In the past couple of weeks I have looked at the cash flow for both the Premier League and the Championship for the 2017/18 season, but how do they compare? Let’s take a look in the following thread, starting with profitability, then moving onto cash.
The Premier League is profitable before tax £472m, while the Championship is loss-making £(289)m. As PL has £149m tax payable, the gap is smaller after tax: £323m profit vs. £294m loss. Both leagues have operating losses, though PL £292m is about half Championship £572m. 
PL £4.8 bln revenue is around 7 times as much as Championship’s £729m. The largest difference of £2.4 bln is broadcasting: £2.8 bln vs. £400m, but there’s also a substantial £1.1 bln gap in commercial: £1.3 bln vs. £173m. Match day shortfall is “only” £511m: £663m vs. £152m.
£5.1 bln expenses in PL are around 4 times as much as Championship £1.3 bln. £2.8 bln wage bill is significantly higher than Championship £773m, but wages to turnover ratio is healthy 59% compared to 106%. Player amortisation/depreciation of £1.3 bln is 5 times more than £264m.
Profit on player sales in the Premier League of £836m is £617m more than Championship £219m, partly offset by £78m profit on stadium sales in the second tier. Higher exceptional expenses in the top flight: £44m vs. £14m.
Despite PL revenue and profit on player sales being a combined £4.7 bln more than the Championship, the difference in profit after tax is “only” £617m, as the top flight has £3.8 bln more on expenses, £54m on interest and £144m on tax.
Premier League has good operating cash flow of £950m after adding back £1.3 bln player amortisation and depreciation to £292m operating loss and. As the non-cash flow expenses are just £264m in the Championship, the £572m operating loss remains a negative £301m cash flow.
Premier League spends much more on players than the Championship. In the top flight, £1.7 bln player purchases less £872m sales gives net spend of £853m. In contrast, the Championship has £315m player purchases, which are almost covered by £274m sales, giving net £41m.
There was more than twice as much financing required in Premier League £626m compared to Championship £253m, but the make-up is very different. In fact, owner financing in Championship £343m was more than PL £269m, while they repaid £90m bank loans vs. £357m external financing.
Looking at the Premier League overall movements, around £1 bln of operating cash flow is generated, but all of this and more is spent on players, capex, interest, tax and dividends, which necessitates around £600m of financing (less than half from owners).
Championship negative operating cash flow of around £300m is also exacerbated by player purchases, capex and interest, though the expenditure is much lower than the top flight. This is very largely covered by owners putting money in: £343m financing + £108m stadium sales = £451m.
Even though both leagues end up in a similar position with small net cash outflows (PL £38m vs. Championship £31m), and both require significant financing, the Championship is much more reliant on the generosity of its owners. It is questionable whether this is sustainable.
