsteiger and still leave him in the stands.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfU5tFZLngLBVJtqS0yPF09eCuwv44_fB9u8FrN3FMAVXXseYl3seGtGsopdyWupt702mZiMt1Be_ppC7YE6uieJm6SlT7DCrRGtme3u_4GSV7We0wttTKDlg1q8b30EbHHVULLCH_yObw/s1600/6+Bayern+Munich+Revenue+Growth+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfU5tFZLngLBVJtqS0yPF09eCuwv44_fB9u8FrN3FMAVXXseYl3seGtGsopdyWupt702mZiMt1Be_ppC7YE6uieJm6SlT7DCrRGtme3u_4GSV7We0wttTKDlg1q8b30EbHHVULLCH_yObw/s640/6+Bayern+Munich+Revenue+Growth+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Despite a blip in 2014/15, due to the lack of competing in the
UEFA Super Cup and FIFA Club World Cup, Bayern’s revenue growth has been mighty
impressive, as the €302 million increase since 2009 means that the revenue has
more than doubled in the last seven years.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Over 60% (€183 million) of that growth has come from
commercial operations, largely sponsorship (€97 million) and merchandising (€71
million), but the two other principal revenue streams have also shot up:
broadcasting by €78 million (112%) and match day by €41 million (68%).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIVUw6KPhhJlQYylKaVAwgEcgSrTsUt2KiASKv9b9gMNEVRsUnMZVz0yhWmD1H3vbEqfr18bCnenOH7r3g-DMn2pDPm-w8C7O1spML-CiAN2BZWW0QVOZNU_07CDDBNizvOQL62qb4wl4O/s1600/7+Bayern+Munich+Revenue+Growth+Germany+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="430" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIVUw6KPhhJlQYylKaVAwgEcgSrTsUt2KiASKv9b9gMNEVRsUnMZVz0yhWmD1H3vbEqfr18bCnenOH7r3g-DMn2pDPm-w8C7O1spML-CiAN2BZWW0QVOZNU_07CDDBNizvOQL62qb4wl4O/s640/7+Bayern+Munich+Revenue+Growth+Germany+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In Germany Bayern’s revenue places them in a league of their
own. Not only is the gap large, but it is getting larger. Since 2009, their
closest challenger, Borussia Dortmund, managed to grow their revenue by an
impressive €179 million, but this was still €123 million less than Bayern’s
growth in this period.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The situation is even worse for the other German clubs.
Since 2009 Schalke have only grown revenue by €95 million, while Stuttgart’s
revenue was flat and Hamburg’s actually fell. This has resulted in Germany only
having three clubs in the Money League top 20, compared to five clubs in 2009.
This has inevitably led to concerns that Bayern’s financial supremacy will be
bad for competition in Germany.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQWYipmHATbzDJkPQ7fvObLmEWxOowLPc_qKe-Yxf-TXyG6eS5JXGJMQ2IBxRTfWYwFCspAX0AzmOYhOXITrJ1pJ6UvK5DVN6pevLe7Olw0N0deIZKfCFss3hH-TUnBkv2KyUVtOnxRHui/s1600/8+Bayern+Munich+Money+League+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="534" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQWYipmHATbzDJkPQ7fvObLmEWxOowLPc_qKe-Yxf-TXyG6eS5JXGJMQ2IBxRTfWYwFCspAX0AzmOYhOXITrJ1pJ6UvK5DVN6pevLe7Olw0N0deIZKfCFss3hH-TUnBkv2KyUVtOnxRHui/s640/8+Bayern+Munich+Money+League+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">It’s a different story in Europe with Bayern battling to
keep pace with the other elite clubs. Indeed in 2014/15 Bayern actually slipped
two places in the Money League to fifth, their lowest position since the
2006/07 season. However, it should be noted that Bayern are one of only three
clubs to be ever present in Deloitte’s annual rankings.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern found themselves around €100 million behind Real
Madrid and Barcelona, so the significant 2015/16 revenue growth was required to
keep up with the Spanish giants, not to mention repelling the threat of the
newer clubs like Paris Saint-Germain and Manchester City, who sandwiched Bayern
in last year’s table.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUkn0pcZL0WHuUMpBFq5xVVQ5rbfU3wBioLeJksE_6mkFWpBxtnwOBfoJ-quVODV6nvlORk-iLzo6EhzRFD8bB8xtc22cHGqVE8Q9kdf_C8IJx2HFQmEqQZe9p3C7Y5mYGW6RIToz_fN3M/s1600/9+Bayern+Munich+Revenue+Growth+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUkn0pcZL0WHuUMpBFq5xVVQ5rbfU3wBioLeJksE_6mkFWpBxtnwOBfoJ-quVODV6nvlORk-iLzo6EhzRFD8bB8xtc22cHGqVE8Q9kdf_C8IJx2HFQmEqQZe9p3C7Y5mYGW6RIToz_fN3M/s640/9+Bayern+Munich+Revenue+Growth+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">For 2015/16, on a like-for-like basis, Bayern’s growth to
€592 million has made inroads into the top clubs’ advantage. Real Madrid still
lead the way with €620 million, though this is only €28 million ahead of
Bayern, closely followed by Manchester United €618 million and Barcelona €612
million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">We should make clear the importance of exchange rates here,
as I have used €1.20 to the £, while it is entirely possible that Deloitte
might use an average 2015/16 rate of around €1.30 when they publish the next
edition of the Money League, which would obviously have a favourable impact on Manchester
United’s Euro figures.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0kKCwHlk0sNyj3XG78APly4_sJwhb1JXqXNqXB68Dysk6C_lBqItygEvGPRyy0QRP8iGBwZkfIChmdp9WeuHu0HaJMM-2Qbg4A9kyzT1-VIeuNqIuMWLX1KfxsDyd3fIPSvyhAvL0HdRv/s1600/10+Bayern+Munich+Money+League+Top+10+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="600" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0kKCwHlk0sNyj3XG78APly4_sJwhb1JXqXNqXB68Dysk6C_lBqItygEvGPRyy0QRP8iGBwZkfIChmdp9WeuHu0HaJMM-2Qbg4A9kyzT1-VIeuNqIuMWLX1KfxsDyd3fIPSvyhAvL0HdRv/s640/10+Bayern+Munich+Money+League+Top+10+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Returning to the 2014/15 Money League, if we compare
Bayern’s revenue with the other clubs in the top ten, we can see that they
enjoy a substantial commercial advantage over almost all clubs, but they are
lagging behind in broadcasting income.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, this already rose significantly in 2015/16,
while there is further scope for improvement in this revenue stream from the
new Bundesliga TV deal starting in 2017/18, which should be worth at least an
additional €30 million to Bayern.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV14Hd2HYeCEhoLfoMmJRIbLMhPhS6ewCnjCamxxCYL1r8GRrr2jJSUwUgXwDtMOvPny1wVfcukYlKiRgrLl-_a7yrSSDCtxMo4kOKs3ROk-iBjd-VKwjPd6ZOxsmt3z6zfqvGCETD6sqW/s1600/11+Bayern+Munich+Gap+from+1st+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV14Hd2HYeCEhoLfoMmJRIbLMhPhS6ewCnjCamxxCYL1r8GRrr2jJSUwUgXwDtMOvPny1wVfcukYlKiRgrLl-_a7yrSSDCtxMo4kOKs3ROk-iBjd-VKwjPd6ZOxsmt3z6zfqvGCETD6sqW/s640/11+Bayern+Munich+Gap+from+1st+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">From a domestic perspective, Bayern’s gap to the second club
(Borussia Dortmund) was €193 million in 2014/15, which was only surpassed in
France, where PSG were €371 million ahead of Marseille. However, the gap is
much smaller in Italy, England and Spain.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Moreover, the gap to the 3rd placed club in Germany
(Schalke) was<span style="mso-spacerun: yes;"> </span>€254 million, which is a
huge competitive advantage. This is much more than the gaps in England and
Italy, though the difference is even higher in Spain and France.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Following Bayern’s impressive 2015/16 revenue growth, the
gap to Dortmund has now widened to an astonishing €307 million: €592 million
vs. €285 million. In other words, Bayern now earn more than twice as much as
their closest domestic competitor.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguRjlWy_B6DBh4iDM0w0c688RY4d2deAfgRaKOoMPMhfXUviTnLX8GXG9_HJE5dFNuW5WoEdC0PWVQ4N-fIO4fZNrZvS25eWY_tFV-OoNduHYNphBmcbPLe6Mc6IWLKPE_zcswPh1LCKWg/s1600/12+Bayern+Munich+Revenue+Mix+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="460" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguRjlWy_B6DBh4iDM0w0c688RY4d2deAfgRaKOoMPMhfXUviTnLX8GXG9_HJE5dFNuW5WoEdC0PWVQ4N-fIO4fZNrZvS25eWY_tFV-OoNduHYNphBmcbPLe6Mc6IWLKPE_zcswPh1LCKWg/s640/12+Bayern+Munich+Revenue+Mix+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, the largest revenue category at Bayern is
commercial income, which accounts for more than broadcasting and match day
combined. That said, commercial’s share of 58% has dropped from the 60% peak
two years ago, thanks to the growth in broadcasting taking that category’s
share up to 25%. As a consequence, match day has diminished in importance to
just 17%, even though it does bring in more than €100 million.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNGeiDtZOOKsI7sQ4WiYSzRgfDzOP2rt4lDm-iwSX90zlybi6SxoodQymvqpxYI5X4HESDRyXmJfg8E2vmT1-BlMMnvKepYPqCNihqq70CpLL0BIWJyb45Ik0pgx3tH3tsk2crSr-A0TJQ/s1600/13+Bayern+Munich+Importance+of+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="514" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNGeiDtZOOKsI7sQ4WiYSzRgfDzOP2rt4lDm-iwSX90zlybi6SxoodQymvqpxYI5X4HESDRyXmJfg8E2vmT1-BlMMnvKepYPqCNihqq70CpLL0BIWJyb45Ik0pgx3tH3tsk2crSr-A0TJQ/s640/13+Bayern+Munich+Importance+of+Commercial+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Only one other club in the Money League top 20 had
commercial income contributing more than Bayern, namely Paris Saint-Germain
with 62%, thanks to the French club’s “innovative” deal with the Qatar Tourism
Authority, which is apparently worth €200 million.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLwfKXnZoKSlfGDcaYvcf-JyLUFTXUGt58200vgmGB_-rPX-74E9sIUZ7maVbZZgJjL-o9agbISxdwn3junMHe3a3Utn6LzCPBA_Br-ijBtj95L_48jwl2KrBixseqQs9ZJM0mUkBTmvRa/s1600/14+Bayern+Munich+Commercial+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="510" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLwfKXnZoKSlfGDcaYvcf-JyLUFTXUGt58200vgmGB_-rPX-74E9sIUZ7maVbZZgJjL-o9agbISxdwn3junMHe3a3Utn6LzCPBA_Br-ijBtj95L_48jwl2KrBixseqQs9ZJM0mUkBTmvRa/s640/14+Bayern+Munich+Commercial+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Indeed PSG was the only club with higher commercial revenue
than Bayern with €297 million, though Bayern were ahead of clubs like Manchester
United €264 million, Real Madrid €247 million and Barcelona €244 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">And that was before Bayern’s 2015/16 growth in commercial revenue
from €278 million to €343 million, comprising sponsoring and marketing €170
million, merchandising €108 million, Allianz Arena €39 million and other
commercial activities €26 million. Bayern do have the advantage of being the
most supported team in the largest commercial market in Europe, but that’s
still some going.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-RYlvz1HkyJZoAGm0wRUNbXI3LprHf0rYiCCCtktDVwAxI4l_hx2qZw14CaFZ6iBVDVCo2sTzM0EFX0FFLBALj499_ZltbdPFYhKxMOXmW91-36J2vq66LymMppt0SDpRTsVLmnAOswJ6/s1600/15+Bayern+Munich+Commercial+vs+Dortmund+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="440" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-RYlvz1HkyJZoAGm0wRUNbXI3LprHf0rYiCCCtktDVwAxI4l_hx2qZw14CaFZ6iBVDVCo2sTzM0EFX0FFLBALj499_ZltbdPFYhKxMOXmW91-36J2vq66LymMppt0SDpRTsVLmnAOswJ6/s640/15+Bayern+Munich+Commercial+vs+Dortmund+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Although commercial deals are very important to all German
clubs, Bayern still earn significantly more than the others. In fact, the
commercial gap to Dortmund, which had narrowed in 2014/15, rose to €191 million
last season, the highest ever difference between the two.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern’s returning president Uli Hoeness said that Dortmund
would need to have a more consistent track record of winning trophies if they
hoped to match Bayern’s global appeal, but that is a tough ask, given their
revenue shortfall.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern have been boosted by strategic partnerships with
three major German companies (Adidas, Allianz and Audi), who all have an 8.33%
stake in the club with the other 75% owned by the fans.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Adidas has a long-standing relationship with Bayern,
extending their kit deal in 2015 until 2030, even though it had a further five
years to run. This was for a reported €900 million, which is worth €60 million
a season, up from the previous €25 million. Allianz have also extended their
stadium naming rights deal for a further five years to 2041 at around €6
million a season, while Audi is a main sponsor and automotive partner.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJ34FDAt02G5124KrGbXeb_fv0bfy_N9MBCMuOIxkYuCQZZhF6s4vgcJZVyYmbCZu5ly2OUvAYOIwiyHXQOPdJ3Z1F_SEwsZ5jclmDfqi8VlFk2qES4wfDcUaIVzfSvwVjR7simlszlelg/s1600/16+Bayern+Munich+Shirt+Sponsor+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="534" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJ34FDAt02G5124KrGbXeb_fv0bfy_N9MBCMuOIxkYuCQZZhF6s4vgcJZVyYmbCZu5ly2OUvAYOIwiyHXQOPdJ3Z1F_SEwsZ5jclmDfqi8VlFk2qES4wfDcUaIVzfSvwVjR7simlszlelg/s640/16+Bayern+Munich+Shirt+Sponsor+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">That’s great news, but it is still far below Manchester
United’s €90 million deal with Adidas (and, for that matter, the new kit deals
at Real Madrid and Barcelona, which are worth</span><span style="font-family: "trebuchet ms" , sans-serif;">
</span><span style="font-family: "trebuchet ms" , sans-serif;">€120-150 million according to various press reports). On the other hand,
it is considerably higher than Dortmund’s latest kit deal with Puma, which is
worth only €15 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In addition, Deutsche Telekom have extended their long-running
shirt sponsorship deal, first established in 2002, to 2023, reportedly
increasing the annual fee to €30 million (though some reports have this as high
as €35 million).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Although the highest in Germany, It’s a fair way behind
other leading European clubs, e.g. Manchester United’s Chevrolet deal is worth
around €70 million, while Barcelona have just signed an agreement with Rakuten
for €55 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As well as Bayern’s four main partners, the club also has a
raft of other big name partners, split between 9 platinum, 5 gold and 11 official,
including DHL, Gigaset, Goodyear, Hypovereinsbank, Lufthansa, SAP, Paulaner Coca-Cola
and Giorgio Armani.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5LrTnY_ZkBRB2ADxEN4pZUGBfl_LSAYTF3kVS4YJyOWFQ3Bfdj_iafshGvBC6XVhYiVaeuLrwMdN3JCfZrUeaiAMerJamUktFZJ2k-l6YJ9ulezbTFXc88B2exzoeNEtRqrCgkpGReOOO/s1600/Mats+Hummels.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5LrTnY_ZkBRB2ADxEN4pZUGBfl_LSAYTF3kVS4YJyOWFQ3Bfdj_iafshGvBC6XVhYiVaeuLrwMdN3JCfZrUeaiAMerJamUktFZJ2k-l6YJ9ulezbTFXc88B2exzoeNEtRqrCgkpGReOOO/s320/Mats+Hummels.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Mats Entertainment"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The Allianz Arena is another major money-spinner for Bayern.
