Chelsea 2017/18: The Lion Sleeps Tonight


…so where do the electrified fences go Ken?

Chelsea had an up and down season in 2017/18, winning the FA Cup but not qualifying for the Champions League.

The club’s financial structure is complicated, Chelsea Football Club Limited is owned by Chelsea FC plc, which is owned by Fordstam Limited, which is funded by Lindeza Worldwide Limited (based in the British Virgin Islands) and Camberley Investments Limited (based in Middlesex), which are owned by Roman Abramovich.

This analysis looks at Chelsea FC plc, mainly because Fordstam Limited tends to publish its accounts a few months later.

Key Figures

Turnover £443 million (up 23%)

Wages £244 million (up 11%)

Pre player sale losses £41 million (down 23%)

Player sale profits £113 million (up 63%)

Player signings £290 million (up 174%)


Chelsea, like all clubs, have three main income sources, matchday, broadcasting and commercial.

Matchday income rose by 13%, mainly driven by Champions League participation increasing the number of fixtures at Stamford Bridge compared to 2016/17 where the club finished 10th and so didn’t play in a UEFA competition.

Compared to other Premier League clubs, Chelsea’s matchday income is impressive, but there is a significant gap to Arsenal and Manchester United above them. Liverpool, who were Champions League finalists and had the benefits of a full year at the increased capacity Anfield, should overtake Chelsea when their accounts are released. Spurs, if when they move into the new stadium which has a capacity of 60,000 and high ticket prices, are likely to also leapfrog Chelsea.

The decision of Roman Abramovich to cancel the move to a new stadium puts an effective cap on Chelsea’s ability to generate money from matchday sales, although the club is very good at extracting cash from the 41,000 who attend there at present.

Chelsea’s broadcast income rose by over a quarter, despite the club finishing fifth compared to being Champions the previous season and so earning less Premier League TV prize money.

The reason for this is that by being in the Champions League Chelsea picked up €65 million in prize money from UEFA, partly due to making it to the last 16 and partly due to BT paying a huge sum for the broadcasting rights, a large portion of which then goes to clubs from BT’s ‘domestic’ leagues in England and Scotland. This, thanks to Brexit uncertainty decreasing the value of sterling, was worth about £59 million to Chelsea.

Chelsea had the second highest broadcast income, although they are likely to drop to third when Liverpool publish their figures, which will include €81 million for reaching the Champions League final.

A screenshot of a cell phone Description automatically generated

Chelsea’s commercial income rose by 24% as the new kit contract with Nike, worth an estimated £60m a year, came into fruition early after the club had previously bought adidas out of their contract.

Whilst Chelsea’s growth here is impressive, they are still some way around Manchester United, which is in a league of its own when attaching the badge to sponsor products and City have unusually lucrative deals with Middle East partners. Chelsea are a big enough club to be able to have separate sponsorship deals for both first team and training kit and this too will help in terms of their commercial growth.

A close up of a logo Description automatically generated

Broadcast income contributes over half the total in the Premier League, which is why the clubs are so compliant when kick off times are rearranged for the benefit of the cameras

A close up of a map Description automatically generated

Chelsea have a fairly even split of income between the three segments, but difficult to see how matchday can grow whilst located at Stamford Bridge. The overall growth in income is impressive compared to other clubs who have reported their results to date.


The most significant costs for a club are in relation to player wages and transfer fees and in both respects Chelsea saw significant increases in 2018.

The wage bill rose 11% in 2018. This would have been partly due to paying additional sums to players and management for qualifying for the Champions League, the failure to do so the previous season resulting in the wage total falling for the first time since 2012. The A screenshot of a cell phone Description automatically generated

The good news from Chelsea’s perspective is that the wage rise was lower than that of income, which is unlike what was experienced by most other Premier League clubs.

A screenshot of a cell phone Description automatically generated

Compared to the remainder of the ‘Big Six’ Chelsea are where most would expect to see them, trailing the two Manchester clubs but ahead of Arsenal (and the gap is likely to grow given their lack of CL exposure this season) and Liverpool, who may shortly replace Chelsea as the 3rd highest wage payers due to significant investment in their squad and improved contracts for star players. Spurs having a lower wage bill than Everton may surprise many, especially Toffees fans.

Amortisation is how clubs deal with transfer fees in the accounts. The fee paid is spread over the contract length, so when Chelsea signed Morata for £60 million on a five-year contract in 2017, the amortisation cost is £12m a year (£60m/5). By dealing with transfers like this is helps to reduce volatility in the accounts from having one big transfer window followed by a couple of small ones and shows the medium term impact of a club’s transfer policy as the total amortisation cost applies to the whole squad (excluding players from the academy and Bosman signings who cost nothing).

One figure that is very odd in relation to Chelsea is that of directors’ pay. This has varied from year to year considerably.

