The Hidden Costs of Luis Suarez

The Six Million Dollar Mouth (Source: Reuters)

No one will ever accuse Luis Suarez of being boring. The Liverpool striker and Uruguayan international has a fiery temper on the pitch which has oft landed him in trouble while in service of both his club and country. Most recently Suarez has found himself on the receiving end of a 10-match ban for biting Chelsea defender Branislav Ivanovic.

Opinions differ on what impact Suarez’s suspension will have on Liverpool, with some calling it an opportunity for reinvention and others seeing big negatives for the club. The ultimate effect remains to be seen, but for now we can take a look at the costs we do know about. To get an estimate of the cost of Suarez’s antics we can look at the games he has been unavailable for and measure them in terms of lost wages; or instances where Liverpool has paid for no option to use Suarez’s talent.

Let’s start by counting the games he has been banned for:

That is a total of 15 bans in the 90 league matches that Liverpool have played so far; 21 (currently) bans for the 242 league games he will play over the life of his contract. From his arrival in 2010-11 till the end of 2012-13 Suarez will have been unavailable for 17% (!) of Liverpool’s league matches. Now let’s estimate a cost in lost salary for each game.

Suarez’s bans to date have (counting forward to 2013-14) cost Liverpool ~2m in lost wages. This figure does not take into account cost of fines or any other related charges. And finally, to put this in perspective with some of the investment already spent on him:

6% of the total wages Liverpool will pay Suarez over the course of his contract will be spent toward his bans. That percentage assumes that there will be no more incidents, something which seems unlikely given past history. Turns out there’s a pretty big price for mad genius.

Sir Alex Ferguson to Retire

Sir Alex Ferguson has confirmed that he will be retiring as Manchester United manager at the end of the current Premier League season. To say this is a moment in sporting history is likely an understatement. Manchester United have announced current Everton manager David Moyes as Ferguson’s successor.

Whether United are able to maintain their level of success without Ferguson is an open question. One indicator we might look at for an initial reaction is the change in the club’s publicly traded stock price. On May 8th the MANU traded down at the open and dropped to a low of $17.75 (-5.4%) before recovering to end the day at $18.45 or just a bit below the previous close.

So the market seemed to shrug off the departure on the day of, we’ll have to see what happens in the coming months and when results from Moyes’ reign start coming in.

Newcastle: Revenue 2007-2011

I am going to use a new format from here on out. Instead of dropping one gigantic, catch-all post about a club’s financials I am going to break it down by category. After all the parts are done I’ll sew them together in a post summarizing . This will make the posts more digestible for you as well as easier for me to create since I won’t have to come up with 2000 words and 20 charts all at one time.

Photo: PA

The 2007-2011 period is a tidy chapter in the Mike Ashley story. Six managers, a relegation and a promotion is just the beginning of the turmoil that has roiled St. James’ Park over the last five years. While 2011-12 was a notable year I feel that it represents a new arc in the Newcastle story and can be left for later…also the financials aren’t out yet so it has to be left for later.

Revenue

Newcastle’s revenues have not grown over the past five years. Total intake has remained close to the £87m it was in 2007. While end-to-end growth has been flat there has been considerable variance within the period. Revenues reached a high of £99m in 2008, a move driven solely by the growth in media revenues, and a low of £52m in 2010 as the club suffered relegation to the Championship.

Quite surprising is the drop in commercial revenue during (and after) the relegation period, at £15.4m the category dropped almost 45% from its peak and has not recovered into the 2010-11 season.

The Month in Soccer Business: September 2012

A monthly compilation of interesting business news related to soccer. September 2012.

Transfer spending rises in England, France and Germany - September 3rd

Spending in the summer transfer window has increased year-on-year in England’s Premier League, France’s Ligue 1 and Germany’s 1.Bundesliga, but has reduced in Italy’s Serie A and Spain’s Primera Division, according to analysis by Deloitte.

The business advisory firm said that player transfer spending by Premier League clubs was around £490 million in the 2012 summer window, marginally up from the £485 million spent in summer 2011 but just short of the £500 million record of 2008. Transfer fees to overseas clubs were around £300 million, almost 50% up on the level seen in 2011.

Full Article >> Soccerex

Manchester United chief executive David Gill will put club allegiances to one side if successful in bid to represent England on Uefa board - September 4th

Manchester United chief executive David Gill will put his club allegiances to one side in his bid to represent England on the board of UEFA.Gill will stand for election as the Football Association’s nominee to the influential 16-strong body that decides on the European football governing body’s policies.

An election will be held at the UEFA Congress in London next May when all the 53 member nations will each have a vote.

Full Article >> The Independent