Celtic and Rangers 2019/20: The Watchman

Innocence is hurting
A world speaks out of tune
Promise calls and promise falls
What are we to do?


No one expects football clubs to have had a good 2019/20 financially due to the impact of Covid-19, but now that the two large Glasgow clubs have published their results, just how badly were they affected by the ravages of the pandemic?

Every business has been impacted by COVID-19, but can Scottish football survive until hopefully successful vaccinations allow a return to ‘normal’ life?

Financial Summary

Celtic Rangers
£’m £’m
Revenue 70.2 59.0
Wages 54.3 43.3
Player amortisation 12.2 7.6
Day to day profit (22.6) (16.3)
Profit before tax 0.1 (17.8)
Wages/Revenue % 77% 73%
Player signings 23.5 11.0
Player sales 19.6 1.1
Net debt/(cash) (12.8) 7.1


In football clubs generate revenue from three main sources, matchday, broadcasting and commercial, the latter of which covers a myriad of activities.

Living in a COVID-19 environment today means that matchday income has been hit severely in 2020/21, but last season clubs were able to play matches before crowds until March.

League football generates solid revenues for both clubs, but progress in Europe makes a huge difference, a capacity advantage of nearly 10,000 should in theory give Celtic more matchday income than their rivals but Rangers’ had nine home matches in the Europa League compared to eight for Celtic.

Equal matchday revenue would probably not have been achieved had COVID-19 not arisen, as Celtic’s capacity advantage would have come into play towards the end of the season but the difference would almost certainly have fallen from £11.3 million the previous season.

No one would expect Scottish clubs to generate more matchday income than English clubs competing in Europe, especially those in the Champions League, but Rangers and Celtic are well ahead of any club other than the ‘Big Six’.

No other country in Europe is as reliant on matchday income as a proportion of the total as Scotland, which is a testament to their devotion, and last season Rangers fans contributed 60% of revenues despite some matches taking place behind closed doors.

Only £21m a year was being made by the SPFL for domestic TV rights, and so qualifying for UEFA competition is critical for Scottish clubs in terms of boosting revenues.

Numbers are not out yet from UEFA in respect of 2019/20, but Rangers did get bonuses of about €7m for getting to the last 16 from their results, and this can be topped up from various pots that apply to the competition.

Having been in the Champions League group stages twice made a huge difference to Celtic at the time but has a legacy impact in the form of UEFA’s ten year coefficient, a form of parachute payment to ensure that larger clubs are not penalised if they fail to get into Europe in a particular year.

Aberdeen have the third highest broadcast income in Scotland but that is only £3.4 million.

Scotland however has a smaller population that England where the broadcast deal is worth about £3.1 billion a season and the lowest team in the division earned £104 million in 2019, although this may be lower in 2020 due to COVID-19.

Getting sponsorship and commercial deals is never easy, but both Celtic and Rangers are big brands and fans in many countries.

Included in commercial income is merchandise/retail sales, some Rangers fans have boycotted this in recent years due to disputes with Mike Ashley’s Sports Direct organisation.

Narrowing the gap between the two clubs is feasible in 2020/21 as Rangers have signed a new deal with Castore, and Celtic’s poor start to the season is likely to impact upon kit sales.

Gathering together the three revenue streams shows that the gap between Celtic and Rangers, which was £69 million as recently as 2018, is now down to £11 million.

Europa League success for Rangers, if they progress from the group stages into the knockout, could result in the gap being eliminated totally but the gap with English clubs will still be large unless either or both clubs make it into the group stages of the Champions League.


Rangers and Celtic unsurprisingly have the highest cost bases in Scottish football, with the emphasis on wages and transfer fees.

Player wages in Scotland are not disclosed for all clubs, but for those clubs that do show details gap between the Rangers, Celtic and the rest is huge.

Until Steven Gerrard arrived the wage gap between the two clubs was never less £20m, and Celtic paid out big bonuses when the team qualified for the group stages of the Champions League.

But in the last two years Celtic’s wage bill has fallen, partly due to the bonus structure and the Rangers board has sanctioned an increase in staff costs to first recruit Gerrard and then commit to his squad changes.

Every player that is signed on a big transfer fee tends to come with a big wage and Rangers wage bill increased by 25% in 2019/20 as the club brought in new players without having big earners being sold.

Scottish wages tend to be reasonable as a proportion of revenue, especially compared to some clubs in England which are as high as 226% but UEFA recommends aiming to keep it below 70%.

Both Celtic and Rangers were above the UEFA red flag in 2019/20 but the inability to generate matchday revenue meant that this should not be a critical issue in the short term.

The other main player related cost is the transfer fee amortisation cost. This is transfer fees spread over the contract life. So, if Ryan Jack signed for £6.4 million on a four-year deal this works out as an annual amortisation cost in the profit and loss account of £1.6 million (£6.4m/4).

Within the last few years, the amortisation costs of both clubs have increased as Rangers investment in transfer fees has resulted in Celtic doing similar. The quality of the recruits is best assessed by fans rather than spreadsheets though.

One employment cost that is purely incurred by Celtic is directors’ pay. This has remained broadly constant in recent years at about £1.5 million a year although there were long term bonuses paid out in 2018/19. The Rangers board has not traditionally been paid for their services.

Profits and Losses

Profits are revenues less costs, and there are a variety of profits that are used by analysts. Operating results from day to day trading resulted in losses for Rangers for each of the last eight years but Celtic’s losses have been higher for the last two.

If non cash costs such as amortisation and depreciation of the stadium/training ground etc. then EBITDA profits/(losses) arise. EBITDA is a cash proxy for profit and ideally should be a positive figure. The fact that it is negative for both Celtic and Rangers is a cause for concern, although again COVID-19 is a contributory factor. The impact of the Champions League is very much highlighted by the high EBITDA profits in 2017 and 2018.

Celtic’s business model in recent years has been based on selling one player a season at a substantial profit and 2019/20 was no exception as Kieran Tierney departed to Arsenal. These profits have helped Celtic to offset the day to day trading losses.

These profits have not been replicated at Ibrox and combined with interest costs on some borrowings Rangers have ended up with better pre-tax figures. Such losses can only be dealt with if there is external funding, either from borrowings or shareholder investment.

Player trading

Rangers have substantially increased player purchases since returning to the Premiership, spending on average £10 million a season, and this has continued in 2020/21 with a further £15 million of spending on the likes of Roofe.

Celtic have at least matched their rivals’ spending but on a net spend level have been more conservative.


Celtic have not borrowed any money in recent years because their player sale model has meant that they have broken even most years. Rangers have borrowed money, mainly from directors, although substantial amounts have been converted into shares. So, although Rangers borrowed more than £23 million during 2019/20 at the end of June 2020 the actual sum outstanding was only £18 million. Celtic have rearranged their overdraft facility with the Co-Op bank and increased the limit to £13 million but had not used any of this at 30 June 2020.

Rangers board of directors have said that they will need potentially another £8.8m for the rest of 2020/21 and £14.4m the following season to continue to trade due to the impact of COVID-19. This puts pressure on the board to deliver this funding but Rangers also now have saleable assets in the squad that could deliver these sums.

Other issues

Rangers have some outstanding legal issues with the likes of Sports Direct and a former employee. According to the accounts there is a potential cost of £3.1 million for the legal fees in relation to the former of these but the final settlement could be higher or lower.


Celtic have had a substantial financial advantage over Rangers and all other football clubs in Scotland for many years. This has been a major factor in their success in winning trophies during that period. That financial advantage has eroded though in the last couple of seasons and perhaps the club has been complacent in terms of player related issues. Rangers are now able to genuinely challenge Celtic and have made a far better start both domestically and in the Europa League. If Rangers qualify for the Champions League group stages, then they are likely to overtake Celtic in terms of revenue generation in a league where finishing second for either team is regarded as failure.

Project Big Picture: My Coup-a-Choo

Coup, Coup, I just want you…

In October 2020 Sam Wallace of The Telegraph revealed ‘Project Big Picture’ (PBP). An attempt by the American owners of Manchester United and Liverpool to radically change the layout and governance of the English game.

The project was hailed by some as addressing wealth distribution issues and financial losses made by clubs, especially those in the lower leagues. In truth it was a power grab by people who see football as a business. They see fans as mugs to be patronised, monetized and provide a backdrop that looks good on television when selling broadcasting rights.

Under present arrangements there is an approximate three times multiplier in terms of revenue earned by clubs between different sectors.

