Group Created with Sketch.
Volume 6 No. 234

Finance

A £100M gap opened up between Premier League and English Football League clubs before a record TV rights deal "even took effect," according to Alex Homer of the BBC. The BBC found that the "difference in average turnovers" between Premier League and Championship clubs grew in each season from '14-16. More and more League Championship clubs "are spending beyond their means chasing a place at English football's top table." However, the Premier League is becoming a "closed shop" as successful clubs "only become richer," an expert said. BBC England's data unit and BBC Sport analyzed the accounts covering the three years until '16. The "full extent of the impact of the new TV deal on clubs is expected to be seen first" in the '16-17 accounts, which have not yet been published. The BBC's analysis found:

  • In '16, four of the six top spenders finished in the top six of the Premier League.
  • In '15, it was "six out of six" and in '14, five out of six. 
  • Trends were "less clear at the foot of the table." 
  • In '16, 16 out of 24 Championship clubs "spent more than 100% of their turnover on staff costs," including their players, coaches, management and administrators (BBC, 8/10).

Rugby club Leeds Rhinos remains "the most profitable" in Super League despite last season's "hugely disappointing campaign," according to the YORKSHIRE EVENING POST. Team owner Leeds Cricket, Football & Athletic Company Ltd. published its annual accounts for the '16 season, with the club "once again making a six-figure profit in the face of what turned out to be a challenging year on and off the pitch." The previous season, '15, had been a "record-breaking year" for the Rhinos. The "combination of losing influential players to retirement," long-term injuries to many players and the loss of the use of the training ground and facilities for a long period due to flooding proved "sizeable hurdles to overcome." Despite "all this adversity, the accounts show that it was the sixth consecutive season the club has made a profit" and the 13th time in 15 years. Operationally, turnover in '16 fell by 13.47%, "in the main due to the absence of significant prize money" and the level of retail sales during the previous year. Corporate sales "enjoyed another good year" and the World Club Challenge generated a "one off" source of income similar to the int'l friendly against New Zealand the previous year (YORKSHIRE EVENING POST, 8/9).

Formula 1 CEO Chase Carey's remuneration is "heavily tied" to the financial performance of the organization he runs, Liberty Media confirmed, according to Adam Cooper of MOTORSPORT. The news comes as Liberty's overall results showed that from April to June, F1 earned revenues of $616M, up 3% on the equivalent period last year. However, operating income fell from $90M to $45M, a drop of 50%, "as operating expenses and others costs rose." Expanding on Carey's arrangements, Liberty CEO Greg Maffei said, "We don't plan to publish his contract, but I did want to share with you the fact that the substantial majority of Chase’s compensation is performance-related, and tied into the operational performance at F1 directly, or the stock of the F1 Group." Carey confirmed that the F1 Group's costs "will rise as it continues to recruit senior staff." In addition, it "made other investments in areas such as the London event, and its pursuit of new digital technology." Carey: "The corporate head count has been sort of 70-75, and it has probably about doubled. We're still building it out" (MOTORSPORT, 8/10).

ManU's American owner the Glazer family is set to earn about $72.9M by selling more of its shares in the club on the New York Stock Exchange. The sale, which equates to around 2% of the club's shares, "is expected to conclude" on Tuesday. It will take the ratio of shares, which have limited voting rights, floated on the U.S. Stock Market to just above 20%. ManU "will not receive any proceeds from the sale" (BBC, 8/9).

Super League rugby club Warrington Wolves recorded a loss of more than £250,000 for the '16 season. In accounts registered by Warrington Sports Holdings Ltd., the club reportedly posted pre-tax losses of £262,708. It is the first time since the '11 season that the club made a pre-tax loss. Turnover increased from £6.7M to £7.2M year-on-year, with merchandise sales boosted to £785,062 from £519,684 in '15 (RUNNING RUGBY, 8/9).