Bristol City: Unfinished sympathy


Bristol City showed the challenge that exists for clubs trying to survive, let alone compete, in the Championship after racking up a recurring loss of £19.2 million before player sales last season. This is for a club that finished 17th in the division. The previous season similar losses were £14.4 million for finishing one place lower in the division.

The continued development of Ashton Gate should give City a better base on which to generate income.

The Championship remains the most frightening division in European football in terms of the financial gamble that exists there, as club owners decide whether to fund a promotion push with the potential £100 million a season that brings in terms of Premier League TV monies.

City are one of the earliest teams to report their results for 2016/17, but we maintain our estimate of sustainable pre-player disposal losses for the Championship exceeding £400 million for the season (compared to £361 million in 2015/16).

Key figures for 2016/17:

Income £21.2 million (up 49.3%).

Wages £20.9 million (up 19.9%) .

Losses before player sales £19.2 million (up 33.3%)

Player signings £13.6 million

Player sales £16.7 million

Steve Lansdown investment £118 million (up £14.9 million).

City had a wobbly season, early contention for the playoffs evaporated and they ended up needing good results in the last month to avoid relegation.

The club are owned by Pula Sports Limited, a company based in the tax haven of Guernsey. Pula Sports Limited also own Bristol Rugby club and Bristol Flyers basketball team.

Pula are owned by Steve Lansdown, a very successful accountant and businessman, half of Hargreaves Lansdown, the £8 billion plus valued financial services company.


All clubs generate money from three sources, matchday, broadcasting and commercial. What separates out the Championship from other league is the impact of parachute payments from clubs who were previously members of the Premier League (EPL).

Total income for the season was £21.2 million. To put this in context, the three clubs relegated from the Premier League, Aston Villa, Newcastle and Norwich, each earned over £40 million in parachute payments.

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Whilst we don’t have figures for most of the clubs for 2016/17, as City are one of the first to announce their results, the table below, based on 2015/16 data, gives a rough indication of just how difficult it is to compete for those clubs without parachute payments.

Football clubs generate cash from three main sources, matchday, broadcasting and commercial.

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Matchday income from ticket sales rose 28% to £5 million. This was due to attendances at Ashton Gate increasing 26% from 15,292 to 19,256.

Broadcasting income rose 42% to 6.8million. This was due to the ‘solidarity payment’ paid by the Premier League to the English Football League increasing from £2.3 million to £4.3 million as a result of a new domestic TV deal for 2016/19 secured by Sky and BT Sport.

In addition, the club gets a share of the EFL TV deal with Sky, and is estimated to earn £100,000 for each home game and £10,000 for every away game broadcast live on Sky.

Other income, mainly commercial and retail, rose by an impressive 71%. This is mainly due to the completed development of Ashton Gate, the stadium that City share with Bristol Rugby Club. Having more modern facilities allows the club to generate extra money from hospitality, hosting conferences, restaurants etc, and allows the club to be open for more than the 25-30 days a year in which football matches are taking place.

Even with these significant increases in income City cannot hope to compete with those clubs in receipt of parachute payments, and so will be in the bottom half of earners in the Championship for the foreseeable future, unless attendances rise to the 25,000 plus level, which will only come if there is a sustained promotion campaign.


The main costs for a club are in relation to players, and come in the form of wages and player amortisation.

Wages in total rose by 20% to £20.9 million. This is quite a frightening figure in many regards, as if a club in the bottom third of the division has to increase wages by 20% to tread water, it bodes poorly for the sustainability of teams in this division unless they are bankrolled by owners.

The wage/income ratio for City was the lowest for a number of years at 99%. This still means that wages were 99% of income, or to put it in more simple terms, Bristol City paid out £99 in wages for every £100 they generated from revenue. This of course leaves effectively nothing to pay for all the other overheads of the club, such as ground maintenance, heat and light, HR, finance and so on.

In the Championship as a whole, this puts the club slightly lower than the average wage level for 2015/16 of £23.1 million, and a wage/income level of 101% for the division as a whole.

Whilst the increase in wages was substantial, it is still significantly less than those of relegated Norwich, who paid out £55.1 million in 2016/17, and promoted Brighton, with £31.3 million plus a further £9 million in promotion bonuses.

The other player related expense is that of player amortisation. This is the cost of signing a player spread over the length of his contract. In the directors’ report City said that the club was heavily reliant on loan players for the season, most noticeably Tammy Abraham from Chelsea, who scored 23 goals in 2016/17.

Despite the use of the loan system, City also spent £13.6 million on signings during the season. The biggest signing was probably Lee Tomlin for about £3 million on a three year contract. This works out as £1 million of amortisation per year.

City’s amortisation charge rose by 160% to £5.2 million compared to the previous season.

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The advantage of focussing on amortisation instead of just looking at transfer fees is that it removes some of the volatility from making one big signing in a single year.

We would expect the amortisation charge to continue at these levels at least for 2017/18. Despite selling tubby convicted felon Lee Tomlin to Cardiff in the summer of 2017, City still spent a net £9.5 million on players during the transfer window.

Other costs:

The club has significant other costs operating from the redeveloped Ashton Gate. Total expenditure on the stadium in 2016/17 was £11 million, bringing the total for the last few years to approximately £45 million.

The stadium and other property costs are being written off over 50 years, but to this is added the costs of depreciating shorter life assets such as office equipment. This gives an overall depreciation charge of £2.5 million, significantly up from £0.6 million the previous season, when the stadium improvements were not still a work in progress. This means that the deprecation charge was higher than for clubs with other stadia (Norwich’s was £1.9 million, for example).

Directors pay

Bristol City seem to have a fairly tight policy in relation to director pay. It could be that the costs are borne by holding company Pula Sports in Guernsey, but at £115,000 the amount is fairly low compared to other clubs, with seven clubs paying over £200,000. The Brighton CEO was paid £1.2 million in 2016/17 as the club was promoted.

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Losses are income less costs, and were £19.2 million last season, or £370,000 a week,before taking into account the sale of Jonathan Kodjia to Aston Villa, for £15 million. This sale was the main driving force behind gains on player disposals of £13.6 million.

Over the last five years City have racked up losses before player sales of £70 million, and the highest positon during that period was last season’s 17th in the Championship.

Player sales have reduced these losses by over £16.7 million, but it is still a substantial level of commitment required from owner Steve Lansdown to underwrite these losses.

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Some of you may by querying how the club has complies with financial fair play (FFP), which restricts losses to £39 million over three seasons, so it must average £13 million a season.

FFP is calculated using a different formula to the accounting losses, and some expenses, such as infrastructure, promotion, women’s and academy football, community schemes and so on are excluded.

Whilst City don’t detail all of these costs, they appear to be easily FFP compliant last season. We’ve asked around some of our chums in football, and have calculated the following FFP loss for 2016/17.

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The sale of Kodjia ensured that the FFP losses were not an issue for the club, and this effectively means that they can incur losses of £39 million over two rather than three seasons and stay compliant.

Player trading:

As previously mentiond, according to the accounts CIty paid out £13.6 million in 2016/17 on player additions.

£13.6 million is a record sum for City, more than triple the amount of the previous season. There is a noticeable discrepancy between this figure and the amount of cash spent on players of £8.9 million. This suggests that a number of signings were made on credit.

it’s a reasonably high figure for a Championship club, but not if compared to the amounts spent last season by clubs relegated from the Premier League in Aston Villa (£76 million) Newcastle (£57 million) and Norwich (£20 million), and promoted Brighton (£19 million).

Similarly, although Kodjia was sold to Villa for £15 million, the amount of cash received from player sales was £6.6 million. Again this is due to the deal being based on instalments rather than a single cash sum. This is borne out by looking at City’s debtors footnote, which reveals that the club is now owed over £10 million from other clubs, comparted to just £250,000 at the end of the previous season.

Spending during the 2017 summer window has resulted in the club transfer record being broken with the signing of Famara Diedhiou from Angers for £6 million.

The Owner

Steve Lansdown’s total investment increased further in 2016/17 as he invested a further £15 million in the club via a new share issue.

This takes his total investment to just over £118 million, in the form of shares and interest free loans.

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Realistically, Lansdown will have to subsidise the club by a minimum of £10 million a year for the foreseeable future, unless promotion to the Premier League is achieved. The investment in the stadium at Ashton Gate will help to generate extra income, but this will not make a serious dent in the operational losses, especially with no sign of wage growth slowing down in the Championship.

The good news for City fans is that there’s no sign of his affection for the club in the city where he made his fortune, or sport in Bristol, waning, despite him moving to Guernsey for tax reasons. He remains the club’s biggest asset, but also it’s biggest risk should anything happen to him and he can no longer underwrite the losses.

Lansdown appears to have adopted the Brighton model of improving the infrastructure first to lay down the foundations of being able to compete in the Championship, and then using this as the basis for a promotion push.

More nights such as the recent defeat of Manchester United in the League Cup are likely to continue to cement Lansdown’s love affair with the city and the club.

The numbers

Brighton and Hove Albion. Please, please, please, let me get what I want

Brighton and Hove Albion: Please, please, please, let me get what I want.

