7/27/2019 A new dawn for Fair Play? The annual survey of Football club Finance Directors (BDO, 2013)
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The annual survey o ooTball clubinance direcTors 2013
a new dawn
or air Play?
7/27/2019 A new dawn for Fair Play? The annual survey of Football club Finance Directors (BDO, 2013)
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ooTball survey 2013 3
oreword
C Btt, Tv Bic I C
Fair play has always been at the heart o the beautiul game,so it is good to see its appearance in the fnances o ootballas well. An encouraging 95% o English clubs are expecting tocomply with the Financial Fair Play rules in 2013/14 (the frstseason when FFP will apply to all English domestic leagues).As a consequence most FDs have reported some orm orestraint on wages and transer ees, a vital step on the roadto more sustainable business models or all.
In fnancial terms, the run o play has been going against manyclubs but i we have discovered anything while producing thissurvey, its that ootball clubs are fghters. Indeed, its probablynot news that many o our fndings this year give some levelo cause or concern. But what is perhaps more surprising, andencouraging, is the extent to which clubs are still managing tocope with adversity and take better controlo their circumstances.
This is not to downplay the challe nges. We are seeing manycommon actors which conspire to increase fnancial instabilityand risk. For instance, a number o clubs depend heavily uponeither a single owner or a small number o key shareholders,who may have their eye on short term glory. Inevitably, thehuge potential rewards or reaching the Premier League may
lure many clubs into a gambling rame o mind, risking uturefnancial security or the big prize. As a long term model, thisis not sustainable, and could result in structural instability ormany clubs i it goes unchecked.
Revenue streams are also down (and by more than fnancedirectors expected). However, some o this can be put downto the UKs delayed economic recovery, though, according tothe latest indicators, we may be turning the corner at last. Itis also interesting to see that the revenues o the SPL (nowScottish Premiership) clubs have not been adversely aectedwhen compared with the other leagues surveyed. Tellingly, SPL2012/13 was the frst season without Rangers.
Now that PKF has merged with BDO, our goal has been tomake this years survey reach urther than ever beore. In totalwe managed to interview 66 fnance directors o ootball clubs,a best-ever total that represents 63% o the ootball leagueseatured. We would like to extend our special thanks to all ourcontributors, and wish every one o our readers a prosperousseason ahead. For every completed survey, we have made adonation to the PFA Benevolent Fund.
Executive summary 1
Methodology 2
Analysis o key ndings 2013 3
BDO Proessi onal Sports Group 25
conTenTs
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Football survey 2013Football survey 2013 21
execuTive summary
inancing The club
Only three out o ten nance directors rate their clubs nancialsituation as very healthy. Almost hal (48%) say that their
situation could be better but is not bad; 17% o respondents
nances need attention while 5% say their nances are a cause
or grave concern.
Two thirds (65%) o respondents are dependent on the principalshareholder(s) to nance annual revenue shortalls or operating
losses up signicantly rom 58% in 2012.
The current owners o more than a third (36%) o FL1 and 28% oFLC clubs in the survey are considering a ull or partial exit.
A th o clubs in the survey (21%) have been approached in thelast 12 months by interested external parties with a view to taking
an euity stake rising to a third o FLC and 40% o SPL clubs.
club revenue and ProiTabiliTy Trends
Almost two thirds o respondents (64%) do not expect tomake a prot before player trading and amortisation in their
next accounting period. The two premier leagues are the
most condent with 92% o EPL and 60% o SPL respondentsanticipating a prot.
Two thirds (65%) o respondents also do not expect to makea prot afterplayer trading and amortisation in their next
accounting period.
The UK economic conditions continue to depress revenues withmore than hal o the clubs reporting reduced sales o match
tickets, merchandising and corporate entertaining. However,
nance directors are more optimistic about revenue prospects in
the orthcoming 2013/14 season.
Only 44% o respondents are using the wages to turnover ratio asa key perormance indicator (KPI) o their clubs nancial health
down rom 58% in 2012. 41% o clubs using the ratio have a
benchmark o less than 55% also down rom 58% in 2012.
club oPeraTions
The three top concerns o ootball nance directors continue tobe the infexibility o players salaries, the loss o income i the
club is relegated, and the all in attendances due to the economic
environment. A new concern or the EPL and FLC nance directors
is the challenge o complying with the nancial air play (FFP)
regulations.
A th o clubs were late with tax payments during the year butmost o these had ormally agreed the delay with HMRC. More than
hal o respondents (52%) said that HMRC was contacting them
earlier and more reuently to chase payment o the tax due.