The ‘Big Six’ teams in the Premier League earn about three times the income of other Premier League teams. These in turn generate three times that of clubs in receiving parachute payments in the Championship, who have three times that of other clubs in the Championship, who have three times revenues of League One clubs.

The PBP headline proposals seemed very seductive with the emphasis on:

  • £250 million to clubs in the EFL
  • 25% of the Premier League TV deal going to the EFL (compared to presently about 13%, and much of this to clubs in receipt of parachute payments).
  • The Premier League would be reduced to 18 clubs, supposedly to help reduce fixture congestion
  • Carabao Cup scrapped.
  • Enhanced voting rights were to be given to nine clubs in the Premier League with the longest consecutive number of seasons in that division, with just six votes needed to pass changes in regulations.
  • The English FA would be given a ‘gift’ of £100 million.

An analysis of PBP proposal revealed that the devil was in the details.

£250 million to the EFL: This would be very welcome by clubs caught in a pincer movement of having to play matches to earn broadcast revenue but missing out on matchday income.

Premier League clubs generate 13% of income from matchday, but this is much greater in the EFL.

The small print of PBP revealed the £250 million proposed was not however a donation from the Premier League but instead a glorified payday loan which would be repaid from future share of broadcast revenues.

There is no doubt that clubs in Leagues One and Two are in desperate need of financial support and tend to have owners who are less wealthy.

The Premier League did apparently offer £50 million in the form of grants and these loans, but this was rejected by the EFL, as was a potential £350m offer for 20% of the EFL broadcast rights from a US based private equity company.

The sticking point in relation to financial assistance was in relation to the Championship. Owners of Championship clubs were collectively worth over £30 billion, according to reports in the English media, and so Premier League clubs questioned why they should provide financial assistance when the Premier League was itself unable to generate matchday revenue.

25% distribution of collective TV revenues to EFL clubs

Again this proposal looks very democratic, as the gap between the Premier League and EFL has grown significantly from when the Premier League started in 1992/3.

In that season Premier League broadcast revenues were £51 million, but this had increased by over 5,800% to over £3 billion by 2019, of which about half came from UEFA competition participation and international deals.

EFL clubs historically kept almost all of their deal with Sky Sports, worth £119 million a year, which is about 7% of the sum earned by the Premier League for its rights.

Embedded within the small print of PBP was a proposal to allow clubs to sell their own rights for up to eight games a season internationally. The revenues from these matches would be kept by the clubs themselves. In addition should the UK government lift the historic ban on matches being broadcast at 3pm on a Saturday, then clubs would be allowed to sell these rights too. This could result in the Premier League, instead of selling a package of 380 matches to overseas broadcasters, instead would have 162 on offer. The price paid by international broadcast partners, who have been willing to offer extra for exclusivity, would fall substantially.

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In addition the Premier League would be responsible for marketing and selling EFL matches too. Therefore EFL clubs would be in receipt of 25% of a much smaller cake than club owners may have thought they would be sharing. Whatever revenues they did receive would be subtracted from the £250 million advanced by the people behind the people at PBP.

By taking some of the matches in house and keeping all the revenues the gap between the Big Six clubs and the remainder would increase substantially. Uncertainty in terms of match results, a contributory factor to the popularity of the Premier League, would be substantially reduced as smaller clubs would not be able to compete for talented players, or refuse offers from the larger clubs for their stars. A less competitive Premier League would make it harder still for the organisation to persuade broadcasters to pay premium prices for a smaller product.

Reduction in the size of the Premier League and abolition of the Carabou Cup

If you are the owner of a club such as Manchester United or Liverpool, then having to play league matches against the smaller clubs such as Burnley and Crystal Palace is a chore. It is harder to charge premium prices for lucrative hospitality packages and the competitive nature of the Premier League makes it difficult to rest players. Then there is the genuine risk that the smaller club might refuse to roll over and win the match, as we’ve seen with Palace winning at Old Trafford and Villa thrashing Liverpool.

The ‘Big Six’ know that UEFA matches are lucrative, and so an expanded Champions League competition would be very lucrative.

The present UEFA Champions League format, which has eight groups of four teams followed by a two legged knockout matches and a final, means clubs can play up to thirteen games. Ideally club owners would like to see an expanded Champions League where there are more matches and more certainty of qualifying for the tournament.

By reducing the size of the domestic league this could be achieved, freeing up valuable weekday slots for an expanded European competition. Various proposals have been made, many of which involve clubs having a dozen group matches followed by a knockout format similar to what is presently the case. This would potentially increase the total number of Champions League matches to 19. In addition a proposed later start to the Premier League season would allow clubs to organise more pre-season tours, which are very lucrative for a handful of clubs.

Therefore the larger clubs would certainly have substantial financial benefits from the proposals, more games against glamourous (European) competitors and opportunities to synchronise more pre-season tours with commercial deals being signed in overseas countries.

As for the ‘Other 14’ clubs in the Premier League, they would have fewer fixtures, so less matchday income, and thus the wealth gap in the division would grow further.

Relegation to the EFL normally comes at a cost in terms of jobs as well as income. When Aston Villa were relegated in 2016 their employment numbers fell by 833 within two seasons. Similarly for Sunderland, relegated the following season, 226 jobs were lost in the same period. Usually when one club is relegated it is replaced by another, so there is a much smaller net impact on national employment, but reducing the size of the Premier League will negate this happening. These job losses are an irrelevance to the cheerleaders of PBP.

Just being in the Premier League can have a positive impact on a town/city’s overall wellbeing. When Brighton were promoted to the Premier League in 2017 the club arranged for an economic impact report after the first season in the top division. This report showed a net benefit to the local economy of £212 million, as being part of the Premier League brings added exposure and businesses in the local supply chain generate extra income, especially when matches are played at home.

The Carabou Cup, whilst being relatively unloved in terms of interest and attendances in the early rounds, contributes at least a third of the EFL domestic broadcast deal according to media reports. The clubs who would therefore lose out are the ones most in need of financial support.

Two clubs would also have to be kicked out of the EFL to accommodate a smaller Premier League, but given the lack of concern by the football authorities over the demise of Bury and Macclesfield Town this would have not caused too many sleepless nights for executives.

Parachute Payments

PBP proposes that parachute payments are abolished. Instead clubs promoted to the Premier League would have £25 million a year deducted from their share of broadcast rights for the first two seasons and this would be repaid to those clubs upon relegation.


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This would make it far more difficult for those clubs who are promoted to compete with those already in the Premier League. Equally when they were relegated they would have a financial advantage over existing Championship clubs, which is one of the reasons why some people criticise parachute payments in the first place.

Whether existing parachute payments within the EFL itself for clubs relegated between divisions and to the National League would also be abolished is unclear. If parachute payments are as evil as their critics claim, then why do they exist in the EFL itself? There is certainly a case for saying they are too high, but the logic behind them, which is to prevent relegated clubs going bust following relegation, has some merit.

Voting Rights

The proposed change to voting rights angered many people in football, anyone with respect for democratic process is likely to hold dear the concept of one person one vote. PBP aimed to destroy that and would effectively only require six clubs to be able to determine the future of English football.

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The somewhat bizarre proposal to have nine clubs with enhanced voting rights over issues such as broadcasting rights, ownership of clubs and promotion/relegation appeared to be a cynical move to get more support from some of the non Big Six clubs for the initial change to the Premier League constitution. Leicester City, who have won the Premier League more recently than Arsenal, Manchester United or Spurs were not going to be included in the elite voting gang.

This was seen by some commentators as revenge from the owners of those clubs who missed out on a Champions League place that Leicester stole from them in 2016/17 by having the temerity to win the Premier League the previous season through having the best team that season.

If clubs streaming matches proves to be lucrative, then it would only take 6 club owners to increase the number of matches streamed from the proposed eight, and this could be expanded into domestic as well as international broadcasting.

The control of English football by six clubs would be North Korean in its grip. For Newcastle’s takeover to be approved or rejected by the owners of Manchester United and Liverpool is staggering. There would be no incentive for the ‘Big Six’ to become a ‘Big Seven’ and therefore if the likes of Villa, Leeds, Everton do have genuine ambitions to break into the existing elite they could be easily thwarted.

For clubs in the Championship, they would be controlled by six clubs in the Premier League. In terms of existing governance, as well as not advising member clubs of the potential private equity investment, the EFL board rejected a few months ago a recommendation from Jonathan Taylor QC’s governance review for independent directors, and chief executive Dave Baldwin mysteriously resigned within 48 hours of PBP being announced. These things are probably just coincidences though.