Chelsea’s amortisation cost increased by over 40%, reflecting the impact of signing Morata, Bakayoko, Drinkwater, Rudiger, Zappacosta, Emerson, Giroud, Barkley and some other bench warmers and Carabou Cup regulars.

This large investment meant that Chelsea now have the second highest amortisation cost in the Premier League, more than twice that of Liverpool and nearly three times the figure for Spurs.

The amortisation cost, combined with wages, meant that it was costing Chelsea £83 for every £100 of income last season in overall player costs, which didn’t leave a huge amount to pay the other costs of running the club, which you would think would have to be under tight control…but if so would have thought incorrectly.

Chelsea’s ‘other’ costs include everything from electricity, transport and matchday expenses. These are now costing the club over £2 million a week and seem to be rising rapidly every year, with the exception of 2016 when the club only finished 10th in the Premier League.

One cost that is not a burden to Chelsea is finance costs. Other clubs, such as Manchester United and West Ham, pay interest to their banks and owners respectfully, but Roman Abramovich has never taken money out of the club in this regard.


There are as many types of profit as there are Pringles flavours. In the Chelsea press release the focus was on profit after tax of £62 million. This is correct and brings the total losses after tax under Roman Abramovich to ‘just’ £677 million, which will buy you a two up two down in Hammersmith these days.

A look at the above profit and loss figures shows there has been much volatility in relation to Chelsea’s profits and losses from year to year. This is mainly due to one off transactions which distort the numbers, such as profits on player sales, the cost of sacking managers and legal disputes and settlements, such as last year spending £6m on buying back retail and licencing rights from the rights holders in 2018.

Most analysts ignore finance, tax and one off costs to create something called EBIT, which is the club’s underlying profit, and for Chelsea in 2018 this converted the profit of £66 million into a loss of £41 million.

A close up of a map Description automatically generated

The EBIT figure shows that running Chelsea is a frighteningly expensive business and therefore the club needs to generate income from an additional source, and that source if player sales.

A screenshot of a cell phone Description automatically generated

Chelsea made a profit of £113 million last season from player sales (Costa, Matic, Ake, Cuadrado, Begovic etc) which helped to offset the day to day losses. This policy is loosely connected to their approach of harvesting young players and then loaning them out to other clubs in the hope of some of them having significant values that can generate money in future years. This policy is presently under UEFA’s scrutiny as it is seen as being anti competitive.

If player transfer sales are to be excluded from profit, then there is a case for excluding transfer costs too, which leads to another form of profit, called EBITDA. This is popular with analysts (try reading the Financial Times Lex column, it is a regular there) as it is a trading cash profit equivalent.

The good news for Chelsea is that their EBITDA is a positive figure and a high one at that too, due to Chelsea’s big amortisation cost.

A screenshot of a cell phone Description automatically generated

The EBITDA profit at £94 million shows the club is generating nearly £2 million a week in terms of cash, which can then be used to invest in player transfers.

A screenshot of a cell phone Description automatically generated

All clubs in the Premier League generate a positive EBITDA, but some are juggernauts and others also rans. Chelsea are certainly generating cash, but trail some way behind most of their peer group.

Player Trading

As has already been mentioned, Chelsea bought a lot of players in 2017/18, most can be filed under ‘meh’, but the fees paid were a record for the club.

The general perception is that Chelsea have paid over the odds for many players last season, and this may be linked to the club’s dislike of committing itself to add on fees for international caps, number of appearances and so on. As a consequence the sums paid tend to have all of the above factored into the initial price.

A screenshot of a cell phone Description automatically generated

Chelsea may have to pay an extra £4.7 million for transfers but this pales into insignificance compared to clubs such as Manchester United who potentially have a £66.4 million cost.

Spending nearly £300 million on players should improve the quality of the squad, but it’s difficult to conclude that the acquisitions have enhanced Chelsea, although Everton fans may be of the same opinion given that they outspent Manchester United last season (and signed Wayne Rooney on a Bosman) for relatively little improvement on the pitch.

The above figures show that clubs with a scattergun approach to signings don’t tend to get value for money.

In a somewhat pithy footnote to the accounts Chelsea did spend a further £125 million in summer 2018 on players, it’s unclear whether this sum includes the payoff to Conte, estimated at £9 million, which takes the amount Abramovich has spent on managerial changes under his reign to just over £80 million.


Clubs get funding from three sources, bank loans, owner loans (which may or may not be interest bearing) and shares issued to investors.

Chelsea are funded by Fordstam Limited, Abramovich’s personal company, which hasn’t yet published its results, although the Chelsea press release did say this company made a profit of £24.9 million last year.

In the Chelsea cash flow statement it revealed that the club borrowed a net £37 million from Fordstam in 2017/18. Whilst the club made a profit in the year, this was insufficient to pay for the net player investment of £150 million, which was why the club had to go cap in hand to the owner.

How much is owed to Abramovich in total will be revealed when Fordstam’s accounts are revealed.


