Championship - Finances

After seeing the comparisons of Barnsley and Brentford where the owner of Brentford has ‘invested’ over £100m in the club, I thought I’d share some analysis that shows just how perilous the finances are of the clubs in the Championship.

All figures are to season end 2019,

On average Championship clubs spend 107% of their revenue on wages. Reading had the biggest overspend relative to revenue with their wage bill almost twice revenue. Villa had the highest absolute spend at £95m and Rotherham the lowest at £7.8m. The average wage bill was £35m and revenue £33m. Spending 107% on wages in not sustainable unless you have owners willing to gamble on the premier league.

To put Barnsley in context, our last season in the Championship before this our revenue was £14m with wages of £10.6m. 75% of revenue.

So at an operating level clubs are regularly spending beyond their means but what does that mean to their debts?

Blackburn, Reading, Stoke and Middlesbrough all have debts of over £100m. In the £50m to £100m category comes Birmingham, Bristol, Forest and Brentford. Even Preston, often cited as an example of a well run club owes £41m. These numbers are post some of the ground sale deals that have helped clubs reduce their debt levels.

Competing with clubs at this level is extremely difficult, many have pushed the boundaries of their finances. Maybe the failure of other clubs will be our saviour, if football continues like this we will always struggle to compete.

If you want to read more try this thread https://www2.deloitte.com/content/d...uk-annual-review-of-football-finance-2020.pdf

 

Or we could gain promotion to the Premiership after taking advantage of others financial peril. It ad' be more helpful not to be relegated to League 1 first mind but we'll get there in the end.

 

And this is why i believe this season has not been as much of a failure as some on here will have you believe.

To put this into context, if i bought a football club, for instance Morecambe, i have no affinity with that club (ala chien) so i would want to run the club in a sustainable manner and not spend my own accumulated wealth on it. Would this hinder my desire to see it do well and progress? No.. because obviously it is still my business so i would do everything within my skillset to ensure it was a successful operation.. by looking to sign young developable players and sell them on, to repeat the process to secure the clubs future and progress..
Anyone that says we should force player to stay and see out their contract have no idea how football is today, agents pressures etc. It is also worth noting that we need every player giving 100% to be successful, forcing a player to stay run the risk of a distruptive influence and even if this is not the case the said player will more than likely not be giving the 100% required to allow is to compete.

As for the best tranafer window ever, i think this statement was a little nieve, let not forget whwn the players were signed during the summer we were all optimistic, luke thomas, looked good in league one and looked to have the attributes required to make the step up, brad collins, great record in league one, even Patrick Schmidt, scores goals at u21 international level on a regular basis, on paper all look good signings.
The obvious emission was the signing of experience, but the owners and board thought they were signing players who had played enough games to have the required experience levels to emable them to be ready for the championship. This proved not to be the case and they admitted their mistake and looked to rectify in January.
I think it is not by chance that the 4 sides with the lowest budgets in the league are/will be essentially bottom 4 in us, Luton, Wigan and Hull.. we recognised this and are trying a different method to compete with clubs run in an otherwise unsustainable manner.. it hasnt worked this season.. but i firmly believe it will come good for us in the medium to long term.

 

Thanks for this. Really useful information to put our club's financial performance into context. The ethos of acquiring and developing young players to sell on is a sound one, but it does mean that we are likely to struggle at Championship level and may well yo-yo between Championship and League One whilst the philosophy endures. On the other hand, at least we should still have a football club at the end of it all and there is a lot to be said for that. The EFL will either have to sort this out, or lose control of club's finances all together. I guess that, when hindsight is achieved in a few years' time, we may well be thanking our board for being prudent with the finances and we may find that we have risen in status as a result of so many others having fallen into a financial pit of debt.

 

I wanted to add that my one key issue with the current system is that our scouting needs to be refined more. I know that it is hard to scout and pick out young players with the potential to become Championship standard players virtually overnight and we have made some good acquisitions, but I think that the board will be able to see now that the gap between some foreign leagues and the Championship is much more than they will have reckoned and some players just can't make the leap in time to become established at this level. The other problem is that players who have demonstrated that they are Championship quality are worth a lot more in transfer fees than those who we will continue to contract in League One next season (presuming ......). If we were to survive in the Championship, more of our players would be worth higher transfer fees towards the ends of their contracts. Another hidden levelling down in our financial calculations, should we be relegated.

 

Very fair point, if this keeps on ( esp if there is a second wave) there will be more than a few pigeons coming home to roost.
Then just wat for the weeping and wailing with the excuses

 

I’ve long held the belief that our clubs policy of operating on an even keel would eventually pay dividends whilst we grew slowly and consistently whereas other clubs gambled and either had to put the brakes on or suffered punishment from the efl. What I didn’t bargain for was the levels of weakness, ineptitude and corruption from the efl to implement their own rules. This is highlighted by the many small things that make up a season e.g last night Wigan scored a goal by someone they can’t afford, assisted by someone else they can’t afford whilst their defence they can’t afford kept a clean sheet.

 

I think it's another Parry idea that will f cuk us more than fair play and that's a salary cap. With a salary cap we won't be able to sign the Mowatt's and Woodrow's in League 1 anymore.

 

A salary cap would help us massively, We operate at 75% of revenue. If the cap were to come in it would significantly cut the ability of other Championship clubs to pay unsustainable salary levels.

 

It would reduce the quality of the player we could sign as it would limit wages.

 

We already operate within the constraints of a self-imposed cap

 

I think all it would do is result in the player getting paid less. It’s all relative, if Player x is not wanted by clubs that over spend now that same player would still not be wanted.