Almost a uarter (23%) o clubs are concerned about increasedchallenges by HMRC to complex salary structures, which could
lead to large PAYE bills. The EPL and FLC are the most concerned
with 41% and 39% o respondents respectively.
It appears that the nancial air play rules are being takenseriously: 95% o respondents will comply with the FFP rules in
2013/14; 42% o clubs admit that their decision not to increase
the cost o the rst team payroll has been partly or l argely driven
by the air play rules; 22% say that FFP rules have aected their
decision to not to increase their transer budget.
Player cosTs and Transers
More than eight out o ten (85%) clubs have clauses in playerscontracts stipulating a wage cut i the club is relegated. The number
o EPL and SPL clubs with these clauses has increased over the last
12 months rom 56% and 33% to 75% and 60% respectively.
More than hal (53%) o respondents will cut the sie o the rstteam suad; 42% will keep it the same sie; and 5% will increase
the suad sie. More than hal (56%) are also pl anning a smaller
payroll budget or their rst team suad.
Nearly two thirds (64%) o respondents will keep their transerbudget the same as last year; a uarter (24%) will reduce it and
only 12% will increase it.
corPoraTe governance
Almost all (92%) respondents regard their ootball club as a publicinterest business with a high degree o scrutiny.
Nearly two thirds (64%) o respondents agree that the levelo public interest leads them to manage the club with a higher
level o corporate governance than they would or a similar sied
business outside the ootball sector.
Proile
o samPle
englishPremierleague
12clubs
60%resPonded
ooTballleaguechamPionshiP
18clubs
75%resPonded
ooTballleagueTwo
17 clubs
71%resPonded
ooTballleagueone
14 clubs
58%resPonded
scoTTishPremierleague
5clubs
42%resPonded
BDO UKs Proessional Sports
Group commissioned anindependent researcher in May
and June 2013 to undertakestructured telephone
interviews with nance
directors o ootball clubs.
A total o 66 interviews werecompleted with nance
directors in the English Premier
League (EPL), English FootballLeague Championship (FLC),
Football Leagues One (FL1)
and Two (FL2) and the Scottish
Premier League (SPL).
Since the survey was
undertaken the SPL hasbeen renamed the Scottish
Premiership.
Throughout this survey, results
are presented as percentagesrounded to the nearest whole,
and arithmetic means, unlessotherwise stated.
meThodology
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Financing the club
1. h t t pt?
% a ePl lc l1 l2 sPl
Very healthy 30 83 22 14 18 20
Could be betterbut not bad
48 17 50 50 64 60
In need o attention 17 0 22 29 12 20
A cause or graveconcern / onthe verge oadministration
5 0 6 7 6 0
Base: 66
Only three out o ten nance directors rate their clubs nancialsituation as very healthy the same result as in 2012 and theres a wide variation between the dierent leagues, with 83% o EPL
respondents enjoying good nancial health compared to just 14% oFL1 respondents.
Almost hal (48%) say that their situation could be better but is not
bad, while 22% o respondents nances need attention or are acause or grave concern. This gure is up rom just 13% in 2012, whileover a third (36%) o FL1 respondents admit nancial diculties.
2. i pt t pp t t pt ?
% a ePl lc l1 l2 sPl
Yes 65 5 0 94 64 53 40
No 35 50 6 36 47 60
Base: 66
The trend towards greater reliance on a single owner or smallgroup o shareholders continues to strengthen. Two thirds (65%) orespondents are dependent on the principal shareholder(s) to nanceannual revenue shortalls or operating losses. This is up rom 58% in2012, and the percentage rises to 94% or FLC respondents.
Indeed, the SPL is the only league which appears to have reduced itsdependency on principal shareholders this year.
analysis o indings 2013
65 DEPENDENT ONPRINCIPAL SHAREHOLDERS%
No surprises here! The EPL surgesahead and the lower leagues are letfoundering in its wake. Howeverthere may be cause or optimism aswe see the implementation o the airplay regulations starting to have astabiliing eect on operations goingorward. Stakeholders are crying outor a sustainable business modeland it can only be hoped that theregulations are embraced not just inletter but in spirit. Trevor Birch
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3. h .. t k t t t ?
% a ePl lc l1 l2 sPl
Advance onseason tickets one year
YesNo
991
0100
1783
793
1288
0100
Advance onseason tickets two or more years
YesNo
0100
0100
0100
0100
0100
0100
Player transeree receivables
YesNo
1486
892
1783
793
1882
0100
Other receivablesYesNo
991
2575
1783
0100
0100
0100
Base: 66
The last 12 months have not seen much rise in the use o secondarysource unding, which was low to begin with. Just 14% o clubs usedsecondary source unding secured on player transer ee receivables,while 9% have used the advance on season tickets as loan security.