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Introduction: Bigmouth strikes again.

This report will focus on the cost of Brighton being promoted to the Premier League in the six years since they’ve moved to the Amex stadium in 2011.

Key figures for 2016/17: Panic

Income £29.2m (up 18.3%).

Wages £31.3m* (up 11.0%) *excludes £9.1million bonus paid to staff upon promotion, would be a 42.9% increase if bonus included.

Losses before player sales £38.9 million (up 50.1%)

Player signings £19.0 million

Player sales £ 0.3 million

Tony Bloom investment £280 million

The Albion just missed out on promotion at the end of 2015/16, first on goal difference to Middlesbrough, and then via the playoffs following a match at Hillsborough in which four players limped off injured in the first hour.

Chairman and professional poker player Tony Bloom was therefore faced with a dilemma at the start of 2016/17. Sell some of their players who were being courted by other teams (Dale Stephens and newly promoted Burnley, Lewis Dunk and small Premier League outfit Crystal Palace, Antony Knockaert and just relegated Newcastle), or stick with them and go all in for one final promotion push.

He knew the latter would be a gamble, as if the club didn’t achieve promotion in 2016/17 it would have had to scale back its investment in the playing squad the following season to comply with financial fair play (FFP).

Bloom’s experience of when to go ‘all in’ worked, he backed Chris Hughton by turning down offers, investing in the squad, and was rewarded with promotion.

Income: Frankly, Mr Shankly

Total income for the season was £29.2 million. To put this in context, the three clubs relegated from the Premier League, Aston Villa, Newcastle and Norwich, each earned about £50 million in parachute payments. The sum is also four times the amount the Albion were generating when playing at the Withdean stadium prior to the move to the Amex in 2011.

Whilst we don’t have figures for most of the clubs for 2016/17, as the Albion are one of the first to announce their results, the table below, based on 2015/16 data, gives a rough indication of just how difficult it is to compete for those clubs without parachute payments.

Football clubs generate cash from three main sources, matchday, broadcasting and commercial.

Matchday income from ticket sales rose 14% to £10.7 million. This was due to attendances at the Amex increasing to 27,966 from 25,583.

Broadcasting income rose 48% to 8.1million. This was due to the ‘solidarity payment’ paid by the Premier League to the English Football League increasing from £2.3 million to £4.3 million as a result of a new domestic TV deal for 2016/19 secured by Sky and BT Sport. In addition, the club is estimated to earn £100,000 for each home game and £10,000 for every away game broadcast live on Sky. With the Albion being in the two top all season, they were regulars on television too.

Other income, mainly commercial and retail, rose by a modest 7%.

Promotion to the Premier League will have a major impact on those figures. Benchmarking against Stoke City, the only club of a similar size who have published their 2016/17 figures to date, we would anticipate matchday income to rise by about 10%, commercial/other income to double, and broadcasting income to be somewhere between £95-£120 million in 2017/18, depending upon how often the club appears on TV, and the final league position.

To get a rough idea of the increments involved, if a club appears on live TV more than ten times they get about £1 million for each additional appearance, and there is prize money for finishing in every position in the Premier League that increases by just under £2 million for each place up the table, so the difference between finishing 11th and 16th is therefore about £10 million.

Costs: Stop me if you think you’ve heard this one before

The main costs for a club are in relation to players, and come in the form of wages and player amortisation.

Wages in total rose by 43% to £40.3 million. Included in this figure is a £9.1 million promotion bonus paid to all 288 staff members, both playing and operational, by Tony Bloom. Excluding the bonus wages would have risen by a more modest, but still challenging 10.6%.

This means that wages (excluding bonuses) were 107% of income, or to put it in more simple terms, Brighton paid out £107 in wages for every £100 they generated from revenue.

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In the Championship as a whole, this puts the club at slightly more than average wage payers, compared to 101% for the division as a whole.

Whilst the increase in wages was substantial, it is still significantly less than those of relegated Norwich, who paid out £55.1 million in 2016/17.

This may explain why Alex Pritchard, who had apparently had agreed to sign for Brighton in summer 2016 for a then record fee of up to £8 million, mysteriously made a last-minute decision to sign for Norwich as he headed back up the motorway to his then host club Spurs.

Pritchard then took on the role of pantomime villain for the 2016/17 season in the eyes of many Brighton fans, for making exactly the same decision they would have made themselves under the circumstances.

The wages paid also perhaps put paid to the claims made by former manager Gus Poyet, who said the club had ‘hit the ceiling’ in terms of wages in 2013.

In recent years it has been an expensive business in terms of wages for clubs to fund promotion. Neither Newcastle nor Huddersfield have as yet published their accounts for 2016/17, so not possible to compare the Albion to the other promoted teams.

The other player related expense is that of player amortisation. This is the cost of signing a player spread over the length of his contract. Brighton broke their transfer record in summer 2016 in signing Shane Duffy from Blackburn, for a fee rumoured to be £3.5 million, on a four-year contract. This gives an annual amortisation charge of £875,000 (£3.5m/4).

The advantage of focussing on amortisation instead of just looking at transfer fees is that it removes some of the volatility from making one big signing in a single year.

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Albion’s amortisation increased significantly in 2011/12 with the then record signings on Will Hoskins, Will Buckley and Craig Mackail-Smith as the club was promoted and moved to the new stadium.

In then plateaued for the next three years before Tony Bloom backed Chris Hughton and sanctioned a modest increase in 2015/16, then making an extra commitment in the summer 2016 window.

Other costs: Well I wonder

The club has significant other costs operating from the Amex stadium. Land and buildings have a balance sheet value of £134 million. This includes £2.5 million spent during the year, which is probably in respect of property close to the training facilities at Lancing.

The stadium and other property costs are being written off over 50 years, but to this is added the costs of depreciating shorter life assets such as office equipment. This gives an overall depreciation charge of £4.4 million, down 10% on the previous year, but still higher than many other clubs in older stadia, constructed at a much lower cost. (Norwich’s was less than half that of the Albion, at £1.9 million, for example).

The Albion have a unique cost in terms of transport. Because of the sustainable transport policy that was a condition of planning permission being granted, the club has to contribute significantly to the local train and bus companies to provide free transport to and from home games. This cost is unknown but is estimated to be in the region of £2.5 million.

Director Pay: Barberism begins at home

One expense that will perhaps result in comment is the remuneration of chief executive Paul Barber, who joined the club over five years ago.

Barber’s pay more than doubled to over £1.2 million. Part of this was performance and bonus related, part of it was to prevent other clubs headhunting him. It was publicised in The Times that PB was on Liverpool’s radar when they were looking to replace Ian Ayre, their chief executive. Ayre’s package at Liverpool was…£1.2 million

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We’ve had some dealings with PB here at the Price of Football, and our view is he’s worth every penny. There can be few chief executives of what is now a £140 million a year business who will reply to every email they receive, and engage in fan debate to the degree that Barber has done during his time at the club.

Ultimately if Tony Bloom thinks Paul Barber is worth the money then that’s more than good enough for us. We don’t always agree with the decisions made, but then I don’t always agree with decisions made by my wife either, and still manage to think she’s wonderful.

For some reason PB generates a hysterical reaction from the Mavis Reilly element of the fanbase, who use any excuse to give him stick. We find such behaviour bewildering.

Losses: Hand in glove

Losses are income less costs, and were £38.9 million last season. This was an increase of £13 million from 2015/16. The losses were underwritten by Tony Bloom, to the tune to £107,000 a day.

Since moving to the Amex the Albion have racked up total losses of £118 million in trying to achieve promotion to the Premier League.

Some of you may by querying how the club has complies with financial fair play (FFP), which restricts losses to £39 million over three seasons, so it must average £13 million a season.

FFP is calculated using a different formula to the accounting losses, and some expenses, such as infrastructure, promotion, women’s and academy football, community schemes and so on are excluded.

Whilst the Albion don’t detail all of these costs, they have stated that they were FFP compliant in 2016/17. We’ve asked around some of our chums in football, and have calculated the following FFP loss for 2016/17.

The above suggests that the Albion were probably at their limit in terms of complying with the FFP rules in 2016/17, and would probably have had to make some player sales in 2017/18 in order to ensure they satisfied the three year figure of £39 million.

FFP in the Premier League is more relaxed, and of more concern to the club will be satisfying the wage control limits of STCC (Short term cost control) that only allow a Premier League club to increase the wage bill by £7 million a season, plus any rises in non-broadcast income

Player trading: Never had no one ever

According to the accounts the Albion paid out £19 million in 2016/17 on player additions.

On the face of it these seems much higher than the sums being quoted in the press, as the main signings were Shane Duffy (quoted at the time as going for a then record £3.5 million), Glenn Murray (£3 million), and Oliver Norwood, (£2m), although the club, as one would perhaps expect from a business owned by a professional poker player, keep their cards close to their chest and don’t disclose actual numbers.

We suspect the discrepancy is because many signings came with conditions in which extra fees kicked in should the Albion be promoted, and these payouts therefore became due at the end of 2016/17.

