- At last a recognition of the effect of injuries, and Arsenal’s brilliant response
- Is it really getting harder and harder to win the Prem ier League.
By Tony Attwood
Swiss Ramble has recently produced an incredibly detailed analysis of the finances of the Championship which has been posted to subscribers, and which includes something rather important, as summarised in this paragraph:
“The 24 clubs generated just under £1 bn of revenue… but then paid out £1.7 bn….
“This led to a sizeable £678m operating loss, exacerbated by £73m net interest payable, which was only partially offset by £420m profit from player sales and £17m exceptional items. As a result, the division as a whole lost £314m.”
Now of course that has got nothing to do with Arsenal who were elected into the first division in 1919 as part of the League expansion aimed at establishing the League as the national league, while seeing off the challenege of the Southern League once and for all.
But the League had a problem because the only team in the First Division south of Aston Villa was Chelsea. And so when the League was expanded clubs were inclined to vote Arsenal into the top division, to ensure there was at least one London derby in the top league and to see off the continuing threat of the Southern League as a rival.
Of course the attraction of the additional revenue from being in the top league is now stronger than ever, so clubs in the Championship have been more willing than ever to take massive risks to get into the top League. At least until now.
For now it seems the costs and risks are so great that Championship clubs have evolved a new ploy, for instead of getting promotion and then spending all the new money on players who can keep the club up, they are virtually accepting relegation as an outcome, and thus are using some of the PL’s extra money to pay off past debts.
This of course is making these yo-yo clubs more viable, but it is making promotion and relegation between the Premier League and the Championship a bit of a nonsense.
But it does help these clubs cope with the fact that although match day and commercial income is rising year on year, so are wages. Indeed the losses made by the clubs in 2023/24 were 26% higher than those of the previous season.
Thus while the Championship clubs together made a whacking great loss of £471, in 2022/3 they made an even whackier loss of £661m in 2023/24. The debt of league clubs rose from £1.8bn to over £2bn. And this despite lots of extra money coming in from commercial, match day and broadcasting revenue. For the simple fact was the clubs spend more and more and more trying to get promotion.
Such debts have to be back sometime, and as we’ll see below the chances of getting promoted to and staying in the Golden Land are getting remoter and remoter.
In the current Championship table the gap between the third-placed club and the sixth-placed club is 19 points. In effect, there is an elite in the Championship which is leaving the rest behind. Worse, when a club from that elite group rises up to the Premier League it finds itself totally out of step with the standards in the top division, and so comes straight back down again – while retaining the salary costs of all the players they bought with the aim of staying in the Premier League.
That leaves the three promoted clubs with a choice. They can take the additional income from the Premier League season and spend it on players in a desperate attempt to stay up (which has been the way in the past) but then risk insolvency when they are relegated again (while still having players on Premier League salaries), or simply accept that they will have one season in the Premier League and then be relegated (but with a fair amount of money to pay off their previous losses).
To see this working in practice….
In 2023 Burnley, Sheffield United and Luton were promoted to the Premier League, while Leicester, Leeds and Southampton went down to the Championship
In 2024, Leicester, Ipswich and Southampton were promoted to the Premier League while Luton, Burnley and Sheffield United went down to the Championship
In 2025 it looks as if, Leeds, Burnley and Sheffield United will come up, and Southampton, Leicester and Ipswich will go down.
Now we could be seeing a total of 18 clubs going up and down. But actually we only have seven clubs in this yoyo process for we are in a world in which the same clubs are going up and down.
This is because the experiment of going up to the Premier League and spending all the extra money that promotion brings on players has been shown not to work. Worse, it leaves clubs that do spend all the extra PL money on players that with a massive debt from which they find it hard to recover. So the clubs will accept the relegation back down, and use the extra money gained from their one year in the PL, to pay off some of their debts.
They also feel that eventually if they keep going up and down they might become debt free, although there is no sign yet of any club getting to that stage. But the fact is, this is the new financial aim of the Championship. Not to go up and stay up – the risk of such a strategy failing after all the massive transfer fees have been paid, is far too great. So now they play at yo-yo.
Which is not exactly what the inventors of the promotion and relegation system actually intended.
