I am always astounded by some of the figures thrown around in the Football industry. It never made sense to me how clubs could pay
blockbuster transfer fees, pay oversize wages and still make as much money as everyone thinks. Favorite Portuguese boo-boy Cristiano Ronaldo is reported to currently be earning £183,000 a week
at Real Madrid with the figure eventually rising to £556,000 a week (!!!) by the end of his contract.
But do big paydays for stars result in big paydays for football owners? A quick, unscientific look at the data for the current grouping of Premier League teams.
As you can see profitable clubs are in the minority even in the Premier League.
- 17 of the 20 clubs are unprofitable with an accumulated deficit over the past 17 seasons.
- 15 of the 20 clubs have an accumulated deficit of £15m (!) or more
- The 3 most profitable clubs also have the lowest wage/turnover ratios with the exception of Arsenal which ranks 4th behind Aston Villa. (this might actually be due to incorrect/misleading data)
- Wigan, Chelsea, and Portsmouth have the highest wage/turnover ratios; 89.5, 84.5, and 77.6 respectively
- Man United has been profitable for 15 of the past 17 seasons
- Fulham has been profitable for 1 of the past 17 seasons
It is even hard to argue that the deficit belongs to recently promoted clubs or that Premier League survival brings financial stability. If we only keep clubs who have had at least a 5-year tenure in the top flight the numbers improve only marginally.
The main lesson? Unless you’re a footballer, a footballer’s agent, a footballer’s wife, Arsenal or Man United, you’re not making a lot of money in Football.
Some info about the data I used. Data was supplied by the wonderful website The Political Economy of Football. The time period sampled was from the 1991/92 – 2007/08 season, not all clubs have complete datasets within this period as some were not in the Premier League, however the missing data is not substantial enough to throw off the general trend. I plan to do a more in-depth analysis in a future post, on the relationship between wages and a club’s financial stability.
Next time on “Show Me The Money!”: Digging into Serie A.