They initially shared ownership with TSV 1860 Munich, but have fully owned the
venue since 2006, leasing it back to their former partners since then. As well
as annual stadium naming rights of €6 million, Bayern benefits from all other
activities staged at the Arena, including concerts and German national team
matches.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Perhaps the most staggering figure is from merchandising
sales, which has nearly tripled since 2009 <span style="mso-spacerun: yes;"> </span>to €108 million. This means that nearly a
fifth of Bayern’s revenue is generated by shirt sales and the like. In fact, according
to consultants PR Marketing, Bayern have averaged sales of 1.2 million replica
shirts in the last five years, a figure only surpassed by Manchester United,
Real Madrid and Barcelona.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Internationalisation is a key element of Bayern’s plans,
both in America and Asia. They have opened a new office in New York, while a
tour to China in the summer of 2015 was preceded the launch of an official
online store and a content sharing agreement with Chinese state broadcaster
CCTV.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5vPPguf5B_aEUuZR-cChV6DSGNMVJvxApdr_5czKBA7SfDEhOVQy4sAdbOE0CKgEMDI2dMjnV_vBEX-MYe7qnDJy6H9c5CfzBWBynRgCpLXL0lQVW9sHza9DJcSTfu_keUkENr5-MnGzK/s1600/17+Bayern+Munich+Money+League+TV+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5vPPguf5B_aEUuZR-cChV6DSGNMVJvxApdr_5czKBA7SfDEhOVQy4sAdbOE0CKgEMDI2dMjnV_vBEX-MYe7qnDJy6H9c5CfzBWBynRgCpLXL0lQVW9sHza9DJcSTfu_keUkENr5-MnGzK/s640/17+Bayern+Munich+Money+League+TV+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Where Bayern (and other German clubs) have lost out is in
broadcasting revenue. Their total of €106 million in 2014/15 was not too bad,
but it was only around half of the</span><span style="font-family: "trebuchet ms" , sans-serif;"> </span><span style="font-family: "trebuchet ms" , sans-serif;">€200
million earned by Real Madrid and Barcelona, who benefited greatly from their
individual domestic deals. It was even behind the likes of</span><span style="font-family: "trebuchet ms" , sans-serif;"> </span><span style="font-family: "trebuchet ms" , sans-serif;">Manchester United, Tottenham Hotspur and
Everton, even though none of those clubs managed to qualify for the Champions
League.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">More encouragingly, Bayern grew their broadcasting income by
39% (€42 million) to €148 million in 2015/16 with increases coming from both
the Bundesliga (€21 million) and the Champions League (€16 million).</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The increase in Bundesliga distribution to €72 million was
largely due to Bayern’s successful performances in international club
competitions over the previous five seasons and the resulting improvement in their
UEFA coefficient ranking, as well as the increase in income from international
TV rights.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4gxLUuafY4JajwiweyD5CKZO2Xa7WIyqGNxeo8vhlj6tXzW2lhTIb5-3PkWqCi_aFV2v-VnWeXg4n21UyRDdpGueJG7PXWgjdyX1Fn5Y-7uLeVMvaw2XTINqSJYBilsW30tF-SFzO-QQM/s1600/18+Bayern+Munich+TV+Bundesliga+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="380" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4gxLUuafY4JajwiweyD5CKZO2Xa7WIyqGNxeo8vhlj6tXzW2lhTIb5-3PkWqCi_aFV2v-VnWeXg4n21UyRDdpGueJG7PXWgjdyX1Fn5Y-7uLeVMvaw2XTINqSJYBilsW30tF-SFzO-QQM/s640/18+Bayern+Munich+TV+Bundesliga+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">TV revenue in Germany is divided among clubs via a points
system, which ranks clubs proportionate to their league positions over the past
five seasons. Performance is weighted in favour of the more recent years, so
last season a factor of 5 was applied to 2014/15, 4 to 2013/14, 3 to 2012/13, 2
to 2011/12 and 1 to 2010/11.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, a form of equality is then applied, as the club
with most points from this algorithm only receives twice as much money as the
club that has the lowest number of points. In this way, Bayern received €40
million in 2015/16, while bottom club Darmstadt received €20 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Nevertheless, television income is not very high in Germany,
as can be seen from the 2014/15 Money League, where Bayern were only 12th,
Borussia Dortmund 18th and Schalke 20th. Rummenigge said, “It’s a dramatic
disadvantage. The DFL has to make sure the German top clubs remain competitive
among the elite teams in Europe.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">To place the Bundesliga TV deal into context, Aston Villa,
who finished last in the Premier League in 2015/16, received around €80 million
TV money, which was higher than the €72 million Bayern received for winning
their league.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZlOWYZiSLKjX9t0Tt8tubhBERi0PXsX3Pe0Wqrq76DnzykTNhpKN64pQehGp3FAlbR-YCVU31bmVRtPAeUm1tkYQ-ggTWfoe0toiYWw5ZKMm11vLEw8_tTBC9HUVN6CmVXla6mwLwNJcV/s1600/19+Bayern+Munich+TV+Rights+Bundesliga+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZlOWYZiSLKjX9t0Tt8tubhBERi0PXsX3Pe0Wqrq76DnzykTNhpKN64pQehGp3FAlbR-YCVU31bmVRtPAeUm1tkYQ-ggTWfoe0toiYWw5ZKMm11vLEw8_tTBC9HUVN6CmVXla6mwLwNJcV/s640/19+Bayern+Munich+TV+Rights+Bundesliga+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">It is therefore good news that the Bundesliga recently
announced a new domestic TV rights deal with Sky and Eurosport for the four
years from 2017/18 to 2020/21, which will significantly increase the money by
85% from €2.5 billion to €4.6 billion, working out to €1.160 billion a season.
As the league advised that total rights would be worth €1.4 billion, that
implies that the international rights will also rise to €240 million a season.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">According to projections, Bayern’s share of the TV revenue
should rise to around €100 million a season (though the distribution model will
also change), but this is still a lot less than the money earned in England.
The new Premier League deal is likely to deliver €150-200 million to the top
four English clubs, depending on the Euro exchange rate.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The new Bundesliga total of €1.4 billion will take it ahead
of Serie A (€1.2 billion) and Ligue 1 (€0.8 billion), but they will still lag
behind La Liga (€1.5 billion) and obviously be miles below the Premier League
(€3.4 billion).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJU2yY3B_ktEcTY6ZNGW5Krk-erhvesWsSo3vX7jPBrfBMlbq42Jj7sTQqTiBja6KvPKY4wcVWnq724TYKMal9EfO8kzBHmelKmmwdVSutKnOG7a7TPpr5jn7sL9aTLtzWTZ-KlUfpq2Sb/s1600/20+Bayern+Munich+TV+Rights+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJU2yY3B_ktEcTY6ZNGW5Krk-erhvesWsSo3vX7jPBrfBMlbq42Jj7sTQqTiBja6KvPKY4wcVWnq724TYKMal9EfO8kzBHmelKmmwdVSutKnOG7a7TPpr5jn7sL9aTLtzWTZ-KlUfpq2Sb/s640/20+Bayern+Munich+TV+Rights+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It is also worth noting that these TV rights cover the two
top German leagues with 80% of the domestic deal going to Bundesliga 1 and 20%
to Bundesliga 2.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, the Bundesliga’s chief executive, Christian
Seifert, noted, “We are now number two behind the Premier League (in terms of
domestic rights).” Although he described the TV market as challenging, Seifert
did emphasise the growth prospects: “Germany is the biggest single market in
Europe, but pay TV still does not have the market position of other countries.