£19 million is a record sum for the Albion, more than double of any previous season, it’s a reasonably high figure for a Championship club, but not if compared to the amounts spent last season by clubs relegated from the Premier League in Aston Villa (£76 million) Newcastle (£57 million) and Norwich (£20 million).

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The club did appear to retrench in 2013 and 2014, partly due to tighter FFP rules, but as these were relaxed in 2015/16 spending has been modest, but perhaps more importantly, of mainly high quality. Previous years signings in the likes of Knockaert, Stephens, Murphy, Baldock, Hemed, Stockdale and so on can all be considered to be bargains.

Spending during the 2017 summer window has resulted in the club transfer record being broken three times. Most Premier League clubs do disclose in the accounts the amount spent (sometimes gross, sometimes net) in the window, in what is called the ‘post balance sheet events’ note, and we’re disappointed (actually probably just nosey) in that the Albion have not followed suit here.

The club have also spent £15.7 million in respect of buying land for development next to the training ground in Lancing. Once this is converted into retail and housing stock this could be a very useful additional source of income for the club. The hotel once proposed for the Amex site seems to presently be on the back burner.

The Owner: Handsome Devil

Tony Bloom’s total investment increased further in 2016/17 as he lent the club £28.2 million in the year. He underwrote the losses incurred, which was the equivalent of subsidising every ticket sold at the Amex in the Championship by £60 per match.

This takes his total investment to just over £280 million, in the form of shares and interest free loans. In addition to Bloom’s loans, the club also had racked up an overdraft of over £16 million by the end of May 2017, probably to pay out the staff bonuses as a result of promotion.

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Some fans are muttering about him selling out at a profit to a mythical Chinese or Middle Eastern investor. There’s no evidence to support this as (a) he’s a local lad (who just so happened to be a billionaire through his mathematical genius mind) who clearly loves the club, and travels to matches by train with the fans, and (b) he wouldn’t get his money back, as the club is worth less than the sum he invested.

Premier League status should allow him to stop having to subsidise the club as the extra monies of the Premier League should enable the club to break even (Stoke, for example, a club of similar size, made a profit of just £3 million in 2016/17).

Bloom remains the club’s biggest asset, as his devotion and decision making have proven to date have been exemplary. That also makes him the biggest risk, as if anything were to happen to him then the status of the club’s loans, for example, is unknown.

As a fan, all I can say is thank you Tony Bloom for bringing me some of the most memorable days of my life, and long many you continue to be in charge.

Walsall: Mama Weer All Crazee Now

Football, it’s all about money, footballers are a bunch of greedy tossers, all clubs lose a fortune and are bankrolled by overseas millionaires, the game is going to destroy itself etc.

But here’s a different club. It lives within its means, makes a profit every year, and that’s without selling a single player for a fee, and has 128 staff who between them earn just over half of what Manchester United pay Jesse Lingard.  Perhaps it could make you fall in love with the game again?

The club is Walsall, in the Black Country, nice little stadium, shame about the lack of decent pubs nearby, but other than that the epitome of a stable lower league outfit who have spent the last ten years in League One. (I now await revelations from angry Saddlers fans who spill the dirt on their club).

As a Brighton fan, I have mixed reactions about Walsall, watching my team lose 2-1 in an insipid  Cup game at the start of 2015/16 season. and seeing the mighty Chris O’Grady’s last kick for the club as he put a penalty for the Albion into Row Z before being immediately substituted and running off the pitch faster than he’d moved during the match.


Most clubs show three types of income in their accounts, but somewhat frustratingly Walsall only show two, by combining broadcasting and commercial streams.

Walsall’s income was almost unchanged at £6.6 million in 2016/17, although a £493,000 increase in commercial/broadcast offset a £425,000 (28%) fall in matchday income. The latter was partially due to a playoff finish and reasonable runs in cup competitions benefitted the club in 2015/16 when they played Chelsea in the League Cup and made it to the fourth round of the FA Cup.

A new BT/Sky TV deal for the Premier League resulted in an increase in solidarity payments that trickle down to League One clubs from £360,000 to £645,000.

Over the last five years Walsall’s income has been growing steadily, mainly due to non-matchday sources.

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Footballs main costs are in relation to players, and here Walsall seem to have a lid on their ambitions.

The total wage bill for 2016/17 was £3.12 million, or just over £60,000 a week, before adding in pension and national insurance costs. This works out as an average of £470 a week for the staff. Even so this represents a 36% increase in the wages paid in 2012/13 of £2.29 million, where the average Walsall employee was on £390 a week.

The club clearly have a tight wage budget set each year, and this is why the wage to income ratio fluctuates in a narrow range around 50%. This compares to an average of 101% for clubs in the Championship.

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The employees who have perhaps done most well from the club are the directors, whose pay has increased from £106,000 to £192,000 over the five years of our analysis.

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The club appears to rent its stadium and training ground. The rent fluctuates from year to year, and went up from £400k to £449k in 2017. This appears somewhat strange, as the club appears to both own and rent the Bescot.

Talking to some fans on Twitter, it appears that the club owns the stadium, but the land it occupies is rented. Apparently the land is owned by Chairman Jeff Bonser’s pension fund.

This has been investigated by the excellent David Conn in The Grauniad.

The club is therefore committed to paying about another £5m in rent for land at the stadium until the next review.

It therefore appears that the board are generating money from the club directly and indirectly in three areas, fees (£192k), rent (£440k) and interest on loans (not too clear but at least £6k).

This doesn’t mean that Posner and his colleagues are in the Monty Burns category of evil company owners, but neither are the likely to be nudging the likes of local philanthropists at other clubs such as Steve Gibson (Boro), Peter Coates (Stoke) and Tony Bloom (Brighton) off their crowns either.


Profits are income less costs. Walsall seem to be able to break even each year, just. This could be manipulated by the directors’ tweaking their pay to ensure the club finishes in the black each season.

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Player trading

You don’t see Walsall mentioned too often in the transfer gossip columns of the papers or sports broadcasters, and there’s a good reason for that.

It initially appears that during  the four years leading up to 2016/17 the club neither sold nor bought a player for a fee.

This record was broken during the last season, when Cypriot striker Andreas Makris was signed for a supposed record fee of £270,000 (€300,000). This was funded by Walsall’s success the previous season.

This fee is at odds with the accounts though, which reveal that the actual amount paid was £179,000 (€200,000). Makris’s season proved to one of disappointment, with one goal in 32 games. After proving to be shite a disappointment Makris’s value was written down in the accounts, and he was sold back to Cyprus in the summer of 2017. Whilst the fee wasn’t disclosed, it looks, from a bit of number triangulation, the fee was about £110,000.

In relation to the sale of players, the issue is muddied by the way the club appears to have dealt with the issue. Normally, when a club makes a disposal, it is shown separately on the profit and loss account, as the club is not in the actual business of selling players.

Sheffield United do this in their accounts, as do practically all others.

What Walsall appear to have done is fold in the profit on player sales within their ‘football and commercial income’ heading. That’s at best reducing transparency, we think it’s a shabby way to deal with the subject, and inconsistent with what we believe is best business practice.


Walsall have shown that a club can break even, by managing their wage budget carefully, and being cautious in the transfer market (ten clubs in League One did not sign players for fees in 2015/16 for example).

Had they been promoted to the Championship in 2015/16 after finishing third and making the playoffs, they would have had a season in the sun, playing the likes of local rivals Villa, Birmingham and Wolves. Having done so once, and seen the likes of Shrewsbury have a good season to date in League One, it’s difficult to see the Saddlers change their business model for the foreseeable future.

The club does have debts of around £2 million from the directors, but these are serviceable. Part of these loans are interest free.

From an analysts’ perspective, it’s also a breath of fresh air to see a club being so transparent and putting out its full results in the public domain for fans to see. Clubs are a part of the community, and the community have a moral right to know about how the club is financed.

However what should be three cheers is reduced to two.

The methods used to extract money from the club by some who are responsible for its long term welfare, and the way that some figures (such as player disposals) are not disclosed.

This is harsh on those who travel the length and breadth of the country watching the team play every week.

Fans invest more than money into their clubs, and have a degree of moral and emotional right to know the extent to which the club has benefited from player trading.

The Numbers

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Celtic: Inbetween Days


Celtic’s accounts for 2016/17 arrived in our inbox 24 hours before the club lost its 69 game domestic unbeaten run.

We recently reported on the financial situation of Rangers, who were promoted to the Scottish Premiership (SPL) in 2016/7.

They highlight the paradox of being in their current position, too rich compared to their peers to make Scottish football competitive (although Hearts fans may now query that), but too poor to be able to challenge in the Champions League, leading to their fans searching through Google Maps as they try to find how easy it is to get to St Petersburg on public transport for the forthcoming Europa League match against Zenit.

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Key figures for 2016/17

Income £90.6m (2016 £52.0m)

Wages £52.2m (2016 £36.9m)

Profit before player sales £3.7m (compared to £13.6m loss in 2016)

Player signings £13.8 m (2016 £8.8m)

Player sales £4.2m (2016 £14.0m)


According to the accounts the club generates its income from three main sources. Matchday, merchandising and broadcasting.

