BeyondthePitch
AComparativeAnalysisofTwoContrasting FootballClubs'FinancialLossesduringthe GlobalPandemic
NoahLeddel
NorthwoodClassof2023
YaleClassof2027
Introduction
Football (or soccer) is the world's most popular sport by a landslide With over 35 billion fansworldwideand250millionplayersacross200countriesaroundtheworld,itissafeto saythatfootballisTHEglobalgame.
Covid-19rippedaholeintheglobaleconomy,withsportsleaguesworldwidetakingmajor financial losses, and many clubs having to shut down In my project, I wanted to combine mypassionforthebeautifulgameandmycuriosityabouttheeconomicsofsporttogether comparingclubsfromtwoleaguesinverydifferentfinancialterritories.
In this project, I will be displaying findings from a year ' s worth of research, data collection, andinterviewswithexecutivesinthefootballingworld,toshowhowtwodifferentclubswith contrastingfanbases,financialfreedoms,andownershipgroupsoperatedduringthistime This project will inform and help struggling clubs prevent closure in light of another economiccrisis.
Whatwerethetotalrevenue lossesbroughtonbyCovid-19?
UnitedCityFC
NewClarkCity,Philippines
After speaking with the CEO of UCFC MichaelHosking,Ilearnedtheextentof the club's financial losses brought on byCovid-19
“To be perfectly honest, we got absolutely battered because of Covid The Philippine Football Federation doesn'tgetanygovernmentsupport.”
NewcastleUnited Newcastle,England
On a much larger scale, Newcastle United lost a total of £40.6 million over the span of one and a half seasons during the height of the pandemic, with about £304 million lost from the Premier League TV revenue. Along with this, they lost an additional £4.8 on match day revenue and £5.1 million on commercial/retailrevenue
The Middle Man - Nashville SC
Howdideachclubdealwith playercontracts?
UnitedCityFC
NewClarkCity,Philippines
Mr. Hosking also explained how United City dealt with their player contract situation. “We had contracted many long-termplayercontractsandhadto try and renegotiate for lower wages” UCFCisnotabletodiscloseanyplayer salaries due to a non disclosure contract. However, the release of the entire squad on free transfers, and withdrawal from the PFL (Philippine Football League) tells you what you need to know about the status of UCFC's wage bill, and financial situation "NoneoftheteamsinthePFL were keeping on foreign players" Hosking explains, showing the overall condition of each clubs wage bill acrosstheleague.
NewcastleUnited
Newcastle,England
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Wheredoesthemoney comefrom?
Because of the Philippine government’s lack of funding to the PFL (Philippine Football League
UCFC signed a deal with Singaporean based real estate and sports investing company RCL, where they were getting funding to pay all operating costs. However, United City had to withdraw from the 2022 season, due to “RCL failing tohonortheagreedfinalsettlement deadlinesearlierthismonth”(Spin).
“The club will not comment on specifics as we have a confidentiality clause as part of the courtcase.”(TheMonitor)
All professional football clubs in the Philippines operate in similar ways, striking deals with investing groups to gain funding for their operations as opposed getting subsidies from thegovernment.Theyareunableto strike TV deals, because viewership is nowhere near profitable, but instead rely on sponsorship deals and private investors to fund each club.
Many clubs in the Philippines are reliant on their academies to generate revenue, which was not a possibility during the Covid-19 period.
Newcastle United rake in about £36.6 million on matchday revenue in one season alone. (Food, Tickets, Merchandise etc ) They earn about £26.6 million in sponsorship and merchandising per season from companies such as sports betting powerhouse Fun88. Instead ofprivateinvestorsstrikingdealsto pour money into the club, Newcastle and other premier leagueclubs’sownershaveamuch more active role, making decisions onplayertransfers,theallocationof funds, and manager and staff appointments.
Newcastle completed the “Saudi Takeover”asitwascalledbymany during the pandemic, with the public Investment Fund of Saudi Arabia taking an 80% share in the club.ThetakeoverallowsNewcastle to allocate more funds to the purchase of players, facilities upgrades,andinvesttheirmoneyin themselves, to win European and domesticcompetitions.
NewClarkCity,Philippines
UnitedCityFC
NewcastleUnited Newcastle,England
Wheredoesthemoney comefrom?
UnitedCityFC
NewClarkCity,Philippines
Because of the Philippine government’s lack of funding to the PFL (Philippine Football League
UCFC signed a deal with Singaporean based real estate and sports investing company RCL, where they were getting funding to pay all operating costs. However, United City had to withdraw from the 2022 season, due to “RCL failing tohonortheagreedfinalsettlement deadlinesearlierthismonth”(Spin).
“The club will not comment on specifics as we have a confidentiality clause as part of the courtcase.”(TheMonitor)
All professional football clubs in the Philippines operate in similar ways, striking deals with investing groups to gain funding for their operations as opposed getting subsidies from thegovernment.Theyareunableto strike TV deals, because viewership is nowhere near profitable, but instead rely on sponsorship deals and private investors to fund each club.
Many clubs in the Philippines are reliant on their academies to generate revenue, which was not a possibility during the Covid-19 period.
Competitior
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