There is a lot of potential though.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Some believe that the relatively low amount paid for
international rights can be ascribed to Bayern’s dominance, which has made the
league boring, but Seifert argued that overseas interest was not purely in the
title winners: “Last year we saw very competitive games to decide who will play
in the Champions League, who will play in the Europa League or relegation.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvqqp3jEGN-c3JqXHShMSwj9TCNtPFmhyuKqCJ_Ynm3JQfKxuT0lJFANM02pBHX4HXmObelLFC6BhLRlQso2ehJBoA6IdTLb2CbDUKgKhGOcgZBGEOKBNEFv2upQvH21KH7IARmerCn-V0/s1600/21+Bayern+Munich+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="630" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvqqp3jEGN-c3JqXHShMSwj9TCNtPFmhyuKqCJ_Ynm3JQfKxuT0lJFANM02pBHX4HXmObelLFC6BhLRlQso2ehJBoA6IdTLb2CbDUKgKhGOcgZBGEOKBNEFv2upQvH21KH7IARmerCn-V0/s640/21+Bayern+Munich+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The news is much better for Bayern in Europe, where they
received €64 million for reaching the semi-finals in the Champions League. That
said, it was still less than four clubs who did not progress as far as Bayern,
i.e. Juventus, Paris Saint-Germain, Chelsea and Roma, thanks to the more
beneficial TV pools in Italy, France and England.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg28guigABnP9v0rzfG6aRdlpG8GPorsE_jBckNhqZXTckEkGPfxlAD_jwY94FRXE8-d8wYJ9vEX9mqSZLknZSaZNTvrW5Bt-bfz30g7px07BFzDUEGVy1KpQP6NnqAzvdkzrrgPeUfB94e/s1600/21a+Bayern+Munich+TV+Pool+by+Country+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg28guigABnP9v0rzfG6aRdlpG8GPorsE_jBckNhqZXTckEkGPfxlAD_jwY94FRXE8-d8wYJ9vEX9mqSZLknZSaZNTvrW5Bt-bfz30g7px07BFzDUEGVy1KpQP6NnqAzvdkzrrgPeUfB94e/s640/21a+Bayern+Munich+TV+Pool+by+Country+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">A club’s share of the market pool is based on the value of
the national TV deal and the number of clubs from that country who reach the
group stages. Thus, Bayern are adversely impacted by Germany’s €68 million TV
pool being less than half England’s €143 million, while Italian and French
clubs benefited from only two clubs reaching the group stage.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Half then depends on the progress in the current season’s Champions
League, while half depends on the position that the club finished in the
previous season’s domestic league (1st place 40%, 2nd place 30%, 3rd place 20%
and 4th place 10%).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1UxEVgyeY223MVGCnEUmxr3TpdicTu63xgrS_pyjQHKOCLBBZDWsV3T-jXbnHlwv8_ylHxELXZrRe7_K0xm5YuSY7GRagyKcAt0MIpaqXPTet8SYxZtJlR_kPnmftkty5H4F1bSQ1QdfG/s1600/22+Bayern+Munich+TV+Pool+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1UxEVgyeY223MVGCnEUmxr3TpdicTu63xgrS_pyjQHKOCLBBZDWsV3T-jXbnHlwv8_ylHxELXZrRe7_K0xm5YuSY7GRagyKcAt0MIpaqXPTet8SYxZtJlR_kPnmftkty5H4F1bSQ1QdfG/s640/22+Bayern+Munich+TV+Pool+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As a result, Bayern only received €26 million from the TV
pool in 2015/16, even though they reached the Champions League semi-final,
compared to Juventus €53 million, Roma €48 million, Manchester City €46
million, Chelsea €45 million and PSG €40 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Little wonder that Bayern are strong supporters of
UEFA’s<span style="mso-spacerun: yes;"> </span>proposed change in the TV pool
distribution system, so that each country will retain much less from its
national TV deal than the current arrangement (reportedly down from around 50%
to 15%) with the vast majority going into the central plot in future. With a
completely straight face, Rummenigge observed, “I am pleased that we have
managed to reach quick and simple decisions for the good of football.” <o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRq2eg3FCprcw_BC-VqqUKpRq-HJz2M6_D_RnFHVGn84Cj_fk5vY_z0x-liuEc4Y40v1Py8Q0gXVUXXQQTXao34-urexU_bhMefeGS0IoDsOxEtD3HJZ9E2ooJ0EZTeXRduv9GGccvrx4G/s1600/23+Bayern+Munich+Europe+Last+5+Years+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRq2eg3FCprcw_BC-VqqUKpRq-HJz2M6_D_RnFHVGn84Cj_fk5vY_z0x-liuEc4Y40v1Py8Q0gXVUXXQQTXao34-urexU_bhMefeGS0IoDsOxEtD3HJZ9E2ooJ0EZTeXRduv9GGccvrx4G/s640/23+Bayern+Munich+Europe+Last+5+Years+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Despite the disadvantages of the TV pool, the Champions
League has still been a lucrative revenue stream for Bayern in recent times, earning
them €256 million in the last five season, around €100 million more than
Dortmund in the same period.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The other German clubs were even further behind: Bayer
Leverkusen received €117 million, Schalke €101 million, Wolfsburg €61 million
and Borussia Mönchengladbach €39 million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwdzZheSvaoh_z8OkbCJFqEQWsjydfzekF2KZU23uXRJc_d9aH1FciouxvLqCrq-DDIpUTt2rnIpVpdhi_ejw5Re8_LpG0XZb5rTaZHNydYJxqU_FjWbbQnMAZHKOJEbbLILx1mSygKEnh/s1600/24+Bayern+Munich+Attendances+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwdzZheSvaoh_z8OkbCJFqEQWsjydfzekF2KZU23uXRJc_d9aH1FciouxvLqCrq-DDIpUTt2rnIpVpdhi_ejw5Re8_LpG0XZb5rTaZHNydYJxqU_FjWbbQnMAZHKOJEbbLILx1mSygKEnh/s640/24+Bayern+Munich+Attendances+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern’s match day income rose 13% (€12 million) from €90
million to €102 million in 2015/16, partly due to the capacity at the Allianz
Arena being raised to 75,000 in the second half of the 2014/15 season.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Their average attendance was only below Dortmund’s
incredible 81,178 in Germany, though a fair way ahead of Schalke 61,386. In
Europe, Bayern were only surpassed by Barcelona 78,250 and Manchester United
75,300, but ahead of Real Madrid 67,700.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5mjcMbH_cPmZN5zrErxoMrxCRjkHh5ApGBrHQtO2sLSS0hrlwYGquR_DeIKAg1iAgbxLWhnVsLAT2EyZtkYJrgsKQ2ltf_RyiZ1mZ64uyi3Wt3GbpO6ePleiDieGWEaXEppCPXPMQ0wze/s1600/25+Bayern+Munich+Match+Day+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5mjcMbH_cPmZN5zrErxoMrxCRjkHh5ApGBrHQtO2sLSS0hrlwYGquR_DeIKAg1iAgbxLWhnVsLAT2EyZtkYJrgsKQ2ltf_RyiZ1mZ64uyi3Wt3GbpO6ePleiDieGWEaXEppCPXPMQ0wze/s640/25+Bayern+Munich+Match+Day+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Despite Germany’s reputation for low ticket prices, Bayern’s
match day revenue of €90 million was actually the sixth largest in the world in
2014/15, even before last season’s increase, though the likes of Arsenal, Real
Madrid, Barcelona and Manchester United all generate €115-130 million.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbfzNwEtGcwj1kmZQ77OWMju8s73G8X7m7xTC5mODDoYrIasQ6-J2rXkbgV9CXQQcF4fnqB9HfoUmEnBvnI2Ku2rdUv7bpUD8NOwn7HX61T_-U1gdEGlWZpi1eosRKwIvDV84rvLBdSd_w/s1600/26+Bayern+Munich+Match+Day+Stats+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="352" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbfzNwEtGcwj1kmZQ77OWMju8s73G8X7m7xTC5mODDoYrIasQ6-J2rXkbgV9CXQQcF4fnqB9HfoUmEnBvnI2Ku2rdUv7bpUD8NOwn7HX61T_-U1gdEGlWZpi1eosRKwIvDV84rvLBdSd_w/s640/26+Bayern+Munich+Match+Day+Stats+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In fairness, the Bundesliga only has 18 clubs, so Bayern
play two fewer home matches a season compared to the other major leagues. Their
average revenue per match of €3.6 million is substantially more than any other
German teams (Dortmund €2.5 million, Schalke €1.9 million), but is still a fair
way below the money earned by Manchester United (€5.4 million) and Arsenal
(€4.9 million).</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhm_YME1FisNhfEHIPNp-C5R-oNMca9GC550nBAHU7AuPKitiS4kckhx7arooYu9teC1XxKO5He7e0aJIpJHEqlS81VCxPh1I9RmzaaipZzGlyRT4N6hUerYxFQ7LqezP55BsPlgC5bWO1-/s1600/27+Bayern+Munich+Wages+to+Turnover+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhm_YME1FisNhfEHIPNp-C5R-oNMca9GC550nBAHU7AuPKitiS4kckhx7arooYu9teC1XxKO5He7e0aJIpJHEqlS81VCxPh1I9RmzaaipZzGlyRT4N6hUerYxFQ7LqezP55BsPlgC5bWO1-/s640/27+Bayern+Munich+Wages+to+Turnover+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Bayern’s wage bill rose 15% (€33 million) from €227 million
to €260 million in 2015/16, but the wages to turnover ratio still fell to a
very impressive 44%, the lowest for many years, following the significant
revenue growth, and way below the 50% targeted by the Bundesliga.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjH8CLrwuMXbsrOldhrwBLpEzsFqurVpLQm1GXi-nB_6inX4LZqCCg_fsQc8rd0bsaO4BsVuJ7-PR49OVRGuuVvPs6OtoP9NlTDOutrfupnc5R5FqrneN-GPhWgSZvmazDwNdcp6E7G87w0/s1600/28+Bayern+Munich+Wages+vs+Dortmund+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="422" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjH8CLrwuMXbsrOldhrwBLpEzsFqurVpLQm1GXi-nB_6inX4LZqCCg_fsQc8rd0bsaO4BsVuJ7-PR49OVRGuuVvPs6OtoP9NlTDOutrfupnc5R5FqrneN-GPhWgSZvmazDwNdcp6E7G87w0/s640/28+Bayern+Munich+Wages+vs+Dortmund+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Again, it is interesting to contrast the wage bill with
Dortmund, whose €140 million is around half as much as Bayern’s, despite a 19%
increase in 2015/16. In fact, the €120 million gap between Bayern and Dortmund
is as high as it has ever been. In fairness to the Bavarians, their revenue is
also substantially higher, but that does not make it any easier for Dortmund
(or anyone else) to compete.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf9hQo30X5YboyCXB4i9V0bkN6w4O55-EOjD_g0DFQTlYL_gO5f4tu8fL5DQyjELSzo71tpGqlfMxgH0lD5GMfVOTqDblxU3mgXY1c6UBP415HxCBi4tLZQlx5LgCWILngfNMxD-vGaE5E/s1600/29+Bayern+Munich+Wages+League+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="372" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf9hQo30X5YboyCXB4i9V0bkN6w4O55-EOjD_g0DFQTlYL_gO5f4tu8fL5DQyjELSzo71tpGqlfMxgH0lD5GMfVOTqDblxU3mgXY1c6UBP415HxCBi4tLZQlx5LgCWILngfNMxD-vGaE5E/s640/29+Bayern+Munich+Wages+League+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Using the same exchange rate as Deloitte’s Money League,
Bayern had the 8th highest wage bill in world football in 2014/15, along with
one of the lowest wages to turnover ratios (only beaten by Dortmund in the top
15 clubs).</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, that gap should be much smaller now, as the wage
bills at the English clubs will be impacted by the weakness of Sterling. It
should also be noted that the Spanish giants’ figures are inflated by sports,
such as basketball and handball.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVLNNKKoOPp8lBVFqD08bE9_LggMz6GKrzQgEaQjFp35JM5CTv8SMjxsEW7P-To6yOZ9ZrX5HN-1JZSujfI0vvmBf_Z85uuOu_HRN6s_uvls2was3Tv7LOXszYpSoNr0tx-MKkh-5YAqpy/s1600/30+Bayern+Munich+Player+Amortisation+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="424" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVLNNKKoOPp8lBVFqD08bE9_LggMz6GKrzQgEaQjFp35JM5CTv8SMjxsEW7P-To6yOZ9ZrX5HN-1JZSujfI0vvmBf_Z85uuOu_HRN6s_uvls2was3Tv7LOXszYpSoNr0tx-MKkh-5YAqpy/s640/30+Bayern+Munich+Player+Amortisation+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The other staff cost, player amortisation, rose 15% (€9
million) from €61 million to €70 million. This has sharply grown from €33
million in 2011, reflecting Bayern’s increasing activity in the transfer
market.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">However, this is still not particularly high for a leading
club. As a comparison, player amortisation at big spending Manchester United
and Real Madrid is over €100 million. That said, it is considerably higher than
the €32 million booked by Dortmund.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrYGMF71fFITPfq7p_hwcQTMpwn5P3ijDK9TJAWBnZMCUNrrpFwJJFpfnWj-j-qRqhP2htn1IEuYbiIRlsBI-Rk4srxiAMAmfuBLBAeb2Il1mpsP13eAexT85GNFZSahFQpW8k5sG2dzGl/s1600/31+Bayern+Munich+Player+Trading+Accounting+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrYGMF71fFITPfq7p_hwcQTMpwn5P3ijDK9TJAWBnZMCUNrrpFwJJFpfnWj-j-qRqhP2htn1IEuYbiIRlsBI-Rk4srxiAMAmfuBLBAeb2Il1mpsP13eAexT85GNFZSahFQpW8k5sG2dzGl/s640/31+Bayern+Munich+Player+Trading+Accounting+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">To explain this concept, transfer fees are not fully
expensed in the year a player is purchased, but the cost is written-off evenly
over the length of the player’s contract. As an example, Mats Hummels was
reportedly bought from Dortmund for €35 million on a five-year deal, so the
annual amortisation in the accounts for him will be £7 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Traditionally, Bayern Munich have been the big spenders in
