vysyble’s first foray into business dynamics started with English football.
We decided to examine football simply because as football fans we were getting increasingly frustrated with the predominantly poor-quality coverage of football’s financial performance and in our opinion the frequently incorrect accompanying analyses.
We released our very first report ‘We’re So Rich it’s Unbelievable! The Illusion of Wealth Within Football. 1st edition’ in November 2016.
Since then we have released three more editions of ‘We’re So Rich…’ in what is now an annual review of the Premier League clubs incorporating a thorough economic examination of the division and its constituents based on the most recent set of annual accounts. The 5th edition is currently in production and will be available free of charge.
In October 2017 we released Over The Line which looked at the costs incurred by clubs chasing promotion into the English Premier League together with longevity for promoted clubs within the division and the cost of relegation. The last update – Over the Line 2 – was released in 2018.
In between our work on football, we have released reports on the UK supermarket sector and UK energy supply market together with blogs on selected company performances across a number of different industry sectors including the commercial property, communications, energy and retail markets.
We launched our first index – the vysyble Football Profitability Index® – in 2017 as part of the 2nd edition of ‘We’re So Rich…’. The index measures the economic efficiency of clubs in converting their revenue into economic profit and has proven to be an incredibly insightful and revealing measurement capability. It is a key factor in establishing a link between economic efficiency and relegation in the English Premier League.
At the beginning of the 2017-18 football season, we trialled and launched Matchday Metrics. This is an information service distributed via Twitter and Instagram (both via @vysyble) where fans can see and compare the economic and financial position of their own club set against their opponent on the day of the game. In June 2018, the service was upgraded and renamed Matchday Data. It has proven to be a wonderfully interactive offering with both fan engagement and impression numbers increasing month-on-month.
We were also the only entity to identify the Premier League’s first ‘Billion Pound Game‘ where the two clubs involved (Arsenal and Manchester United) had a combined annual revenue of just over £1bn. This resulted in further global media coverage for the company.
Indeed, our work has received international coverage and recognition from numerous media outlets and individuals. We were especially pleased that we were asked to compose a guest blog for Professor Stefan Szymanski’s Soccernomics website in September 2017. See article.
In conjunction with Professor John Barbour of the University of Strathclyde Business School, we launched the Future Market Value model in September 2019 with an analysis of the world’s largest 15 Pharmaceutical companies. By calculating the level of expectation in terms of future business performance as a percentage of the share price, we can determine the future rate of economic returns required to meet the current share price.
The implications for management teams and directors are clear. The capital markets do not reward underperformance. Therefore, do the relevant companies have the necessary strategies in place to meet shareholder expectations? If not, what can be done? That’s where we come in…
Our belief in value-based analysis and insight emanates from the same thread of thinking as that of Benjamin Graham and Warren Buffet. Our reports have been purchased by global consulting companies, UHNW family offices, major investment banks and sporting consultancy/sponsorship businesses. Our opinions and views are sought by some of the world’s leading media outlets as we continue to spread the word regarding value-based performance.
Validation of our work
More often than not, the established narrative is one which does not necessarily reflect the underlying industry financial dynamic. The English Premier League is a classic example whereby the administration’s message is one of near-continuous profit and progress when the reality is anything but.
Despite the protests and opposition from various quarters that the economic profit measure is either ‘unsuitable’ or ‘inappropriate’, we often find that our work and opinions reflect the eventual reality. Again, the example of football’s extreme financial distress during the current health emergency might have been lessened if the game had taken on board some of our warnings dating back to 2016.
Here are a few examples of our work in action.
19th June 2018 – ‘Newcastle United’s transfer budget explained’ – Newcastle Chronicle.
‘This is the best explanation yet why Newcastle United’s transfer budget is not at the top end of the Premier League market’ – Mark Douglas, Football Editor Newcastle Chronicle.
We said…’A European Super League is inevitable’ –The Sun, 26th December 2016.
2nd November 2018 – Documents show secret plans for Elite League of Top Clubs – Der Spiegel
2nd November 2018 – Top European clubs again planning Super League breakaway – Reuters
6th November 2018 – European Super League would threaten football’s future – The Guardian
25th April 2019 – Chairman of European Clubs Association (ECA) releases letter to all ECA clubs calling for a ‘pyramidal Pan European League System…’
We said… ‘…the Big Six energy companies are not rolling in money nor are they making insane profits…Deteriorating financial performance on this scale will soon mean the Big Six becoming a very average-sized Five or even Four.’ – blog ‘Illuminating, non?‘ vysyble.com, 9th May 2017.
8th November 2017 – SSE confirms merger with Npower – BBC
We said… ‘…big spending English Football League (EFL) clubs are chasing a dream that can rapidly become a financial nightmare….without the presence of extremely generous benefactors, the current situation is wholly unsustainable in the longer term unless the EFL starts to recognise and measure the economic health of clubs’ – Press release ‘Championship clubs generate average losses of £14.67m during promotion season to Premier League’ vysyble.com, 10th October 2017.