For most clubs winning the FA Cup, making the knockout stages of the Champions League and finishing 5th in the Premier League would be a pretty good achievement. In the world of Roman Abramovich this wasn’t good enough and so Conte paid the price.

Record profits of £61 million are unlikely to be repeated in 2019 due to the UEFA Europa League being less lucrative than the Champions League and lower profits on player sales.

The biggest fly in the ointment is Roman Abramovich and his intentions. He has invested a huge amount in the club and clearly has some affection for it, but his lack of appearances at the ground for the last year and the decision to not go ahead with a new stadium leaves Chelsea falling behind the rest of the pack potentially in future years.

In previous seasons he has paid £1m a year for his private box, but the decision to not renew it for 2017/18 will further the whispers that he is looking for an exit route.

Using the Markham Multivariate Model (Google it if you want more details) we value Chelsea presently at about £2.8 billion, but that value is likely to fall if the club cannot maintain the level of profits on player sales and qualify for the Champions League.

Bolton Wanderers: What’s the frequency Kenneth?

A screenshot of a cell phone Description automatically generated

Ken Anderson, Bolton Wanderers Swiss/Monaco resident rogue chairman until the club went into administration, has been in the firing line recently from fans, players, other clubs, unpaid creditors and the local media.

Even before Anderson was involved with the club Wanderers had been struggling financially, despite once heady days in the Premier League and a benevolent former owner.

Nat Lofthouse, the Lion of Vienna, is no doubt spinning in his grave as a series of damning stories have been publicised over the running of the one club he played for during his whole career.

A look at Bolton’s most finances over recent years shows highlights the club’s decline that has led to the present debacle as Burnden Leisure Limited, the parent company that owns both the football club and a nearby hotel, has posted the following figures in the year ended 30 June 2017.

Burnden Leisure Limited Key Figures

Income £14.7 million (down 52%)

Wages £13.8 million (down 38%)

Trading losses £13.5 million (up 67%)

Player signings £0.0 million

Player sales £6.3 million

Borrowings £22 million (down 19%)


Nowadays most clubs divide their income into three main categories, Bolton are slightly different in they own a hotel via Burnden Leisure and so have four sources of revenue.

Day to day income is rare for a football club, which realistically is only open when a match is played.

Earning money from matches becomes more important as clubs drop down the divisions due to lower TV revenues and this impacted upon Wanderers in 2016/17 as they spent a season in League One.

Revenue from matches held up in 2016/17, partially due to average attendances, despite relegation, rising from 15,194 to 15,887, but is significantly lower than the final season in the Premier League in 2011/12.

Some clubs in League 1 don’t publish their profit figures, but from the ones that are available Bolton were towards the top of the matchday income table.

A screenshot of a cell phone Description automatically generated

Overseas TV viewers don’t have a huge appetite for third division English football, and whilst there’s a bit more interest domestically there are few live matches shown either, which explains why broadcast income is so low in this division and has fallen 96% since Bolton were in the top flight.

Nevertheless, Bolton were in receipt of parachute payments for four seasons following relegation, but the ending of these, combined with a further drop into League One, was catastrophic for the club in 2016/17.

Hotel income fell by 16% in 2016/17, probably due to a combination of fewer away fans making overnight stays for weekends in Bolton as away followings tend to be lower, along with general economic trends in the hospitality market.

As the club was on live television far less often in 2016/17 and the nature of the opposing teams was less glamourous, it made it more difficult for the commercial department to sell sponsorship deals, and this was why commercial income more than halved.

Sponsors are often local companies and they are also less likely to be keen to have a large marketing and entertainment budget for events such as football given Brexit uncertainty.

Although a club such as Bolton doesn’t have the global appeal of the likes of Manchester United or Liverpool, it can still be seen when Championship games are broadcast internationally and so expect this to rise in 2017/18.

Some fans think that shirt sponsorship deals are worth a fortune to clubs, but in the Premier League these are sometimes worth no more than £1.5 million a season, in League One it is likely to be in the tens of thousands.

Merging all the income sources together results in Wanderers having the highest total in League 1, but if hotel income is excluded this fall to £8.3 million, which shows that it was a decent achievement for the club to be promoted that season.

At least by being back in the Championship Bolton will be earning more TV money, as the EFL deal and solidarity payments from the Premier League work out at about £7million a season compared to League One.


League One income is lower than that of the Championship, but costs don’t necessarily fall as swiftly.

Like all clubs, Bolton’s main expense is in relation to players, in the form of wages and transfer fees.

Wage costs fell by a third to £13.8 million and were about a quarter of the amount that Wanderers were paying when they were in the Premier League in 2011/12.

Included in the wage total is about £1.2 million relating to the hotel, which should be noted if comparing Bolton to other clubs in the division.

A screenshot of a cell phone Description automatically generated

League One clubs (excluding those that use a legal loophole to avoid disclosing their costs) had an average wage bill of £6.1 million in 2016/17 and whilst Bolton’s costs were twice this it would have partially due to promotion bonuses, as well as some players being on Championship contracts that didn’t contain large relegation reduction clauses.