However, urther analysis o the results reveals that 39% o FLCrespondents have used at least one o the secondary sources ounding listed in the survey. Only the SPL respondents did not citeany such unding at all.
4. h tt t ?
% a ePl lc l1 l2 sPl
Yes 30 42 28 21 12 80
No 70 58 72 79 88 20
Base: 66
Although seven out o ten clubs in the survey have not given a xedcharge over their stadium as loan security, 80% o SPL and 42% oEPL respondents have done so.
It is likely that the banks have been willing to use the stadia o largerclubs as security or loans to meet the lenders reuirements, but in thebelie that it is unlikely that they will need to make a call on this security.
5. i t tt t , t tpp t ?
% a ePl lc l1 l2 sPl
Build or expandthe stadium
36 20 33 0 75 50
Provide cash fowor the club
64 80 67 100 25 50
Base: 20
O the 20 clubs who have given a xed charge over the stadium assecurity, 64% used the loan to provide cash fow or the club, while
just 36% used the money to build or expand the stadium. Two clubsreported that they had used the loan or both purposes.
Leverage o xed assets or shortterm working capital, rather thaninvestment in inrastructure, is clearlyunsustainable. However, one mightexpect to see this trend reverse in lighto nancial air play regulation.
Ian Clayden
30have given a fixed chargeover their stadium%
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6. a t t t pt t t t t 12-18 t?
% a ePl lc l1 l2 sPl
Yes 17 0 28 3 6 0 20
No 83 100 72 64 100 80
Base: 66
Although only 17% o respondents current owners are considering aull or partial exit, this is mostly concentrated in the FL1 (36%) andFLC (28%) clubs.
7. wt t t 12 t, t jt t pp tt t pt t t tk qt tk t ?
% a ePl lc l1 l2 sPl
Yes 21 8 33 21 0 40
No 79 92 67 79 100 60
Base: 66
Over the last 12 months a th o respondents (21%) have beenapproached by external parties rising to a third o FLC and 40% oSPL respondents. Only the FL2 respondents have had no interest.
investment cycle
In Leagues Apart, our 2012 report, we identied the growingdisparity between the English Premier League and the rest o theootball industry. This years survey suggests that the gap mayhave widened even urther in the past 12 months.
Intense competition or a limited number o promotion placeshas pushed the majority o Championship and League One clubs
into the red and created a dependency on principal shareholdersbankrolling trading shortalls.
In this context, we now see around a third o existing ownersseeking a ull or partial exit, while a similar proportion o clubsare being approached by new external investors. Despite thesignicant nancial costs, the enduring appeal o ootball hascreated a clear investment cycle, with new owners eager to pickup the baton rom shareholders that are no longer prepared orable to nance the cost o their clubs ambition.
Clubs outside the EPL arecontinuing to experience nancialchallenges so the growing numbero owners seeking out externalinvestment is a conseuentialinevitability. This trend is likely tocontinue, although the growingappetite or investment is encouraging,refecting the attraction that theleagues still hold. Ian Cooper
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Football survey 20139
club revenue and proFitability trends
8. d pt t k pt before p t tt t t p?
% a ePl lc l1 l2 sPl
Yes 36 92 17 29 18 60
No 64 8 83 71 82 40
Base: 66
With the exception o the SPL nance directors who are morecondent than last year these results are very similar to those in2012, with almost two thirds o respondents (64%) not expectingto make a prot beore player trading and amortisation in their nextaccounting period.
However the two premier leagues are much more condent, with92% o EPL and 60% o SPL respondents expecting to make a protcompared to just 17% o FLC and 18% o FL2 respondents.
9. d pt t k pt afterp t tt t t p?
% a ePl lc l1 l2 sPl
Yes 29 42 6 43 24 60
No 65 42 88 50 76 40
Dont know 6 16 6 7 0 0
Base: 66
The overall prot outlook or the next nancial year continues todarken, with two thirds (65%) not expecting to make a prot aterplayer trading and amortisation compared to 57% in 2012 (and onlya third in 2011).
The most troubled leagues are FLC and FL2, where respectively 88%and 76% o respondents expect to make a loss.
The SPL respondents have the brightest outlook, with 60% expectingto make a prot.
It is concerning to note that despitenancial air play and wage capping nowoperating in all English proessional divisions,there is no noticeable improvement in thehigh number o clubs expecting to make a lossnext season. Responses to uestion two veryclearly demonstrate that these losses will benanced by the clubs principal shareholder,a position that is not sustainable. We shouldnot be surprised to see more administrationsin the coming months. Charles Barnett
before playertrading
36% after playertrading
29%
oF clubs who expectto make a proFit....%
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Football survey 2013Football survey 2013 1211
10. wt t pt t t t t t t ?
