- Selling the kids to balance the books: it’s the Premier League’s new game
- England should compensate season ticket holders when a player is injured in the World Cup
Premier League football clubs have two ways of making money (three ways if you include the Manchester City approach, but they truly are outliers so we’ll forget them for now and come back later).
One way is to make a profit from trading players and the big attraction now is in expanding academies so that they become player farms, nurturing young players, bringing them on and selling them. The sale prices they get (which can often be dependent on number of games played and how much they are subsequently sold on for) are pure profit and so help keep the FFP sums in order.
This is hardly an ideal approach although it does have benefits other than for balancing the books, for it can mean that players with lots of potential can get top-rate coaching which prepares them for league football, rather than finding themselves being coached within the academies of second and third tier clubs where expertise (including expertise in avoiding injuries and recovering from injuries) are far less well developed.
When we look at Premier League finances they look very promising – but when we take out “player trading” which of course includes selling young players who cost nothing on to Championship, and League One and Two clubs, the issue is far less rosy – Premier League profits were down by over £70mm at a time of growing interest in football. That’s a drop of 18%.
The pre-tax losses of the Premier League was £685m – an astonishing amount, despite revenue being up by 11% to £6.1bn. That growth comes from match day income, commercial income and broadcast income. How much it would have been if Manchester City’s commercial income had been investigated earlier we don’t know of course, but the 115 charges against them suggest strongly that they have been counting a lot of money as genuine commercial income when it is in fact nothing more than donations from the owners, dressed up as commercial income.
None of this is new. In 2017 the Sun told us that Japanese tractor manufacturer Yanmar had announced that they would be forming a global contract with the men at Old Trafford. Their name duly arrived in the stadium, although the impact of that was probably small, unless the tractor drivers all decided to eat Mamee Noddles.
Overall the “big five” leagues, (England, Germany, Italy, France and Spain), recorded an aggregate operating profit of €500m. It was the first profitable season overall since 2018-19.
At the same time Championship clubs gained an extra 10% revenue but remained heavily loss-making. In fact Championship spending on wages fell below revenue for the first time since 2016-17 in the 2022-23 campaign, according to data published by Deloitte. The owners it seems either had cold feet, or were reading the rule book.
Deloitte’s most recent figures showed revenue increases of 10% in the Championship, 9% in League One and 1% in League Two, but there are still huge questions about sustainability. Operating losses were £316m and none of the clubs in League Two generated any operating profit when player trading is taken out of the equation.
However Europe is travelling in a different direction for the European market grew by 16% to £29.9bn helped in the figures just released, which of course were helped by the end of the remaining covid restrictions.
So overall the big clubs get bigger, but keep spending more and more money. The five big leagues in Europe ran up an operating profit of €500m – although since that was the first profitable season since 2018-19 there is still a massive amount of debt sitting in the clubs.
What everyone seems to be realising is that just because football is becoming THE global game, which is now more or less played all the year round, no one is quite sure which way the monolith is heading.
A big part of the problem is that clubs are competitive within their own league, and then each league is competitive against other leagues, while quite separately each country is competitive with every other country.
There are then the various official bodies that are certainly not operating in harmony. Refereeing standards are different in each country, both on the pitch and in terms of what referees can say or do once off the pitch.
The rise of the Manchester City model is also causing problems and the ways of the City Group are causing rumblings. This means that it is not just the Spanish clubs who are looking at Girona with interest. That club (owned by the City Group) has had a rise that is so fast, that there is every chance that next season bankrupt Barcelona could be pushed out of second place. Girona came third in Spain just four points behind Barcelona and with a better goal difference. Next season Barcelona might slip further.
Indeed there are rumblings everywhere.