Clubs in League One and League Two would no longer have to have academies. Instead Premier League clubs would be able to loan out up to four players to a single club. If the EFL club sacks the manager the Premier League club would be able to recall those players immediately.

This would mean that lower league clubs effectively become incubators for larger clubs, as the present Elite Player Performance Plan, which gives EFL clubs some (but not very much) compensation when their academy players are snatched by PL clubs, would cease to exist.

Small town clubs would therefore have little incentive to maintain academies, which would reduce opportunities in these areas, and have a knock on impact on employment and physical health development.

England and the FA

The authors of PBP say that the national team will benefit from PBP due to fewer fixtures. At present clubs tend to play their second string teams in the Carabou Cup, so scrapping this will have negligible impact upon England regulars. In terms of reducing the size of the Premier League, all that will happen is that the matches foregone will be replaced by bloated European Competitions, a FIFA World Club Championship, summer tournaments and friendlies.

If the Qatari or Russian government had been offering £100m ‘gifts’ to those who were choosing the destination of the FIFA World Cup then the media would probably accuse them of making bribes.

The authors of PBP have offered millions to the English FA (whose chair Greg Clarke seems to have been involved in the project too) who presently have a ‘golden share’ which can be used to veto issues such as voting rights and relegation/promotion.


There is a proposal to reduce ticket prices for away matches to £20, this will no doubt be welcomed by fans. The other proposal to provide some form of subsidised travel to away matches sounds better than it is in reality. The vast majority of fans travel to away matches by public transport or car as they prefer to arrive early at matches to see the sights, sounds (and let’s be honest pubs) of the places that they are visiting.


Whilst PBP was ‘unanimously rejected’ at a Premier League meeting following its leak to the press, many of the ideas contained within will resurface as those at the top try to increase their share on the finances of English football.

There have been 49 clubs who have participated in the Premier League to date. These proposals will make it much more difficult to increase that number due to proposed changes to the playoffs, where the club finishing third bottom of the Premier League will now participate, with the benefit of a PL budget.

The present 58% of total revenues shared by 30% of clubs (i.e. the ‘Big Six’) is not enough in the eyes of their owners, and to quote Gordon Gekko in the film Wall Street “The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit”.

Manchester United 2019/20: Spoilt Victorian Child

Past trees the fairies are flyin
Past trees with rose bushes in
The child was spoilt Victorian

Key Financial Figures

2019 £’m 2020 £’m Change %
Total Revenue 627 509 (18.8%)
Matchday Revenue 111 90 (19.0%)
Broadcast Revenue 241 140 (41.9%)
Commercial Revenue 275 279 1.4%
Wages 332 284 (14.5%)
Operating profits 44 (13) (130.1%)
Player purchases 103 162 56.7%
Net debt 198 474 139.3%

Losses are to be expected in a Covid-19 world, so it was no surprise to see Manchester United’s financial results take a dip in the year to 30 June 2020.

Under New York Stock Exchange rules (where Manchester United’s shares are traded) companies must publish accounts relatively quickly after the year end as it also has to sent out quarterly figures.

Keeping shareholders up to date is part of the price paid for those companies such as Manchester United who want access to stock market funds.

Every club has had a tough 2019/20, so with Manchester United being the first club to produce figures for last season caution should be used when comparing to other clubs whose numbers are for the previous season.


Starting at the top of the Profit and Loss account, Manchester United’s total revenue for the year ended 30 June 2020 decreased by 19% but there were mitigating factors.

Having had the highest revenue total of any Premier League club for the whole of its existence Manchester United faced the prospect of being toppled in 2019/20.

A lack of Champions League competition, having finished 6th the previous season, coupled with Covid-19 hit Manchester United, as the club has the highest average attendance and matchday income.

Whether United can hold onto top spot in the revenue table is uncertain, as Liverpool and Manchester City both had the benefit of higher league positions and Champions League participation last season.


Over the last decade Manchester United have tended to keep season ticket prices frozen, and 2019/20 was no different.

Revenue from ticket sales fell however as matches were postponed because of Covid-19 and when they returned, they were played behind closed doors.

Due to having the largest capacity stadium and sold out home matches Manchester United matchday revenues last season are still impressive even compared to figures from 2018/19 for all the other Premier League clubs.

Europa League matches, especially in the group stage, do not generate high ticket prices, but even so Manchester United are likely to top the Matchday table, although Spurs’ new stadium will make them potential challengers.


Revenue from broadcasting for a club the size of Manchester United comes from two main sources, Premier League and UEFA.

Some matches in 2019/20 were played after Manchester United’s financial year end (30 June) and the club has not included the broadcast revenue generated from these games in the figures.

Due to being in the Europa League, which only gets about a quarter of the broadcast income of the Champions League, Manchester United’s only made about £22m from UEFA, compared to £83m the previous season.

Ordinarily Manchester United earn more money from the Premier League than some clubs who finish above them in the table due to being so popular with broadcasters, and the £118 million for 2019/20 is likely to be surpassed by very few.


Unlike every other club in the Premier League, who all earn more money from broadcasting than other sources, Manchester United’s most lucrative revenue source is from commercial and sponsor deals.

Because Manchester United have so many blue-chip commercial partners their revenue from this area rose slightly in 2019/20 after a few years of flatlining.

Looking at the biggest deal with Adidas, who paid the club £78 million in 2019/20, Manchester United would have been subject to a 25% deduction if they failed to qualify for the Champions League two seasons running, so a third place finish will be hugely beneficial to the club for 2020/21 too.

Even when compared to other clubs 2018/19 figures, Manchester United’s ability to strike deals with sponsors is peerless, effectively earning the same as the combined commercial income of the ‘Other 14’ clubs added together.

Commercial revenue fell by about 10% overall in the final quarter of 2019/20, reflecting the impact of Covid, but suggesting that should some form of ‘normality’ return to life that Manchester United could exceed £300 million from this source.


Having high revenues is great, but a club still needs to spend them wisely to deliver success on the field of play.

Everyone knows that the key costs in relation to football are talent based in terms of the footballers at a club.

Expenses relating to players come in two forms in a profit and loss account, wages, and transfer fee amortisation.


Spending on wages at Manchester United fell by 15% in 2019/20.

Europa League participation was a significant factor in this decrease because Manchester United’s pay structure is heavily incentivised towards Champions League participation.

Because Manchester United played ten games after the financial year end of 30 June 2020 appearance, goal and other bonuses also were not earned, further driving down the overall wage total.

UEFA Champions League bonuses will therefore increase the wage bill in 2020/21, along with a full years wage bill for new contracts for Marcus Rashford and David De Gea, as well as the likes of Cavani coming in on large salaries.

Remuneration for executives at Manchester United also fell slightly, although the suits still took home £10.5 million plus many of them earning dividends too.

Given that Manchester City and Liverpool both participated in the Champions League in 2019/20 and finished as runners up and Champions of the Premier League then Manchester United may end up with the third highest wage bill for the season when the results are published for other clubs.

Even with a significant salary cost reduction in 2019/20 the average Manchester United first team regular had an annual wage of about £7.1 million.

Revenue fell faster than salaries and so Manchester United paid £56 in wages for every £100 of income, the highest proportion for a decade, but still well below UEFA’s ‘red line’ of 70%.


Amortisation is how the accountants deal with transfer fees, by spreading them over the life of the contract.

Non-cash this figure may be, but it does give an indication of a club’s long-term investment in player spending as it strips out the impact of large or small amounts spent on player signings in a single season.

Due to Lukaku leaving and Manchester United having a substantial number of first teamers such as Rashford, Greenwood and McTominay coming from the academy and so cost nothing in terms of amortisation the amortisation figure was broadly flat in 2019/20.

For critics of the Glazers, who believe the club has not invested enough in the playing squad in recent years, Manchester United still have the second highest amortisation charge of Premier League teams, as well as their success in bringing in players from the academy.

Running a football club of the size of Manchester United means there are other overheads too, but these fell by 15% in 2019/20 as fewer matches played following Covid meant lower transport, accommodation, and stadium costs.

Player sales

If a club sells a player then the profit (transfer fee receivable less the accounting book value at sale date) is taken directly to the income statement.

Each year clubs usually record more profits than losses due to the accounting values for players being cost less amortisation which explains why Manchester United have made gains in nine years out of the last ten.

Some clubs have business models where they aim to make a lot of money from player sales but Manchester United do not tend to take this approach.