% a ePl lc l1 l2 sPl
mt tktReducedNo impactImproved
592120
255025
731116
651421
652411
600
40
mReducedNo impactImproved
552916
581725
731710
503614
48475
202060
mt tReducedNo impactImproved
444115
17758
562816
423622
53416
402040
cpt ttpkReducedNo impactImproved
562420
501733
671122
502921
59356
404020
s tkt ReducedNo impactImproved
453124
176617
666
28
352936
532918
404020
sppReducedNo impactImproved
334324
8
4250
393328
432631
365311
40600
Base: 66
This years results continue the trend o the last three years, withlittle evidence o improvement in revenue streams over the past12 months. More than hal o the respondents continue to suera reduction in revenues or match tickets (59%), merchandising
(55%) and corporate entertaining (56%). However, the impact is lessnotable within the EPL than in other leagues.
The FLC is suering the greatest reduction in almost all revenuestreams, with 73% reporting lower revenues or match tickets andmerchandising, 67% experiencing a drop in corporate entertainingand season ticket sales, and 56% reporting a reduction in match daycatering.
Two thirds (65%) o FL1 and FL2 respondents have also suered areduction in match day ticket sales, and 59% o FL2 respondentshave reduced revenues rom corporate entertaining.
The only glimmers o good news are improved results or merchandisingand sponsorship or SPL respondents; an improvement in sponsorshiprevenues or hal o EPL respondents (compared with just 11% in2012); and an improvement in season ticket sales reported by 36% oFL1 respondents up rom 13% in 2012.
29%
%
11. wt t pt t tt t t 2013/14 t p t t jt ?
% a ePl lc l1 l2 sPl
mt tktReducedNo impactImproved
294724
176617
503317
215821
185329
400
60
mReducedNo impactImproved
275122
244333
444412
7
7221
186418
400
60
mt tReducedNo impactImproved
235423
0
1000
394417
145036
304624
202060
cpt ttpkReducedNo impactImproved
294526
255025
334522
145036
414118
204040
s tkt ReducedNo impactImproved
353530
175825
611722
363628
244135
202060
sppReducedNo impactImproved
245026
8
5042
394417
145036
244729
404020
Base: 66
Finance directors across all the leagues are generally more optimistic orthe orthcoming year (2013/14). The SPL is the most condent league oall, with 60% o respondents anticipating improved season ticket sales,merchandising, match day catering and match day ticket sales.
23%
MaTCh dayCaTerIng
27%MerChandIsIng
24%
sponsorshIp
35%seasonTICkeTsales
29%MaTChTICkeTs
CorporaTeenTerTaInIng
paCkages
oF clubs whopredict a Fallin sales For the
Financial yearahead
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Football survey 2013 14ooTball survey 201313
12. d t t t t kp t t t?
% a ePl lc l1 l2 sPl
Yes 44 50 39 43 35 80
No 56 50 61 57 65 20
Base: 66
13. i k?
% a
66% 7
Base: 29
In last years survey there was evidence that best practice on wagesto turnover ratios were beginning to be ollowed. However, thisposition has reversed this year with only 41% o clubs operating toa benchmark o not more than 55% compared with 58% o clubs inthis range in 2012. Even so, there has been no signicant change inthe percentage o clubs using a benchmark o greater than 60%; this
year 35% used this benchmark, virtually the same as in 2012 (33%).
14. wt t t t tpt ?
% a ePl lc l1 l2 sPl
66% 29 42 66 0 12 0
Not calculated 6 0 5 7 6 20
Base: 66
Although 42% o all respondents operate below 55%, much o thiscan be attributed to FL1 and FL2 clubs which have operated with asalary cap or the last ew years. Indeed, more than three uarters othe FL2 clubs and hal o the F L1 clubs operate below 55%. Howeveronly 31% o EPL and 17% o FLC clubs operate below 55%, with twothirds o FLC and 42% o EPL respondents operating above 66%.
The results or EPL and FLC show the extent to which these clubsinvest in players, undoubtedly in an eort either to retain or gain EPLstatus. This ties in with the g eneral ndings that the rewards o theEPL are hugely, even disproportionately attractive, and can temptclubs into highrisk strategies.
