Premier League clubs have pushed back against the independent regulator proposed in the recent @tracey_crouch government-led review, raising concerns about the “unintended consequences” of the report’s recommendations. But what is the actual state of English football’s finances?
This analysis looks at how football clubs in the top two divisions have fared in the last 10 years up to 2019/20, the last season when all clubs have published accounts. It therefore excludes 2020/21 when COVID had a big adverse impact as matches were played behind closed doors.
Just looking at revenue, people might think that there are no problems, as the 44 clubs in the Premier League and Championship have generated an impressive £41 bln in the 10 years 2011-20. That said, there is a clear gap between the Big Six, led by #MUFC £4.7 bln, and the rest.
However, a large chunk of this money has simply gone on £28 bln of wages – before clubs pay any other operational expenses, buy players or invest in stadiums, training grounds, etc. Perhaps unsurprisingly, highest wages were paid by #MCFC £2.4 bln, #MUFC £2.3 bln & #CFC £2.2 bln.
This approach has resulted in many unsustainable wages to turnover ratios. Over the last 10 years, 32 of the 44 clubs in Premier League and Championship are above UEFA’s recommended 70% upper limit, including 22 higher than 80%. An incredible 12 clubs are above 100%.
As a result, in the last 10 years the top two English leagues have lost a massive £3.1 bln pre-tax with the largest losses at #AVFC £455m and #MCFC £446m. In this period only 11 out of 44 clubs managed to make money, led by #THFC £338m, #MUFC £191m, #AFC £112m and #NUFC £94m.
These losses would have been even higher without £5.1 bln profit from player sales, led by #CFC £602m, #LFC £359m, #AFC £356m and #THFC £336m. This is a legitimate business model, but these transactions are once-off, so cannot always be relied on to offset operating losses.
Operating losses in the Premier League and Championship in the last 10 years are a staggering £7 bln, with #CFC “leading the way” with £658m, followed by #AVFC £582m, #MCFC £580m & #EFC £408m. Only 3 clubs have produced operating profits: #MUFC £461m, #THFC £137m & Burnley £37m.
These losses have essentially been funded by football club owners putting their hands into their pockets with £6.3 bln financing in the last 10 years (loans £4.2 bln, share capital £2.1 bln). Most generous owners are #MCFC £837m, #CFC £559m, #AVFC £434m and #EFC £348m.
The good news is that relatively little bank debt has been taken out with “only” £693m external financing in the last 10 years. By far the highest is #THFC £746m (new stadium), followed by #LFC £153m (Anfield expansion). In contrast, repayments at #MUFC £249m and #AFC £76m.
However, much of the activity in the transfer market has been “funded” via payments on credit, as transfer debt has increased by £1.4 bln in the last 10 years. The largest increases have come at #AFC £136m, #MUFC £135m, #CFC £111m, #THFC £111m and #WWFC £100m.
These figures are based on the clubs that were competing in the Premier League and Championship in the 2019/20 season, so exclude some clubs relegated to League One, whose financial record is awful, e.g. #SAFC operating losses in last 10 years were over £200m.
In conclusion, there is absolutely nothing wrong with English football – apart from huge losses, unsustainable wages, player purchases on credit and a massive dependency on owner funding. Nothing to see here, please move on, definitely no need for an independent regulator.
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A review of Ipswich Town's finances, as they return to the Premier League after 22 long years away. Focus is on the latest available accounts from 2022/23, but also has comparisons with Championship clubs and some estimates for the top flight #ITFC
Losses have been growing under the new owners, as they invested in the squad and infrastructure in an attempt to return Ipswich to former glories - which has clearly worked #ITFC
Even though they were in League One, 2022/23 was the first time that the club broke through the £20m revenue barrier since the last time that they were in the Premier League back in 2001/02 #ITFC
An explanation of how the new format for UEFA competitions will work from next season, including an explanation of the revenue distribution.
The number of clubs in the Champions League will increase from 32 to 36 with the group stage of 8 groups of 4 teams being replaced by a single league of 36 teams, then a new knockout round, before reverting to the traditional last 16.
Total revenue distribution will increase by 21% from €2.7 bln to €3.5 bln. Lion's share will go to the Champions League €2.5 bln, followed by Europa League €565m and Europa Conference €285m.
Quick review of the money earned by England's Champions League representatives to date after this week's matches.
#MCFC lead the way with £93m, followed by the other quarter-finalists #AFC £80m. The two clubs eliminated in the group stage earned less: #MUFC £51m and #NUFC £29m.
Champions League TV money is split into 4 elements:
- Participation Fee
- Prize Money
- UEFA coefficient
- TV pool
Each club that reaches the group stage receives a €15.6m participation fee.
So Everton have been deducted 10 points by the Premier League for a breach of the Profitability & Sustainability Rules #EFC
I have frequently looked at their case, the last time during an overall review of FFP. The article can be found on my blog here swissramble.substack.com/p/financial-fa…
However, given the importance of this decision, I've attached a series of screen shots from that article that help explain the background #EFC
First, Everton's initial FFP situation over the monitoring period up to 2021/22, where they are a fair way over the maximum allowed loss #EFC
Analysis of Rangers' 2022/23 financial results, when pre-tax loss slightly increased to £3m, as revenue fell 4% to £84m and operating expenses rose £11m, partly offset by profit on player sales more than doubling to club record £24m #RangersFC
In terms of profitability, #RangersFC and #CelticFC were at the opposite end of the spectrum with Rangers posting a small £3m pre-tax loss, while Celtic generated a record £41m profit.
Given that both clubs qualified for the Champions League, the size of the gap might come as a surprise. Cost bases are very similar, but #CelticFC revenue is substantially higher plus once-off other income, partly offset by #RangersFC better player sales.
8 of the 9 highest revenue increases over 2020/21 came from English clubs. #LFC led the way with an impressive £106m, followed by #MUFC £89m and #THFC £82m. The biggest reductions were at two Italian clubs, troubled Juventus £44m and Inter £32m.