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Matchday income was up 50%, the main reasons for this were:

  • Champions League qualification and attractive ties against Munchengladbach, Barcelona and Manchester City.
  • Higher season ticket sales as fans wanted to ensure they saw their team play against Rangers in the Scottish Premiership for the first time in years.
  • Preseason tournament against Leicester, Barcelona and Inter Milan.

Matchday income contributed 41.5% of total revenues for the club. Compared to the English Premier League (EPL), this is a far higher proportion than for any club in that competition.

Celtic’s matchday income would place them seventh if they had been in the EPL, which shows the contribution made by fans to the club.

Broadcast income more than doubled, again driven by a Champions League qualification. The payout was €31.7 million, compared to only €5.8 million the previous year, when the club only qualified for the Europa League.

Celtic also benefited with the payouts being made in Euros, as the pound fell in value at the UK’s economy was downgraded as a result of the Brexit vote. This added a further 15% to the sterling value of the sum received by Celtic.

Other/merchandising income was up 30%, as the club launched three new kits during the season.

Compared to rivals Rangers, who have the second highest level of income in Scotland, Celtic’s income was substantially higher in all three main areas. The figures also show that the Scottish Premiership’s TV deal with Sky is paltry compared to the riches available in the Champions League.

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Having three times as much income as the next largest club makes it very difficult for anyone to compete with Celtic when it comes to paying out the costs of running a club.


The main expense for a football club is in relation to players. These consist of two main elements, wages and amortisation.

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Wages rose by over 40% because Brendon Rogers signed the likes of Scott Sinclair, Kolo Toure, Cristian Gamboa and Eboue Kouassi, all of whom were on lucrative contracts by Scottish standards. Players would also have been paid bonuses for featuring in the Champions League.

At £52.2million, Celtic’s wages were three times those of Rangers (£17.6m). The next highest in Scotland was Aberdeen at £6.8m.

For the first time a Celtic director received pay of more than £1 million, with Peter Lawwell taking home in total £1,167,000. Somewhat bizarrely, for the four previous years the highest paid director had always been paid £999,000, perhaps not wanting to upset fans with the thought of one of the suits trousering more than a million for being to help mastermind the defeat of the likes of Ross County and ICT.

Celtic seem to have their wage levels under control, even with the increased amounts being paid. The wage/income ratio, which in the English Championship was over 100%, was more in line with the EPL, which averages 68%.

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Player amortisation represents the transfer fee cost being spread over the life of the contract signed by the player. So. if Scott Sinclair signed for £3million on a four year deal, this would result in an amortisation charge of £750,000 a year.

The amortisation charge arose as a result of Celtic spending £13.8 million on players for the 2016/17 season. Over the last five years Celtic have spent a total of £49.8 million on new players, which will get you one very good full back in the Premier League.

This contrasts with Rangers spending £10.3 million in their first season back in the SPL, although that was in marked contrast to the £4 million they spent in total over the four preceding years.

Celtic did have a further £1.5 million of costs in 2016/17 that were called ‘exceptional’. These are expenses that are one off in nature and so not expected to recur every year.

This included £287k in relations to signings that proved to be shite less impressive than when the club bought the player, and so had to be written down. There were also payments to former employees and over £1 million.

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Profits and losses

Ask an accountant what they mean by profit, and they will start to sweat, loosen their tie, and look nervously around the room.

There are many levels of profit that can be calculated, but here at the Price of Football we concentrate on three.

The first is operating profit. It is total income less all day to day operational costs of running the club.

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Celtic’s operating profit rose by a factor of ten to £7.5 million in 2016/17, driven by the increased income mentioned above. Rangers had an operating loss of £6.8 million during the same period.

The problem with operating profit is that it can be distorted, especially by player disposals. We therefore also calculate profit before player sales and other one off items. We refer to this as EBIT (Earnings Before Interest and Tax) This removes the volatility in relation to selling one player in a single season at a huge gain (such as Van Dijk), and having no such sale the following year.

Despite the domestic success and European qualification over recent years, Celtic made an EBIT loss of over £31 million in the last five seasons.

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This shows that the club is dependent upon selling players each year to help make the books balance.

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Gary Hooper and Victor Wanyama contributed most of the gain in 2014, and Virgil Van Dijk that for 2016. These gains are used to offset the EBIT losses. Celtic have had a negative net transfer spend of £600,000 over the last five years as a result of these sales.

The final profit figure adds on player amortisation and depreciation of the stadium and other long-term assets. We call this EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation). This is the nearest figure we have that is a ‘cash’ profit total. This is what is used by analysts when they are trying to calculate a price for a club that is up for sale (such as Newcastle at present).

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Celtic’s EBITDA profit of £12.9 million, compared to a loss of £6.9 million the previous season shows how critical it is for the club to have Champions League qualification. This compares to an EBITDA loss of £0.7 million for Rangers.


Celtic are debt free, having cash of £24.5 million of cash at 30 June 2017, compared to outstanding loans of £13.5 million. This should be good for Rodgers if he is looking to strengthen the squad in the January transfer window. He did spend over £6 million on signings in the summer 2017 window. Rangers, by comparison, had a net receipt of £240,000 during the same window, as they sold more players than they signed.

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Celtic are in a strong position financially. Qualification for the Champions League in 2017/18 guaranteed the club another £30 million in broadcasting income. Whilst, as expected in a group featuring PSG and Bayern, they did not qualify for the knock-out stage, they are now in the Europa League, albeit with a tough first draw against Zenit.

The financial gap between them and Rangers is substantial, which gives them a playing advantage too. Whilst Celtic fans don’t care, how good the lack of competition is for Scottish football, especially if it is trying to negotiate new TV and commercial deals, is uncertain.

The numbers

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Sheffield United: Crushed by the wheels of industry


We’ve always considered Sheffield United to be a big club. Whether that’s due to Tony Currie being a favourite player when I was a kid, Brian Deane scoring the first ever Premier League goal, or Sean Bean’s very public support of the club, we’ve always been well supported, with a decent stadium, so one would expect them to be in the top two divisions.

It’s therefore a surprise to see that it took the Blades six years to return to the Championship, since being relegated in 2011.

Key figures for 2016/17

Income £11.4m (up 7.5%).

Wages £10.0m (down 11.5%)

Losses before player sales £7.7m (down 18.1%)

Player signings £3.1 million

Player sales £2.8 million


United have certainly been one of the biggest teams in League One for the last six years. Although they were unable to keep with those clubs who dropped into that division who were receiving parachute payments during that period (Wolves and Wigan come to mind), they had income higher than most other clubs during that period.

In League One the majority of income for a club comes from matchday income, as the EFL TV deal with Sky, and parachute payments, are skewed towards clubs in the Championship.

Attendances were slightly up at an impressive 21,892 (compared to 19,803 in 2015/16), but made little difference to matchday income, as the previous season included a lucrative FA Cup match at Old Trafford.

Broadcast income was slightly up, partially due to EFL clubs receiving a proportion of the new Premier League TV deal with BT and Sky.

Promotion to the Premier League will increase broadcast income to about £6.6 million in 2017/18.


The main cost for clubs at all levels is wages. United managed to keep a lid on their wages in 2016/17, paying out £10 million, down from £11.4 million. This is still high by League 1 standards (the median is about £4 million).

United have backed their managers during their time in League One in terms of a player budget. Wages have matched or exceeded income three times during that period.

The club had to cut back on wages significantly in 2013 to ensure compliance with FFP rules in League One.

The other main cost is player amortisation. This is accounting talk for the way that clubs deal with player transfers. The fee paid is spread over the life of the contract signed by the player. So a £1 million signing on a four year contract will give an amortisation charge of £250,000 a year.

In addition to this the club showed an impairment of £614,000 during 2016/17. An impairment arises when a club signs a player for a fee, and then realises he is rubbish (or has a career ending injury) and has to write his value down in the accounts. Who this player was for 2016/17 has not been disclosed in the accounts.

A £3.1 million spend on signings in 2016/17, high by League One signings (ten clubs in the division paid no transfer fees), combined with the inspirational management of Blades fan Chris Wilder, meant that the club was promoted with over 100 points.

The club has traded well with their existing playing staff, making significant profits from selling players every season, with the likes of Jamie Murphy, Kyle Walker, Harry Maguire being sold, and generating over £13 million over the six years in League One.

Hidden away at the back of the accounts is a little disclosure that will benefit the club substantially in 2017/18. It shows that United earned over £7 million as a result of sell on fees in respect of former players. Again, no details are given, but the smart money is on a 10% fee for the sales of Kyle Walker to Manchester City and Harry Maguire to Leicester.

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Losses are total income less costs. United’s losses, before taking into account player sales, were £7.7 million in 2016/17, or about £150,000 a week. Total similar losses during the League One years were £31.2 million, although player sales reduced this by £12.5 million.

The club did make a profit of over £30 million in 2013/14, but this is more to do with the dark arts of accounting than actual trading. This arose when another member of the group wrote off a £30 million loan.