Jubilee and Olympic optimism thatinvigorated the UK in the summer o2012 was not enough to end o theimpact o the near collapse o theEuroone, a return to recession andsome o the worst weather in livingmemory. In this regard, like much othe UK economy, the results or theootball sector did not, on the whole,meet expectations.
use the wages toturnover ratio as a keyperormance indicator44%
Ian Clayden
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inancial air Play (P) regulaTions will aPPlyacross all english Proessional divisionsor The irsT Time This coming season.
sPoTlighT on:
inancial air Play
0% 10% 20% 30% 40% 50% 60% 70 80% 90% 100%
88%claim To havecomPlied wiThThe relevanTregulaTionslasT season
83%Plan To
sPend Thesame or lesson Payroll
42%saId TheIr
deCIsIon wasInfluenCed
By ffp
most pressing concerns for epL and fLc cLubs
exPecTTocomPly
wiThouTany
significanTchangesTo
businessmodels
85%
10%exPecTTo
comPly
albeiT
follo
wing
significan
T
chan
ges
oF clubs expect to reducetheir transFer budgetsor keep them the same.O the clubs planning to reduce orkeep their transer budget constant,22% stated that FFP was a driver;however, this gures rises to 44%and 41% or EPL and FLC clubs
88%t
f f q,
. o
FFp q . t
, f f
- .
ian clayden
ooTball clubcomPliancewiTh The P
rules in 2013/14
t t ptt, p 79% t
; t ePl, t 56% t 75%
84%
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Football survey 2013Football survey 2013 1817
club operations
15. wt t pjt -ppt p t t t ?
% a ePl lc l1 l2 sPl
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Football survey 201319
19. w t t t t pt t ..pt t, Paye/nic, vaT t hmrc?
% a ePl lc l1 l2 sPl
Yes 20 0 17 29 29 20
No 80 100 83 71 71 80
Base: 66
A th o all respondents were late with tax payments during theyear. None o the EPL clubs were late compared with three out o teno the FL1 and FL2 clubs. O the clubs who paid late, 14% and 18%o FL1 and FL2 respondents respectively had not ormally agreed thedelay with HMRC.
20. h t hmrc tttt p t t t ?
% a ePl lc l1 l2 sPl
Yes, it is contactingus earlier and /ormore oten
52 42 61 71 35 40
Yes, it is taking themlonger to get intouch
3 0 0 0 6 20
No 45 58 39 29 59 40
Base: 66
More than hal o respondents (52%) said that HMRC was contactingthem earlier and more oten to press or the collection o the tax due.
21. hmrc j pjt p tt t t pt p t tt.T t ptt Paye t . w tttt ft ?
% a ePl lc l1 l2 sPl
Not concerned, the taxposition on paymentsto our players is robustand very deensible
77 58 61 86 100 80
Somewhat concernedthat a sieablechallenge could createa problem
18 25 39 7 0 20
Very concerned thata sieable challengewould create aproblem
5 17 0 7 0 0
Base: 66
Last year, 92% were condent that their tax position on payments toplayers was robust and deensible to HMRC but doubts appear to becreeping in with only 77% not concerned this year. The EPL and FLCare, not surprisingly, the most concerned with respectively 42% and39% o respondents.
It is no great surprise thatnearly a uarter o all clubs areexpressing concern about a possiblechallenge rom HMRC into complexpay structures. The pressure onremuneration planning has increasedas a result o legislative changes, policyand the increased media attention. Ithe appeal in the case o Murray GroupHoldings v HMRC (involving RangersFC) nds in avour o the tax man thenwe can only expect heightened activityby HMRC into arrangements by other
clubs. Apart rom salary structures,payments made to agents are alsounder HMRCs spotlight.
Andy Goodman
were condent their tax position onpayments to players was robust anddeensible to HMRC compared to92% last year
77%Football survey 201319 ooTball survey 2013 20
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Football survey 2013Football survey 2013 2221
27. i t t 2013/14 t , t t tt t p ?
% a ePl lc l1 l2 sPl
Not at all 78 56 59 84 100 1 00
Yes, to some extent 14 33 23 8 0 0
Yes, to a considerable extent 8 11 18 8 0 0
Base: 58
78% o respondents who are reducing or keeping their transerbudget the same deny that their decision has been driven by the FFPrules although more than one in ve (22%) admits that the FFP ruleshave had an impact on their decision.
The FLC and EPL appear to be most aected by the FFP rules with41% and 44% respectively admitting that their decision was p artlydriven by new regulations.
player costs and transFers
22. d p ttt tpt tt t t
t t?
% a ePl lc l1 l2 sPl
Yes 84 75 94 71 94 60
No 14 17 6 29 6 40
No response 2 8 0 0 0 0
Base: 66
More than eight out o ten (84%) clubs have clauses in playerscontracts stipulating a wage cut i the club is relegated, a slightncrease on last years 79%. The FLC and FL2 clubs are the most likely
leagues to have relegation clauses in players contracts (94%).