Profits are revenues less costs, although talk to anyone involved in finance and they will often talk about a variety of different profit measures.

Operating profits are those made from the day to day running of a club. Due to Covid this fell by £57 million, meaning that the club lost money for the first time in a decade.

Manchester United must achieve an EBITDA profit (Earnings before Interest, Tax, Depreciation and Amortisation) of £65 million to avoid penalties being charged by lenders. The club easily achieved this target, making more than double the metric that could have triggered the penalty and higher than any other Premier League club except Spurs, even though the other figures are from 2018/19.

Financiers like EBITDA because it excludes non-cash costs such as depreciation and amortisation, and so many see it as a ‘cash’ profit measure, which is why it is often linked to borrowings.

Manchester United had an interest cost of £27 million in 2019/20, taking the total to £837 million paid since the Glazers acquired the club by borrowing £700 million in 2005.

In addition, Manchester United paid out £23 million in dividends to shareholders and £21 million in buying back shares from the stock market, perhaps to shore up the share price.

Player Trading

Many fans are unhappy with the Glazers in respect of investing in players, but the figures suggest it is the quality of players signed, rather than the sums spent, that is the problem.

Since Sir Alex Ferguson retired Manchester United have spent £1,173 million on players to 30 June 2020, and a further £101 million since then in summer 2020.

Manchester United have made a big effort in the last few years to reduce the sum they owe to other clubs for outstanding transfers. Leicester apparently insisted on the full fee for Harry Maguire being paid up front, which explains why there was a net cash cost of £192 million in 2019/20.


Manchester United’s debt increased slightly due to the continued fall in sterling against the dollar. The club’s loans are set out in dollars, so a weakening pound increases the value of loans in the accounts.

Net debt (borrowings less cash) increased spectacularly following the large cash cost of signing players along with monies from season ticket sales for 2020/21 not being sought due to Covid-19. Net debt was negative pre-Glazers and increased following the takeover, with reductions arising when the club raised some money on the stock market.

Manchester United’s actual cash balance fell from £308 million to £52 million, and the club has arranged for a £150 million overdraft facility to help it ride out the worst effects of Covid-19. In mid-October 2020 the overdraft facility was extended by a further £50 million.


Buried away in the small print of the 782 page document (on page 166 for those that are interested) the accounts disclose “We are in active discussion with UK tax authorities over a number of tax areas in relation to arrangements with players and players’ representatives”. This is probably connected to image rights disputes, where a portion of player remuneration is paid to a company, sometimes located offshore, and the player therefore pays less tax. Such arrangements tend to be opaque but are not necessarily tax evasion (which is illegal) but could be tax avoidance (which accountants prefer to call tax planning and/or compliance).

Manchester United paid their independent auditors, and former Ed Woodward employers PWC £446,000 for tax advice (up from £160,000 the previous year) as well as a devilishly impressive £666,000 for the audit itself. PWC have earned over £17 million in fees since becoming the club auditors nearly 20 years ago.

Manchester United also, perfectly legally, took advantage of Covid-19 legislation in the UK to delay paying £19 million of VAT. The club commendably did not use the furlough scheme.


Manchester United would have been happy with a third-place finish in the Premier League in 2019/20. However, the increased competition for Champions League places and the consequences of non-participation explain why the so called ‘Project Big Picture’ which aims to make the Premier League less competitive has been plotted for about three years.

EFL Finances: The Same Deep Waters As You

The clock is ticking for clubs in the EFL in terms of their ability to financially survive with the effects of Covid-19, money is needed, and quickly too, but who should be putting their hands in pockets…if anyone?

How should an industry which has learned nothing from the ITV Digital crash in 2002 and the economic slump created by bankers, accountants and debt rating agencies in 2007 be viewed in terms of its governance and regulation?

EFL clubs between them had a total net loss (total revenues less total costs) of £286 million in 2018/19.

Calculating profits is tricky though as they often contain one off profits such as stadium and player sales that do not occur every year.

Unfortunately, many clubs in the bottom two divisions don’t publish full accounts and so it is only possible to calculate operating profits for clubs in the Championship, these totalled over £600 million in 18/19.

Regrettably both Derby County and Sheffield Wednesday have chosen to not publish their accounts, so their figures are for 2017/18.

EFL Championship clubs have in the main lost money because of an inability to control player related costs, especially wages.

Spending more money on wages than is generated as revenue means that the finances of clubs at this level were precarious prior to the pandemic.

Due to getting a fixed percentage of the Premier League TV deal in the form of solidarity and parachute payments, EFL clubs have had some significant rises in their revenue streams over the last decade which have gone straight through to higher wages.

In 2017, for example, at the start of a new Premier League TV cycle, Championship income increased by £148 million mainly due to this deal but wages increased by £153 million.

Some clubs in the Championship, and many further down the EFL pyramid do try to operate a tighter financial regime but this is difficult with so many others in an arms race on wages and transfer fees chasing promotion.

In a division where the highest wage bill is 12 times that of the lowest it is difficult to have sympathy for those clubs paying out wages of over £1 million a year (£19,230 a week).

Nevertheless, there is a real danger of insolvency, especially in Leagues One and Two, who only get 12% and 8% respectively of the broadcasting deals in the EFL.

Premier League

The head of the DCMS, Oliver Dowden, has said the Premier League should ‘step up to the plate’ and provide financial support to EFL clubs, who are potentially looking at a £200 million income shortfall in 20120/21.

EFL clubs however received about £348 million from the Premier League in 2019/20 in the form of parachute payments as well as solidarity payments of £4.5m for Championship teams, £670,000 in League One and £450,000 in League Two.

Giving further funds to the EFL therefore grates with some Premier League club owners, who point to the potential £680 million shortfall in revenue they will suffer if matches continue to be played behind closed doors for 2020/21.

Reliance on matchday income is less critical for Premier League clubs than it is for those in the lower leagues, with 13% of total revenue coming from this source for the top tier compared to over 40% for many clubs in League Two.

Additional to parachute/solidarity payments, Premier League clubs have paid those in the Championship over £100 million during the summer by recruiting the likes of Nathan Ake, Ollie Watkins and Callum Wilson.

The Premier League clubs also point to the fact that they have not, unlike many companies of a similar size, used the government furlough scheme (and when some did contemplate this approach performed an immediate U-Turn due to fan displeasure) and that some Championship clubs (Birmingham, Villa, Reading, Sheffield Wednesday and Derby) sold their stadia to club owner controlled companies for nearly £1/4 billion in 2018.


It is the government who introduced the rules preventing football matches taking place before a paying audience, so should the government bear some of the financial cost that could cause the industry to lose some clubs over the next few months?

Over the course of the pandemic the football industry has been used as a target (Matt Hancock’s comments about player wages) and a source of positivity (the initial pilot schemes were championed as success in combatting the disease) by politicians.

No one is suggesting that the government pays all of the costs incurred by the industry, but for those clubs in the EFL who are suffering as a result of being unable to generate revenue, there is a sense of frustration that the government is focussing on the Premier League and ignoring the position of those further down the pyramid.

If the government can provide grants for the entertainment industry and the National League to allow it to play, should the same be the case for the EFL?

Some clubs in the EFL, such as Shrewsbury, Lincoln, Tranmere and Accrington Stanley not only operate on tight budgets but also are integrated into their local communities, offering respite and schemes for those most in need of help, and surely such efforts should be recognised?

The problem could be that the EFL does cover a range of clubs from those paying out wages varying from small tens of thousands a year to over a million, which makes it difficult for the government to be seen to be financially supporting all three divisions.

Having a scheme which is linked to individual club’s personal circumstances is a potential solution, but this would take time to implement and in the intervening period clubs could become insolvent.

English football is part of the fabric of our society and as such deserves preserving, the financial cost compared to other schemes is relatively low.

By supporting football, however, would the government be setting a precedent for other sports and outdoor related industries who would also be after financial investments?

EFL clubs in the main don’t pay much corporation tax as they nearly all lose money but do provide employment both directly and indirectly (transport, pubs, restaurants on match days etc) and so contribute towards HMRC’s employment tax receipts.

EFL Itself

Some people might take the view that the EFL, combined with clubs and owners, who are worth an estimated £32 billion between them, should take on the responsibility for funding the game during the pandemic.

The EFL is however only an organisational body, sometimes working for, sometimes at loggerheads with individual clubs in terms of agreeing and implementing rules.

