Tycoons turn goal-shy over club ownership (based on FT story)

We're under a week away from the much-anticipated return of the Premier League, but it seems not everyone is convinced about the growing appeal of the English game - with some tycoons appearing to have lost some of its lustre.

Once upon a time... it's used to be every rich man's dream to own an English football club. On paper, owning a Premier League club, even a relatively modest one, has never been more attractive; with even the smallest minnows being able to swim amongst the top 6 of any other league in Europe in terms of revenue. However recently, deals for Crystal Palace, Aston Villa, Hull City, West Bromwich Albion and Southampton have failed to materialise despite, in some cases, prolonged bargaining.

Dan Jones, a Deloitte partner, has been open in stating that, "The change in club profitability in 2013-14 was more profound than anything we could have forecasted. This may move clubs from being seen as exciting and enticing trophy assets to being recognised as business capable of delivering consistent profits".

Despite this, those involved in negotiations said buyers had been put off by tighter regulations on club ownership, worries over regulation and even geopolitical problems - like in West Bromwich Albion's case, when the deal collapsed after the Chinese stock market plummeted. Aston Villa were also affected, with the deal scuppered by sanctions on Russia over Ukraine. Crystal Palace's situation was rather different, however, as talks broke down when better performance on the pitch led to a price rise.

External circumstances are not the only constraint. The Premier League has made its 'fit and proper person' test (for potential owners) much tighter. Another recent law passed means shareholders and directors have to be approved. These internal regulations may make the prospect of applying for ownership of a Premier League club a daunting and burdensome process.

A banker who works on deals said football clubs were difficult to value and market. "This is such an unusual business because it's a talent business, but when you think about talent businesses, they are often part of a conglomerate. These clubs are standalone and relatively small in financial terms and that is a big risk". This insight reveals that there is high risk in acquiring a football club due to its volatile nature in terms of revenue and popularity - especially the vitriolic abuse that fans often hurl at their owners, especially when a club is failing to live up to expectations.

On the outside, the prospect of owning a Premier League club has never been brighter, with revenues from the £5.15bn television deal soon to kick-in for the 2016-19 seasons. However, the regulations and the overall package that comes with controlling a football club has made cause for potential purchasers to think twice.

Lucrative TV deal reflects the level of Season ticket prices

In the off-season, there is a lot of speculation flying around regarding which players will join which club, which managers will get the boot, what some players are choosing to with their free time. However, in this post, I am choosing to focus on arguably the most important component of the beautiful game... the fans. The fans are the ones who make it happen, because without the demand and the passion received from the fans, football would simply not be the median in which pulls together people from all around the world.

One direct effect on the fans is the price of tickets, in particular the price of season tickets for the select few. Over the years, it has been said that fans have been unfairly exploited by the Premier League clubs as they can charge whatever price they want, in the knowledge that fans will continue to turn up regardless. For example, the most expensive season ticket is at Arsenal at an extortionate £2,013, this is compared to the lowest at a Premier League club which is surprisingly Manchester City, who charge £299 for their least expensive season ticket. Analysing this with some basic demand and supply theory, allows us to see that most clubs are able to charge whatever prices they desire and demand exceeds the supply, as there will always be fans who are willing to pay more if the incumbent holders choose to give up their season tickets, with most clubs having waiting lists to be signed up to be a season ticket holder.

However, it's not all doom and gloom. Manchester United have decided to freeze their season ticket prices for the fourth consecutive season, whilst Arsenal have also announced a freeze, which also includes non season ticket prices - a victory of sorts for fans of the club. Other clubs including Stoke City and Crystal Palace have in fact cut their early season ticket prices; a decision that should be celebrated amongst the football community.

Overall, if clubs do really care about their supporters, more cuts and price freezes will hopefully be seen in the future, considering the increasing amount of funds they are receiving from the TV deals. Clubs can afford to freeze prices and should do, because the fans make the clubs what they are, so it is only fair to give something back to the fans.

Wages-to-Points Ratio: The Overachievers and the Underachievers.

Surprisingly for some, Chelsea are in fact overachieving when it comes to comparing wages to league position in the Premier League.

Chelsea are notorious for high spending, and this hasn't changed this season, with their wage bill racking up to a extortionate £197.7m; with the acquisitions of Cesc Fabregas and Diego Costa contributing to this. However, it isn't just the big names who are driving the wage bill up, but Chelsea have an unnecessary amount of players on loan who are all tied up to lucrative deals; this is one of the big driving forces which people tend to forget.

Let's not forget the 2 highest spenders, the 2 Manchester clubs, with Manchester United leading the way at £215m, Manchester City just a measly £10m behind (£205). United can thank the ever non-present Radamel Falcao who is reportedly earning a whopping £300,000 week as well as Wayne Rooney who is on a similar amount.

1885. The year when it became possible for a player to be paid a wage. To think that the maximum wage in 1901 was £4 - football really has evolved into the profession which has people talking. Whether it's justifiable is a subjective matter in itself. Is the enjoyment and entertainment that football fans crave worth it? I'll let you make your own mind up.

Anyway... back to the subject. So Southampton have done remarkably in terms of what they have achieved when comparing performance to their wage bill. They rank 16th on the wage bill league table, when compared to their current league position of 7th, it makes fine pickings for the Southampton board. They can thank this endeavour to the clever directors and scouting systems, who have managed to acquire bargains in the form of the Graziano Pelle and Dusan Tadic, as well as retaining the reliable Morgan Schneiderlin, who was on the brink of a move to Tottenham in the summer. Southampton also deserve credit on the way in which they have managed to progress youngsters from their academy, names such as James Ward-Prowse, Harrison Reed and Sam Gallagher have all managed to make the step and show their worth in this fine Southampton team.

On a negative note, QPR, who are 19th in the league at the moment, have the 8th highest wage bill in the league which clearly demonstrates the lack in football knowledge by their owner Tony Fernandes. QPR have not managed to get rid of unwanted players, so as a result have had to pay the price of keeping them on their wage bill whilst they play Golf and occasionally make an appearance in the reserve team.

Overall, the findings show a strong correlation between league standings and total wage bill, which is an encouraging sight, and shows at least for some of the clubs, the market mechanism of a higher wage bill to attract the best players for the best teams is working to an extent. More savvy management is needed in some clubs to cut down the wage bill and make sure that the clubs have the right players for their club, because only then will the players play to their full potential and only then will it be affordable for the club.