Essential The Official Football (Soccer) Thread - We are SO back, the Premier League returns!
Lakerman0834
Veteran
Jude has exceed my expectations. Plays like he’s been 10 year veteran
He's got about that many miles on him
he gonna end up at chelsea on a 8 year contractBack in the day Fergie would have had that Fergie yute at Utd alreadyTimes have changed
English football finances in ‘precarious position’ as report finds most clubs ‘heavily reliant on owners’ funding
By Luke Bosher | Jul 12, 2023
A report on club finances in English men’s football has provided a frank assessment of the state of play, finding that most clubs are “heavily reliant” on their owners to provide cash injections on a regular basis.
It adds that many sides owe other teams “significant amounts — resulting in a risk of a ‘house of cards’ systemic failure”.
The report comes from LCP, a leading business consultancy based in London which developed TransferLab — the player scouting tool used by clubs and agencies — in partnership with football data company Analytics FC.
It found that the Premier League accounted for 85 per cent of the industry’s revenue and the ‘Big Six’ almost half.
The report details that 63 of the 92 clubs in the Premier League and EFL recording annual losses, which total £1.2billion ($1.56bn).
The report, using data from the 2021-22 season, also provides a ‘Football Sustainability Matrix’ for the Premier League, Championship, League One and League Two. LCP says the matrix balances “sporting success with financial sustainability”, plotting a financial score against a sporting score.
“These findings show that the men’s club game in England is in a precarious condition and why improving financial sustainability and transparency really matters,” said John Parnis England, one of the report’s co-authors.
“Change, including better regulation, is needed – and we believe our three recommendations, if carefully and thoughtfully implemented, would make a real difference.”
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What are the key numbers in the report?
The report particularly highlights the hegemony of the Premier League and its ‘Big Six’ — Manchester City, Manchester United, Liverpool, Chelsea, Arsenal and Tottenham Hotspur.
Those clubs account for 48 per cent of English football’s total revenue of £6.5bn, with the Premier League together representing 85 per cent of that figure.
It also looks at the Championship, which it says has a “gambling culture” of clubs spending vast amounts to try and win promotion to the Premier League. The report says the Championship is running “by far the most financial risk”.
UEFA’s target threshold for a club’s wages-to-turnover ratio — the percentage of a side’s turnover that it spends on wages — is 70 per cent. The Championship, on average during the 2021-22 financial year, averaged 102 per cent, meaning its clubs spent more than their revenue on wages.
In terms of debt, English clubs owe their owners £2.6bn. While club owners often absorb losses and provide cash injections at their own expense, this debt could be called in at any time.
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So, which clubs are performing well?
According to LCP’s Football Sustainability Matrix, the best-performing club in 2021-22 was Plymouth Argyle. Plymouth finished seventh in League One that season on a relatively small budget for the division, then using that as a springboard to win the title and promotion last season.
In the Premier League, Manchester City and Chelsea were the top performers. The report notes that Chelsea’s change of ownership in 2022 contributed to a significant reduction in owner debt, leading to a “significantly improved financial score”. The west London side also finished fourth in the top flight that season, compared to a disappointing 12th-placed finish last campaign.
Other standouts include Exeter City, Portsmouth, AFC Wimbledon and Shrewsbury Town.
And who’s performing badly?
They may have been one of the stories of the Premier League season just gone, but south-coast side Brighton & Hove Albion score poorly on the financial score of the Football Sustainability Matrix.
Brighton have enjoyed a very successful period in recent years — but the Football Sustainability Matrix marks them out as at risk (Photo: Mike Hewitt/Getty Images)
“It is possible that a generally well-run football club, such as Brighton & Hove Albion, can score unfavourably from a financial perspective,” explains George Bassnett, another of the report’s co-authors.
“This would typically be because the club is highly reliant on continuing funding support from an owner — either to fund ongoing losses, or through historic amounts having been lent to the club. Our matrix is designed to draw out how sustainable a football club is, after excluding that external support.”
The report adds that “LCP’s analysis does identify Brighton as an example of high level of reliance on the funding provided by a single owner, which is a potential risk to financial sustainability should the owner’s circumstances change”.
Other poor performers on the financial score include Reading, who were placed under embargo by the EFL and were issued a winding-up order last month.
From the Premier League, Nottingham Forest and Bournemouth — who both won promotion during the 2021-22 season — also score badly. The report explains that they “took on significant debt to support their successful push for Premier League promotion, potentially putting at risk the long-term financial sustainability of each club”.
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What next?
The report, perhaps unsurprisingly, calls for more transparency and consistency in terms of financial reporting — many League One and League Two clubs, for example, do not submit detailed accounts meaning it is hard to determine their financial positions.
It also points to the UK government’s white paper on football governance and how that can help the situation. The legislation aims to safeguard the future of clubs amid a period of commonplace financial instability that has seen several teams — including Bury, Macclesfield and Derby — either fold or experience severe difficulties.
As part of the white paper, an independent regulator for football will be created to help protect the future of English football’s pyramid.
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“Football holds great cultural significance in the UK, extending far beyond being just a game,” added Tracey Crouch MP, who chaired the fan-led review of football governance which called for an independent regulator.
“It greatly impacts both the economy and local communities, and is closely followed by fans and other key stakeholders who are deeply invested in its continued success.
“LCP’s report offers new insights into the financial stability of English men’s clubs, and how this relates to their on-pitch performance. The report provides a valuable contribution to understanding the current financial state of play of English football.
“I urge the industry to continue to embrace and reflect on relevant data and insights as we work towards encouraging more effective governance strategies within this important sporting sector.”
(Photo: OLI SCARFF/AFP via Getty Images)
English football finances in ‘precarious position’ as report finds most clubs ‘heavily reliant on owners’ funding
Yall seen Partey injured again? Looks like we won't be playing him at RB against Man U. Also means Havertz is almost definitely playing.
It's been Havertz plus 10 already
I've accepted this fate until fixture rotation forces him to do overwise.
EA
A Pound & A Prayer
Premeditated
MANDE KANG
Arsenal are so overrated. wtf
How are they fourth favorites for CL?
How are they fourth favorites for CL?
Ukbrotha
Superstar
EA
A Pound & A Prayer
Injured Partey ruled out ‘for a while’ as Arsenal prepare to face Man United
Arsenal have lost Thomas Partey to injury ahead of their huge Premier League clash against Manchester United.
www.standard.co.uk
Yea, Ghana has said he wont be part of the squad cause of injury. I did here it could be weeks, though you know with him and Tomiyasu, weeks turn into months without anybody saying anything to us. Seems like a groin this timeHe‘s out for months, apparently
Ghana FA confirm Thomas Partey injury blow ahead of Arsenal vs Man United
Thomas Partey has picked up an injury ahead of Arsenal's fixture against Manchester United, as per the Ghanaian Football Association
www.football.london
Roberto Firmino
#GoonLife
Darwin
Curtis
Let’s get it
Mané Swagincha
6 times
Nitro Tuggle
All Star
Big Dom