A look at EFL finances does show that it has been a lucrative place of employment for some though.

Looking at wage figures at the EFL it does seem strange that someone’s salary shot up from 2016 onwards but critics will say that there was no improvement in the governance or financial success of the organisation.

Bury, Bolton and Macclesfield fans, and probably some from other clubs too will point to the continued self interest that appears to be the driving force of how the EFL operate.

Under Jonathan Taylor QC a governance review did take place earlier this year and the main proposal, that of the appointment of independent directors on the EFL board, was rejected.

Making a good case for financial support from other parts of the football world is now more difficult for the EFL when its own governance structure is called into question.

Gambling Companies

English football has proven to be very lucrative for gambling companies, with the likes of Bet365 generating over £64 billion in wagers that generated £3 billion of profits.

Viewers of football on TV will have noted that many shows are sponsored by betting companies, the EFL itself is sponsored by Sky Bet and over half of Championship clubs have front of shirt sponsors from the industry.

Even when a House of Lords Select Committee report recommended a front of shirt ban from betting companies recently the EFL acted as a cheerleader for the bookies by responding “The association between football and the gambling sector is long-standing and the League firmly believes a collaborative, evidence-based approach to preventing gambling harms that is also sympathetic to the economic needs of sport will be of much greater benefit than the blunt instrument of blanket bans.”

Reading between the lines the EFL clearly thinks that gambling companies are somewhere between Mother Theresa and the NHS in terms of the positive impact they have on society.

A 1% levy on gross bets placed could bring in substantial sums to the government and this could be used to finance EFL club finances and that of grass roots football too.

However, help is needed now, and it could take too long for legislation to be introduced in time to prevent clubs disappearing.

In addition, the betting industry could potentially go even further offshore than it is presently, and the government could end up out of pocket as a result.


The Premier League (probably) and EFL club owners (certainly in the bottom two divisions) can’t pay for the full shortfall with a full ban on fans attending games for its own games. The Premier League might be more supportive of a limited form of support for clubs in Leagues One and Two, perhaps the bottom of the Championship too, but this will not be a free lunch, and there will be some ‘concessions’ sought from the lower divisions.

The government is under pressure from a variety of industries to give them support, of which football is one. In the short term it could help as it has done in the National League in the last week, longer term it might look for some form of increased transparency and better governance from EFL clubs.

The betting industry has been a major beneficiary of football since the sport lockdown was lifted, but its lobbying power and ease at moving operations overseas means that it is not a short term solution to clubs that are already worrying whether they can pay the wages at the end of October and November.

Premier League Club Values 2020

Photo displaying partial image of two pie charts on a canvas-textured page
University of Liverpool Premier League Club Valuations 2020 University of Liverpool Centre for Sports Business Group

Executive summary

  • The value of Premier League clubs based on their 2018/19 accounts increased by 1.5% overall to £14.7 billion, with the ‘Big Six’ (Manchester United and City, Liverpool, Arsenal, Chelsea and Spurs) making up £11 billion (75%) of this total (2018: £10.6 billion 73%).
  • Spurs overtook both Manchester clubs at the top of the table on the back of reaching the Champions League final, a fourth-place finish in the Premier League and a wage bill barely half that of Manchester United.
  • Wolves, acquired for £45 million by owners Fosun in 2016/17 is now worth more than ten times that amount.
  • Many clubs have fallen in value due to relatively flat revenues as broadcasting revenues are in the final year of a three-year cycle.
  • The median value of a Premier League club fell from £366 million to £291 million.
  • The figures do not take into account the impact of COVID-19, which, based on falls in share prices for those clubs who are quoted on stock exchanges, would reduce values presently by 25-35%


This is the University of Liverpool’s annual Premier League club valuation report. There are a variety of models used in practice to determine company values, and in an actual takeover deal environment more than one would be used.

At a time of global pandemic football is an irrelevance in terms of its importance to the economy, health, and general wellbeing of nations. We took the decision to publish the results in the context that the findings are just discussion points for fans and not in any way to pretend that it is of any importance compared to the steps being taken to reduce the harm caused by the pandemic.

Some of the values reported do seem intuitively high or low. This is a reflection of shortcomings of any model-based system, but also does perhaps highlight the success or otherwise of some clubs in terms of their business strategies compared to sporting achievements.

Valuation Table


The valuation method is broadly based on the Markham Multivariate Model created by Dr Tom Markham, who presently is a senior executive for Sports Interactive, creators of Football Manager.

The model takes into consideration the main financial drivers of football club value in the form revenue, profits, non-recurring costs, average profits on player sales over a three-year period (which ties into how the Premier League calculates profits for Financial Fair Play purposes), net assets, wage control and proportion of seats sold.

The figures are derived from the financial statements sent to Companies House.

The model assumes that the club retains its position in the Premier League. For those clubs that have subsequently been relegated to the Championship realistic values are 60-70% lower.

The formula used is

((R+A) x ((R+P-NR+D)/R) x C)/W where

R = Revenue

A = Net Assets (adjusted for ‘soft’ loans from owners)

P = Net profit

NR = Non-recurring items (legal settlements, redundancy, player & asset sale gains/losses etc)

D = Average player sale profit over last three years

C = Average attendance/ Stadium capacity

W = Wages/Revenue

There have been some adjustments to components in the formula from the previous season and these are reflected in the comparative numbers.

As with all models, they should be treated with caution and in conjunction with other models to get a broader indication of club valuation.

Club by Club Analysis

1: Spurs £2,567 million (2018 3rd: £1,837 million)

All clubs have to compromise sporting achievement versus financial sustainability. Spurs’ control on the latter in recent years has meant them having something to put in the trophy cabinet in the new stadium in the form of winning this particular award.

Spurs have a degree of control over wages and player transactions that sets them far apart from their peer group in the so called ‘Big Six’ clubs.

Spurs income increased by 21% to £461 million in 2018/19, on the back of commercial deals at the new stadium and reaching the Champions League final. They achieved this despite their main player expenses, wages, and amortisation (transfer fees divided by contract length) being about half of some of their peer group.

Paying just 39% of their income in the form of wages gives Spurs a significant boost and their ability to keep wages so relatively low is the envy of many other club executives.

Whether this achievement is sustainable in the future is questionable, and a relatively poor season on the pitch in 2019/20 to date may be indicative of their low-cost base catching up with them.

2: Manchester City £2,186 million (2018 1st: £2,364m)

Manchester City’s first place position in the 2017/18 valuation surprised some commentators but was borne out by American investors SilverLake buying a 10% stake in the City Football Group in late 2019 for $500 million.

City’ value decreased slightly in 2019 despite winning three domestic trophies. Income advanced by 7% but the wage bill increased at three times this rate, possibly as a result of bonuses being paid for achieving targets in terms of trophies won on the pitch.

Since Pep Guardiola was appointed as first team manager City’s wage bill has increased by over £100 million and this has meant that profits have been relatively static.

City’s value is underpinned by the investment of Sheik Mansour’s Abu Dhabi United fund, which has allowed the club to have relatively low debt levels.

3: Manchester United £2,080 million (2018 2nd: 1,935m)

Manchester United’s value increased in 2019 due to an increase in profit on the back of slightly better player sales, lower tax charges and better overall cost control.

Whilst intuitively one might expect Manchester United to lead the valuation table they have had significant commitments in the form of interest charges on loans, which reduce profits, and dividends to shareholders, which reduce net assets.

Manchester United’s income advantage has been on the back of commercial deals with a variety of partners, but this advartage has stalled in recent years as the lack of on pitch success has led to commercial income plateau.

Manchester United were in danger of being overtaken in terms of generating the most income in 2019/20, but this is now less likely following Covid-19 which is likely to restrict income growth at both Liverpool and Manchester City, United’s biggest threats here.

4: Liverpool £1,553 million (2018 6th: £1,356 million)

Liverpool’s value increased in 2018/19, and the figures do not reflect the club winning the Champions League, which took place on June 2nd 2019 but their accounts go up to 31st May.

Had it not been for Covid-19 a further sizeable increase in the value would have been anticipated for 2019/20 on the back of the Champions League bonuses, World Club Championship success and almost certainly being Premier League champions too.

Liverpool’s owners FSG have seen a significant return on the £300 million that it cost them to buy the club in 2010.

Wage costs at Liverpool have doubled since 2015 as the club’s strategy appears to be to aim to break even on a day to day operating basis. The wage to income metric has operated in a relatively tight 56-58% band over recent years apart from the season that Jurgen Klopp was recruited.

