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0:00
My name is Kieran Maguire from the University of Liverpool Management School,
and I'm a lecturer in football financing.
I've been doing this for six or seven years
teaching on the MBA course and to undergraduates,
as well as historically teaching a variety of
financial related issues to both the academic profession and the industry, itself.
I moved into football finance because like many people,
I am besotted with this sport,
and this was an opportunity to combine my love of football with my background.
So, let's get on with the show.
0:35
Why do we need to have an interest in relation to football players in particular,
which is going to be the focus of this particular talk, and finance?
One of the reasons is that football finance, in many people's eyes,
has gotten out of control.
We are seeing potentially clubs going bankrupt;
we are seeing owners having to subsidize their clubs;
and there's lots of controversy relating to the ownership models of clubs.
So, we take a look at this particular picture.
This shows something which is quite alarming.
As you can see, this is the English championship and it's
showing the relationship between overall player costs,
which is the wages paid to players and the cost of their transfers, compared to income.
Now, normally in business,
you would expect wages to be in proportion to income.
If you think about what we mean by profit,
profit is income minus costs.
As you can see, the vast majority of clubs in the English championship also surprisingly,
some in the premier league as well have
wage costs and overall player costs which exceed income,
which means that the clubs are actually losing
money before they start doing anything else:
before they pay interest on their loans,
before they pay for costs of maintenance for the pitch,
and the training facilities, and the ground,
and before they pay the electricity in the club lights.
So, there's lots of money going out of clubs and
the main cost is in relation to football players.
Therefore, we're going to look at how we deal with
football players in the finances as our main topic here.
