Even football clubs at the top can make losses. But why do the owners allow it?

 

By Tony Attwood

• Man C being investigated of financial deception by the European Commission
• How the media keep the football conspiracy theories running

Liverpool made a financial loss of £57m in 2023/24 compared to Arsenal’s loss of £17.7 million.  The previous year, Liverpool’s loss was £52.1 million compared to Arsenal’s loss of £52.4 million.    Combining the figures we can see a loss for Liverpool of £109.1m while for Arsenal it was £70.1m.

It is often said that the Premier League has been very successful since it was created in 1992, with the incomes of the clubs rising by a multiple of getting on for 3000%.   Of course, us fans have paid for some of this, as the price of doing anything (including watching football) has more than doubled since 1992, but the income to the Premier League has gone up by far more than the cost of our tickets.  Sponsorship and advertising have mostly paid for it, but then the companies recoup that money through getting more customers and charging higher prices.   (Which can be a worry because ultimately all markets are saturated, and there are no more people to draw in, and prices simply can’t go any higher).

And yet, as we can see, despite this massive increase in income, the clubs still can’t make a profit (except for the state-run clubs such as Manchester City).

So although football’s losses in 2024 were down from the losses in 2023, it is still a whacking great loss, and that shortfall of money has to come from somewhere.   And the problem is, every time that somewhere is found (usually in terms of more sponsorship, more advertising and higher broadcasting fees, although to an extent in terms of higher prices to watch the matches) the clubs still spend more and more.

To a degree, this doesn’t matter because ludicrously rich men and insanely rich countries own most of the clubs.  And yet, ultimately, the bubble has to burst.  Athough owners sometimes write off the loss, ultimately, the owners are either running their clubs to publicise the goodness of their country (as is the case of Saudi Arabia and Qatar for example) or for investment purposes, meaning the owners want something out of it at the end.

And the problem is that one day that bubble could burst, and suddenly football clubs will no longer the flavour of the month, and more owners want to get out than want to get in.

One reason why this might happen is simple disenchantment with football, caused by the rising level of financial scandals surrounding the game.  There is more on this in our piece Man C being investigated of financial deception by the European Commission.

But the question remains why, with so many clubs losing money and so many scandals circulating around football, and with the competitive element of football declining, do rich people and indeed whole countries still invest in football?

One reason of course is found within that sentence above: “scandals”.  Football is seen by some as an easy way of moving money around – it is sometimes suggested that a lot of money changes hands as part of the background of football, without every action being legitimate.

This, is turn, leads us into the world of sportswashing, in which the football club is used as a way to move money from one source to another so that the origin of the money gets lost in the movement.  In addition, some very rich people and indeed some very wealthy countries like owning clubs in order to stop people asking questions about the political regime, its lack of democracy, its demonisation of parts of the population and its levels of inequality which are seen by some as utterly obscene.  

But of course some people are in the business because they expect the club either to make a profit or at least for the club to be sold at a profit, especially as long as sportswashing remains unrestrained and the number of very rich people remains high enough for their to be a market.

Unfortunately, the sportswashing and the covering up of the owners’ activities remain very attractive as many football fans are willing to ignore or even accept ludicrous counterarguments from owners in return for the success of the club – which is what has made this approach ever more attractive in the last decade.

This process is helped by the fact that the clubs do attract a lot of ready money through TV deals, sponsorship, entry fees, merchandise and above all, player transfers – the latter being particularly beneficial as they are often only reported in the media as the fantasies of journalists.  We should remember that most clubs don’t publish the salaries of most players, and most players don’t reveal their salaries.  The data published in newspapers is invariably based on extrapolations.

Thus, although in the past it was said that some owners bought clubs for the celebrity status this brings, this is now increasingly rare, as generally owners can get more demonisation than devotion.  But as a way of moving money in and out of places that Revenue and Customs can’t explore, it remains particularly attractive.