Liverpool’s profits have been generated from player sales. Whilst this is an erratic and volatile method the supply line of players from Anfield in recent years has been such that they have made over £300 million from this strategy since 2015. These profits have been reinvested in improving the quality of the squad.

5: Arsenal: £1,374 million (2018 5th: £1,471 million)

Arsenal’s value has fallen for the second consecutive year due to once again only qualifying for the Europa League instead of the Champions League.

Revenue fell despite reaching the final of the Europa League, highlighting that this competition is a relatively minor earner and that Thursday evening football, especially in the early stages of the competition, is not a big draw for fans, broadcasters, or sponsors.

Arsenal are in danger of becoming detached from the rest of the ‘Big Six’ in terms of generating revenue and are falling further and further behind their peers in terms of the one area that the club can potentially grow, that of commercial income.

Arsenal made a pre-tax loss for the first time in many years as player sales generated £12 million profit compared to £120 million the previous season.

In 2017/18 Arsenal had to rely on player sales to reverse operating losses of £18 million as Oxlade-Chamberlain, Sanchez, Giroud and Walcott helped generate a profit of £120 million on disposals.

Less money in from player sales meant a lower investment in terms of recruitment too. Another season in the Europa League in 2019/20, combined with a relatively early exit from the competition is likely to see a further fall in Arsenal’s value.

6: Chelsea £1,231 million (4th: £1,615 million)

Chelsea’s value fell significantly in 2018/19 due to the club registering pre tax losses that exceeded over £100 million.

Chelsea’s income was static during the year as lack of Champions League participation led to falls in matchday and broadcast income. This was broadly matched by an increase in commercial revenue.

Chelsea have a disadvantage compared to the other ‘Big Six’ clubs in that the capacity of Stamford Bridge is considerably lower than that of the rest of its peer group.

Wages increased by 11% and transfer fee amortisation 40% resulting in Chelsea having player costs of £102 for every £100 of income, which helps explain the significant operating losses.

Roman Abramovich bankrolled a big spend on players resulting in the club being the biggest spenders on players last season.

Abramovich’s motives are as opaque as ever. His decision to stop progress in relation to moving to a new stadium appeared to be a reaction to a falling out with the UK government over visa issues.

He then lent Chelsea a net £248 million in 2018/19 to underwrite the investment in playing staff which seems inconsistent with his approach in relation to the stadium.

7: Wolverhampton Wanderers £458million (2018: Championship)

Wolves’ appearance this high in the table in their first season in the Premier League is likely to be questioned, but this reflects their success both on and off the pitch.

Wolves invested £111 million in player additions in 2018/19, but this resulted in a 7th place finish and qualification for the Europa League.

Wolves had relatively good wage control, paying just £53 in wages for every £100 of income, the fourth best in the division. Expect this to increase in future years as further signings and new contracts for established players outstrips revenue. This will have a negative impact upon the valuation when wages rise.

Owners Fosun have made a spectacular return on the £45 million it cost them to buy the club in 2016.

8: Newcastle £387 million*

Newcastle disappointingly but unsurprisingly have not published their 2018/19 accounts, so the above valuation is based on 2018 figures adjusted for changes to the model formula. UK Chancellor Rishi Sunak made an announcement in late March 2020 that companies could take an additional three months if they wished in submitting their accounts.

Mike Ashley, a master at the dark arts of Companies Act compliance, was one of only two Premier League teams to take advantage of this change to the rules.

Newcastle are presently subject to an estimated £300 million sale, which takes into account the disruption of COVID and Newcastle’s wage bill presently likely to be considerably higher than the 2018 figure of £93 million. This will reduce profits and increase the wage/income ratio, both of which would cause the MMM value to fall.

Profits in 2018 were £21 million due to good cost control and modest transfer spending, an issue which has frustrated many of Ashley’s critics, who feel more money should be invested in the playing squad.

9: Burnley £350 million (2018 8th: £398 million)

Burnley’s regular appearance in the top half of the valuatoin table always provokes queries, but ultimatly reflects that they are in many ways the club that punches above their weight both on and off the pitch.

Burnley’s income decreased slightly in 2018/19 despite participation in the Europa League. A fall from 7th to 15th in the Premier League meant far lower prize money (this works out at about £2m per place in the final table) which offset the additional revenue from Europe.

Burnley’s success is built around a modest wage and transfer fee budget. They usually recruit domestic players who have proved themselves to be successful in the Championship.

Burnley have not required any cash injections from their owners for a decade and have the ability to deliver profits on an annual basis when they are in the Premier League and modest losses when in the Championship.

10: Leicester £304 million (9th: £378 million)

Leicester’s value decreased significantly in 2018/19 mainly due to costs rising far faster than revenue. Leicester have invested significantly in players since winning the Premier League in 2016, and this has caused both wage and transfer fee amortisation costs to accelerate.

Leicester had wage and amortisation costs of £120 for every £100 of income in 2018/19. Whilst this was offset to a degree by profits on player sales, it is indicative of the challenges for any club that is attempting to break into the ‘Big Six’.

The sale of Harry Maguire and a potential Champions League finish in 2019/20 should generate an increase in Leicester’s value.

11: Watford £279 million (2018: 18th £168 million)

An improved Premier League position, FA Cup final appearance and a reduction in the wage bill have contributed to Watford’s value increasing in 2018/19.

In addition the sale of Richarlison to Everton meant the club made £22 million in player profit sales.

Like many of the ‘Other 14’ clubs Watford are reliant upon Premier League broadcast income for most of their revenues. This was a major concern earlier in 2019/20 after a poor start to the season, but with improved form under Nigel Pearson they now have a fighting chance of staying in the top division.

Watford, like most clubs in the Premier League, are still making losses on a day to day basis, but player sale profits covered those losses in 2018/19.

12: Fulham £276 million (2018 Championship)

Fulham’s value looks high and benefits from the club being promoted to play in the Premier League in 2018/19. What is becoming increasingly common is that clubs make a profit in their first season in the topflight but that is quickly reversed. Fulham however made a £21 million operating loss in 2018/19, partly due to an increase in wages but also due to spending £120 million on new signings.

Fulham’s results suggest that regardless of division, parachute payments or promotion, owning a football club is an expensive business, with losses averaging £500,000 a week over the last seven years.

13: Southampton £269 million (2018: 10th £369 million)

Southampton made an operating loss of £58 million in 2018/19, so their relatively high position in the valuation table may seem at odds with their day to day trading activities.

The club’s main ability is to develop players and sell them at a profit. Since promotion to the Premier League Southampton have generated over a quarter of a billion pounds of profit on player sales.

Whether the club can continue to make such gains in the post-COVID 19 transfer market is uncertain, as the consensus of views is that fees will be significantly depressed as sellers may be prepared to accept fire sale prices and buyers have limited funds to spend.

14: Everton £257 million (11th: £363 million)

Everton were valued at £175 million when Farhad Moshiri acquired the club in 2016. Their relatively modest present valuation is due to a significant investment in players which have been hit and miss in terms of improving results.

A repeat of the 8th place finish the previous season meant no additional prize money for Everton, wages increased partly due to their accounting period being extended to 13 months and the amortisation charge continues to grow rapidly as Richarlison was added to the squad.

The combined impact of this investment in players resulted in an operating loss of more than £100 million. This is sustainable in the short term under Premier League Profitability and Sustainability rules. Everton have had this season to resort to some unusual transactions, such as selling an option on naming rights for their yet to be approved stadium, to stay within the limits.

Everton are limited by the size and age of Goodison Park, where matchday revenues of £14 million make up just 8% of the total. A move to the new stadium at Bramley Moor Dock is essential if the club wishes to start to challenge the ‘Big Six’ financially.

15: West Ham £248 million (12th: £321 million)

West Ham is another club who most fans would expect to be valued higher than the £248 million produced by the model. CEO Karren Brady values the club at £800 million.

West Ham certainly have the potential to be higher in the valuation table, but their financial performance has held them back. Playing at the London Stadium should in theory result in substantial matchday income, but this has risen only modestly since the move from the Boleyn Ground. This is partially due to season ticket prices being relatively cheap compared to some of the other Premier League clubs in London.

West Ham’s owners have a strained relationship with fans, but there has been significant investment in players in recent seasons, but this has not been converted into improved performances on the pitch.

16: Cardiff £223 million (2018: Championship)

Cardiff effectively took an ‘air shot’ in respect of their season in the Premier League. Revenue increased as a result of promotion, but the wage bill was by some distance the lowest in the Premier League.