the German transfer market, often acquiring the strongest players from rivals,
e.g. Mario Götze, Robert Lewandowski and Hummels from Dortmund; Manuel Neuer
from Schalke.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7veIpuOM52dd4igqQqYGwJVfuSyL32Jaqa1AEJcaZYiwZM992N5Blxr__0OxGxRPO3qltG1CRdYullN5QqCwE8yhf1P4QOw__trE-5Sih32OtJHZBcNJxIHDFdES-lJTrPzPO1se9A2pq/s1600/32+Bayern+Munich+Player+Trading+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7veIpuOM52dd4igqQqYGwJVfuSyL32Jaqa1AEJcaZYiwZM992N5Blxr__0OxGxRPO3qltG1CRdYullN5QqCwE8yhf1P4QOw__trE-5Sih32OtJHZBcNJxIHDFdES-lJTrPzPO1se9A2pq/s640/32+Bayern+Munich+Player+Trading+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, Rummenigge was keen to emphasise the club’s two
pillar system: “We sign crucial players like Robert Lewandowski and Arjen
Robben, but we also aspire to nurture our own talents.”</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That may be the case, but Bayern’s outlay on players has
been on the rise: averaging €31 million 2005-09; €53 million 2009-13; and up to
€68 million 2013-16. Recruitment has been good with the club bringing in the
likes of Arturo Vidal (Juventus), Douglas Costa (Shakhtar Donetsk), Joshua
Kimmich (Stuttgart), Mehdi Benatia (Roma), Juan Bernat (Valencia) and Xabi
Alonso (Real Madrid).<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, the net spend has actually fallen in the last four
seasons: from €44 million to €24 million, as Bayern have earned good money from
the sales of Kroos, Mandzukic, Götze, Luiz Gustavo, Mario Gomez, Hojberg,
Shaqiri and Rode.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY-HjiaBeRL5hh6gE-NgKs5ojBuhP2O3FLKvPTL7AebMvYlBQAnWjc-XUgOMTFAOi2yZJwqkjWyD0TVwJtyrOJx9AfodYoYMOiG4J6w4LXyT-D7rjvLor_k-o2_sQDWuseQAVndwPFHVN8/s1600/33+Bayern+Munich+Transfer+Spend+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="540" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY-HjiaBeRL5hh6gE-NgKs5ojBuhP2O3FLKvPTL7AebMvYlBQAnWjc-XUgOMTFAOi2yZJwqkjWyD0TVwJtyrOJx9AfodYoYMOiG4J6w4LXyT-D7rjvLor_k-o2_sQDWuseQAVndwPFHVN8/s640/33+Bayern+Munich+Transfer+Spend+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Despite these sales, Bayern’s net spend of €95 million over
the last four years is still miles higher than almost all other German teams –
with one important exception, as new boys RB Leipzig have actually spent most
in the Bundesliga with a cool €100 million in this period.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">To show how far ahead these two clubs are, the next highest
spending clubs (on a net basis) have shelled out less than half: Hamburg €43
million and Dortmund €42 million. In fact, over the last four years no fewer
than eight Bundesliga clubs had net sales, as opposed to spend. Moreover, all
other Bundesliga clubs combined only spent a net €78 million – less than either
Bayern or Leipzig.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Although the football club has had no debt for a while, the
group did have debt from the Allianz Arena company, which was used to finance
the stadium, though this was paid off 16 years ahead of schedule. As Rummenigge
explained, “In 2005 we borrowed exactly 346 million euros in a 25-year plan,
which was meant to last until 2030. Now we have paid the stadium off after only
nine years. I'm very proud of that.”<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVRL9fp7XyXnOq7rQJOCQ5BIH1WIW9x2OOWwlvNdrOP3hDW5w3POxt7_RwzkW7zaBlYqyolKU1mhURz1ZDUOPPtKv9Pq_pKOEympFqeC2kAmpcVYSQVmMFBx7-7EsAYm9hPMm1T81kAnDf/s1600/34+Bayern+Munich+Debt+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="610" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVRL9fp7XyXnOq7rQJOCQ5BIH1WIW9x2OOWwlvNdrOP3hDW5w3POxt7_RwzkW7zaBlYqyolKU1mhURz1ZDUOPPtKv9Pq_pKOEympFqeC2kAmpcVYSQVmMFBx7-7EsAYm9hPMm1T81kAnDf/s640/34+Bayern+Munich+Debt+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This meant that bank debt was completely eliminated in 2014,
having been as high as €167 million in 2009. At the same time cash balances
have been over €100 million for the last few years.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">We will not know whether this is still the case in 2015/16
until the detailed accounts are published, but we can see that current assets
(including cash) have risen by 29% (€51 million) to €227 million, so the
chances are that cash has increased. On the other hand, total liabilities
(including debt) have also grown 67% (€68 million) to €171 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The (early) clearing of the debt is undoubtedly a splendid
achievement, as recognised by former Bayern great Paul Breitner, “Bayern are
self-sufficient. We are independent and we are the only major club in the world
that does not have any debts and is in a secure financial situation.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxAQ0i-3R_3pzUHc-Hr234uEqVVOynER7zk_LOnVAO0GqwLGWfJH0_2fhQbzBBuypH2SLXM51wVTS-z6tF8cYiibLtDVkhqrH28KyOhqZkA3ArRbYhBb78dFNZQGoN6yYDrj1O3_1Yf4rm/s1600/35+Bayern+Munich+Cash+Flow+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="350" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxAQ0i-3R_3pzUHc-Hr234uEqVVOynER7zk_LOnVAO0GqwLGWfJH0_2fhQbzBBuypH2SLXM51wVTS-z6tF8cYiibLtDVkhqrH28KyOhqZkA3ArRbYhBb78dFNZQGoN6yYDrj1O3_1Yf4rm/s640/35+Bayern+Munich+Cash+Flow+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Again, we will have to wait for Bayern’s detailed accounts
to see a cash flow statement, but the club’s power can be seen from previous
reports. In the ten years up to 2015 Bayern generated €540 million of cash from
operating activities. However, they were also boosted by €200 million from new
share capital.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Unfortunately, Bayern do not analyse their €475 million net
investment in assets between players and infrastructure, but it is likely that
the vast majority of this expenditure has been for improving the squad.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKaPzLwMj1QickRCHbId02wtWoLH2K_fYaWSieIou_lnMIW1UKo3_Ep2GshAlmWiIvPJX85p7AMPNxfVPbkgZpbpS2lRzLPIL9Z6OHeiKj0VVNBCMsRsvphVbiGl9cLDeASZA0V5UAExuM/s1600/36+Bayern+Munich+Use+of+Funds+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="460" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKaPzLwMj1QickRCHbId02wtWoLH2K_fYaWSieIou_lnMIW1UKo3_Ep2GshAlmWiIvPJX85p7AMPNxfVPbkgZpbpS2lRzLPIL9Z6OHeiKj0VVNBCMsRsvphVbiGl9cLDeASZA0V5UAExuM/s640/36+Bayern+Munich+Use+of+Funds+2016.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">What is notable is that more than a quarter of a billion
Euros was used to repay loans. Another €35 million was used to pay dividends,
an increasing trend. In fact, the next dividend payment has been increased to
€12 million, up from €7.5 million.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Now that the stadium debt has been repaid, it has given
Bayern even more cash to spend on transfers. It is not entirely clear exactly
how much more, but Uli Hoeness once claimed that they would have an additional
€25 million budget each year once the debt had been cleared.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Hoeness is once again Bayern president, having been elected
unopposed at the recent AGM. He had resigned in February 2014 after being found
guilty of tax avoidance via an undeclared Swiss bank account, though he was
released after serving half of his prison sentence due<span style="mso-spacerun: yes;"> </span>to good behaviour.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMbnPx08SoCguYIlkbwOF5fCNIT-FoPhnimzgvXepqu90tpCYRRblml6M_UlYgMUAAtlGmcF53W4QkrTcXmSaFhYksA-AnWpFZ5MlO4g29OQ3tZUTD8PXxShN2Cm5ZwXqo07Zae91W4i-_/s1600/Arturo+Vidal.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="175" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMbnPx08SoCguYIlkbwOF5fCNIT-FoPhnimzgvXepqu90tpCYRRblml6M_UlYgMUAAtlGmcF53W4QkrTcXmSaFhYksA-AnWpFZ5MlO4g29OQ3tZUTD8PXxShN2Cm5ZwXqo07Zae91W4i-_/s320/Arturo+Vidal.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Street Fighting Man"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Bayern make great play of their independence with Breitner
saying, “We do not need any sheikhs or oil tycoons.” Deputy chairman Dreesen
sang from the same sheet: “We pay everything through our own efforts. The main
thing is we’re one of the very, very few clubs at the top of Europe that are
completely independent.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That said, there is little doubt that the club’s strategic
shareholders have been instrumental in the club’s success, developing a
virtuous circle, whereby each Bayern trophy means more sales for the sponsor
(especially Adidas), which in turn means more money for Bayern. Not to mention
the funding made available by direct investment, such as Audi paying €110
million for an 8.33% stake in 2014.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Perhaps the biggest threat to Bayern’s position in Germany
is the way clubs have started to get round the<span style="mso-spacerun: yes;">
</span>“50+1” rule, which dictates that members must own a minimum of 50% of
the shares plus a deciding vote, theoretically preventing a club from being
subject to the whims of an individual owner and taking on excessive debt.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh32X2r8yJtq7aAh_ZTrBeBlwWoU4KNtNx97vkysZaTxDnZvP_ZSGCbMiyNaJeC2_uNqJrF6SiSBAPSpguhIxVdxFesbBMkuzx650IJavkn6EwHnM7CtfL-XpFJ-boLRyqJP9hi-6I5fRA1/s1600/Thiago+Alcantara.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh32X2r8yJtq7aAh_ZTrBeBlwWoU4KNtNx97vkysZaTxDnZvP_ZSGCbMiyNaJeC2_uNqJrF6SiSBAPSpguhIxVdxFesbBMkuzx650IJavkn6EwHnM7CtfL-XpFJ-boLRyqJP9hi-6I5fRA1/s320/Thiago+Alcantara.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Look Sharp!"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, RB Leipzig, owned by Austrian energy drink
manufacturer Red Bull, have implemented a scheme whereby a member must pay €800
a year (compared to Bayern’s €60) and they reserve the right to reject any
application without justification. This means that Leipzig only have 17 members
(and most of them are Red Bull employees) compared to 284,000 at Bayern.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This may not break the letter of the rule, but it is clearly
against the spirit, though what other option does an “upstart” club have if it
wants to mount a genuine challenge to Bayern’s financial dominance?<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Though not entirely convincing, Hoeness seemed to welcome
the emergence of RB Leipzig, “The more I think about it, it is good to have
really good rivals. Good for us and the competition.”<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAb0ln6ltid0BXby1zdXj_c7s63S00NzOVJ7SkCOpCVm_fBL2Gex1akKnbdn2VmRU8tJ3gqh1_0gtk_sRfCQpKmwlcGz85M1BxYpo7Xg4lmhT1gQuWdvQteBsPnMlgMEHR645wRJRowcN1/s1600/Philippe+Lahm.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAb0ln6ltid0BXby1zdXj_c7s63S00NzOVJ7SkCOpCVm_fBL2Gex1akKnbdn2VmRU8tJ3gqh1_0gtk_sRfCQpKmwlcGz85M1BxYpo7Xg4lmhT1gQuWdvQteBsPnMlgMEHR645wRJRowcN1/s320/Philippe+Lahm.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Calling Captain Autumn"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Captain Philippe Lahm followed a similar line after Bayern’s
recent defeat to Dortmund, though his remarks were heavily laced with sarcasm:
“It’s wonderful for the league, exactly what everybody had wished for.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This was a reference to people becoming fed up with the
predictability of Bayern winning the Bundesliga. Indeed, before he knew he was
joining, Ancelotti had observed, “Bayern win the league with their hands in
their pockets.”<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">A large part of that success has been due to their financial
strength, as acknowledged by Dreesen: “FC Bayern is in outstanding shape,
operating at the highest Champions League level in financial terms. Our club is in a superb position. That’s been the case for the last few years,
and that's more than ever true for 2016. Our entrepreneurial objective is the
maximisation of sporting success alongside financial prudence.”<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">He added, “Our increasing financial power will be used
primarily to make the regular investments required in our first-team squad in
order to ensure we remain competitive among the elite teams in Europe.”</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span>