United have returned to where many would consider their natural place is in the football hierarchy, but it has taken time and a lot of money to achieve promotion.

Being competitive in the Championship is expensive (we estimate losses to exceed £300 million for clubs in 2016/17).

The ownership of the club is a little muddy. The McCabe family, who had owned the club for a long time, sold a 50% share of the parent company Blades Leisure Limited to a Saudi investor via a company called UTB LLC, registered in the West Indies in 2013. Hopes of a Manchester City style splashing of the cash from Middle East ownership have never materialised though. This may change perhaps in the Championship, with the allure of Premier League exposure being so close.

In recent months there has been musical chairs in the boardroom, with directors leaving and then returning. It would appear that the McCabe family, who have bankrolled the losses for many years, are still in effective control.


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The Numbers

Grimsby Town: Seven Seas


Remember ITV Digital? The board of directors of Grimsby Town certainly do. They are still blaming the demise of the company for the financial woes of the club 15 years after the Monkey advertised channel went kaput in…err…March 2002.

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For those of you unfamiliar with the company. ITV Digital went bust after signing a £105 million per season TV deal for live broadcast of Football League matches.

To give some context, the current Sky deal for the Football League is worth about £60 million.

Whoever signed the contract on behalf of the Football League was clearly put on the naughty step, as it ended up losing about £180 million when ITV Digital went into administration. Grimsby, like many small provincial clubs, were hit hard by the event, as TV rights generated about 60% of the club’s income in 2002. The club was relegated in 2003, and that was the last time the club was in the top two divisions.

Since then it’s been a struggle for the club in terms of both league position and finances. But how much of this misfortune can be put at the door of ITV Digital?

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That’s a shame, as we like Grimsby here at the Price of Football. Not only can you get a great fish and chips pre match, there is also the experience of the final game at the end of the 2002/3 season, between Grimsby and Brighton, which took place on a Sunday afternoon.

Both sides had to win to have a chance of avoiding relegation, and to get to the match on time we ended up spending our first (and possibly last) Saturday night in Cleethorpes.

A great time was had by all, shapes were thrown on the dancefloor of some memorable nightclubs. The highlight however was being offered by a local lady of indeterminate age and morality a chance of a romantic encounter behind a skip after buying her a drink, on the grounds that she’d ‘never had a Cockney’.

What she would have offered for if a bag of chips had been offered as well was sadly never clarified.

The offer was declined, partly because of fear (she claimed to have four children by three different fathers, all of whom were apparently in prison), and partly because we feared her genital cleanliness was as impressive as her knowledge of geography.

The financial consequences.

The ITV Digital demise certainly cost Grimsby money, in 2002 it accounted for 70% of total income that season.

However, the club would have suffered financially too if the club had been relegated. This is because the TV deal was very much skewed towards clubs in the Championship.

Worse was to happen in 2009/10, when the club was relegated to the National Conference, which was not covered by the EFL TV deal. This explains why income took another dive in 2011, as the club took its time to come to terms with a new life.

Latest results

Grimsby eventually returned to the EFL in 2016/17, and have just published their first set of financial results since being once again part of the 92.

The first thing to say about Grimsby is a positive one. The club has not hidden behind Companies Act legislation and produced abbreviated accounts, which do not show key metrics such as income, wages and profits.

Here at the Price of Football we are hugely disappointed that so many clubs (8 in League One and 17 in League Two) are not transparent and show the full picture of their finances to fans, who are the spiritual and emotional, if not necessarily the financial, owners. The Football Association could do something here, but their silence on this governance issue is damning.

Impact of promotion

Promotion has been good for Grimsby, with income rising by 24% and average attendances up 21% to 5,259, the sixth best in the division. The rise in attendances only made a £30k increase in matchday revenue, mainly because the figures for the previous season were boosted by Grimsby getting promoted via the playoffs at Wembley, which was a big payday for the club.

Wages also took a hit since the administration. The club does seem to have had some bad years where wages were as high or higher than income, but have taken back control ((c) All Brexit Voters) of wage levels in recent years. Whilst wages rose by 30% in the first season back in League 2, this was more than covered by the benefits of return to the EFL.

Player signings

Grimsby have never been a wealthy club, known for big signings, and this is reflected in the sums paid for players since 2002.

2016/17 resulted in Grimsby having their highest player outlay since before ITV Digital went bust. On the plus side, the club also sold the splendidly named Omar Bogle to Wigan. Whilst Grimsby have not disclosed the fee, a bit of accounting fun and games suggests that total player sales for the year generated £1,066,000.

It does appear that some Grimsby fans are unhappy with the ownership of the club. The largest shareholder is John Fenty, a local businessman and Conservative councillor, who has we think about 42% of the shares.

Owner investment

Like many provincial clubs, Grimsby are dependent upon the owners for financial support.

From what we can see, the total invested in the club by the board is as follows:

It certainly appears that the board (presumably Fenty) has put money into the club, especially after relegation to the Conference/National League. How wisely the money has been spent is best dealt with by those with local knowledge. Many seem to think that Fenty’s decision making is on a par with my ability to do ballroom dancing whilst blindfolded.

There doesn’t, however, appear to be much of a correlation between the fall of ITV Digital and the owners writing out cheques to cover losses. Grimsby made an operating loss of just £111,000 between 2002 and 2017, although is should be emphasised that this period was bookended by £1 million profits in both 2002 (as the club had received some money from ITV Digital) and 2017 (due to the sale of Omar Bogle).

Where the club goes from here is open to conjecture. Attendances are down 15%, as second season syndrome kicks in. In Russell Slade they have an experienced EFL manager, and currently sit just three points off a playoff position.

Promotion to League 1 is worth about £400,000 a season extra in TV income. Whether Grimsby could then survive in the bear pit of the Championship, where we are estimating total losses to exceed £300 million, is debatable, but the likes of Burton, who were the team who relegated Grimsby into non-league football, have shown it can be done.

Glasgow Rangers 2016/17: Orange Crush


I’ve only ever seen Rangers play once, which was at the 2008 UEFA Cup final. It’s fair to say that there was a discrepancy between the number of people who came to Manchester for the event and those who had tickets. The following morning I was on a breakfast TV show, and had to walk around and over hundreds, if not thousands, of Rangers fans who had decided to sleep al fresco on the streets following the match.

2016/17 saw a return after four years to the Premiership, Joey Barton scrapping with team mates, lawsuits against former directors and Mike Ashley, three managers, fan groups buying shares in the club, fan groups falling out with each other after buying shares in the club and occasionally some football.

Rangers accounts are…err… comprehensive, clocking in at 59 pages. Having said that, there are some excellent disclosures that put other clubs to shame, showing a degree of transparency at times that is a credit to those who prepared the information. The financial statements touch upon the ongoing disputes with enemies both within and external to the club.

The club’s recent history is  a source for fiery debate in Scotland, and the legal status of Rangers International Football Club plc provokes incendiary comments on social media from polarised views on both sides of the divide.

None of the name calling is of any interest to us at the Price of Football, we are non-partisan.  As someone who works in higher education though, it is nice to see so many people from East Glasgow enrolling on night courses on Scottish Insolvency Law in recent years.

Suffice to say a club called Rangers ended up applying to join the Scottish Third Division,  and schools in small towns such as Elgin, Peterhead and Alloa had to introduce seventeenth century Irish history into the curriculum for the impending visit by the club and its fans.

The accounts don’t really answer the question as to how big are Rangers, as the numbers reveal a paradox when comparing to clubs south of the border.


Unlike clubs in the English Premier League, some of whom have 80% of more of their income from broadcasting rights, Rangers are reliant mainly on matchday income as a source of revenue. This is unlikely to change until the club starts not only competing but also progressing in UEFA competitions.

Rangers total income rose by just over 31% in the year to £29.2 million. This is some way behind Celtic’s total (for 2016, they have not yet published their 2017 figures) of £52 million, but way above that of the next largest Scottish club, Aberdeen (£13.4 million). Rangers third place finish in 2016/17 is poor compared to the club’s financial advantage over every SPL club except Celtic.

Compared to England, the income total places Rangers between Wolves and Leeds in the English Championship, but behind small clubs in the Premier League such as Bournemouth and Crystal Palace.

Promotion back to the Scottish Premiership (SPL) in 2016 led to an increase in average attendances at Ibrox from 44,359 to 48,893, of which over 43,000 were in the form of season tickets.

Such attendances drove matchday income to £21.6 million, far in excess of any club in the Championship, and would put the club in the top half of the English Premier League (EPL).

Admittedly Rangers matchday totals includes ‘hospitality’, of which there is probably copious amounts at Ibrox to help the locals give vocal backing to the team.

Broadcasting rights, whilst better in the SPL than the Championship, are still miniscule at £3.6 million compared to the £100 million minimum in the EPL.

‘Other’ income including shirt sponsorship (£1.5m) and commercial income (£0.3m) are also up significantly by 43%. Rangers should benefit in 2017/18 from having greater control over their merchandising in future years, following the resolution of a dispute with Sports Direct. This can be a significant sum for a club with such a committed fan base. Celtic, for example, had merchandise sales of over £12.5 million in 2016.