Prudence is clearly on the rise, however, with 75% o EPL and 60%o SPL respondents now having these clauses, compared to 56% and33% respectively last year.
23. i t 2013/14 t tq z , t t t jt ?
% a ePl lc l1 l2 sPl
Larger 5 8 0 7 6 0
Same 42 50 28 50 47 40
Smaller 53 42 72 43 47 60
Base: 66
Clubs this year are continuing the trend o reducing the sie othe rst team suad, with more than hal (53%) o respondentsbudgeting or a smaller rst team suad next season. A urther 43%expect to keep it the same sie, while just 5% expect a larger suad.
None o the FLC and SPL respondents expect to have a larger rstteam suad, and 72% o FLC and 60% o SPL respondents will becutting the sie o the rst team.
24. i t 2013/14 p ,t t p t t tt q t t jt ?
% a ePl lc l1 l2 sPl
More 17 42 6 14 18 0
Same 27 33 16 36 29 20
Less 56 25 78 50 53 80
Base: 66
Not surprisingly, given that 53% o respondents are budgeting or asmaller suad, 56% overall are planning to spend less on the payrollcost but this gures is as high as 78% or FLC and 80% or SPLrespondents.
However, more than our out o ten (42%) o EPL clubs will bespending more on their payroll (up rom 33% in 2012), despite only8% expecting larger suads. This is a clear indication that playersalary infation is still prevalent in the EPL.
o respondents arereducing or maintainingtheir transer budgets
PROJECTED SIzE OF FIRSTTEAM SqUAD FOR 2013/14
88%
25. i p t p t p t t t t q t2013/14 , t t tt t
p ?% a ePl lc l1 l2 sPl
Not at all 58 14 23 75 93 1 00
Yes, to some extent 31 72 59 8 7 0
Yes, to a considerable extent 11 14 18 17 0 0
Base: 55
42% o clubs admit that their decision not to increase payroll spendon the rst team suad has been partly or largely driven by the FF Prules, but there is a divide between the larger teams 86% and 77%o EPL and FLC clubs versus just 25% and 7% o FL1 and FL2 clubs.
26. w / t t
t ?
% a ePl lc l1 l2 sPl
Increase 12 25 6 14 12 0
Same 64 50 50 65 76 100
Reduce 24 25 44 21 12 0
Base: 66
The trend towards controlling the transer budget continues this year
with nearly two thirds (64%) o respondents keeping their transerbudget the same as last year (up rom 52% in 2012) and a uarter (24%) reducing it. Only 12% will increase their transer budget this year.
53SMALLER
% 42SAME
%
5LARGER
%
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Football survey 2013 24
corporate governance
28. d t -t pt t?
% a ePl lc l1 l2 sPl
Yes 15 33 6 7 12 40
No 85 67 94 93 88 60
Base: 66
Only 15% o respondents have remunerated nonexecutiveindependent directors on their clubs board. This rises to a third o EPLand 40% o SPL respondents.
In a ollow on uestion, almost all (92%) respondents regard theirootball club as a public interest business with a high degree o scrutiny.
29. d t p tt t t t tpt p t z p t t t t?
% a ePl lc l1 l2 sPl
Yes 64 67 67 50 76 40
No 36 33 33 50 24 60
Base: 66
Nearly two thirds (64%) agreed that the level o public interestin their club leads them to manage the club with a higher level ocorporate governance than they would or a similar sied businessoutside the ootball sector.
social media
30. h ptt t tt t ?
% a ePl lc l1 l2 sPl
Low importance 5 0 6 7 0 20
Medium importance 30 0 38 29 41 40
High importance 65 100 56 64 59 40
Base: 66
Two thirds o respondents (65%) say that social media is a veryimportant contributor to the promotion o the clubs brand. Thispercentage rises to 100% o EPL clubs.
31. d t pppt k tpt ?
% a ePl lc l1 l2 sPl
Yes 82 92 94 64 76 80
No 18 8 6 36 24 20
Base: 66
More than eight out o ten clubs (82%) say that they have theappropriate skills to exploit the benets o social media. Thiscondence in skill levels rises to 92% o EPL and 94% o FLC
respondents.
82%To some extent, the perceived
higher than average level o publicinterest aced by ootball clubsmaniests itsel in a ocus on goodcorporate governance, as refected inthe relatively high (15%) number opaid nonexecutive directors(note that this excluded unpaid nonexecutive directors). However, thedirection o travel or the UK is anincreased level o commitment tocorporate governance so we watchwith interest to see i the statisticincreases in uture years.
t b
o respondents say theyhave the skills to exploitthe benets o social media
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Football survey 2013Football survey 2013 2625
our professionaL sports group cLient base extends across majorprofessionaL sports incLuding footbaLL, horse racing, rugby,goLf, cricket, and motor racing, as weLL as other heaLth andfitness businesses.
n proessional ootball we have worked or an array o high proleootball clubs and governing bodies providing specialist servicesranging rom tax advice on image rights and agents ees throughto accounting, annual audit and insolvency assignments.
