- “Priceless momentum” is what one club claims, but really has everything just ground to a halt?
- Arsenal agree £55m Viktor Gyökeres deal with more transfers to come
By Tony Attwood
There are all sorts of questions in football that seem to remain unanswered for much of the time, such as why investors keep on investing in clubs despite the clubs often making long-term losses.
Arsenal’s loss for the year 2023/24 ws £17.7 million. Although that seems awful, it was a lot better than 202/23 where the loss was £52.1 million. An improvement, but still a loss.
Of course, a lot of the loss comes not from the matches (which sell out for every game) but from buying players for lots of money and then selling them for far less. In this regard, information on this issue came from CIES Football Observatory which did a review of players (excluding those who came up through the academy) signed and then later sold between 2014 to 2023 is particularly helpful.
Barcelona made a loss on their deals of £540m, behind which came Chelsea and Arsenal in second and third place in terms of losses. There was in fifth place for losses, Manchester United, then Aston Villa in seventh, Everton in eighth and Liverpool in ninth position.
Now of course everyone can see the danger signals for Villa and Everton because they have not been achieving particular success on the pitch despite that investment. Villa for example, have in the past three seasons finished 4th, 6th and 7th – an improvement over the 11th, 14th, and 17th in the previous three years, but still not enough for regular Champions League participation.
Everton also have the problem of financing their new ground, and although it is possible that as with Tottenham, there will be claims that the club is not affected by the ground debt, the fact is that having a stadium build debt handing over a club is never good news, no matter how it is financed in the books.
Even relatively long terms spent by what we might call smaller clubs in the Premier League, although looking as if they might result in golden pay-outs, can actually make matters worse. In fact, the only two Premier League teams in the top 50 list of football clubs in profit are Brentford in 26th place and Brighton in 29th.
Worse still, once a club has been in the Premier League, the losses it carries forward seem to hang around for years thereafter. Stroke City left the Premier League in 2018, but their losses have continued to this day, not least because players were on high salaries, and supporters were demanding a return to the top tier, and thus more investment. Indeed, few supporters are able to accept that their clubs’ natural level is the Championship, once it has had a year or three in the Premier League.
The key to the problem is, of course, transfers. Clubs get into the Premier League and then go out and spend money on the players who they think will keep them in the Premier League – but who can’t. So the club has two problems – one is the Premier League income comes to an end (although that is slightly lessened by solidarity payments) and the other is that player salaries still have to be paid from Championship incomes.
Chelsea have been masters of this, signing Pulisic for £58m and selling him for around a third of that price. And we should remember they paid £50m for Jorginho and Arsenal got for him for £12m..
Of course, a lot of clubs get transfers wrong – in fact, I am sure every club has done so on occasion, but doing it repeatedly can cause problems. Consider for example, Barcelona signing Coutinho from Liverpool for £142m and selling him for £17m. And then just to show that was no fluke the same club signed Dembele for £135m and sold him to PSG for £43.5m. It makes one wonder.
The real problem, however, is not doing that just the once, it is doing it over and over again, for that can not only cause a big hole in the finances (holes that are calculated in hundreds of millions of pounds in the case of Chelsea) but it also upsets supporteres who lose all faith in the board.
Arsenal, of course, suffered a loss of around £72m on Pepe, who many people could see after two games really wasn’t up to the standard needed but was being played because he cost so much. And that obviously adds to the problem. It is not only hard to sell a player who has been an expensive flop, but also hard to drop him, because of the resultant publicity.
Clubs can go on losing money for years and years for all sorts of reasons – we might in fact remember Chelsea under Abramovich but huge losses. Liverpool lost £57m in 2023/24 but this was forgotten because they then won the League. It is losses and not winning the league that is considered a failure, even though the revenue of the Premier League is rising by getting on for £50m a year on average.
Losing money through running a football club does seem to be a bit of a strange way to run one’s business, but it seems to be what the very rich like to do.