Love them or hate them, player wages are a regular topic for discussion amongst fans and based on a rough and ready formula we estimate that Bolton’s first team squad would have been averaging £335,000 a year.

You often hear fans saying that they ‘pay player’s wages’, but this isn’t the case in reality. The matchday income for Bolton for 2016/17 worked out at 25 pence for every pound of wages.

Transfer fees are dealt with in the accounts by something called amortisation. This takes the total transfer fees paid by the club and spreads it over the number of years of the contract signed by the player. So, when Nicolas Anelka signed for Bolton in 2006 for £8 million on a four-year contract it worked out as an annual amortisation cost of £2 million.

As the club’s finances have deteriorated in recent years it has had to reduce the sums paid for players and this impacted upon the amortisation total.

Bolton’s amortisation cost has fallen by 97% since being in the Premier League, which reflects the nature of loans and free transfers that are the most common methods of signing players in League One.

Bolton also paid £33,000 a week in 2016/17 in interest charges, partly due to an unusual arrangement with a company called Sports Shield BWFC Limited, controlled by Dean Holdsworth, which charged a Wonga-Tastic 24% interest per annum before going into liquidation.

It looks as if the interest due to Sports Shield will not be paid following a dispute with the club, so there should be a £1m reversal of interest charges in the 2017/18 accounts.

Further costs related to Ken Anderson, the club owner who was previously barred from being a company director in the UK for eight years.

As someone who used to work in the insolvency industry, you would have to irritate the authorities a huge amount just to get a telling off, so his behaviour in achieving an eight-year ban (which expired a few years ago) must have been spectacular in terms of poor governance and transparency. David Conn, The Guardian’s superb rottweiler like investigative journalist, uncovered some of Anderson’s past that does not paint him in a particularly good light.

Bolton’s ‘rogue chairman’ Ken Anderson puts EFL ownership rules under scrutiny | Football | The Guardian

Anderson was paid £525,000 for his services via Inner Circle Investments Limited, a company he set up in 2015 with an investment of £1 of shares.

By having such an arrangement, it allows him to legitimately say that he is not being paid a salary by Wanderers.

Inner Circle Investments Ltd appears to be little more than an investments vehicle, as the only asset it owns is a 95% share in Burnden Leisure.

In addition, £125,000 was paid to another member of the Anderson family, which appears to Ken’s son Lee Anderson, via something called the Athos Group. A trawl of Company’s House reveals that Athos Group is a services company that seems to have no executive called Lee Anderson. It would therefore appear that Lee was paid for consultancy or other work, such as modelling BWFC leisurewear. Whether a future career on the catwalk for Lee is going to arise is less certain.

Profits and Losses

There is a common misconception that football clubs, especially those in the Premier League, are a licence to print money. Research shows that clubs in the Premier League only started to make profits from 2014/15 when Sky and BT increased the sums paid for broadcast rights by 70%. Clubs outside the top flight, especially in the Championship, lose large sums, and Bolton are no exception to this.

Over the course of the last decade Bolton lost £178.5 million, despite spending the first half of that period in the Premier League. These losses were initially absorbed by Eddie Davies, before he became too ill to continue. This is where Dean Holdsworth and Ken Anderson stepped in, although it seems the former was all fur coat and no knickers when it came to covering the day to day running costs, and the two fell out, resulting in Anderson obtaining majority control.

Ken Anderson deserves credit if he’s therefore been underwriting the trading losses, and cutting costs. There’s little evidence that Anderson has done anything than look after his own interests though.

His critics will no doubt point to the sale of players to offset these losses, the muddy waters on this should clear when the 2018 accounts are published.

If you are going to run a football club in the Championship then expect to incur substantial losses, as shown above. Ken Anderson has said that he’s not rich enough to take the club forward and is seeking external investment, but surely he must have known how much it costs to run a club in the Championship before becoming involved in Bolton.

Recent non-payment of wages (which Anderson claims to have now paid out of his own pocket), player strike threats and news of players loaned to Bolton having their wages paid by the host club, combined with a transfer embargo from the EFL suggest the club is struggling to pay the day to day costs.

Player trading

Bolton’s player purchases and sales history in recent years is a textbook analysis of a club that has fallen through the divisions.

In the Premier League the club was able to buy and sell players in multi-million-pound deals. Once relegated the initially the club buys players in an attempt to bounce back into the Premier League, and if this becomes unlikely then the purchases decrease and sales rise as the club needs to flog off the talent to pay the bills.


Football clubs can borrow from three broad sources, third party loans, director’s loans (which may or may not be interest bearing) and shares, which can in theory receive dividends if the club makes a profit, but in most cases don’t.

Whilst Eddie Davies was around Bolton were beneficiaries of his benevolence as he lent money interest free to the club he loved. This, as Tom Jones once said, is not unusual for local lads who have been successful in business, as clubs such as Huddersfield, Stoke, Brighton and Brentford will testify.

