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By Tony Attwood
Although we don’t know the financial data for 2021/22 yet, it looks like the 20 Premier League clubs will between them offer up some record figures. One will be the highest turnover ever. The other will be the highest level of losses ever. And the figures hide within them another danger…
The forecast is for losses of £590m to add to the mega-losses made during covid when people were not allowed into grounds. In short, the opportunity to re-set the finances of football that covid provided has not only not been taken – things are getting worse.
Details of European club revenues have been set out by Goal. They show that for 2021/22 the top income in football came to Manchester City at £619.1m. In fact six of the top ten places in the income table went to Premier League clubs, including Tottenham Hotspur at ninth place with revenues of £442.8m and Arsenal in 10th with revenue of £367.1m – the difference in revenue in part due to a continuing lack of Champions League football at Arsenal. Manchester City’s income was almost double Arsenal’s for 2021/22.
The non-Premier League clubs in the top ten are Real Madrid, PSG, Bayern Munich and Barcelona. Also we might note that such is the financial dominace of the Premier League that only six of the top 20 revenue places are taken by non-PL clubs including Inter Milan, AC Milan and Juventus.
And a report by Off the Pitch suggests that revenues are continuing to rise, not just recovering from covid, but growing beyond the pre-covid level. So no problem then.
Except that at the same time as revenues rise, losses are rising faster, and we have noted before the huge financial difficulties that are besetting the likes of Barcelona, Juventus and Inter Milan.
The problem is simple. Football matches are won by talented players, so clubs are willing to pay ever more to buy talented players. Talented players expect to benefit from this and demand higher wages. Each year the top clubs have to spend ever more to stand still, The “Off The Pitch” report suggests that the wage bill in the PL will increase by £70 million in total this year.
As a result, some Premier League clubs are getting to the stage of spending their entire income on players’ salaries. Leicester are thought to be spending 94 percent of their income on player salaries, and Everton 96 percent. Which doesn’t leave much for ground improvements, other staff, travel, insurance, ground repairs…
Of course Tottenham are seeing a huge jump in income with their new stadium earning almost twice as much in a year as the tumble-down old ground. Although there is one problem: they still have to pay for the building of the new ground.
But the real problem can be seen by the fact that clubs are now virtually at the point of spending all their income on players. As a result, the current estimate for the combined losses of the Premier League in the 2021/2 season is thought to be £941m.
Of course, one of the ways the clubs hope to pay for everything is finding a mega rich owner as PSG, Manchester City and Newcastle United have. But that is getting harder.
A second problem is the growing association between football and corruption. The EU enquiry into Qatari corruption within the very heart of the EU, the behaviour of Fifa and Uefa, and the ongoing legal dispute with Infantino in Switzerland don’t help.
But now there is something else. In America one of the broadcasters, Diamond Sports Group has gone into liquidation and so some games have not been shown on TV.
What is interesting is that this has led to a reduced number of people going to games, with people saying that because they could not see games on TV, they felt less connected with their team and so lost interest. Which is exactly the opposite of what has generally been assumed.
Most concerning, (but a factor that is largely ignored) is the fact that no club seems to have an exit plan. Leicester City have had their most successful time ever winning the FA Cup and the Premier League in the last seven years, and yet they are sitting on the edge of the precipice. Each season two of the three clubs promoted to the Premier League, go straight back down, unable to compete financially.
The fact is, without total restructuring of the system in England, more and more Premier League are getting into difficulty. 50 Football League clubs have gone into administration this century – that is over half of them in the space of 22 years. And the problems really are getting a lot worse.
Of course we don’t know who is next but my guess would be Leicester, which would really bring the problem home to the Premier League.
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