Research constantly there is a positive correlation between final league positions and wage levels. It is therefore no surprise that the two clubs with the lowest wage bills in the Premier League were relegated and two of the three highest wage expenses were incurred by the winners and runners up.

Cardiff made a profit before tax of less than £3 million, but this was after taking into consideration the full cost of the transfer of Emiliano Sala, the young man tragically killed shortly after signing for the club in January 2019. Cardiff also wrote down other transfer fees by nearly £12 million to further depress profits.

Cardiff’s main achievement was promotion from the Championship the previous season under Neil Warnock despite negative net spends on players in that division for four seasons.

Realistically their value will have fallen by about two-thirds at least following relegation.

17: Crystal Palace £200 million*

Crystal Palace’s valuation is based on their 2018 accounts, as like Newcastle, they have taken advantage of the relaxation of rules in relation to publishing their accounts.

Conspiracy theorists and rivals will no doubt use this to criticise Palace but there is no evidence of any undue financial stress.

Palace’s strategy since promotion to the Premier League is one of paying wages that many would consider relatively high for a small club, as well as a £240 million investment in players.

Whether the club can reduce the wage bill is open to question. Wilfried Zaha is one of the most coveted players in the Premier League and is paid accordingly to keep suitors away.

Palace had a sizeable loss in 2017/18 which kept the club value low and the club’s profits have fallen every year since promotion which has a further negative impact upon the valuation.

18: Brighton £187 million (2018 15th: £234 million)

Brighton avoided relegation in 2018/19 but it came at a financial cost. The £9 million operating profits of the club’s first season in the Premier League became a £25 million loss as player costs increased by 39% but revenue only 3%, despite an FA Cup semi-final appearance.

Brighton owner Tony Bloom has continued to invest in the club despite it reaching the Premier League.

Brighton have invested significantly in players in recent years in both the Championship and the Premier League. Player sales however have been relatively modest, and this has meant that operating losses have effectively been borne by the club owner.

19: Huddersfield £178 million (2018: 13th: £242 million)

Huddersfield were sold at the end of 2018/19 for an estimated £60 million. This coincided with the club being relegated from the Premier League, and ties in with the view that clubs in the Championship suffer a 60-70% fall in value in the second tier of English football.

Huddersfield’s income declined and wages were static. Income due to finishing lower in the Premier League and wages because many player contracts were bonus driven in relation to avoiding relegation.

However, transfer fee amortisation increased as Huddersfield spent a further £46 million on signings in 2018/19.

20: Bournemouth £99 million (2018 20th: £158 million)

Bournemouth’s value decreased due to the pincer movement of lower revenues and higher costs, especially those relating to players.

With a stadium capacity of only 11,000 the club is heavily reliant upon broadcasting income for most of its total, and the club, which was in the third tier of English football as recently as 2012/13, has been transformed by membership of the Premier League.

Bournemouth are not alone in their dependency on broadcast income with eleven Premier League clubs generating at least three-quarters of revenue from this source.

Bournemouth’s finances are further evidence of the myth that the Premier League is paved with gold for club owners. In 2012/13 the club was in League One, since then its income has increased by £126 million, but player costs have increased by £134 million.


The Big Six clubs continue to be very valuable and their dominance of revenue streams is likely to ensure that the gap between themselves and the remaining clubs in the Premier League is maintained.

Cost control is proving to be very difficult for all clubs in the division, especially in terms of wages and this may restrict future growth in the value of clubs especially with broadcast revenue growth slowing. Wages as a proportion of revenue grew in 2018/19 as the Premier League entered the final year of the three season deal with Sky and BT. Broadcast revenues were set to rise slightly in 2019/20 but it is unlikely to match wage growth.

Underlying profitability (pre tax and interest, excluding one off transactions and player sales) shows that Premier League clubs had a collective loss of £384 million, assuming that Newcastle and Crystal Palace’s results are the same as the previous season.

The pandemic, which of course relegates football to the sideshow in life that we have always secretly known it to be, will have had a significant impact upon the figures for the present and future seasons. Revenue streams will be reduced as matches being played in front of fans may not return until 2021. Transfer fees will decrease significantly as so few clubs will have cash to spend. In the short-term wages may fall slightly, where they will go as long-term contracts expire will be determined by long term revenue trends.

Premier League Ownership Investment: Love, profit, vanity or insanity?

Premier League Funding

Football clubs can broadly arrange their finances in one of three ways, bank lending, owner loans or shares.

In terms of the Premier League all three methods have been used. The following analysis is from the most recent documents filed by clubs at Companies House.


League leaders Liverpool are owned by the American Fenway Sports Group (FSG), who also own baseball team Boston Red Sox.

FSG acquired Liverpool in October 2010 for an estimated £300 million. The club paid off existing loans due to the previous owners of £105 million.

Since then FSG have lent the club almost £100 million as well as borrowing £56 million from banks to help fund stadium expansion at Anfield.

Liverpool have a borrowing facility of £150 million from the bank but sales of the likes of Suarez, Sterling and Coutinho have allowed Liverpool to stay significantly below that sum.

If the club goes ahead with further expansion to take Anfield up to 60,000 capacity then they may need to borrow more.

The loans are at very low interest rates (1.24% from FSG and 2.24% from the banks).

Manchester City

Manchester City were acquired by Sheik Mansour’s Abu Dhabi United Group in 2008. The owners initially lent money to the club at an interest rate of 10% but these loans were quickly converted into shares, upon which no interest is payable.

Abu Dhabi United accelerated City’s growth by underwriting large losses as the club invested heavily in players, manager and infrastructure. These losses peaked at £197 million in 2011.

Manchester City are part of City Football Group, which owns clubs in the USA, Australia, China, Japan, India and Uruguay. The success of the multi club model was evidenced recently when American tech company SilverLake bought 10% of City Football Group for £389 million.


Spurs historically have been cautious in terms of issuing shares and borrowing, but the decision to build a new stadium at White Hart Lane necessitated change. Spurs have mainly taken the bank borrowing route with a £537 million loan facility arranged with a consortium of Bank of America, HSBC and Goldman Sachs. In addition majority shareholder ENIC, controlled by Joe Lewis in the Bahamas, have provided a further £50 million.

The interest rate on the loan is modest so Spurs will be paying about £15 million a year, which will be more than covered by the additional matchday, hospitality and commercial income generated by the 62,000 multi-function stadium, which has already been used for hosting NFL fixtures.


The Chelsea company structure resembles that of a matryoshka doll, which is befitting given that Roman Abramovich is from Russia.

Chelsea Football Club Limited is owned by Chelsea FC plc, which in turn is owned by Fordstam Limited, which is funded by Camberley International Investments Limited, (CII) controlled by Mr Abramovich.

In 2018/19 Abramovich lent £247 million to the club, which seems at odds with the stories that he had lost interest in Chelsea following the refusal of the British government to renew his investor visa. He had historically rented an executive box at Stamford Bridge for £1 million a year but has not been seen at the stadium now since 2017.

In total Abramovich has lent the club £1.38 billion interest free since acquiring it in 2003. The club’s stadium expansion/move has been put on hold indefinitely though, which does mean that Chelsea are some way behind its peer group in the ‘Big Six’ in terms of capacity, which in term impacts upon its ability to generate revenues.

Manchester United

Manchester United were acquired by Malcolm Glazer in 2005 via a Leveraged Buy Out (LBO), at a time when the club had zero debt and cash in the bank. An LBO arises when an investor borrows a substantial sum to buy a company and uses the cash generated by the business to pay the loans.

Initially banks were wary of lending to a business they were not convinced was risk free and this was reflected in very high interest rates and some of the loans being Payment In Kind (PIK) where the borrower pays neither capital nor interest, and the interest cost is added to the value of the loan.

Manchester United are another example of a complex ownership structure, involving a myriad of companies registered in both the UK and Cayman Islands. The club had a share listing in New York in 2012, part of which was used to pay off £200 million of loans. United have approximately £500 million of loans outstanding but these have been renegotiated at much lower interest rates.

The Glazer family have not invested sums into the club themselves. Manchester United is the only Premier League club that regularly pays a dividend to shareholders, and this returns about £22 million to them each year.


Arsenal’s owner Stan Kroenke controls the club via US company KSE UK Inc. Kroenke has come under criticism from Arsenal fans for his perceived reluctance to invest money in the playing squad, instead concentrating on reducing the club’s debt levels.