<span style="font-family: "trebuchet ms" , sans-serif;">Bayern’s appetite for more Champions League success is obvious,
as Rummenigge admitted, “We long for it.” Whether they have enough firepower to
win again in Europe is another question. Their excellent 2015/16 financial
results will certainly do their prospects no harm, but it will still be
difficult for Ancelotti to add to his three (managerial) victories in Europe’s
flagship tournament.</span></div>
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<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com7tag:blogger.com,1999:blog-487486960623783530.post-9361559504056895012016-11-22T07:17:00.001+01:002016-11-22T07:18:15.066+01:00UEFA Champions League - Safe European Home<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxtc2rZx8hicaqDIHSpsO_tGCfoLJxZ_zf422QBOl0ie8MUEv3gb95yvF-t_yTg63Ku9pnqZVOmUu0Lhf1SBkFUHtQRzYtKKrl1uzrtPMHOqjK33VNWklMucRATspFdbFwxuzoOwG0sUpq/s1600/Gareth+Bale.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgxtc2rZx8hicaqDIHSpsO_tGCfoLJxZ_zf422QBOl0ie8MUEv3gb95yvF-t_yTg63Ku9pnqZVOmUu0Lhf1SBkFUHtQRzYtKKrl1uzrtPMHOqjK33VNWklMucRATspFdbFwxuzoOwG0sUpq/s400/Gareth+Bale.jpg" width="400" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The importance to a football club’s bottom line of
qualifying for Europe has been evident for many years, as the money distributed
to teams competing in UEFA’s competitions can have a significant impact on their
revenue.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This is even more the case with the latest cycle of UEFA’s
TV deals that has seen the total funds available for distribution to clubs rise
by 38% in 2015/16 from €1.270 billion to an amazing €1.756 billion. The lion’s
share of €1.345 billion went to the Champions League, but the Europa League also
received a much larger proportion than the previous arrangement, amounting to €411
million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Despite the steep growth in the Premier League’s TV deals,
Europe is still important for English clubs, as seen by Manchester City earning
more than any other club with €84 million, followed by Real Madrid €80 million,
Juventus €76 million, Paris Saint-Germain €71 million, Atletico Madrid €70
million and Chelsea €69 million.<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHtT1rwn-Dxptchkpl1UUzLjZfAhMBpAKlt3D2p01hz9N0Mkd_0Hpti7M3oIMuKw8FZMsORJXrJbhbQnb3BCiBhkOkAGVaYVgiXC9bw6hX3Ab9XVBrLhKlBHjpBidPOT0xDY51mgD00lB4/s1600/1+Europe+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="464" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHtT1rwn-Dxptchkpl1UUzLjZfAhMBpAKlt3D2p01hz9N0Mkd_0Hpti7M3oIMuKw8FZMsORJXrJbhbQnb3BCiBhkOkAGVaYVgiXC9bw6hX3Ab9XVBrLhKlBHjpBidPOT0xDY51mgD00lB4/s640/1+Europe+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In other words, City received more money for reaching the
Champions League semi-finals than Real Madrid did for actually winning the
trophy. This puzzling anomaly is down to the high value of the British TV deal,
which means that English clubs can earn more than teams from other countries
who progress further in the tournament.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This was also demonstrated in the Europa League, where the
top earners were Liverpool €38 million and Tottenham Hotspur €21 million, followed
by Villarreal €16 million, Lazio €15 million, Fenerbahce €15 million and
Borussia Dortmund €14 million.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The amount earned by Liverpool for reaching the final showed
that clubs can now generate useful cash from the Europa League. The Reds’ distribution of €38
million was the 14th highest overall in Europe last season, i.e. more than the money earned by 19
clubs that qualified for the Champions League group stage.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCN1krKPRcOncVkVDyML0uMgn3qvCMdXZOEa1Fah8H5PXQIJ7OOF8G4yITVuHEmOSJC6737c0tYAyprNdeW7ybd-jUvCZi6A7QeQGeudyvoNjRp14VuxGUxj2X8Ype5d64uJSNEfQ1Ma8V/s1600/2+Prize+Money+vs+Market+Pool+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="590" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCN1krKPRcOncVkVDyML0uMgn3qvCMdXZOEa1Fah8H5PXQIJ7OOF8G4yITVuHEmOSJC6737c0tYAyprNdeW7ybd-jUvCZi6A7QeQGeudyvoNjRp14VuxGUxj2X8Ype5d64uJSNEfQ1Ma8V/s640/2+Prize+Money+vs+Market+Pool+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The discrepancy between different countries’ receipts is
highlighted by comparing the top two earners. Manchester City’s €84 million
total was geared towards the TV pool €47 million (56%) with prize money €37
million (44%), while it was the opposite for Real Madrid, who earned more from prize
money €54 million (67%) compared to the TV pool €26 million (33%).</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">The contrast is just as stark for the Europa League, e.g. Villarreal
received €16 million for reaching the semi-final, split between prize money €8
million (49%) and TV pool €8 million (51%); while Tottenham received €21
million, i.e. €5 million more, for only reaching the last 16, split between
prize money €6 million (28%) and TV pool €15 million (72%).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4Nw0PkacOfqfjWl-LR1VH4UMl8PXzsph-w2a8MnyLNUTMXtH-01tff2VKUwToLNPvpVPVnIT-QdTx59MLYjyuWsFKFiOBgt24Kk_kJX5SQO_kChJGRp9XYoOFpJGg_MWDriJIO_rU1_27/s1600/3+UK+Champions+League+TV+Rights.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4Nw0PkacOfqfjWl-LR1VH4UMl8PXzsph-w2a8MnyLNUTMXtH-01tff2VKUwToLNPvpVPVnIT-QdTx59MLYjyuWsFKFiOBgt24Kk_kJX5SQO_kChJGRp9XYoOFpJGg_MWDriJIO_rU1_27/s640/3+UK+Champions+League+TV+Rights.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">This is linked to the huge British TV deal with BT Sports,
who paid a hefty €299 million a season for the 2015-18 three-year cycle. This
is more than double the €132 million paid by the combination of Sky Sports and
ITV for the previous agreement.</span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhePiwQAvGV6-M9AmrUJHK2MhscTwX1Su9CNuRf7FRpF6Ah3ZuZ5gPdqIHkPPMjcDiFyX9BsSf1dKHKr4-Wlc5OcdArt0LZGDbXNvNFEInGrxaB5cCSqGvWZnzFF_qGGwA9cg4e3IaB-TP1/s1600/4+Prize+Money+England+2016+vs+2015.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhePiwQAvGV6-M9AmrUJHK2MhscTwX1Su9CNuRf7FRpF6Ah3ZuZ5gPdqIHkPPMjcDiFyX9BsSf1dKHKr4-Wlc5OcdArt0LZGDbXNvNFEInGrxaB5cCSqGvWZnzFF_qGGwA9cg4e3IaB-TP1/s640/4+Prize+Money+England+2016+vs+2015.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As a result of the higher deal, English clubs did much
better (at least from a financial perspective) in 2015/16 with Manchester City
leading the way, as their revenue increased by €38 million (84%) from €46
million to €84 million. Similarly, Chelsea’s revenue rose by €30 million (76%)
from €39 million to €69 million, while Arsenal’s revenue grew by €17 million
(47%) from €36 million to €53 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Liverpool’s revenue was also 11% higher, even though they
competed in the Europa League, as opposed to the more lucrative Champions
League the previous season. Tottenham’s revenue was an astonishing 244% (€15
million) higher for going one round further in the Europa League.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAH8h9ivZVF8OzIEfoEcO01amZLq8Qwk1UweZseXAX4xAP_J0D7yAeMoEeQ_6N0lyD6kjNrLXUB5KXVjI5k_6JuQnvfNPYF4u8CvMW9-8oU7BFAp3hVqfT5JUBjldpC2aRqzVOaCr3DQlN/s1600/5+Last+5+Years.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAH8h9ivZVF8OzIEfoEcO01amZLq8Qwk1UweZseXAX4xAP_J0D7yAeMoEeQ_6N0lyD6kjNrLXUB5KXVjI5k_6JuQnvfNPYF4u8CvMW9-8oU7BFAp3hVqfT5JUBjldpC2aRqzVOaCr3DQlN/s640/5+Last+5+Years.jpg" width="600" /></a></div>
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<u><span style="font-family: "trebuchet ms" , sans-serif;">Last Five Years<o:p></o:p></span></u></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">To emphasise the value of the Champions League to the
leading clubs, it is worth exploring how much they have earned in the last five
years. At the top of the pile are Juventus with €281 million, which is perhaps
somewhat surprising, given that they have only reached the final once in that
period, but is again testament to the might of the TV pool.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Next come Real Madrid €277 million (winners in 2014 and
2016), Bayern Munich €256 million (winners in 2013), Chelsea €253 million
(winners in 2012) and Barcelona €246 million (winners in 2015). All to be
expected.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, this table also highlights a core element of the
strategy of the <i style="mso-bidi-font-style: normal;">nouveaux riches</i>
clubs, i.e. spending for success, as we find Paris Saint-Germain and Manchester
City in sixth and seventh places with €228 million and €222 million
respectively.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidHcURMHd1FhW9If0dXA7EPFexfiG9Be5xQYoNB1tPBVIOORZ4aLlwEMRb-0PuzQ-RLLm7EcjIO-XNInOOekpGMaAnvCS1-8op3y5EwIEPRV4Jq7PUL36rnaksdxVAp9jgu-DnkZ3Rey0y/s1600/6+Last+5+Years+-+England.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidHcURMHd1FhW9If0dXA7EPFexfiG9Be5xQYoNB1tPBVIOORZ4aLlwEMRb-0PuzQ-RLLm7EcjIO-XNInOOekpGMaAnvCS1-8op3y5EwIEPRV4Jq7PUL36rnaksdxVAp9jgu-DnkZ3Rey0y/s640/6+Last+5+Years+-+England.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In England consistency has been rewarded with the three
clubs ever present in the Champions League leading the way: Chelsea €253
million, City €222 million and Arsenal €177 million. Manchester United would
have been higher if they had qualified for Europe in 2014/15, but they still
earned €159 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Despite qualifying for the Champions League in 2014/15 and
reaching the Europa League final in 2015/16, Liverpool are a long way back with
€77 million, while Tottenham’s Europa League residency has earned them only €41
million.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzHapltkB2qMKV9zW74EZ7hOcBxyl_OGlvC6lrm-60QQlt17ZN3nOPn35sc-o_R_nRRsbRyNAOWFCN-EAvqQSL4y2x5Y_OvnnzsGyq0wRgvh3mTgs-YMN68CBMzxmoFYPREQi5h8aSPvd8/s1600/7+Last+5+Years+-+Germany.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzHapltkB2qMKV9zW74EZ7hOcBxyl_OGlvC6lrm-60QQlt17ZN3nOPn35sc-o_R_nRRsbRyNAOWFCN-EAvqQSL4y2x5Y_OvnnzsGyq0wRgvh3mTgs-YMN68CBMzxmoFYPREQi5h8aSPvd8/s640/7+Last+5+Years+-+Germany.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In Germany Bayern’s Champions League exploits have earned
them €256 million, almost €100 million more than Borussia Dortmund’s €162
million. Europe has allowed the Bavarian giants to put even more distance
between them and their domestic rivals.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">All of these have earned much less: Bayer Leverkusen €117
million, Schalke 04 €101 million, Wolfsburg €61 million and Borussia
Mönchengladbach €39 million (the latter two almost all from 2015/16).<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3kNT_iR4YQv1EYuQq2o41gS8w0YCtFPULdmU2guqKoy4JxkOyyzpdhHhP8LR_YnYKCPxUmycUKLgHlMdBme6HYJ_-P4D3L6EgFiXwuRwgqxzeIUNOdrkGKNQTrn5nVWpqQgmqMmrMBaXH/s1600/8+Last+5+Years+-+Italy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="542" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3kNT_iR4YQv1EYuQq2o41gS8w0YCtFPULdmU2guqKoy4JxkOyyzpdhHhP8LR_YnYKCPxUmycUKLgHlMdBme6HYJ_-P4D3L6EgFiXwuRwgqxzeIUNOdrkGKNQTrn5nVWpqQgmqMmrMBaXH/s640/8+Last+5+Years+-+Italy.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The gap between the top club and the others is even wider in
Italy, as Juventus’ €281 million is around €150 million more than the next club
Milan, whose €129 million was restricted by not qualifying for Europe in the
last two seasons. Juve’s performance is even more impressive, given that they
did not even qualify for Europe in 2011/12.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Milan’s place in the Champions League has been taken by
Roma, who have earned €116 million in that period. The next highest are Napoli
€100 million and Lazio €51 million. Inter’s recent difficulties are highlighted
by the <i style="mso-bidi-font-style: normal;">nerazzurri </i>only earning €45
million<span style="mso-spacerun: yes;"> </span>from Europe in the last five
years. This is less than the €49 million they earned in 2010/11 when they
defeated Bayern Munich to win the Champions League.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje0LGZOlL98MZtj4NkGo_riQHQbjVJeIM4pZCcwAhdo_Rwo-vmzBHtv3Dwue8Vhtq7nn_SisN_Nx2RnGcgnjby4DNGRchIsKHbiOt6yVq8LAFqh1-UbGHg4FWsJakBK9rryLNMzJFNpmWU/s1600/9+Last+5+Years+-+Spain.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje0LGZOlL98MZtj4NkGo_riQHQbjVJeIM4pZCcwAhdo_Rwo-vmzBHtv3Dwue8Vhtq7nn_SisN_Nx2RnGcgnjby4DNGRchIsKHbiOt6yVq8LAFqh1-UbGHg4FWsJakBK9rryLNMzJFNpmWU/s640/9+Last+5+Years+-+Spain.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Spain is all about the big two with Real Madrid €277 million
