Swiss Ramble Profile picture
Jul 29 27 tweets 22 min read
In football money often talks, i.e. success on the pitch is almost invariably reserved for clubs that have spent the most on wages and transfer fees. However, it might be interesting to see which clubs have performed the best (and indeed worst) relative to their budget.
This thread will therefore look at how teams in the Premier League in 2021/22 performed relative to their wages, combined wages/player amortisation and squad cost. This is not an exact science, but just a bit of fun, as there are a few caveats to an analysis of this type.
First, I have used financial figures from the most recent published accounts, i.e. from 2020/21, so these are a year out of date compared to 2021/22 league position. Moreover, the last figures available for the 3 promoted clubs are from the Championship, so are under-stated.
In addition, wage bills are for all staff, so include administration, commercial, stewards, etc, as opposed to just the playing squad, Furthermore, player contracts are often highly incentivised, so wages at more successful clubs will be inflated by high bonus payments.
Finally, some clubs changed their accounting date in 2020/21, so their accounts only covered 11 months, mainly because the previous year included 13 months, due to 2019/20 season being extended for COVID delays. In these cases, I have annualised the wages for a fair comparison. Image
Enough caveats, let’s look at some numbers. In 2020/21 four Premier League clubs reported wage bills over £300m, namely #MCFC £355m, #CFC £333m, #MUFC £323m and #LFC £314m. There was then a sizeable gap to #AFC £238m, #THFC £205m, #LCFC £192m and #EFC £183m. Image
Looking at wages per point, the clubs with best value for money were #BHAFC £2.1m, #WHUFC £2.3m, #NUFC £2.4m & Burnley £2.5m. Brentford ae also likely to be one of the best even after their wages increased in PL. In contrast, #MUFC £5.6m, #EFC £4.7m & #CFC £4.5m by far the worst. Image
Another way of ranking clubs’ performance is wages per league position, as this is what really counts (higher merit payment, European qualification, relegation). The way this is calculated is to give 20 points for 1st place, 19th for 2nd, etc, then divide wages by those amounts.
On this basis, the same clubs do best: Brentford, #BHAFC, #WHUFC and #NUFC, though worth noting #THFC impressive performance in 5th place. The three relegated clubs look bad on this metric, but this also highlights underperformance by #LUFC and particularly #EFC. Image
Clubs can also be ranked by comparing final league position with position implied by wage bill, as there is a strong correlation between wages and performance. Here #LFC shine, despite high wages, as they finished 2 places better, but their neighbours #EFC were 8 places worse. Image
However, the wage bill is only one element of squad investment, so for total cost we should also include player amortisation, which is the way that football clubs account for transfer fees.
Basically, football clubs consider players to be assets, so do not fully expense transfer fees in the year a player is purchased, but instead write-off the cost evenly over the length of the player’s contract via player amortisation.
So if a player is purchased for £25m on a 5-year contract, the annual amortisation in the accounts would be £5m, i.e. £25m divided by 5 years. This means that the player’s book value reduces by £5m a year, so after three years his value in the accounts would be £10m. Image
Five Premier League clubs booked more than £100m player amortisation in 2020/21 with #CFC leading the way with £162m, followed by #MCFC £146m, #MUFC £120m, #AFC £117m and #LFC (only) £108m. Worth noting that #EFC £81m was higher than #THFC £74m. ImageImage
Player amortisation is a useful metric, but not perfect for a few reasons: (a) none for players signed on a free transfer; (b) zero for players developed by the Academy; (c) lower if contract length is longer; (d) can be reduced if a player’s contract is extended.
If we look at wages and player amortisation combined, #MCFC were still top of the Premier League with £500m, but #CFC £495m were not far behind. There was then a fair sized gap to #MUFC £443m, #LFC £422m, #AFC £355m and #THFC £279m. ImageImage
Based on wages and player amortisation, Brentford £1.2m and #BHAFC £3.0m again score well on cost per point, though Burnley pop up in 3rd place. What’s maybe more interesting is the high amounts paid for each point by #MUFC £7.6m, #EFC £6.8m and #CFC £6.7m. Image
Again, the addition of player amortisation does not make too much difference to the ranking of clubs in terms of cost per league position, though this is where Burnley did less well. In other words, a club can be frugal, but relegation can sometimes be a high price to pay. Image
It’s much the same story when comparing league position with the amounts paid in wages and player amortisation. Three clubs finished exactly where implied by their finances, namely #MCFC (1st), #AFC (5th) and #CPFC (12th). Image
Finally, we can compare clubs in terms of their squad cost, based on the figures from club accounts (i.e. actual amounts paid including agent fees and signing-on fees), as opposed to the actual market value. These can be very different, e.g. Messi had zero value in Barca’s books. Image
Based on the accounts, two clubs competed with squads costing just under a billion: #MCFC £975m and #CFC £959m. The next highest were #MUFC £861m, #LFC £709m, #AFC £586m and #THFC £481m, though #EFC £451m were not too far behind. Image
Excluding clubs promoted from the Championship, the clubs with the cheapest squad cost per point were Burnley and #BHAFC (both £3.6m), followed by #LUFC £4.4m. Four clubs were higher than £10m: #MUFC £14.8m, #CFC £13.0m, #EFC £11.6m and #MCFC £10.5m. Image
The real stand-out for squad cost per league position is unfortunately #EFC with £90.2m, which is almost exactly six times as much as #BHAFC £15.3m. Last placed #NCFC were worst with £93.5m, but the next highest were #MUFC £57.4m and #CFC £53.3m. Image
In terms of league position against squad cost, the best performing of the “Big Six” were #LFC and #THFC, both 2 places better, while the worst performing were #MUFC, who were 3 places worse. Image
If we add together the rankings of all the metrics we have reviewed, we should have a fairly good idea of which clubs have outperformed , notwithstanding all the health warnings. In this way, we can say that the clubs who get most “bang for their buck” are Brentford and #BHAFC. Image
At the other end of the spectrum,  the worst performing clubs in the Premier League, relative to money spent, were *drum roll* #EFC and #MUFC, though this will surely not come as news to their supporters. Image
Clearly, many fans will say that the only measurement that counts is the number of trophies won by their club, but it is instructive to see which clubs outperform their budget. It looks like the data-driven strategy employed by Brentford and #BHAFC has worked pretty well.