Our team o sector experts which includes partners with experienceo managing and running top fight ootball clubs, can provide ootballclubs with a complete range o business advisory services including:
our sPecialisT services include:
CorporaTe fInanCe and fInanCIal ModellIngWe have signicant experience providing transaction advisory andinvestigative services across all proessional leagues to a numbero Clubs or both vendors and acuirers. Our specialist transactionservices team perorms due diligence or potential investors and orFFP planning and compliance, and our advisory team specialises inleading sales processes and procuring investment.
BusIness resTruCTurIngWe have been appointed Administrators o a number o clubsincluding Motherwell, Oldham Athletic, Dundee and most recentlyPortsmouth, Dunermline and Hearts. All completed appointmentshave led to a successul outcome whereby a dividend was acceptedby creditors under a Company Voluntary Arrangement (CVA). Allcompanies survived ollowing the CVAs and are continuing to trade.
speCIalIsT VaT C onsulTanCySome o our recent assignments have included providing extensiveVAT input on the ollowing:
Anity card agreements
Overseas sponsorship issues
Testimonial/benet games or current and ormer players
Stadium reurbishments and alternative uses, catering issues,retail sales
Agents eesWe have produced a VAT overview guide or clients in connectionwith a number o rules and treatments, including the place o supplyo goods & services, plus certain VAT reporting reuirements and amatrix relating to the key income streams.
bdo Proessional sPorTs grouP
scoTland
Proessional sPorTs grouP Key conTacTsFor more inormation on any o our services or the ootball industry, contact the relevant BDO expert in your region.
charlesb arnett
Audit /Corp Finance
T:0141 249 5233
andymcnamara
Audit
T:0141 249 5249
bryanJackson
BusinessRestructuringT:0141 249 5203
brian lovie
Tax
T:0131 347 0366
trevor birch
BusinessRestructuring
T:020 7893 3733
tim Ferris
Corporate TaxT:020 7893 2372
andy goodman
Employment Tax
T:020 7893 3437
ian clayden
Audit
T:02078933612
ian cooper
Corporate Finance
T:020 7893 2678
James roberts
Audit / Corp Finance
T:01293 591087
stuart lisle
Tax
T:023 8088 1861
Jim gee
Forensic
T:020 7893 2830
souTh
billy cairns
Tax
T:0113 204 1306
Julien rye
Audit
T:0161 817 7505
chris heatlie
Corporate Finance
T:0161 833 8362
norTh / norTh midlandslondon / souTh midlands
eMployMenT TaxOver the last twelve months our team o specialists has providedadvice in connection with the complex area o reward. This is inthe light o heightened HMRC interest into the use o complex andconvoluted remuneration structures sometimes involving EmployerFinanced Retirement Benet Schemes (EFRBs), Employee BenetTrusts (EBTs), contracts or dierence and the use o Image RightsCompanies. We have also assisted clubs with investigations into theuse o such structures by HMRC Specialist Investigations. Obviously,in their day to day business, many clubs make payments to sportsagents and we have advised clubs on how these should be correctlydealt with or income tax and national insurance purposes.
CorporaTe goVernanCe
Good corporate governance is essential i clubs are to be managedeectively by executive directors and legal obligations dischargedproperly by nonexecutive directors. Procedural issues include:
Transer policy Auisitions and disposals
Disciplining regulations and rules players and directors
Fraud protection
Antimoney laundering
Cost control regulation
Transparency measures
Diversity and community
forensIC and fraud InVesTIgaTIons
We provide orensic accountancy, investigatory and expert witnessservices to a number o clubs. Working in a partnership with theCentre or Counter Fraud Studies at the University o Portsmouth,we are also able to help organisations to measure and reduce thecost o raud. We deliver real nancial benets oten achieving a 12:1return on the cost o the work.
External and internal audit Corporate tax Corporate nance and nancial modelling Business Restructuring Specialist VAT consultancy Employment tax Corporate governance Forensic and raud investigations
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BeTTIng & gaMIng
BDO has acted as auditors, tax advisers and consultants to many UKand international betting and gaming businesses, both private andpublicly uoted. Our clients range rom many o the major bricks& mortar bookmaking and casino operators to major oshoretelephone and internet sports books, casinos, poker and other onlinegaming activities. As well as the more traditional orms o bettingand gaming, we also act or FSA regulated businesses in the nancialtrading, nancial spread betting and CFD sector.