Rangers have had the second highest wage bill in Scottish football for a number of years. Even when they were playing against the local amateur teams in the third division the wage bill was over £17 million, more than the total of the bottom two Scottish divisions put together.

Wage costs were brought under control slightly in subsequent years, but promotion to the SPL resulted in a 35% increase in total wage costs.

Rangers’ unusual (but welcome) breaking out of player from other wages shows that player wages took up £10.4 million (59%) of total staff costs. This is quite low compared to English clubs, where player wages are usually in the 80-85% of total staff costs range.

This means that player wages as a percentage of total income was only 36% (29% in 2015), and total wages to income 60% (59% in 2016), a figure that would make many English owners jealous (in the Championship wages were 101% of wages in 2016).

Part of the reason for the good wage control was due to highest earner Joey Barton being only paid for a couple of months before getting a free transfer to Ladbrokes, and Kenny Miller was old enough to claim a pension and so wasn’t officially on the payroll.

How the other £7 million wages are distributed at Ibrox is not disclosed. If the club has an in house legal team I’d expect that they have been very busy in recent years and will have been paid accordingly.

In past years the highest paid director at the club has been on a significant sum, especially if viewed solely in the role of running a lower division Scottish football club.

As boardroom regimes have come and gone at Ibrox that particular cost has diminished, and directors have not rewarded themselves for the last couple of seasons. This is in contrast to Celtic, where the directors took home over £1.6 million in 2016.

Rangers did disclose that ‘key management personnel’ costs were £455k for the year. This is presumably the combined costs of Mark Warburton and the Yoda like Pedro ‘The dogs bark and the caravan keeps going’ Caixinha.

Other costs rose by 30% to £12.3 million, this is not fully disclosed, but increased repairs, stewarding, policing and travel for an overseas pre-season tour have contributed.

Rangers invested significantly in the squad in 2016/17 following promotion, with £10.3million being spent according to the accounts. This might cause a few eyebrows to raise amongst Rangers fans, as apart from £1.8 million for Joe Garner from Preston most signings were thought to be for no more than low six figure sums or free transfers. Perhaps Mike Ashley managed to sign himself for the club for £5 million in one of his more creative moves, as the numbers otherwise look very strange.

Alternatively there may have been some payments in relation to previous signings that were conditional on Rangers being promoted to the Scottish Premiership.

Celtic, by means of a benchmark, spent £8.8 million on players in 2015/16.

Equally baffling is the amortisation charge on these transfers of ‘only’ £1.6 million. Amortisation is the cost of the players spread over their contract period, so we would expect this figure to be much higher (£10.3/4 = £2.6 million, plus amortisation of the existing squad)  if players were on an average of a four-year contract.

Rangers showed a cost of £3 million in respect of resolving one of their many disputes. This particular one was with a man who is as unpopular in Newcastle as he is at Ibrox, Mike Ashley. The settlement did however allow Rangers to have greater control in terms of selling and making profits from merchandise sales. Rumours that all you can eat restaurants in Glasgow were celebrating as Ashley severed his ties with the city, as they lost money every time he visited, have yet to be confirmed.


Profits are income less costs. Rangers losses more than doubled in the year to £6.3million (£2.7 million 2016). Excluding the Mike Ashley payoff, the losses are broadly the same as the previous season.

Losing £120,000 a week is substantial, although half of it is a one off cost. For Rangers to turn to profitability they will need to make progress in Europe, as it is not realistic to increase their other income streams, and for that they will need to invest in the playing staff, or get a manager who can manage.

Rangers have claimed that their EBITDA profits (which exclude non-recurring items, depreciation and amortisation, are £110,000. We’ve done our own calculations and arrive at a loss of about £700,000. There’s no agreed definition for this category of loss, it just depends on the assumptions used. What is important is that Rangers losses are looking far lower than a few years ago.


Whilst Rangers do have a fair amount of debt (£14.4m), most of this is in the form of loans from directors and friendly parties. These loans are due for repayment in July and December 2018, and July 2019 It’s not possible to see how such repayments will be made, so we anticipate lenders will roll over the debts to a later date. Alternatively, Rangers might issue shares to investors which are used to pay off the loans.

Rangers have other outstanding legal issues, which may or may not increase the level of indebtedness.


To a certain extent Rangers are boxed in. Celtic have had the benefit of Champions League participation, which, even if they are regularly knocked out in the group stages, gives them a minimum £25 million a year advantage in terms of income, which can be used for player recruitment and wages.

Celtic benefit from the market pool in terms of Champions League distribution, which is where British clubs take more money out as a result of BT Sport paying such a huge sum to broadcast the competition.

The Europa League is a more realistic option for Rangers at present, but it is long haul before it starts to be lucrative for competing teams.

Whilst there is regular talk in the media of both Old Firm clubs playing in England, there’s no realistic chance of this occurring. English teams probably don’t want the competition, and there could also be a breach of UEFA rules.

Rangers therefore need to hope that they can secure investment, from a benefactor, rather than an investor wanting a financial return, to be able to topple Celtic and then have the riches that Champions League membership brings. But the club has seen in recent years promises from some of those at the top turn to dust.

Five Year Financial Summary

Rangers International Football Club plc 2013 2014 2015 2016 2017 Year
£’m £’m £’m £’m £’m Change
Matchday 13.2 12.4 11.6 17.3 21.6 24.9%
Broadcast 0.8 1.0 1.2 2.1 3.6 71.4%
Other 5.1 4.2 3.7 2.8 4.0 42.9%
Total Income 19.1 17.6 16.5 22.2 29.2 31.5%
Operating expenses
Staff costs 17.9 14.4 13.3 13.0 17.6 35.4%
Other costs 13.5 10.8 10.0 9.4 12.3 30.9%
EBITDA (12.3) (7.6) (6.8) (0.2) (0.7)
Player amortisation 1.7 0.9 1.0 0.8 1.6
Depreciation 0.8 1.3 2.1 1.6 1.6
EBIT (14.8) (9.8) (9.9) (2.6) (3.9)
Non-recurring income (costs) 16.2 0.0 0.0 (0.8) (2.5)
Gain on player sales 0.0 0.4 1.2 0.1 (0.4)
Total Costs 17.7 27.0 25.2 25.5 36.0
Operating profit/(loss) 1.4 (9.4) (8.7) (3.3) (6.8)
Net interest paid 0.2 0.1 0.1 0.0 0.0
Profit before tax 1.2 (9.5) (8.8) (3.3) (6.8)
Tax (0.3) (0.2) 0.0 (0.1)
Profit after tax 1.2 (9.2) (8.6) (3.3) (6.7)
£’000 £’000 £’000 £’000 £’000
Highest paid director 716 378 225 0 0
£’m £’m £’m £’m £’m
Total player cost 19.6 14.9 13.1 13.7 19.6
Wages/Income % 94% 82% 81% 59% 60%
Total player cost/income % 103% 85% 79% 62% 67%
Balance Sheet Highlights
Player trading
Player additions 1.6 0.3 0.3 1.7 10.3
Player sales 1.0 0.5 1.3 0.1 0.8
Net player addition/(disposal) 0.6 (0.2) (1.0) 1.6 9.5
Post year end player trading
Net cost (income) 0.0 0.0 0.7 3.0 (0.2)
Cash 11.2 4.6 1.1 3.0 2.8
Borrowings 1.7 2.4 9.2 9.0 14.4
Net debt/(cash) (9.5) (2.2) 8.1 6.0 11.6
Position 3D 1 L1 1 C 3 C 1 P 3

Stoke City 2016/17 Results: Bring on the dancing horses


We like Stoke City, owned by a local who has underwritten the club’s rise to the Premier League, free coaches organised for fans to away matches, decent ticket prices, oat cakes (if you’ve not tried them you are missing out), cheap beer…and Peter Crouch, one of the game’s most likeable players.

The club’s financial results are similar to the club itself. Nothing too flash, solid, dependable, which begs the question, why on earth have they just been relegated?

Summary of key figures

Income £136 million (up 30%)

Broadcast income £108.7 million (up 37%)

Wages £84.9 million (up 3%)

Wages to income 62% (79% in 2016)

Profit before player sales £3.7 million (£11.9m loss in 2016)

Player additions £35.9 million (£51.4 million in 2016)

Borrowings £75.7 million (up 27%)

Money wasted on Berahinho £12 million (nothing in 2016)


Stoke’s income rose by over 30% in 2016/17, which on the face of it, despite falling from their traditional 9th place to 13th, looks impressive.

This places Stoke broadly where you would expect it to be in the Premier League food chain. Not bothering the elite clubs with their football tourist fans and global commercial partners, but neither are they paupers.

Broadcast Income

Stoke are a club who are very dependent upon continued membership of the Premier League as broadcasting income is the key element of their finances.

A new Sky/BT domestic deal, coupled with the Premier League’s amazing ability to extract increased fees for broadcasting rights overseas, especially in emerging markets such as Asia, means that EPL clubs are sharing just over £8 billion over the three seasons commencing 2016/17.

