Deloitte’s analysis found that in 2017/18 Championship clubs lost £307,000,000 between them, which in any analysis looks a bit careless. Spending on wages in the league was 11% MORE than income. Early figures for 2018/19 suggest the situation got worse with over half the clubs now spending more on salaries alone than they receive in income.
Only one club has died this season – Bury – but many more are on the brink. The Wigan chairman said that at one stage his family were putting £1m a month into the club just to keep it going.
What makes the matter even more insane is that many of the clubs that go up to the Premier League then spend a fortune on players, as Aston Villa have done this year, so the craziness never stops.
Thus most Championship clubs make a loss. In 2017/18 (the last season for which figures are available) Wolverhampton were the prizewinners losing £57m. After that came Fulham (£45m), Cardiff (£39m) and QPR (£38m).
Only five clubs made a profit (Burton, Sheffield Wed, Preston, Norwich and Hull).
Now the rules introduced in 2016/17 allow clubs to make £39m loss across three seasons, but the clubs are simply ignoring this, hoping to get into the Premier League and thus avoiding the Championship rules, and so getting no fines. Last season only Birmingham were penalised for breaking the rules – despite the wholesale breaches of regulations elsewhere.
Now the argument can be made that the number of clubs that go bust is tiny, so there are always more people willing to buy a club.
And that is true – until a moment like this comes along. Now we have the situation in which the money that the clubs relied on to reduce their losses is simply not there any more. But the thing that loses all that money (salaries) is most certainly still there.
And as we know, through the leak of Wolverhampton figures, in the Premier League they (as one example) and continuing the insanity, having now already spent NEXT SEASON’S first TV payment – borrowing the money against that payment, to help them get through this season and have funds available for transfers.
In the Championship, clubs don’t care about fines and points deductions – because these only apply if the club fails to get promotion. If the club goes up, then all is forgiven, as with the curious case of Leicester City’s money and its marketing company, that we have covered in the past. Nothing has been done about it, because odd behaviour in the Championship is not investigated when a club is in the Premier League.
To get around the problems Aston Villa and Derby County have used the device of selling their grounds to their owners. Sheffield Wednesday are the latest to try the trick. Questions are still be asked over these transfers, but even if they get away with it, clubs can only do that once – although Wednesday are now suing the EFL – I think for defamation.
So it’s all bad news in the Championship – and it is getting worse because wages rose more than income last season. No one is learning any lesson. Wages were up by 11% from the previous year and until the virus hit, figures suggest the situation was getting worse.
Such a situation can’t go on forever of course, and all that the virus has done is brought reality closer. TV companies are not going to pay for games that have not been played, and without TV money clubs will collapse. Even if championship clubs get through this lockdown, the chances are they will go on spending far more than they earn in the desperate hope of promotion.
It is not just clubs in the Premier League who are in trouble. For the championship, it is not just a case of if it will implode, but simply when.
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