Specialist advice we can provide to the sector includes:
International tax planning and structuring
Corporate nancing and fotations
Property and corporate acuisitions and disposals
Financial Services Act regulations and compliance
Installation o management reporting and controls andinternal audit unctions
IT controls, environment reviews and systemsimprovement advice.
hoTels
Our expertise covers the entire spectrum o investment and operatingactivities and our involvement brings credibility, competence andindependence to any project. In short, i you are active in the hotelindustry then you should be talking to BDO, the industry experts.
Specialist advice we can provide to the sector includes:
Audit and assurance
Feasibility studies
Business valuations
Litigation support and expert witness services
Mergers and acuisitions including MBOs, MBIs and fotations
Fund raising and renancing
Financial investigations and dispute resolutions
Systems reviews
Turnaround and distressed situations
bdo leisure and hosPiTaliTy
alongside the proFessional sports group, our team works with international businesses across the
leisure industries, including betting & gaming, hotels, restaurants, bars & pubs, and travel & tourism.
John barKerTEL: 020 7893 3980
EMAIL: [email protected]
sTuarT collinsTEL: 020 7893 2604
EMAIL: [email protected]
david camPbellTEL: 020 7893 3610
EMAIL: [email protected]
dominic sTammersTEL: 020 7893 2471
EMAIL: [email protected]
resTauranTs, Bars & puBs
BDO can help realise the opportunities and minimise the pressures just as we have helped numerous clients to do, during our longestablished history as a leading adviser in this sector.
We have advised clients as diverse as international brands andnational chains, to owner managed businesses and outlets looking toexpand and/or diversiy. Our expertise will assist whether you are theindividual restaurateur, the group operator, the restaurant ranchisoror ranchisee.
Specialist advice we can provide or your sector includes:
BERR report, TRONCS, minimum wage legislation
Tax ecient employee incentive plans
Property issues and the associated stamp duty andcapital allowances
Business acuisitions
Raising nance or business expansion public and private,euity and debt
Franchise advice
TraVel & TourIsM
The travel sector has undergone some o the biggest changes we havewitnessed to one particular industry over the last ew years. It has beena rollercoaster ride o new entrants and new technology, consolidationand unpredicted new challenges to business, such as SARS andterrorism. BDO has helped its travel clients turn a turbulent time intoone o opportunity.
Our commitment to this sector has seen us attract some o thebest known names in the business rom owner managed privatebusinesses through to large listed companies with internationalnetworks. BDO is an ABTA Travel Industry Partner and provides thesection on Travel Agents and Tour Operators or Butterworths FinancialReporting and Accounting or Specialised Sectors. We have memberson the ICAEW / ABTA Working Group instigated by ABTA and also onthe ICAEW/CAA Working Group instigated by the CAA.
Specialist advice we can provide or your sector includes:
ATOL applications
Tour Operator Margin Scheme Industry regulation and compliance
Flotations, acuisitions and disposals
Tax planning and compliance or the travel industry
Business continuity planning
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contactF :
charLes barnettpartner, professionaL sports(scotLand)t: 0141 249 5233e: [email protected]
ian cLaydenpartner, professionaL sports(engLand)t: 020 7893 3612e: ian [email protected]
trevor birchpartner, professionaL sports
(business restructuring)t: 020 7893 3733e: [email protected]
(See ull list o contacts on page 25)
This publication has been careully prepared, but it has been written in generalterms and should be seen as broad guidance only. The publication cannot berelied upon to cover specic situations and you should not act, or rerain romacting, upon the inormation contained therein without obtaining specicproessional advice. Please contact BDO LLP to discuss these matters in thecontext o your particular circumstances. BDO LLP, its partners, employees andagents do not accept or assume any liability or duty o care or any loss arisingrom any action taken or not taken by anyone in reliance on the inormation inthis publication or or any decision based on it.
BDO LLP, a UK limited liability partnership registered in England and Walesunder number OC305127, is a member o BDO International Limited, a UKcompany limited by guarantee, and orms part o the international BDOnetwork o independent member rms. A list o members names is open toinspection at our registered oce, 55 Baker Street, London W1U 7EU. BDOLLP is authorised and regulated by the Financial Services Authority to conductinvestment business.
BDO is the brand name o the BDO network and or each o the BDO MemberFirms.
BDO Northern Ireland, a partnership ormed in and under the laws o
Northern Ireland, is licensed to operate within the international BDO networko independent member rms.
August 2013 BDO LLP. All rights reserved.
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