As a consequence, the proportion of total income that comes from broadcasting for Stoke has increased from 69% to 80% since 2013. There is nothing wrong with this, but now that the club has been relegated,  even with parachute payments, there will be a big hole to fill.

The decrease in the final position from 9th to 13th in the table cost Stoke about £7.5 million in ‘merit payments’ in terms of broadcasting rights distributions. This is because 25% of the amount paid out is based on the final league position.

A further 25% of broadcast distribution is linked to the number of times a club appears on live domestic TV. Stoke had the third lowest number of matches (nine) broadcast, and so suffered relatively to small London clubs such as Crystal Palace (who had 14) who have more local derbies, which are popular with the TV companies.

Parachute payments are yet to be finalised, but are looking at approximately £41 milion in 2018/19, and, if the club don’t bounce back to the Premier League, falling to £34 milion and then £14 million in the following two seasons.

After that the club would be part of the EFL TV deal, which brings in about £6.5 million a season, slightly more if you are regularly chosen  for live TV.

Stoke sell out the Bet365 stadium every week, but it is not a huge cash generator. The Potteries is not a wealthy area of the country, and the Coates family, who own the club, have kept prices low.

Matchday income for 2016/17 was down 14% to £7.2million, which is the lowest for a number of years. This may be partly due to work undertaken to expand the capacity of the Bet365 stadium to over 30,000 for 2017/18.

There are not many figures available for other clubs yet for 2016/17, but an analysis of Stoke’s matchday income for the previous season shows that it is towards the bottom of the division in this regard.

Stoke’s ‘other’ income, which includes commercial deals and sponsorship, rose by 23% to just over £20 million. How much of this comes indirectly via the owners at Bet365, who are shirt sponsors as well as stadium rights, is unclear.


Despite the overall 30% increase in income, Stoke managed to keep a lid on wages in 2016/17. The wages bill only rose by £2.7m (3%) to £84.9 million. The previous season wages increased by 24%, so it appears that the club decided to gamble to a degree in 2015/16 on spending on players (and wages) prior to the new TV deal in 2016/17.

This is evidenced by the amortisation charge (player costs spread over the contract term) rising by nearly a third to £23 million.

The reason for such an increase is that after a couple of cautious seasons, Stoke had record spending in 2015/16, with mixed results, as Imbula, Shaqiri and Joselu were signed.

Last season Stoke somewhat bizarrely signed Said Beharinho, who most West Brom fans would have driven to the Potteries for nothing, and Joe Allen took up the bulk of the £35.9 million.

As most of these recent signings are on long term contracts, the amortisation costs will remain relatively high for a few more seasons.

The summer 2017 transfer window was a relatively quiet one for Stoke, the accounts show a net income of £1.9m as the signings of Wimmer and Indi were offset by Arnautovic and Joselu leaving.

It’s not just the players for whom wage restraint exists at Stoke, one director, in all probability chief executive Tony Scholes, had a 14% pay cut in 2016/17. Admittedly this took his paypacket down to a still considerable £806,000, which is the cost of a good night out in Hanley or Burslem.

Such levels of pay are quite common in the Premier League, with  ten clubs having highest paid directors on a million plus a year,  a decent return for deciding on what colour next season’s away kit will be.


As a family run club funded by the Coates family, the owners are not particularly motivated by making profits.

Profit is the residue after subtracting the running expenses of the club from the income. Prior to 2014 most clubs in the Premier League were losing money. Despite the riches of the game, income went out almost immediately in what Alan Sugar referred to as the ‘prune juice effect’. As each new TV deal was signed, players agents would negotiate improved contracts for their clients to ensure the extra money was swallowed up by higher wages.

Premier League owners managed to reduce the prune juice effect by introducing Short Term Cost Control (STCC) rules, which meant that the wage bill could only be initially increased by £4 million a year, unless the club also managed to increase its non-TV income.

The impact on Stoke shows how successful STCC has been, as the club has gone from losing over £30 million in 2012/13 to making a small profit in subsequent years.


Stoke have a solid financial base, but are still reliant on the Coates family, via Bet365, and are presently owed over £60 million, interest free, by the club.

It’s difficult to know where the club go next. 9th in the Premier League was about as much as they could realistically hope for, although there is always the allure of a decent cup run.

Provided fans are happy with this situation then the club can carry on in their present role, ruffling the feathers of some of the ‘Big 6’ who don’t fancy playing in front of a hostile local crowd, hopefully a cup run as a distraction now and then…and that’s it. So long as this is acceptable then the club has potentially a decent stay of execution in the Premier League.

Five year summary

Below are all the numbers from the analysis. Apologies for any mistakes!

Manchester City: Some girls are bigger than others


No trophies, third in the league, and the costs of embedding a new managerial regime may have had some thinking City would struggle financially in 2016/17

The headline figures are mixed, income is up significantly, profit before interest down 80%, but the club claims to have no debt and is self sufficient.

Direct comparatives with the previous year’s profit and loss account figures are slightly distorted by City having a 13 month period of account for 2016/17, so bear this in mind when looking at growth compared to 2015/16. There’s nothing sinister in our opinion in changing the year end to 30 June.


Clubs have three sources of income.


Matchday income at City fell slightly, mainly due to a relatively early knockout in the Champions League. The expansion of the Etihad in recent years has allowed City to generate £50m plus a season from matchdays, but this is still way behind United (£111m) and Arsenal (£100m).

City have always priced their tickets towards the lower end of the market, which is great for fans. Initiatives such as the ‘Tunnel Club’, where (presumably corporate) fans get to sit behind the dugout and see the players in the tunnel pre and post match show that City are trying to extract more from the prawn sandwich brigade.

Matchday income was only 11% of City’s total revenues. You would perhaps expect this from a small club in the Premier League such as Crystal Palace, but it does seem low for a behemoth such as City. United had 19% of income and Arsenal 24% from this source.


Broadcasting income was up 26% and tops £200m for the first time. This is mainly due to the impact of the new domestic TV deal with BT/Sky. UEFA TV monies actually fell by £13m due to City being knocked out of the last 16 round of the Champions League compared to the semi-final the previous year.

Compared to their closest rivals who have reported to date, at £204m City are slightly ahead of both United (£194m) and Arsenal (£199m)

Any growth in TV income in 2017/18 will be dependent upon City’s progress in the Champions League, as the domestic deal runs for three seasons. Even if City win the Premier League they will only receive about an extra £4m in terms of merit payments.


Commercial income at City normally causes Arsene Wenger, an intelligent man who is nonetheless known for whining at events at the Etihad both on and off the field, to start muttering ‘Financial Doping’ as his handlers reach for the smelling salts.

This income source rose over 22% to £218 million. The reason why eyebrows are raised in relation to City in this regard is the club’s commercial links with related parties to the Abu Dhabi owners.

City’s critics accuse the club of negotiating deals at above market rates, overinflating income and therefore allowing the club to pay more for wages and transfers whilst complying with Financial Fair Play (FFP) regulations.

City have fallen foul of FFP issues in the past, but we suspect they have been very careful to adhere to the rules in the present climate of UEFA inspectors.

Can clubs manipulate their finance to comply with the rules? The answer in our opinion is an unequivocal yes, but that is the subject of a separate blog post. Are City guilty of such behaviour? We have no idea, but expect City to not be subject to any UEFA sanctions (the Premier League’s own FFP rules are much easier to satisfy than those of UEFA).

City’s commercial income is still some way behind that of United (£275.5m) but United are in a league of their own when it comes to global appeal, and their commercial department negotiates deals accordingly.

City are way ahead of Arsenal (£125.4m) in this income source, which is perhaps a testament to Arsenal’s inconsistent appeal to sponsors and their commercial department’s rather disappointing performance.


The main costs for a club are player wages and player amortisation (transfer fee costs spread over the life of the contract).

City’s wage costs, which had been under relative control for three seasons, rose over a third to £264.1 million. This compares to United (£263.5m) and Arsenal (£199.4m). When Sheik Mansour acquired City, the club had to play over the odds in wages to attract high quality players, as Champions League appearances were not in the offing. This explains why wages were so high in 2013.

Clearly recruiting Pep Guardiola and his team, new signings and improved contracts for some squad members came at a cost.

Despite the increase in wages, City’s wage expense as a proportion of total income, which has risen in the year, is a healthy 56%, although notably higher than United (45%) and Arsenal (47%).

Amortisation charges are up nearly 30% to £121.7 million.

‘Other’ costs rose 23% to £104.3 million. It’s not clear what has driven such an increase.

One thing that may have Arsene Wenger once again being only allowed to eat with a spoon is directors’ pay. This is in the City accounts at a zero figure.

City’s parent company, City Football Group Limited, (which is not subject to FFP as such, and has not yet published its results) had ‘key management compensation’ (presumably director pay) of £4.4 million in 2015/16. Such behaviour prompts City’s critics to accuse the club of transferring some costs to other outposts of the City group empire to ensure the club of complying with FFP.