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More from @SwissRamble

Sep 26
Manchester United’s 2021/22 accounts cover a season when they finished 6th in the Premier League and were eliminated in the last 16 of the Champions League. Manager Ole Gunnar Solskjaer was replaced by Ralf Rangnick, since succeeded by Erik ten Hag. Some thoughts follow #MUFC
#MUFC pre-tax loss shot up from £24m to £150m, despite revenue rising £89m (18%) from £494m to £583m, thanks to recovery from COVID and return of fans to the stadium, plus profit on player sales increasing £15m to £22m, as expenses rose £154m (29%) after investment in the squad.
#MUFC operational decline was exacerbated by the impact of the weakening of Sterling on non-cash finance costs, as unrealised forex losses on unhedged USD borrowings meant that net interest experienced an adverse swing of £75m from £13m recoverable prior year to £62m payable.
Read 47 tweets
Sep 21
The Premier League has published details of the TV payments to clubs for the 2021/22 season. These amounted to £2.5 bln, ranging from £153m for champions #MCFC to £101m for 20th placed #NCFC (the first time the bottom club got more than £100m).
The largest increases compared to the previous season came at #BHAFC, up £16m, and #AFC, up £11m. In contrast, three clubs received over £10m less than 2020/21: #LUFC £17m, #EFC £13m and #LCFC £11m.
Each of the 20 Premier League clubs received £87.5m as an equal share, coming from domestic rights £31.8m, overseas rights £48.9m and commercial revenue £6.8m.
Read 9 tweets
Sep 12
In advance of football clubs starting to publish their accounts for the 2021/22 season, I thought it might be helpful to share some 2-page financial overviews for each of the Premier League clubs for 2020/21, including a comparison against prior year and a 5-year graphical trend.
These overviews also include Premier League rankings for each of the main financial categories, e.g. which club had the highest profit, loss, revenue, wages, debt, transfer spend, etc in 2020/21.
One caveat with these figures is that revenue was significantly impacted by COVID in 2020/21 with match day reduced to almost zero, as games were played behind closed doors, while some broadcasting income was deferred from 2019/20 for matches played after the accounting close.
Read 24 tweets
Aug 31
As we near the end of the transfer window, some fans ask why their club has not splashed more cash on bringing in new players, despite generating significant revenue. This thread will look at where the money goes by analysing the last 5 years for the Big Six Premier League clubs.
This analysis will look at the source and use of funds for the 5 years up to 2021 (most recently published accounts). We will remove pure accounting entries, such as player amortisation and profit on player sales, but incorporate all cash movements to give a “real world” view.
The Big Six Premier League clubs had £17.6 bln available funds, ranging from £3.2 bln for #MCFC & #MUFC to £2.5 bln for #AFC. Main driver is obviously £13.6 bln revenue with 57% (£7.8bln) going on wages. Net transfer spend is £2.3 bln: purchases £4.3 bln less £2.0 bln sales.
Read 34 tweets
Aug 29
Following Bayern Munich’s imperious start to the season, on the back of 10 Bundesliga titles in a row, I thought it might be interesting to look at their finances, even though it’s been a while since they published their 2020/21 accounts #FCBayern
Despite the significant impact of COVID, #FCBayern “achieved sound financial results”, once again posting a pre-tax profit, though down from €17m to €5m (€2m after tax). Revenue (club definition) fell €54m (8%) from €698m to €644m, largely offset by €42m cut in expenses.
#FCBayern revenue hit by COVID driven reductions in match day, down €59m (83%) to €12m, and commercial, down €15m (4%) to €345m, while transfer income dropped €31m to €33m. Broadcasting rose €51m (25%) to €255m, mainly due to money deferred from extended 2019/20 season.
Read 42 tweets
Aug 23
Following last night’s match between Manchester United and Liverpool, I thought it might be interesting to see how the finances of these clubs compare, particularly the direction of travel over the last 10 years (up to most recent accounts for the 2020/21 season) #MUFC #LFC
10 years ago #MUFC £320m revenue was nearly twice as much as #LFC £169m with the difference rising to a peak of £217m in 2017, but since then the gap has almost completely closed to only £7m with United’s £494m just ahead of #LFC £487m.
#LFC have earned more broadcasting income than #MUFC in each of the last four years, due to more success on the pitch, especially in Europe, where Liverpool’s exploits in the Champion League have generated much more TV money.
Read 19 tweets

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