and Barcelona €246 million a long way ahead of Atletico Madrid €179 million,
who are in turn much higher than Valencia €89 million, Sevilla €69 million and
Athletic Bilbao €51 million.</span></div>
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<br /></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Sevilla are an interesting case, as their reward for winning
the Europa League three times in a row is clearly much less than qualifying for
the Champions League. Following a change in the rules, Sevilla’s victory in
2014/15 gave them a place in the following season’s Champions League, so their
2015/16 €35 million revenue is split between €21 million from that competition
and €14 million from dropping down to the Europa League.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoEmbhlDS9EioNx4fzm7xU3PXrk6HPPSkEfp2qu5SOu6DXYYuYoynI-dnpiXr8AkCchjGKh-DHAlWEf5pOQCQe5TCkDVnGviH7_pmv4BlGe3iDvr62DBK4sZCd4Ej2pT6oQ4uWhDFuGOPY/s1600/10+Last+5+Years+-+France.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoEmbhlDS9EioNx4fzm7xU3PXrk6HPPSkEfp2qu5SOu6DXYYuYoynI-dnpiXr8AkCchjGKh-DHAlWEf5pOQCQe5TCkDVnGviH7_pmv4BlGe3iDvr62DBK4sZCd4Ej2pT6oQ4uWhDFuGOPY/s640/10+Last+5+Years+-+France.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">France demonstrates Paris Saint-Germain’s domination, as
their €228 million is €150 million more than Lyon’s €78 million, closely
followed by Marseille €73 million and Monaco €69 million.</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Paris Saint-Germain’s competition has been weakened by the
other French Champions League spots being shared among their domestic rivals,
e.g. Lille and Montpellier have also featured in this period. In fact, PSG only
earned €2 million in 2011/12, so their earnings in the last four seasons have
been really high.<o:p></o:p></span></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiT6UfwbsbJb2eCx5ghO9gtNkeDZ0WQMZNLjPvCVwXMtqvyyuu9Vn0vj5OvOxPm54jUenLal7ii9MGEejVUTzJyNEbp-SBLkOUtEopCDAZU2vTseVCiTBkQnob5JZcDcfRI-arjfZFvuu3Z/s1600/11+Last+5+Years+-+Portugal.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="544" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiT6UfwbsbJb2eCx5ghO9gtNkeDZ0WQMZNLjPvCVwXMtqvyyuu9Vn0vj5OvOxPm54jUenLal7ii9MGEejVUTzJyNEbp-SBLkOUtEopCDAZU2vTseVCiTBkQnob5JZcDcfRI-arjfZFvuu3Z/s640/11+Last+5+Years+-+Portugal.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Portugal demonstrates the rivalry between Benfica €111
million and Porto €98 million, while the others are nowhere: Sporting €31
million, Braga €22 million, Estoril €5 million and Belenenses €4 million.</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdrCJupZJF2sEIjxkLaMoAGBrLbYv58W_DyzMgSy6VhixWT9AJVvCO8SguPjlI0G9Y359EdajFn-ElFUV0QTYavDPQJ1WShsFKJfI1aqG_PmQshM5lSvG3NT78yUxjh5fCeFJ6sqLQ5xUJ/s1600/12+Last+5+Years+-+Turkey.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdrCJupZJF2sEIjxkLaMoAGBrLbYv58W_DyzMgSy6VhixWT9AJVvCO8SguPjlI0G9Y359EdajFn-ElFUV0QTYavDPQJ1WShsFKJfI1aqG_PmQshM5lSvG3NT78yUxjh5fCeFJ6sqLQ5xUJ/s640/12+Last+5+Years+-+Turkey.jpg" width="610" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Galatasaray’s “welcome to hell” has been worth €98 million,
even though there was no revenue in 2011/12, a long way ahead of Trabzonspor
€37 million, Besiktas €27 million and Fenerbahce €26 million.</span></div>
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<u><span style="font-family: "trebuchet ms" , sans-serif;">UEFA Distribution Model<o:p></o:p></span></u></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, the amount of revenue available to
distribute to the clubs increased significantly in 2015/16 by €487 million
(38%) from €1.270 billion to €1.756 billion, but this masked a couple of
interesting developments.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">First, UEFA decided to give proportionally more to the
Europa League, whose pot rose by 71% (€171 million) from €240 million to €411
million, while the Champions League fund “only” rose by 31% (€315 million) from
€1.030 billion to €1.345 billion. The Europa League has always provided a
platform for smaller clubs to compete in Europe, but now has the added bonus of
being financially worthwhile (though obviously still no match for the Champions
League money).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In UEFA’s terms, clubs in the Europa League now receive
about €1 every €3.3 received by clubs in the Champions League, compared to €4.3
under the old arrangement. This might be considered a step in the right direction,
but, put another way (and rather less impressively), the Europa League still
only has 23% of the total pot, albeit up from 19% the previous season.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"At The Height Of The Fighting"</span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Second, UEFA has endeavoured to reward success more by
increasing the amount allocated to prize money compared to the TV pool. In
2014/15 the split was 52% for prize money and 48% for TV pool, but the 2016/17
budget is essentially a 60:40 split in favour of prize money.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">UEFA’s 2016/17 estimate provides a useful break-down of how
the distribution model works. Based on gross commercial revenue of €2.350
billion, 12% (€282 million) is required to cover organisational and
administrative competition-related costs, while solidarity payments have been
significantly increased to €200 million, comprising €82 million for those clubs
participating in the qualifying rounds and €118 million to national
associations for club development projects.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">After these deductions, we are left with €1.868 billion of net commercial revenue. Of
this, €149 million (8%) is reserved for “European football”, i.e. remains with
UEFA, which gives a €1.719 billion pot for distribution to the clubs. This is
equivalent to the €1.756 billion in the 2015/16 season, which was higher than
expected due to more commercial revenue proceeds than budgeted.<o:p></o:p></span></div>
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<u><span style="font-family: "trebuchet ms" , sans-serif;">Champions League<o:p></o:p></span></u></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Looking at the payments by country for the Champions League,
it’s a case of the rich getting richer, as the payments are dominated by the
Big Five leagues (Spain, England, Germany, Italy and France). They accounted
for 71% (€949 million) of the total €1.345 billion pot.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Spain earned the most with €254 million, closely followed by
England €245 million, though Spain’s money was largely due to success on the
pitch with €105 million from prize money, nearly twice as much as England’s €54
million. In contrast, England’s share of the TV pool of €143 million was
considerably higher than Spain’s €89 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Italy were also boosted by a relatively high TV pool of €112
million, while their prize money was just €23 million. Germany’s €52 million
prize money was almost the same as England, but their TV pool was less
than half at €68 million.<o:p></o:p></span></div>
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<u><span style="font-family: "trebuchet ms" , sans-serif;">Champions League – Prize Money<o:p></o:p></span></u></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In 2015/16 each of the 32 teams that qualified for the
Champions League group stages was guaranteed a minimum participation fee of €12
million - even if it lost every single game. This was a significant 40% increase
on the 2014/15 fee of €8.6 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">In addition, the performance bonuses in the group stage were
increased by 50% to €1.5 million for each win, though stayed at €500,000 for a draw. So if a team were to
really put the pedal to the metal and won all six of its group
matches, it would get €9 million on top of the participation fee.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">If a team qualifies for the last 16, it is awarded €5.5
million, while there is additional prize money for each further stage reached:
quarter-final €6 million, semi-final €7 million, final €10.5 million and winners
€15 million.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Therefore, the maximum that a club could have earned (by
winning all its group matches and lifting the trophy) was an impressive €54.5
million (not counting the TV pool), up from €37.4 million in 2014/15. The prize
money for 2016/17 has been tweaked upwards again, so the maximum will rise to
€57.2 million this season.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;">Clubs involved in the play-offs shared a total of €50
million: €2 million for each winner and €3 million for each club that was
eliminated. Teams defeated in the qualifying rounds received: first qualifying
round €200,000; second qualifying round €300,000; third qualifying round
€400,000. In addition, each domestic champion that did not qualify for the
group stage received another €250,000.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwH5PoBxVYhFS3OYc4GH1urbuQZGAnrxw81-_VE-tB62BdnSl_1GZYfhHIjmGU1Ukqykrf-1SQMTGs4LuLquTr3OPeG41wcwhU1FwUXWqazPmaL-8uOW5kOLf3eX41pPUfR63sb-P_iySw/s1600/15a+Champions+League+-+prize+money+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwH5PoBxVYhFS3OYc4GH1urbuQZGAnrxw81-_VE-tB62BdnSl_1GZYfhHIjmGU1Ukqykrf-1SQMTGs4LuLquTr3OPeG41wcwhU1FwUXWqazPmaL-8uOW5kOLf3eX41pPUfR63sb-P_iySw/s640/15a+Champions+League+-+prize+money+2016.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As we have seen, Spain earned much more money from prize
money in the Champions League than any other country with their €165 million,
far ahead of England €102 million and Germany €100 million. This is a fair
reward for the two Madrid clubs reaching the final, meaning that the winners
Real Madrid trousered €54 million with their city rivals Atleti earning €48
million, while Barcelona got €31 million for reaching the quarter-finals.</span></div>
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<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The two other semi-finalists, Bayern Munich €39 million and
Manchester City €37 million, helped boost Germany and England. France and Italy
were a long way back earning just €48 million and €47 million respectively,
partly due to their third clubs not reaching the group stages.</span><o:p></o:p></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjomDwHmumBnGt1Jt5jrEx1mYijdhd1xNyx9nKcUqpFnt83Uz3ZKFqzeXnrXWSOEF14GyWaMxv3LEUPX9Hez9Mv7NWrgnzX2FWmo7RvjTOJrqRp9mYOk0Tzachlp7K1yV49LBJ1pi6I0x19/s1600/16+Champions+League+-+TV+pool.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjomDwHmumBnGt1Jt5jrEx1mYijdhd1xNyx9nKcUqpFnt83Uz3ZKFqzeXnrXWSOEF14GyWaMxv3LEUPX9Hez9Mv7NWrgnzX2FWmo7RvjTOJrqRp9mYOk0Tzachlp7K1yV49LBJ1pi6I0x19/s640/16+Champions+League+-+TV+pool.jpg" width="640" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Champions League – TV Pool<o:p></o:p></span></u></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In addition to prize money, clubs received a share of the
television money from the TV (market) pool, which amounted to €578 million for
the Champions League in 2015/16. Each country’s share of the market pool is
based on the value of the national TV deal, which means that English clubs have prospered
from the huge BT Sports deal, though it should be noted that around half of
this goes into the central pot, so they do not receive the full benefit.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Half of the TV pool depends on the position that a club
finished in the previous season’s domestic league. For countries with four
clubs, the team finishing first receives 40%, the team finishing second 30%,
third 20% and fourth 10%. If only three clubs reach the group stage, the share
would increase to 45%, 35% and 20% (for national associations ranked 1 to 3,
i.e. Spain, England and Germany).<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">For countries with only two representatives through to the
group stage, the share is 55% and 45% (for national associations ranked 4 to 6