Whilst City have no direct bank debt, they do show an interest cost in relation to the Etihad stadium. Whilst not wanting to bore you with accounting dullardness, because the Etihad is rented on a 250 year lease, which is effectively its useful life, the stadium is treated as being an asset of the club, funded by a loan from the council.

Offset against the above costs is gains on profit sales of £34.6 million (see below for more detail).


Profit is an abstract concept, in theory it should simply be income less costs. In practice there are a range of profits quoted, depending on which costs are included.

City are quoting a profit of £1.1 million for the year. This is however after taking into account gains on player disposals. Whilst we expect to see clubs making a profit on player sales each year due to the way player signings are treated in the accounts, this figure is volatile as it depends on individual player disposals.

Excluding player disposals, City’s EBIT (which is ‘recurring’ profit before interest and tax) was a loss of £30.2million, compared to a profit of £2.8m the previous season.

Adding back the non-cash expenses in the form of depreciation and amortisation gives an EBITDA profit of £105 million, which is very close to the previous year’s £109m. United made an EBITDA profit of £200m and Arsenal £145m, reflecting City’s relative generosity in terms of wages compared to the two other clubs.

City had a negative tax expense in 2016/17.

Player activity

City spent £203.5 million on the likes of Stones, Jesus, Gundogan and Sane in 2016/17 (what about Nolito and Claudio Bravo some of you will of course also cry? We’ve not mentioned them as they are, in the words of former Manchester legend Frank Sidebottom, a bit bobbins, and we don’t want to embarrass Pep, especially as my wife fancies him).

If these players are each on five year contracts then this gives an extra amortisation cost of £40.6 million (£203.5/5), which ties into the cost analysis above.

In terms of disposals, City sold players for £51 million, to give a net spend for 2016/17 of £153m.

Hidden in the footnotes to the City accounts are a couple of interesting figures (interesting only to those who are still reading this tedious summary we suspect). The first is contingent liabilities. This is the sum City have to pay to players and former clubs if certain achievements (appearances, trophies, international caps etc.) are met. This is £111 million at the end of June 2017.

City had a spending spree in Summer 2017, mainly on signing Mendy, Walker, Bernardo Silva, Ederson and Danilo. A number of players left the club too, but the accounts reveal a net spend of £161 million in the window.


City’s owners are not motivated by making profits, so the breakeven in the year is more to do with keeping the beancounters at UEFA happy more than bringing a smile to face of Sheik Mansour.

Their business model in relation to being part of a group with tentacles in many clubs across the globe will fuel idle gossip and accusations from the club’s detractors.

For those who think that all this financial analysis is a load of old cobblers, there’s a case for saying, just watch the football, which is possibly the best seen in the Premier League since its inception (although of course no trophies are won in November).

Financial Summary

Key figures from the accounts shown below


Hull City 2017: Marooned in Flamingoland

They came, they saw, they went back to the Championship. If ever a club in recent years deserves the ‘Yo-Yo’ label, it is Hull City. In the ten seasons commencing 2007-8 the club has been promoted and relegated three times.

Hull were promoted via the playoffs in May 2016, but spent the summer in limbo, with a clear conflict between the owner Assem Allam and manager Steve Bruce, presumably over recruitment.

Mike Phelan took over as caretaker, and on the back of a victories in the first two matches the club made the decision to appoint him as manager on a full-time basis.

It’s doubtful whether any other £100 million a year business would make decisions on the fly in such a manner. Somewhat predictably, Hull’s season went into a nosedive, and they had one win in the next 18 matches, leading to Phelan being sacked.
Hull spent £32 million in the transfer market, mainly on cast offs from other Premier League clubs (Ryan Mason, Will Keane, James Weir), loanees and unheard of foreign signings.

Hull’s relatively conservative transfer policy has resulted in some more established Premier League clubs questioning the distribution of broadcasting revenues and parachute payments to relegated clubs.

Whilst Hull didn’t lose many of the players during the summer window, by the time January arrived the vultures were picking over the relatively few bones left, with top scorer Robert Snodgrass and Jake Livermore jumped ship for West Ham and West Brom respectively in £10 million plus deals.

New manager Marco Silva managed to improve results compared to Phelan, taking the club out of the relegation zone, but defeats to already relegated Sunderland, and fellow strugglers small London club Crystal Palace, sent Hull down.

Silva left for Watford, and Hull’s manager became the splendidly named Leonid Slutsky, who we think used to play Spock in the original Star Trek.

Hull’s figures in recent years highlight the impact that promotion to the Premier League can make. In 2012/13 the club’s total income was £17 million, of which £5.9 million was their final parachute payment after being relegated from the Premier League in 2010.

Income for 2016/17 was nearly £117 million, due to the popularity of the Premier League with broadcasters. A new three-year TV deal with Sky and BT commencing in 2016/17 along with recently boosted overseas rights. Hull’s TV income, despite relegation, was £94 million, or 80% of total revenue. All clubs in the Premier League benefited by on average £35 million due to the new deal.

Because Hull were relegated immediately after being promoted in 2016/17, they will only receive parachute payments for two seasons.

Gate receipts were marginally up in 2016/17, 10% to £7.9 million, but other match day income, presumably corporate boxes and perhaps perimeter advertising (clubs are notoriously vague as to what appears in individual headings) quadrupled from £2 to £8 million.

‘Other’ income, which includes commercial and retail, benefited from Hull’s promotion too. The sad thing in relation to this is that Hull ditched our favourite shirt sponsors, Flamingoland, home of the Mumbo Jumbo extreme ride, for a generic betting organisation.


As always the biggest outlay for a professional club is in relation to players. Hull’s wage bill more than doubled to £61 million, partly due to signings, but also due to pay rises for the existing squad.

Hull are only the third Premier League club to publish their results, so it’s not possible to directly compare with their peers, but it would have been bottom three compared to the Premier League the previous season.

Given the increase in income due to the TV deal mentioned above, we would expect wages to rise for most clubs. Premier League club owners have tried to restrict all of this money ended up in players’ wage packets via the pompously named Short Term Cost Control (STCC rules), which restrict the increased amount spent on wages to £7 million PLUS any extra non-TV money earned by the club.

Whilst wanting to appear noble, the aim of STCC is to increase the profits for the owners of clubs, by restricting the amount that goes to players.

The other main player cost is player registration amortisation. Whilst this is a non-cash expense, it is linked to the amount Hull have paid in respect of transfers, spread over the contract life period. At £32.6 million, it is a sizeable sum, but will fall in 2017/18 as Hull have offloaded some players.
Combining the two player costs shows that Hull have struggled in the Championship to deal with the demands of the division.

On the plus side in 2013 and 2016, when Hull were in the Championship and total player costs exceeded income, the club was promoted both times. These figures therefore include promotion bonuses (£10.4m in 2016, not disclosed in 2013).

One other cost that is noticeable in Hull’s books is the interest expense. The vast majority of Hull’s loans are due to the owner and/or Allamhouse Ltd, a company owned by the owner.

The interest rate on the loans, calculated very crudely by us, is not particularly high, and likely to be much lower than that charged by a bank.

Profit represents total income less the costs of running the club. The profits after tax belong to the owners, and can either be reinvested into the club or paid out in the form of dividends (very rare though, except for Manchester United) .

Hull are a perfect example of why English clubs in the Premier League are attractive to owners. In that division they make a lot of profit for owners, as well as being high profile outfits that are seen globally by TV viewers.

There are a variety of profits that tend to be analysed.
Profit before tax is as it says on the tin.

Operating profit is income less all costs except tax and finance costs.

EBIT is the same as operating profit, adjusted for non-recurring items such as gains on player sales (which, whilst arising each year, tend to be volatile and unpredictable) and legal claims.

EBITDA is the same as EBIT but has the non-cash expenses of depreciation and amortisation added back. This is a proxy for the sustainable ‘cash’ profit made by the club.

Hull’s figures show the price to be paid for playing in the Championship, as well as the rewards of the Premier League. Promotion in 2016 resulted in a boost of over £55 million to Hull’s profit before tax, with the other metrics improving too. Over the five year period of the analysis the club made a profit of just over £10 million. Nothing too excessive, but still enough for a good Saturday night out in Hull city centre.
Hull banked a lot of money in 2016/17 from their one season in the Premier League. As well as selling their crown jewels in the January 2017 window, the remaining good players in the shape of Harry Maguire, Tom Huddleston, Sam Clucas and Andrew Robertson departed in summer 2017. This could be part of a strategy to streamline the wage bill.

Their replacements have not fared well, and Hull are presently hovering near the relegation zone in the increasingly cut throat Championship. The only positive from this is that is Hull continue to perform poorly we could see a return of Flamingoland as the shirt sponsor.

One area of possible concern is the relationship between the club and its owner. Since failing to get the football authorities to change the club name to Hull City Tigers,  Assem Allam has been throwing his toys out of the pram with a series of Trump like inflammatory statements.

In the last year, Hull have increased, then decreased, the number of shares that they have in issue. Whether this was due to a potential sale or part sale of the club is uncertain, but Hull are best filed under ‘watch this space’ in terms of ownership for the foreseeable future.