Another former director, Brett Warburton, (of the crumpet making baker family) has lent Bolton £2.5 million, but is charging interest at a rate that is far higher than he is likely to earn on his ISA.

Davies lent the club about £175 million, effectively summarised in the above table. He then in 2016 wrote off nearly all the sum due.

In September 2018, shortly before his death, Davies lent the club a further £4.8 million to allow it to pay off a loan due to Blumarble Capital Limited, a company with two employees and relatively few assets, apart from, according to its last recorded balance sheet, a loan due from another company of £4.8 million (almost certainly Bolton) and some cash. The Blumarble loan was arranged by Dean Holdsworth.

Blumarble effectively bought the loan from the liquidators of Sports Shield and have charged interest at 10% compared to 24% on the original loan.

Blu Marble was threatening to put Bolton into administration at the time. Eddie Davies’s loan came via a company called Moonshift Investments Limited based in the British Virgin Islands tax haven.

Ken Anderson has repeatedly said in his ‘notes from the Chairman’ column that Bolton have lower debts than most clubs in the Championship. This is true, but the credit for this should surely go to Davies rather than Anderson in writing off so large a sum, so it’s difficult why Anderson is so proud of himself over this issue.


Bolton’s is a tragic story, a historic and proud club whose name is continually being dragged into the mud. Fans just want to be able to see their team play some decent football with the certainty that there will still be a club in a month’s time, and that certainty is not presently guaranteed.

Ken Anderson claims that all is right, and that people should ignore his past in terms of running companies into the ground and being banned from being a director. Perhaps he is correct, all is Hunky Dory and HMRC, Stellar Football Limited (one of the world’s most successful sports agencies) the Insolvency Service, Forest Green Rovers, The Bolton News and all of the club blogs and fan groups have it wrong in terms of the club’s finances.

Straight answers are what are required to allay fears, but Anderson’s approach is one of snide whatabouttery in his Chairman’s notes column in the club program and website, which will I suspect result in a further loss of goodwill to a club that needs support from everyone in the game.

Anderson’s motives are unclear. If he wants to run the club then surely he should expect that it will lose money in the Championship, so whining about having to cover wages makes him no different to any other club owner in the division.

His other ambition may have been to flip the club by selling it at a profit to someone else, here we will have to wait and see the outcome.

As for his financial rewards from involvement with the club, they are high by League One standards but the club was promoted so he can argue were deserved.

If there were not subsequent alleged issues involving winding up orders and non-payment of staff or other clubs for loan fees payments to him become more difficult to justify.

One way to stop the brickbats is for Anderson to publish the 2018 accounts. Bolton will have had to submit them to the EFL for Profitability and Sustainability reasons (the new posh words for FFP), so there’s little reason to delay submission to Companies House. This could stop the criticism in its tracks if all is as rosy as Anderson claims, over to you Ken…

Everton 2017/18: The Long and Winding Road

He who smelt it, dealt it…


Farhad Moshiri, Everton’s new owner, had a busy year in 2017/18, sacking two managers and trying to make progress on a new stadium for the club.

After sacking Ronald Koeman in October 2017, the club’s fans grumpily tolerated the alehouse tactics of Sam Allardyce that took them from 13th to 8th in the Premier League, and then he too was jettisoned.

To an outsider this seems harsh, but phone ins and social media comments clearly indicated that Allardyce’s pragmatism in achieving results was not enough for a fanbase that had high expectations last season.

Spending restrictions under the previous owner Bill Kenwright were replaced with both managers splashing the cash as never before, and this trend has continued in 2018/19 under Marco Silva.

An analysis of Everton’s accounts shows that the club is in a far better place under Moshiri, but is this enough for them to challenge the ‘Big Six’ or should expectations be more focussed on being the best of the rest?

Key financial figures for year to 31 May 2018: Everton Football Club Company Limited

Income £189.2 million (up 10%).

Wages £145.5 million (up 39%) .

Operating loss £10.2 million (previous year £39.7million profit)

Player signings £214.6 million (up 133%)

Player sales £108.5 million (up 98%)

Owner loans £149.25 million


Matchday income for a club such as Everton tends to be the smallest element, but is essential for both financial fair play (FFP) purposes and if the club wants to challenge the established elite.

How to increase this income stream is tricky, as it can realistically can only be achieved by higher prices, more fixtures (such as through cup runs of qualifying for UEFA competitions)…or by moving to a bigger venue.

As can be seen from the above graph, Everton’s matchday income rose by 15% last season, as the club participated in, but did not progress too far, in the Europa League.

A screenshot of a cell phone Description automatically generated

Selling tickets at competitive prices has always been a symbol of Everton’s traditional working class fanbase, and this is reflected in the relatively low total of £418 per fan, as the club’s stadium is not presently suited for prawn sandwich consumers.

