Avram Grant was recently quoted on the topic of Portsmouth’s troubles and administration in the Premier League:
“It will not be the last time,” Grant said. “There are other teams in debt. What will they do with them?
“The Premier League need to check their rules about who can buy a football club, because sometimes when you point the finger at someone else, you need to ask what did you did wrong.”
He may be more correct than he knows. Several clubs look to be in the danger zone, and that financial instability will be doubly compounded should they be relegated.
Those with the best chances of getting hit by the double whammy? Burnley, Hull, and Wigan. (West Ham has been excluded because their new owners seem to be minted).
Those who look to have staved off relegation this year, but could still use some financial sorting? Bolton and Blackburn.
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.
Premier League Clubs ranked by income
Top Flight Stability Doesn’t Help By Much
As you can see profitable clubs are in the minority even in the Premier League.
Highlights:
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.
An overview of the best passers in the Premier League for Gameweek 8.
The Soccer CEO 