Arsenal moved from Highbury to The Emirates stadium in 2006, with loans peaking shortly thereafter at £415 million. Since then the debt has halved as the club has made regular repayments to lenders.

Kroenke bought out the other shareholders of Arsenal for £600 million to take the club private in 2018. His critics have used this to accuse him of having money to fund share purchases but being reluctant to spend on players to help win trophies.

Research indicates that on field success in terms of trophies is closely correlated to wage levels and here Arsenal have fallen behind their peer group. Kroenke’s critics have accused him of being content to sacrifice on pitch performance for a better looking balance sheet.

Under Arsene Wenger the club finished either 3rd or 4th in the Premier League for ten seasons from 2005-6 onwards, sufficient to qualify for the Champions League but in the eyes of fans not investing enough in players to challenge for major trophies.


Everton recently announced record losses of £112 million as new owner Farhad Moshiri has underwritten an attempt to break into the regular group of clubs who compete for Champions League places.

The losses are a result of paying higher transfer fees and wages than in previous years. Moshiri was previously a shareholder at Arsenal, but sold his shares and used the proceeds to buy 49.9% of Everton for an estimated £175 million in 2016.

Since then Moshiri has increased his shareholding to give him greater control, but more importantly for the club has lent £350 million interest free via an Isle of Man company. In addition Moshiri’s business partner Alisher Usmanov has paid £48 million for innovative naming rights schemes for the training ground and a potential future stadium at Bramley-Moore Dock.

West Ham

West Ham have been owned by David Sullivan and David Gold since 2010. The club’s previous owners, an Icelandic bank consortium, had financial trouble following the global economic crash.

Under Gold and Sullivan West Ham have moved to the London Stadium after selling the Boleyn Ground. They lent the club money upon which interest of £18 million was charged over the years. The loan balance of £45 million is still outstanding. This has angered some West Ham fans who feel that the interest charges would have been better spent on the playing squad. The owners argue that the interest rates they have charged, of between 4-6%, are lower than would have been charged by a bank and so the club has saved money.


Brighton owner and lifelong fan Tony Bloom acquired the club when it was in League One and playing at a local athletic track. He then underwrote the move to a new stadium at Falmer as well as new training facilities in a combination of shares and interest free loans. Despite promotion to the Premier League in 2017 Bloom has continued to bankroll the club, with a total commitment of £362 million by the end of 2019.

Podcast 23 January

Kieran talks Kevin through his number crunch of the average weekly wages at each Premier League club since 1993. They also examine the difference between the prize money in the Women’s FA Cup compared to the men’s version, the size of the new kit deal between Nike and Liverpool, the significance of the Sunderland owner putting the club up for sale, and why some Championship clubs are charging more than those in the Premier League for away tickets. https://play.acast.com/s/priceoffootball/6d457b09-cb48-4da7-a09f-7c74396f45fb

Football Transfers and Creative Accounting: Protect me from what I want

It’s the disease of the age, It’s the disease that we crave.

When Derby County published their response to the EFL charges for financial misconduct on Friday 17th January 2020, it included reference to ‘the newly notified charge of intangible fixed asset amortisation’.

The nonsense below is all about the said subject, but extended to how clubs can increase or decrease costs in the accounts in relation to how they account for players.

The Basics

When a club signs a player, they will often pay compensation to the previous club for his registration certificate lodged at the football authorities, this is what is commonly called a transfer fee and is either negotiated between the two clubs or embedded in the player’s contract.

The buying club then spreads the cost of the transfer fee over the period of the contract signed by the player, so when Harry Maguire signed for Manchester United in summer 2019 for £80 million on a six year deal this works out as an annual amortisation cost of £13.3 million (£80m/6).

The total amortisation fees for the whole squad are treated as an expense in the accounts, and importantly, ARE included in Financial Fair Play/Profitability & Sustainability (P&S) calculations.

Amortisation costs for many clubs in higher divisions are usually the second biggest expense after that of player wages, as shown by the figures below for Everton.

The creatives

Under P&S rules clubs are assessed over a three year period, so sometimes it may be beneficial for them to accelerate or decelerate costs in a particular year, so ensure they stay within the limits during a particular three year assessment period.

Here are possible methods that could be used, all of which have been approved by the clubs’ respective auditors.

  1. Player impairment

All fans have seen players who they quickly write off as rubbish and a waste of money. This applies in the accounts too.

In 2015/16 Aston Villa were relegated from the Premier League, which allows a P&S loss of £105 million over three years, which then tapers down to £39 million over three years in the EFL Championship.

It is therefore in Villa’s interests to put as many costs into their 2015/16 accounts to be absorbed by their Premier League P&S limit.

Villa achieved this by charging an extra £79.6 million as a cost in the expense for impairment of the stadium and players (called ‘intangible assets’ in the accounts).

This works as follows. If you sign a player for £30 million on a five year contract the amortisation cost is £6m a year, a tough cost to have to deal with in the Championship. However, if the club was relegated at the end of the first season there is nothing to stop it from assessing the player’s value and conclude that he is worth, say, £10 million.

This would mean that his book value at the end of year one would fall from £24 million (£30m less one year’s amortisation of £6m) to £10m, which would result in a £14 million impairment charge.

However in subsequent years the amortisation charge would be just £2.5 million a year (£10m book value spread over the remaining four years of the contract), which is useful for P&S purposes in the Championship.

When Villa did this the £35 million impairment charge in 2016 would (if remaining contract lengths were on average 3 years) have reduced costs by nearly £12 million a year in the Championship.

Sometimes the reason for an impairment is clear and the decrease in value is understandable (due to long term injury, the fee initially paid was too high or the player is Mario Balotelli). Impairment does however give clubs licence to accelerate player costs into an earlier year.

  1. Contract extensions

Amortisation is the registration fee spread over the contract period, so if you extend the contract you reduce the annual cost.

Example: Sign a player for £20m on 1 January 2019 on a four year contract. At the end of 2019 give him a two year contract extension.

Amortisation charge in 2019 = £5m (£20m/4)

Amortisation charge 2020 onwards £3m ((20-5m)/(3+2))

This reduces FFP losses by £2m a year.

Therefore by extending a contract a club can reduce costs in a single year.

  1. Player sale profits

These are calculated by comparing the transfer fee receivable to the book value of the player. Even when a player is sold at what fans may think is a loss for accounting purposes it can work out at a profit.

Example: A player is signed for £40 million on a five year contract on 1 January 2018. He’s not been a success so is sold for £26 million on 1 January 2020. At that date his accounting book value is £24 million (£40m – 2 years amortisation at £8m a year) so book a profit of £2m on the deal.

It’s always important to check the sale date though, as these can be confusing. In the Derby County accounts for the year ended 30 June 2017 the club included the profit on the sale of Tom Ince to Huddersfield Town, which contributed towards FFP for that year. That’s all well and good but the sale of Ince did not take place until July 2017, which is in the 2017/18 accounts in theory.

By having a player sale just before or after the year end a club can increase or decrease profits in the year that suits it best.

  1. Residual Values

The issue that appears to be irking the EFL most of all is Derby’s use of residual values for players. All other Premier League and Championship clubs amortise player contracts on a straight line basis to a zero value at the end of the contract. This is because players can leave on a Bosman deal at the contract end so the ‘selling’ club received no fee.

Derby changed their accounting policy in 2017 for player registration fees to include the ‘ consideration of active market residual values’. Prior to that Derby ignored residual values similar to other clubs.

This might seem an insignificant comment, but this allows a club to reduce amortisation fees (and therefore costs for FFP). A player signed on a £30m four year deal costs £7.5 million annually in amortisation.

If the club gives him (say) a £12 million residual value at the end of the contract (which ignores he can leave on a Bosman) then the amortisation cost falls to ((£30-12m)/4) = £4.5 million a year.

A look at Derby’s accounts shows that for 2017/18 the club had transfer fees and registration intangible assets that were £52.5m at the start of the year and £62.2m at the end. This gives an average of £57.3m. The amortisation fee for the year was £6.6 million. This means that Derby were effectively spreading transfer fees over 8.7 years, which seems very long for contract length, and is far longer than the average for the division of about 3.7 years.

Derby’s defence is that the EFL had already signed off on the issue and that they should have been aware of it. I can confirm the latter having written to the EFL in June 2018 on the very subject which generated this response from…supporter services.

Given that the EFL have been aware of the issue since June 2018, it does seem odd that the charges have been made at Derby in January 2020.