Relative to Liverpool, Everton only generated 29 pence from each fan for every £1 of matchday income for their rivals from Anfield.

A move to Bramley Moore Dock, which is presently under discussion, is therefore essential if Everton have genuine ambitions at generating the level of income that will allow them to compete at the top table.

Nevertheless, it is difficult to see Everton attracting the number of football tourists, who are prepared to pay higher ticket prices and spend large sums in the merchandise store that will substantially boost matchday income, even if the club does move venues.

Commercial income for Everton rose by 60% in 2017/18, and the reason for this, according to the accounts, is that somewhat surprisingly Europa League income of €14.1 million was allocated to this source, as well as new shirt sponsorship deals from SportPesa and Angry Birds.

Income from UEFA is mainly in the form of central payments which are funded by TV companies, so it would seem logical to perhaps show this money as part of broadcasting income, although we would stress Everton have done nothing wrong with the way they accounted for this money.

Diving into the footnotes of the accounts shows that Everton’s commercial income also included £6 million again for sponsorship of the training complex from USM Services, the Ukrainian metal trading company that is partly owned by Farhad Moshiri, this has caused critics to question the commercial logic of such a deal and mutter about ‘financial doping’ of the accounts.

A close up of a map Description automatically generated

Finally, Everton generated money from broadcasting, and like most Premier League clubs, this is the main source of income.

As the club finished one place lower than the previous season, this meant that broadcast income was lower, as the formula for how it is allocated to clubs includes an element that is based on the final position in the table.

A screenshot of a cell phone Description automatically generated

Relative to the clubs who finished around it the table, Everton were an attractive proposition to the TV companies in 2017/18, perhaps initially partly due to the Rooney factor, with 19 Premier League matches being shown live, one more than the previous season.

The club has been quoted as saying that the proportion of total income received from broadcasting fell to 69% in 2017/18 from 76% the previous season, but if UEFA prize money is included within broadcasting this figure has hardly changed.

So, overall, Everton’s income for 2017/18 was broadly in line with the club’s final position in the table and whilst the gap to the next club up (Leicester) will be eliminated as the Foxes are no longer in the Champions League, there is still a £120 million hole before Everton can catch up with Spurs, who will have the benefits of playing at Wembley and a new stadium to boost their finances.


The main costs for clubs are those relating to players, in the form of wages and transfer fee amortisation.

Whilst Everton’s income rose by 10% in 2017/18, it failed to keep pace with player related costs as the investment of players of the calibre of Sigurdsson, Pickford, Rooney, Walcott, Keane and Tosun came with associated wage demands. Normally there is a big wage jump in the first year of a new TV deal (which commenced in 2016/17) followed by relative stability, but this has not been the case for Everton as Moshiri released the handbrake on player recruitment.

Everton’s average weekly wage (and we fully accept that these are rough and ready figures) jumped from £49,000 to £70,000 a week, putting Everton substantially ahead of Champions League qualifiers Spurs (albeit Spurs figures are for 2016/17).

A close up of text on a white background Description automatically generated

As a consequence, Everton’s wages to income ratio increased to 77%, meaning that the club was paying £77 in wages for every £100 of income.

It is not just players who have benefitted from the generosity of the owner, the highest paid director saw their income rise by 57% to £927,000.

By Premier League standards Everton’s board are reasonably well paid, but this pales into significance when compared to Daniel Levy’s package of over £6 million at Spurs, although Daniel’s fan club will no doubt point out this is partially linked to bonuses linked to his amazing success at delivering Spurs’ new stadium on time and budget.

The amortisation cost represents the transfer fee paid spread over the term of the contract signed by a player. So, when Everton signed Sigurdsson for £45 million on a five-year deal it meant that the amortisation cost is £9 million (45/5) a year for five years.

Everton’s annual amortisation cost has tripled since Moshiri acquired the club, showing the extent of his investment in the playing squad.

In using amortisation, it is possible to get a broader feel for a club’s longer-term transfer policy rather than just a couple of windows of buying a selling within an individual season. It would appear that Everton’s strategy is to try to compete with the big six in terms of player investment, although this is an arms race where you have to run to stand still as competing clubs constantly up the ante (apart from Spurs).

The substantial investment made in the fees paid for players meant that if amortisation costs are added to wages, it cost Everton £112 in player costs for every £100 of income generated, leaving nothing to pay the remaining bills of the club, unless there are substantial player sales too or an owner willing to underwrite the day to day expenses.

In terms of player sales, these were substantial, as the departure of Lukaku, Barkley and Deulofeu were the main contributors to a profit of £88 million. The danger with such an approach to funding the club’s day to day costs though is that sometimes it forces the club to be a seller, and also there are no guarantees that there will be buyers for your prize assets at the price you were hoping to sell them for.

Everton had some costs that fans will hope will not be repeated.

