An analysis from Vysyble and republished in the Telegraph totalled the clubs’ losses at £599.54 million, despite the clubs making record revenues of over £5 billion.
Four Championship clubs appear to be rather late in coming up with their figures for last season but are expected to take that league’s total losses to £350m. Which with a spot of nifty adding up gives us a loss for the top 44 clubs in England of getting on for £1bn. Which is a record.
And of course there was no nasty virus in 2018/19. So this season is going to be far, far worse.
Although the Premier League clubs have avoided the catastrophic refund scenario that would have occurred without playing the remaining games, they still have to pay a late finish rebate which itself will increase by £35m for every week the season runs beyond July 26th.
Plus there is the further loss from not having anyone in the grounds. Arsenal have announced that season ticket holders will be credited for the missed matches against next season’s ticket, but the club is also losing match day catering and related revenues, plus away ticket income.
Roger Bell, a director of Vysyble who undertook the research is quoted in the Irish Times as saying “The Covid-19 virus is not the cause of football’s financial distress. It is merely the accelerant on what our data has very clearly and very correctly identified as a much longer-term problem.
“The 2018-19 numbers are a disturbing and profoundly worrying financial outcome from England’s senior football divisions and is symptomatic of the deeper issues with the overall financial model which we have highlighted many times previously.
“With record losses at club level for 2018-19 and just 36 per cent of Premier League clubs achieving an annual economic profit since 2009, the perception of the Premier League as ‘football’s richest division’ is clearly challenged.”
Indeed the figures show that since 2009 there have only been two seasons where clubs have collectively posted a profit. Which shows the craziness of the scramble by Championship clubs to get into the Premier League. They are spending a fortune to get into a League where it is more than likely they will lose money!
These figures also show that the finances from Wolverhampton, who have already borrowed and spent the first part of their TV income from next season, cannot be that unusual. The Wolverhampton figures were revealed because they borrowed by an agent, seemingly having run out of banks willing to lend them any more dosh; others are undoubtedly getting ever deeper in the mire having borrowed from other more expensive sources.
What is particularly bizarre is that the loss of £599.54m comes in a market where the television income from the current cycle is worth £8bn. This simple table shows that as the TV money goes up, so do the losses.
|Era||TV Revenue||1st year loss||Final year loss|
|2013/14 to 2015/16||£5.25bn||£12.17m||£395.44|
The point here is that by 2015/16 the clubs knew exactly what money they had lost in the earlier parts of the cycle, and what income they would have in 2015/16 – the final year of the cycle. Yet they still managed to increase their loss by over 3291%!!!
Businesses can of course lose money, not least because businesses are often experimenting with new products and new services which need to be tried out to see if there is a demand for them.
But here we have football – the most tried and tested of all sports. The original mass market sport in fact.
The whole point of the three year cycle is so that clubs knew exactly where they would be financially and so could cut their cloth accordingly. And yet as an industry they just go on spending more and more and more.
With every conceivable revenue stream already exploited (with the possible exceptions of a fee for arm and leg tattoos) there is no more money to be had, except for one: the farming of young talent. If clubs get to persuade the footballing parents to produce more offspring via cloning procedures then, it could be argued, clubs will have more and more talent at their disposal. Mind you I doubt if even then they would make a profit.
Although literal farming is thankfully unlikely, there is no doubt that clubs are looking to expand their academy facilities to produce more and more talented players who are there simply to be sold on.
Ultimately loss making always ends in collapse, and even if the clubs do manage to scrape out of the virus situation (which of course is not included in the figures above) it seems very unlikely that they will all make it through next year’s crisis when TV revenues go down and they quite simply run out of cash.
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