Trickle down economics and the transfer window

Where can you rub shoulders with the owner of AC Milan, the CEOs of Brighton and Brentford, one of football’s top super agents, the investors financing the buyout of Lyon, and the heads of La Liga and Serie A? The answer is the FT’s Business of Football Summit, which returns in less than a month.

Join the FT’s sport and finance teams on March 1-2, when we’ll be discussing all the big issues facing the game — from multiclub ownership and player power, to fan engagement and the race to grow in the US — with many of football’s most influential people.

You can read the agenda, see the speaker list and buy your ticket here. Do sign up — Josh Noble, sports editor

One of the most striking things about the record-breaking January transfer window was how little of the Premier League’s shopping was done at home. Just 3 per cent of the €830mn outlay by EPL clubs went to England’s lower leagues, the smallest portion on record.

Tim Bridge, lead partner of Deloitte’s sports business group, said the trend was likely to cause “growing concern” for clubs further down England’s football pyramid, many of which are still reeling from the financial impact of Covid-19. The divide also comes amid UK government scrutiny of football clubs and their owners.

“Transfer income from Premier League clubs, which has historically been an important source of club funding, now appears to be less guaranteed, with Premier League clubs choosing to prioritise talent from abroad,” he said.

While increasingly turning a cold shoulder to English clubs, Premier League owner have been pouring money into the rest of Europe. The biggest beneficiary over the past five years is Portuguese club Benfica, which has generated more than €300mn from sales to England in the past five years, according to Transfermarkt. Lyon, which was acquired by US investors in December, ranks in the top five after selling players worth €232mn to the Premier League.

Despite the flow of money to Europe, not everyone is pleased. La Liga chief Javier Tebas this week accused English football of being a “doped market”, where rich patrons enable their clubs to lose “barbaric amounts”.

Chelsea’s record-smashing January spend has drawn the focus of the football world. In January, the London club outspent all of the top tier clubs in Spain, Italy, France and Germany combined.

Other English clubs have been busy too, especially the three newly-promoted sides hoping to stay in football’s most lucrative league. Since returning the top division last summer, Nottingham Forest have brought in 30 players for a total of £164mn, while Bournemouth spent heavily in January after being taken over in December by US billionaire Bill Foley.

Total spending this season by the trio of Forest, Bournemouth and Fulham reached £300mn during the January window, a record for newly-promoted teams.

James Dolan’s sphere of influence under pressure

He’s the owner of basketball’s New York Knicks and ice hockey’s New York Rangers. The man who controls two of Manhattan’s most legendary entertainment venues, Madison Square Garden and Radio City Music Hall, with ambitions for an expanding empire from Las Vegas to London.

James Dolan, the son of Cablevision and HBO founder Charles Dolan, is one of the most powerful men in New York, already a household name across the five boroughs. His command of several of the city’s elite franchises and tourist attractions — through the sister companies MSG Entertainment and MSG Sports — makes the younger Dolan a force to be reckoned with across New York’s plurality of power sectors, from politics to finance and entertainment.

Over the past week, however, MSG Entertainment has come under fire from the New York attorney-general, Letitia James, over its use of facial recognition technology at MSG and Radio City to bar entry to lawyers engaged in litigation against Dolan’s companies. Dolan and MSG have said they intend to continue to use facial recognition tools and defended their position as a for-profit business to refuse entry to some patrons, specifically attorneys suing the companies.

Dolan’s reputation as a sports and entertainment titan is replete with colourful anecdotes, some of which we explore in this in-depth FT profile. The facial recognition row comes at an awkward time for his business.

Currently, MSG Entertainment is awaiting review by the mayor of London on a proposed 21,500 capacity venue in Stratford, the MSG Sphere. Last March, the London Legacy Development Corporation approved an application for the venue, a spherical structure enveloped in full LED displays, which critics say could create light pollution. Among opponents are rival entertainment group AEG, operator of London’s O2 Arena and Los Angeles’s erstwhile Staples Center, now the Crypto.com Arena.

Closer to home, Dolan is facing the expiration of Madison Square Garden’s city permit this summer, which allows the venue to operate as an entertainment centre. MSG has previously applied for, and been denied, permanent permits for the space and was instead granted licences for 10-year use. The looming deadline also coincides with the long-term redevelopment plans of Penn Station, one of Manhattan’s major transit hubs.

Were Madison Square Garden to move from atop the rail station to a more remote part of Manhattan — the Steve Ross-developed Hudson Yards project is reported to have extended an invitation — it would be bucking a trend elsewhere in pro sports, as more teams seek to relocate from the fringes to the heart of downtown, like the Knicks’ East coast rivals the Philadelphia 76ers. 

Most importantly, a career of brash and combative management style for Dolan may be coming home to roost. He may ultimately control the Knicks and Rangers, but warring with public officials with so much of MSG’s business on the line could be storing up trouble for the future.

Highlights

• US carmaker Ford confirmed its return to Formula 1 through a partnership with world champions Red Bull, while German carmaker Audi acquired a minority stake in F1 team Sauber, as the sport revs up for new engine regulations in 2026.

• Aiyawatt Srivaddhanaprabha, the Thai owner of Leicester City, has written off almost £200mn of debt owed to parent company King Power, which he said was a sign of his long-term commitment to the club.

• The Premier League has struck a multimillion-pound licensing deal with Sorare, the blockchain-based fantasy sports game, as the English football league bets on digital collectibles despite the recent crypto crash.

• The competitors for this month’s Super Bowl are now set, with the Kansas City Chiefs and the Philadelphia Eagles slated to face off at the National Football League Championship a week from Sunday. A 30-second commercial during the most-watched US broadcast of the year is expected to cost $7mn.

• Lunch with the FT: Siya Kolisi. The first black captain of South Africa’s rugby team talks about winning a world cup over soup and salad in Chiswick.

Final whistle

Napoli’s President, De Laurentiis trying to leave the stadium last night 😂😂 pic.twitter.com/RAQtG4kSBX

— Italian Football TV (@IFTVofficial) January 30, 2023

Neapolitan football fans are starting to believe. Their team went 13 points clear at the top of Serie A after beating Roma 2-1 last Sunday, putting Napoli on track for their first league title since Diego Maradona guided them to victory in 1990. Outside the stadium named after the diminutive Argentine star, club president Aurelio De Laurentiis found himself caught up in the post-match celebrations — a little taste of what the city will be like if and when they win the league.