  • Sacking Koeman and Allardyce, along with their entourages, did not come cheap, as the club has to pay out £14.3 million to show them the door at Goodison. It had cost the club £11.3 million in 2016 when Roberto Martinez was sacked.
  • There were transfer fee write downs of £8.2 million, not sure who the players are, but no doubt Everton fans have their suspicions and will be able to finger them.
  • The new stadium project progressed during the year, but as usual consultants, accountants, lawyers and other parasites had their snouts in the trough as things crystallised, and this cost the club a further £11.4 million, which hopefully will be money well spent if the plans come to fruition.

Everton borrowed substantial sums during 2017/18. Whilst Farhad Moshiri’s loans are interest free, the club also took out a £43 million loan secured on future TV revenues, and a couple of IOU’s from other clubs for transfers (almost certainly those of Manchester United for Lukaku) were used to borrow money from another lender. Consequently, the club ended up with an interest charge of nearly £120,000 a week on these loans.

Profits and Losses

Profit, if you ask the right accountant, is what you want it to be, and there are as many types of profit as there are flavours of Pringles.

A rough definition is that profit represents income less costs, and if this figure becomes negative it becomes a loss.

The headline figure in the Everton press release was a loss of £22.9 million, although this excluded all aspects of player trading, which, if included, would reduce the loss to £10.2 million, compared to a profit of £25 million in 2016/17. This figure is distorted by the one off factors such as manager sacking costs and profits on player sales that have been discussed above.

Stripping out the above distortions gives something called EBIT (earnings before interest and tax) profit, which is a better measure of recurring profits excluding the one-off volatile items.

A screenshot of a cell phone Description automatically generated

Everton’s EBIT losses worked out at £1,232,000 a week in 2017/18, as the investment in player wages and transfer fees had such a significant impact on costs. This is far in excess of previous years, although could be seen as an investment in players for the future, and if it results in qualification for UEFA competitions could be substantially reduced in future seasons.

A screenshot of a cell phone Description automatically generated

If non-cash costs such as player amortisation are stripped out, the position however improves, and Everton have an EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) profit instead of a loss.

EBITDA is an important profit measure as it is the closest to a ‘cash’ profit that analysts use to assess a business and shows how much the club has to invest in player acquisitions from its day to day activities. Everton have made over £70 million in EBITDA profit over the last six years but have invested more than that in improving the squad.

Player trading:

A screenshot of a cell phone Description automatically generated

According to the accounts Everton spent over £215 million in 2017/18 on player signings, and on top of that Wayne Rooney was recruited on a free transfer. This is almost as much as the club spent in the five previous years put together.

Even taking into account the record domestic transfer fee when selling Romelu Lukaku the net spend was still £106 million.

Compared to their peer group, Everton’s spending is very much as the top end of the table.

Since the end of the season the board have backed new manager Marco Silva with a net £83 million on new signings such as Richarlison.

Funding the club

Clubs usually have a choice between third party loans (which attract interest payments) owner loans (which may or may not charge interest) and shares (which occasionally pay dividends).

In the case of Everton, the club have focussed on owner loans and short term interest-bearing loans.

On top of the sums borrowed in 2017/18, the footnotes revealed that Farhad Moshiri has lent a further £100 million to the club since May 2018. This money has presumably been invested in new players and the ongoing application for a new stadium.


Under Moshiri Everton have certainly moved to a new level of investment, mainly in terms of the playing squad. This wasn’t particularly successful in 2017/18, but there are signs of improvement under Marco Silva as the squad starts to gel together.

Whilst the club is playing at Goodison there is little scope to increase income, and every year until a new stadium is open for business will increase the gap between the club and the ‘Big Six’, all of whom have competitive advantages in terms of income generating capacity and facilities.

Until the new stadium arrives, unless Moshiri is willing and able to underwrite substantial losses (which could cause financial fair play problems should Everton qualify for UEFA competitions) then realistically seventh place and entertaining football is the realistic target for the club.

West Ham 2018: Plastic Passion


Getting to the London Stadium was supposed to be a game changer financially for West Ham, according to the club’s owners, David Gold and David Sullivan.

Once the move was completed the additional capacity, combined with the greater opportunities for developing sponsorship and commercial agreements should have given the club the extra income to allow West Ham to break through the glass ceiling of the ‘Big Six’ clubs who had taken nearly all of the Champions League places this decade.

Local fans however have not been happy with the move, leading to an uneasy relationship with the owners that manifested itself last season on occasion with demonstrations and hostility towards the board of directors.

During the first two years in the London Stadium there have also been conflicts between the club and the landlords, as well as grumblings from the London Mayor that West Ham had a deal that was too generous to the club.

As the results for 2017/18 came out, has the club moved on to a new level, or has the move been more trouble than it was worth?

Key figures for year to 31 May 2018: WH Holding Limited

Income £176.3 million (down 4%).

Wages £106.6 million (up 12%) .

Operating profit £22.0 million (down 55%)

Player signings £60.9 million (down 25%)

Player sales £57.7 million

Shareholder loans £54.5 million.