10th October 2017 (in reply to our findings) – ‘…no club has been through an insolvency process for several years.’ – EFL spokesperson, reported by the BBC Sports website
29th April 2018 – Ellis Short – ‘Man who lost £200m while running Sunderland into ground’ – The Northern Echo
5th June 2018 – Aston Villa miss £4m tax bill deadline as Chief Executive is suspended – The Guardian
4th January 2019 – Birmingham City facing significant points deduction following financial overspending – Sporting Life
13th May 2019 – Bolton Wanderers appoint administrators and face 12-point deduction – BBC News
28th August 2019 – Bury expelled from EFL due to insufficient financial resources – various
We said… ‘We’re getting to the point where the cycle of ever-bigger domestic TV deals is unsustainable.’ – Mail Online, 10th July 2017.
13th February 2018 – Premier League takes a hit as football TV rights price falls – Financial Times
14th February 2018 – Premier League raises less from TV rights auction – BBC
7th June 2018 – Amazon to show 20 matches a season from 2019 – BBC
We said… ‘…between 2010 and 2017, according to Hammerson’s annual reports, the ‘bonus’ to the CEO totalled £5.4m despite the company consistently producing a capital market value less than book equity.’ – blog ‘Mall Administration’ vysyble.com, 3rd August 2018.
28th April 2019 – Hammerson faces shareholder rebellion over executive pay – The Guardian
25th February 2020 – Hammerson halves dividend as £800m wiped off retail property empire – The Telegraph
We said… ‘Our findings also show that there is further risk in the ability of the broadcasters to fund future TV contracts if the historical trend continues. This could negatively impact the top English Premier League clubs and the game on several levels with, in our view, the potential for significant structural change…The report offers detailed analysis of each of the clubs’ economic performance together with that of Sky and BT. The report also discusses the potential impacts on the game arising from the identified economic risks.’ – Press Release ‘Football faces uncertain futured due to poor economic performance of top English clubs’ vysyble.com, 22nd November 2016
19th November 2016 – Football clubs ‘vulnerable’ after relying on TV rights – Sunday Telegraph (Pre-release exclusive based on the above press release)
10th July 2017 – Premier League clubs losing £876k per day – ESPN
14th August 2017 – ‘Scaremongering nonsense.’ – Nick Harris, Mail On Sunday journalist, referring to our annual football finance report ‘We’re So Rich It’s Unbelievable!’ 2nd Ed. released in July 2017.
31st March 2020 – Premier League is slammed for plan to resume playing in May to avoid losing huge £762m in TV deal rebates – Mail Online/Daily Mail
8th April 2020 – Revealed and explained: the terrible state of Premier League clubs’ finances – The Athletic
8th April 2020 – Has football’s credit crunch finally arrived? – Mail Online/Daily Mail
5th May 2020 – ‘...Vysyble, which has long warned of the fragility of professional football’s economic model.‘ – Telegraph Online
5th May 2020 – Premier League’s £880m black hole – Mail Online/Daily Mail
Professor John Barbour
Professor Barbour is one of the world’s leading experts in managing for shareholder value. Previously, he was Director and CEO Strategy at PA Consulting Group before leaving to become a Partner at Marakon Associates. In 1999 he formed The Barbour Partnership LLP and has worked with the CEOs and executive management teams of more than fifty leading global businesses including:
Babcock International Group
He is Visiting Professor of Strategic Management in the Department of Management of the University of Strathclyde. It is one of the world’s larger and more entrepreneurial business schools. His classes on “The Challenges and Choices facing the CEO” and “Managing for Shareholder Value” have consistently received the highest assessments from MBA students.
Roger Bell MBA
Formerly the Director of Strategy, Risk and Marketing for a FTSE-100 company, Roger has been an avid promoter of the concept of shaping strategy via a value-based perspective in conjunction with Professor John Barbour (University of Strathclyde Business School). He has advised a wide range of companies including several FTSE-100 businesses and has also had his work debated in UK and European Parliaments regarding his study on the financial viability of Europe’s energy companies. He is also a Non-Executive Director of Milton Keynes Development Partnership. Roger has had several articles published in industry journals covering a wide range of sectors and companies as well as being quoted and interviewed by various media around the world including BBC, CNN, ESPN, Forbes and TalkSPORT. Roger’s only irrational pursuit is that of supporting Newcastle United.
John Purcell B.Sc (Hons)
John has held a number of senior roles in companies providing business and financial information. John has a particular interest in trend dynamics and has been active in developing the indexing capabilities of the business. He has been interviewed and quoted by numerous major media outlets regarding the company’s work on the finances of football.
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