and 13 to 16). If only one team gets through to the group stage, they would
take 100% of that country’s TV pool.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In other words, from a purely financial perspective a club
would hope that the other clubs from its country would be eliminated in the qualifying
and play-off rounds, as the available money would then be divided between fewer
clubs.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The other half of the TV pool depends on a club’s progress
in the current season’s Champions League, which is calculated based on the number of games
played (starting from the group stages).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifHzR-I7xE_WknlwIlHIsPnSzsIn2oYWsz8G7YK8sGpZZcMOan8uc8TN91PqHJzMIGI8NUEkBXm7IMp2FRk0jgP1k5b93jJggVM8izo1suZmogQAUfb6Z4fjWJcClcMdNpKqt_t-iHaZr6/s1600/17+Champions+League+-+TV+pool+2016.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="420" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifHzR-I7xE_WknlwIlHIsPnSzsIn2oYWsz8G7YK8sGpZZcMOan8uc8TN91PqHJzMIGI8NUEkBXm7IMp2FRk0jgP1k5b93jJggVM8izo1suZmogQAUfb6Z4fjWJcClcMdNpKqt_t-iHaZr6/s640/17+Champions+League+-+TV+pool+2016.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Thanks to BT Sports’ exclusive “game changer” of a deal,
England’s TV pool was the highest in Europe at €143 million. Nevertheless, the
club that earned the most from the TV pool in 2015/16 was Juventus, whose €53
million was higher than Manchester City’s €47 million, despite only reaching
the last 16. This is because the Italian TV pool of €112 million was only
shared between three clubs compared to the four in England.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It was even worse for the Spanish clubs, where €89 million
was shared between five clubs after Sevilla were awarded a place in the
Champions League for winning the Europa League in 2014/15. German clubs were
hit by the “double whammy” of having the lowest TV pool of €68 million, allied with
having to share this sum between four clubs.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeRLEF15nDz0AEPNeG6mPgSwb2mvolqGAOdp-3vkM96JtJfWU90T0h5KfPVBkUc2q5uAt8VlEjAujC1yAspgf8oU8JGyCz4L2tUurhiGU10WZAz0aBMbYf8HC3kxIkf7DXPhDWbaadxL74/s1600/18+Champions+League+-+TV+pool+England.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeRLEF15nDz0AEPNeG6mPgSwb2mvolqGAOdp-3vkM96JtJfWU90T0h5KfPVBkUc2q5uAt8VlEjAujC1yAspgf8oU8JGyCz4L2tUurhiGU10WZAz0aBMbYf8HC3kxIkf7DXPhDWbaadxL74/s640/18+Champions+League+-+TV+pool+England.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">England’s TV pool increased by a hefty 52% (€49 million)
from €94 million to €143 million in 2015/16. Manchester City earned the most with €47 million, even though they only finished second in the Premier League in
2014/15, due to their achievement in reaching the semi-final when no other
English club got beyond the last 16.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">One little known fact is that English clubs receive less
from the TV pool when a Scottish club (usually Celtic) qualifies for the group stage, as they
are awarded 10% (based upon the population split), because there is no separate
Scottish broadcasting deal with UEFA.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">If an English club were to enjoy a perfect season, I
estimate that they could earn around €113 million from the Champions League:
the maximum prize money for winning the trophy and all six group games would be
€57 million; while the TV pool could be as high as €56 million. This assumes:
(a) they won the Premier League the previous season; (b) the other English
clubs were all eliminated at the group stage.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYEDmxt1C8mtpaGGqXzYdRbBLkAGwFnr445RkZir65Gl9D0-CMvsdSvYIuwIkEUQGCxkpzsifwJXw_b-yxupcLLlgEGm9hpHT5naLsfY5ryuTdKHkWLL9Qct1TeDOZ410OxME_1gZTZ68l/s1600/19+Champions+League+-+TV+pool+Germany.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYEDmxt1C8mtpaGGqXzYdRbBLkAGwFnr445RkZir65Gl9D0-CMvsdSvYIuwIkEUQGCxkpzsifwJXw_b-yxupcLLlgEGm9hpHT5naLsfY5ryuTdKHkWLL9Qct1TeDOZ410OxME_1gZTZ68l/s640/19+Champions+League+-+TV+pool+Germany.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Bayern Munich only received €26 million from the TV pool in
2015/16, even though they won the </span><i style="font-family: 'Trebuchet MS', sans-serif;">Bundesliga</i><span style="font-family: "trebuchet ms" , sans-serif;">
the previous season and reached the Champions League semi-final, highlighting just how low the German TV deal is. Moreover, last season this only increased by 4% to €68
million.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUtVzMTzzRhQLOb_8gXec3JTCQZzCe-Oyza5U1WyJHD2VXVZEE1eudYkV_YeXuwYdkZGsLalbbaLVVs1gFJuqlPOw_AFA-Ia_7kD7zbHYC6ehPal5uZT24Nx90v_ZdHbdRPt9krA3tZnFN/s1600/20+Champions+League+-+TV+pool+Spain.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="414" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUtVzMTzzRhQLOb_8gXec3JTCQZzCe-Oyza5U1WyJHD2VXVZEE1eudYkV_YeXuwYdkZGsLalbbaLVVs1gFJuqlPOw_AFA-Ia_7kD7zbHYC6ehPal5uZT24Nx90v_ZdHbdRPt9krA3tZnFN/s640/20+Champions+League+-+TV+pool+Spain.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Spain’s TV pool rose by 6% (€5 million) from €84 million to
€89 million, but the most earned was only €27 million by Barcelona, as this had
to be shared between five clubs including Sevilla from the Europa League.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">This demonstrated a new rule, whereby a club that qualifies for the Champions League by winning the Europa League (i.e. like Sevilla) or
indeed the Champions League, but would not have qualified via their position in
the domestic league, does not receive any money from the first half of the TV
pool.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQBg5EKNr2wv50IFi2xPSfwbr-RAcmcVeMba04QO1ET2eSwJSu_YuxyKhsY0pDzdi5NOX8Xj5btQvd1h3nBP6Cri3-GclptoGhCi5Ow6nbYA1BVaoa5u3jxEXIJ0X7Vjihm2VIE1Z-9bvY/s1600/21+Champions+League+-+TV+pool+Italy.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQBg5EKNr2wv50IFi2xPSfwbr-RAcmcVeMba04QO1ET2eSwJSu_YuxyKhsY0pDzdi5NOX8Xj5btQvd1h3nBP6Cri3-GclptoGhCi5Ow6nbYA1BVaoa5u3jxEXIJ0X7Vjihm2VIE1Z-9bvY/s640/21+Champions+League+-+TV+pool+Italy.jpg" width="640" /></a></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The Italian TV pool grew by an impressive 19% (€18 million) in 2015/16 from €94 million to €112 million. The last two seasons' payouts show how
Juventus and Roma have benefited from the inability of Italy’s third club to
reach the group stages, first Napoli in 2014/15 and then Lazio in 2015/16.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Even though a new rule introduced last season meant that a
club eliminated in the play-offs would be allocated 10% of that country’s TV
pool, the vast majority of the large Italian TV pool was still shared between just two clubs.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgX3iZpqAuFdJuxbftak6L16sN8KL6r3SjxptEJ2N0zcwtu-5qBSaz_AT1pyZhP2xRScSRTL_3fGjUT5bDGgkYeRixQA6AJ5dqZ1B12MiZGbhKc9lOg6wzTs52tJX03xNpA7rD5jZUlbayN/s1600/22+Champions+League+-+TV+pool+France.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgX3iZpqAuFdJuxbftak6L16sN8KL6r3SjxptEJ2N0zcwtu-5qBSaz_AT1pyZhP2xRScSRTL_3fGjUT5bDGgkYeRixQA6AJ5dqZ1B12MiZGbhKc9lOg6wzTs52tJX03xNpA7rD5jZUlbayN/s640/22+Champions+League+-+TV+pool+France.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It was a similar story in France with Monaco eliminated in
the play-offs in 2015/16, thus receiving 10% of the French TV deal, which
increased by 11% (€7 million) from €68 million to €75 million. Lille received nothing for losing their play-off in 2014/15, as the rules were only changed the following season.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Paris
Saint-Germain have benefited from regularly winning </span><i style="font-family: 'Trebuchet MS', sans-serif;">Ligue 1</i><span style="font-family: "trebuchet ms" , sans-serif;">, but the relatively small differential between first and
second place (55% vs. 45%) has resulted in good payouts to Monaco and Lyon in
the last two seasons.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcjH5sZctPdfBr2WuB8H-bwohyzNZITVdweEYvx8QMGKJRLDip9AqgE75YMM6856a7WWMS0E9Z46rl02ZuG2ZPpuOXjw6oW0FPScabBZATtzdUh-1FB6nAgBMUaxUCsDy5vqYu8-2v5vnZ/s1600/23+Europa+League+-+by+country.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcjH5sZctPdfBr2WuB8H-bwohyzNZITVdweEYvx8QMGKJRLDip9AqgE75YMM6856a7WWMS0E9Z46rl02ZuG2ZPpuOXjw6oW0FPScabBZATtzdUh-1FB6nAgBMUaxUCsDy5vqYu8-2v5vnZ/s640/23+Europa+League+-+by+country.jpg" width="584" /></a></div>
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<br /></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Europa League<o:p></o:p></span></u></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The payments by country show a more equitable revenue
distribution in the Europa League. The share received by clubs from the Big
Five leagues was still the highest, but only 52% (€216 million) of the total €411
million, compared to 71% of the Champions League money.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The Europa League features clubs from many more countries
than the Champions League, e.g. in 2015/16 24 countries were represented in the
Europa League (group stages onwards), compared to 16 in the Champions League
group stages.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">England led the way with €63 million, ahead of Spain €47
million, though again this was more down to the TV pool (England €44 million
vs. Spain €20 million) with Spain once again doing better on the pitch,
resulting in higher prize money (Spain €22 million vs. England €14 million).<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkZdkLb-YwpmABC_mhO-jQYXpXsev1hqgEavHSE1OuSwlUuAk84PGCyEoUjppG2mBThw6S4f2dAlDQUIU8dDnkUam1LpssExEWECVqTjv5cvMg5oevkSl7z-nvYwE5KvAcvULo546FnxsH/s1600/24+Europa+League+-+prize+money.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkZdkLb-YwpmABC_mhO-jQYXpXsev1hqgEavHSE1OuSwlUuAk84PGCyEoUjppG2mBThw6S4f2dAlDQUIU8dDnkUam1LpssExEWECVqTjv5cvMg5oevkSl7z-nvYwE5KvAcvULo546FnxsH/s640/24+Europa+League+-+prize+money.jpg" width="640" /></a></div>
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<br /></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Europa League – Prize Money<o:p></o:p></span></u></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The allocation of prize money in the Europa League is much
the same as the Champions League, though the sums involved are clearly smaller
and there are a couple of other differences.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In 2015/16 each of the 48 clubs involved in the group stages
received a participation fee of €2.4 million, up from €1.3 million the previous
season. In addition, there was €360,000 for each win and €120,000 for each draw
in the group stage, up from €200,00 and €100,000 respectively.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">One difference in the Europa League, presumably to encourage
clubs to give their all in this secondary tournament, is an additional bonus for teams
that qualify for the knock-out stages, with the group winners earning €500,000
and runners-up €250,000.<o:p></o:p></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBIvEoA_vKzKkT1xldheD-MPBc5TOuvTn1I7iKIWGt20OfMN_vj6vfk6cpy5rSCoHKyyejL87OUkYHjWEZDMe_PbgoJXz631sD7rSZl1xoZv_d5k777704lVqG84XYtYHsmLLIUiYqGu4U/s1600/Robert+Lewandowski.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="190" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBIvEoA_vKzKkT1xldheD-MPBc5TOuvTn1I7iKIWGt20OfMN_vj6vfk6cpy5rSCoHKyyejL87OUkYHjWEZDMe_PbgoJXz631sD7rSZl1xoZv_d5k777704lVqG84XYtYHsmLLIUiYqGu4U/s320/Robert+Lewandowski.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"One More Time"</span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Clubs receive a further €500,000 for reaching
the last 32, €750,000 for the last 16, quarter-finalists €1 million and semi-finalists
€1.5 million. The Europa League winners collected €6.5 million and the finalists
€3.5 million.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Thus, the maximum that a club could receive is €15.31
million, 55% up from the previous season’s €9.9 million. That’s now a pretty
good incentive, compared to the €6.2 million prize money awarded to the 2011/12
winners Atletico Madrid.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">One other difference to the Champions League is that only
clubs eliminated in the play-offs receive a payment (of €230,000). Teams
defeated in the qualifying rounds received: first qualifying round €200,000;
second qualifying round €210,000; third qualifying round €220,000.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinP5A0gkcnH1ulMXR_sbzZ0-7yH814LDRf4eyutzYaxSjn9boavbtJ6kddLgKSY5ntSABDWem_lzvS747a1aBDcYn6BNJ4X39dgv6K2U453nbAIdUkWq7U_hW77Ql0FQWBaBdqQtTzVDg5/s1600/25+Europa+League+-+TV+pool.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="490" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinP5A0gkcnH1ulMXR_sbzZ0-7yH814LDRf4eyutzYaxSjn9boavbtJ6kddLgKSY5ntSABDWem_lzvS747a1aBDcYn6BNJ4X39dgv6K2U453nbAIdUkWq7U_hW77Ql0FQWBaBdqQtTzVDg5/s640/25+Europa+League+-+TV+pool.jpg" width="640" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Europa League – TV Pool</span></u></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The allocation of the TV pool in the Europa League is again
similar in principle to the Champions League, as half is based on performance
in the previous season’s domestic competitions and half on the progress in this
season’s Europa League, but there are some subtle differences.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The percentage split for the first half again depends on the
number of teams qualified from a country, but if a domestic cup winner reaches
the group stage, then that club receives a higher share for this element. For
example, if four clubs qualified, then the cup winner would receive 40% with
the other three clubs getting 20% apiece; if no cup winner, then each of the
four clubs would receive 25%.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">OK, that’s relatively straightforward, but the second half
of the TV pool is more complicated. First, it is divided up between each round
of the Europa League: group stages 40%, last 32 20%, last 16 16%,
quarter-finals 12%, semi-finals 8% and final 4%.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">The stage money is then split into as many portions as there
are countries represented by at least one club in the round concerned,
proportional to the value of the relevant country’s TV deal. Each country’s
share is then split equally among all the country’s clubs participating in that
round.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdjuHQivkRdJ2fAYHJHUXhTdd_WsBvKgdYY6byumq9h_uKLpQfL93JAHTo-LhyphenhyphenQZrirjkrpySAXf14YuGqcLQ_aoGaDc4YFmaul2mA2wQcHTX2DdmdVgCtntVUfAOySQrusbXw7NCNXX5l/s1600/26+Europa+League+-+TV+pool+England.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="164" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdjuHQivkRdJ2fAYHJHUXhTdd_WsBvKgdYY6byumq9h_uKLpQfL93JAHTo-LhyphenhyphenQZrirjkrpySAXf14YuGqcLQ_aoGaDc4YFmaul2mA2wQcHTX2DdmdVgCtntVUfAOySQrusbXw7NCNXX5l/s640/26+Europa+League+-+TV+pool+England.jpg" width="640" /></a></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Let’s take the England TV pool in 2015/16 as an example. As the
total TV pool was €183.1 million, €91.6 million was available for participation and €91.6 million for performance.
England contributed around 20% of the TV pool, so their share of the first
(participation) half was 20% of €91.6 million, i.e. €17.9 million. As there was
no cup winner qualified from England, this was split evenly between Liverpool
and Tottenham, resulting in €8.9 million each.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">For the second (performance) half, I have estimated
England’s share of the TV pool in each round. The assumptions are pretty solid
in the latter stages of the tournament, e.g. the final is a simple carve-up
between England (62%) and Spain (38%), but the earlier stages require more
guesswork.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In the group stage, England’s share was divided evenly
between Liverpool and Tottenham, while Manchester United were added for the
last 32 and last 16, having dropped down from the Champions League, which meant
one-third for each club. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">From the quarter-finals onward, Liverpool were England’s
only remaining representative, so they took 100% of England’s share. This
success resulted in Liverpool earning the substantial sum of €26.4 million from
the TV pool.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-rhMKc_Gt8zmoPoRZ6mUl6Km44WuvsxVh6loRQGWTivUh0p-yO_NhOuxEV7Rv1etei-N3wZYjvRBU1iUYblYmuueBJgNIa1PvZIQt_Vsh7b4x5WSpsTkSDZ86QVnkBHhEp1D692qW602d/s1600/Lionel+Messi.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-rhMKc_Gt8zmoPoRZ6mUl6Km44WuvsxVh6loRQGWTivUh0p-yO_NhOuxEV7Rv1etei-N3wZYjvRBU1iUYblYmuueBJgNIa1PvZIQt_Vsh7b4x5WSpsTkSDZ86QVnkBHhEp1D692qW602d/s320/Lionel+Messi.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Everybody's Happy Nowadays"</span></div>
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<br /></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Other Factors<o:p></o:p></span></u></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">As anybody who has opened a newspaper recently will know, Brexit
has had a dramatic impact on the exchange rate. In particular, the weakening of
the Pound against the Euro has significantly increased the UEFA revenue in
Sterling terms.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">To illustrate this impact, Manchester City’s 2015/16
distribution of €84 million would be worth £72 million at the current exchange
rate of 1.17, compared to just £60 million at the mid-2015 rate of 1.44. As the
saying goes, every cloud has a silver lining.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In addition to the TV money from UEFA, clubs playing in Europe also benefit
from additional match day revenue. Not every club analyses this revenue stream
between different tournaments, but as an example of how much this can be worth,
Roma’s €52 million match day revenue in 2015/16 included €29 million from the
Champions League.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Furthermore, participation in the Champions League should
boost a club’s sponsorship revenue, both in the short term through contractual
bonuses, and longer term by strengthening the attractiveness of the brand
through increased exposure and a better profile.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, there can also be a downside, as shown by
Manchester United’s kit supplier deal with Adidas. This is worth an astonishing
£750 million over the next 10 years, i.e. £75 million a year, but if United
fail to participate in the Champions League for two or more consecutive
seasons, then the payment for that year would reduce up to 30%, i.e. £22.5
million.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhjX1xlxHWqZxTbs-zV4LDsM3xUKnC9jkJ1194DHUs8CcdeWCAtVdWSSMKOZUAj4rZzhy4hDMbnAUS0S6W-vafxGF5M2H3ztu6_gQClIMhJ5T0pcKts2PvrZc1325Y1XcRRVhyB-Zd4BHa/s1600/Angel+Di+Maria.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhjX1xlxHWqZxTbs-zV4LDsM3xUKnC9jkJ1194DHUs8CcdeWCAtVdWSSMKOZUAj4rZzhy4hDMbnAUS0S6W-vafxGF5M2H3ztu6_gQClIMhJ5T0pcKts2PvrZc1325Y1XcRRVhyB-Zd4BHa/s320/Angel+Di+Maria.jpg" width="320" /></a></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"When the Angel sings"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<u><span style="font-family: "trebuchet ms" , sans-serif;">Here’s To Future Days<o:p></o:p></span></u></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">To place the €1.756 billion from UEFA’s competitions into
perspective, it is still considerably less than the €3.3 billion a season from the
new Premier League TV deal. Incredible as it may seem, this means that the
bottom placed club in the English top flight will earn more than the Champions League winners this season.<o:p></o:p></span></div>
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<!--EndFragment--></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">Nevertheless, European money still makes a difference for
the elite clubs and there’s little sign of the gravy train slowing down with
UEFA predicting a 30% rise in revenue for the next 2018-21 cycle. That’s
useful, but what is really thought-provoking is that there are plans to change the
distribution model.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">First, the big four leagues (England, Spain, Germany and
Italy) will each receive four guaranteed places in the Champions League group
stages, thus taking up half of the available 32 places. This is no big deal for
Spain, England and Germany, as their four representatives invariably qualify
for the group stages. However, Italy are the big winners here, as they
currently only have three places – and also have a disastrous record in the play-offs.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwzjJstWMIhSV89FTWc51S0vlIniP40gCCKyCKikt8NwejeMP_FXRgbgq6pJjvdxxHJQgmwsyb-CWTk0VOMd1Stwj_FKMsbuhMmvt4N6OPxyVI-xNhVjdwDr76btcMrhpf6C3AWDX3g9_c/s1600/Diego+Costa.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwzjJstWMIhSV89FTWc51S0vlIniP40gCCKyCKikt8NwejeMP_FXRgbgq6pJjvdxxHJQgmwsyb-CWTk0VOMd1Stwj_FKMsbuhMmvt4N6OPxyVI-xNhVjdwDr76btcMrhpf6C3AWDX3g9_c/s320/Diego+Costa.jpg" width="320" /></a></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"Love don't Costa thing"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In addition, the distribution of the TV pool will be
amended, so that each country will retain much less from its national TV deal than
the current arrangement (reportedly down from around 50% to 15%) with the vast
majority going into the central plot in future. So far, so good, as a more even distribution
of the richer countries’ TV wealth is probably no bad thing and should help boost
competitive balance.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">However, here’s the rub: the future split will be based on
individual clubs’ UEFA co-efficient, which has been modified to include credit
for historical performances. Again, this just happens to favour Italian clubs
like Milan and Inter, who have not even qualified for the Champions League
recently, but can boast several trophies in their glorious past.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">It will also prove advantageous to the old establishment,
e.g. Manchester United would do better out of the new approach to co-efficients than
their “noisy neighbours” Manchester City.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><o:p></o:p></span><span style="font-family: "trebuchet ms" , sans-serif;">The new model has unsurprisingly drawn criticism, not least from the European Professional Football Leagues (EFPL), leading to the European Club Association (ECA) promising to increase the "support" to the Europa League by €60 million.</span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6oUpfS4TpzIcfK_V0tGgEW3CYKXPS5CxiUBrWOyvu09X4IB3LeuDPgvJh_Im5LsIxqD617g0Sv3AKPuMr5bHZX3yiHQzVxty_n8mvtXT7OmAVqBl3nToFV2DCZMlnPvnWwOR9Nj187Qmj/s1600/Kevin+de+Bruyne.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6oUpfS4TpzIcfK_V0tGgEW3CYKXPS5CxiUBrWOyvu09X4IB3LeuDPgvJh_Im5LsIxqD617g0Sv3AKPuMr5bHZX3yiHQzVxty_n8mvtXT7OmAVqBl3nToFV2DCZMlnPvnWwOR9Nj187Qmj/s320/Kevin+de+Bruyne.jpg" width="320" /></a></div>
<div class="MsoNormal" style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: xx-small;">"New Gold Dream"</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">ECA chairman, Karl-Heinz Rummenigge, boasted, “I am pleased
that we have managed to reach quick and simple decisions for the good of
football.” That’s one way of putting it, Kalle.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">In fairness to UEFA, they are caught between a rock and a hard
place, as the leading clubs carry the persistent threat of forming a breakaway Super
League, but this proposed change still leaves a sour taste in the mouth.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif;">That man Rummenigge, also Bayern Munich’s chief executive,
had shown his hand back in 2013, when he complained, “The highest prize is the
Champions League, but it is a competition where there are no guarantees, and
the things you take for granted in domestic football don’t always work.”</span><br />
<span style="font-family: 'trebuchet ms', sans-serif;"><br /></span>
<span style="font-family: 'trebuchet ms', sans-serif;">Hence, the desire of the leading clubs to make Europe’s
premier tournament as much of a closed shop as possible. As The
Clash once sang, it is indeed a “Safe European Home”, at least for a privileged
few.</span></div>
<div class="MsoNormal">
<o:p></o:p></div>
The Swiss Ramblerhttp://www.blogger.com/profile/11423088862174893998noreply@blogger.com4