Nearly all clubs split their income into three main sources, matchday, broadcasting and commercial, for comparative purposes, and West Ham are no different.

Despite having now spent two years in the London Stadium, which had a capacity of 57,000 last season compared to the Boleyn Ground, where I saw my first ever football match in 1971, matchday income last season was lower than in the final season of the 35,000 seater iconic ground that was West Ham’s home for so long.

A screenshot of a cell phone

Description automatically generated

Second season syndrome is often evidenced by lower attendances, but this wasn’t the case for West Ham as tickets sold out for every game, but even so matchday income fell £4 million as there were four fewer fixtures played due to non-participation in the Europa Cup and less domestic cup progress at home.

A screenshot of a cell phone

Description automatically generated

Unless West Ham can either further increase the stadium capacity (potential is 66,000), increase prices or achieve a good UEFA competition run it is difficult to see how West Ham can narrow the gap with the clubs above them, especially with Spurs, should their new stadium materialise this season, having a ticket pricing structure aimed at lightening wallets.

Longer term West Ham could potentially sell more tickets to the prawn sandwich element of the fanbase, who are prepared to pay higher prices for hospitality tickets and all that goes with that the commercialisation of the game.

Lowering season ticket prices at the London Stadium was one of the cornerstones of the owners’ rationale behind the move away from the Boleyn, but once reduced, it is difficult to see how prices can then be increased to narrow the matchday income gap with the clubs above West Ham.

In the case of broadcast income, West Ham still remain an attractive proposition to the TV companies, with 17 Premier League matches being shown live domestically in 2017/18, the highest of any team in the bottom half of the division.

A screenshot of a cell phone

Description automatically generated

Variances from season to season only tend to arise during the three-year period of a TV deal if the club finishes in a different position to the previous season, so the fall from 11th to 13th resulted in a slight fall from this income source.

A screenshot of a cell phone

Description automatically generated

Another way of increasing broadcast income is to make progress in UEFA competitions, as the sums available to clubs for these rights are worth up to £100 million a season and this has created a glass ceiling for clubs such as West Ham keen to break into the ‘Big Six’ who have vacuumed up nearly all of these riches in recent years.

A screenshot of a cell phone

Description automatically generated

No one was expecting West Ham’s commercial income to fall last season, so the 6% decrease caused eyebrows to raise as this was the area the owners hoped to grow the most with the stadium move

A reason given for the decrease is that the commercial income for 2017 contained ‘one-off factors’ which were behind the 25% increase that year, presumably linked to the move away from the Boleyn.

A close up of a map

Description automatically generated

Relative to other clubs West Ham are way behind the self-styled ‘Big Six’ who have the advantage of being able to sell commercial packages to sponsors wanting regular Champions/Europa League exposure, as well as more lucrative overseas pre-season visits to where their football tourist fanbases are located.

Everton’s commercial income being higher than that of West Ham may surprise some Hammer’s fans, but this is partially due to a lucrative training ground naming rights deal with the business partner of Everton’s owner.

A picture containing businesscard

Description automatically generated

Due to the sums paid by TV companies for broadcast rights, this source represented 2/3 of West Ham’s total income for 2017/18, but this is a lot less than for some other clubs who are effectively little more than entertainment slaves for BT and Sky.

A screenshot of a cell phone

Description automatically generated

Income overall for West Ham at £176 million puts them into the top half in the Premier League, and it is difficult to see them being overtaken by the clubs below them, equally it is unlikely to see how they can move to the £300 million a year gang who dominate Champions League places.


Largest costs for clubs are those relating to players, in the form of wages and transfer fee amortisation.

A screenshot of a cell phone

Description automatically generated

Despite all income types falling in 2017/18, the wage bill increased by over 12% as a combination of new players and new contracts for existing squad members proved to be expensive.

Oberving individual player wages is not really within our realm but based on a formula that seems to generate decent benchmark figures, the average West Ham player is paid about £51,000 a week, but this is surprisingly below smaller clubs such as Southampton and Crystal Palace.

A close up of text on a white background

Description automatically generated

Some comfort can be gleaned by looking at the club’s wages to income ratio, although this has increased it is still within the £60 of wages to £100 of income threshold that is deemed to be ideal for a Premier League club.

Experts divide transfer fees paid over the contract period to calculate something called amortisation and this fell by 10% in 2017/18 despite West Ham breaking their transfer fee record by signing Arnautovic for £20 million on a five-year deal, which gives an amortisation cost of £4 million (£20 million/5) per year.

Looking at amortisation, it is possible to get a broader feel for a club’s longer-term transfer policy rather than just a couple of windows of buying a selling within an individual season.

Luckily for the present season, with Spurs signing no players during the 2018/19 window, and West Ham making substantial investment in the squad, the Hammers should jump to 7th in the amortisation table, suggesting that the owners have backed the manager in the transfer market.

Ever since moving to the London Stadium the club have been involved in a rent dispute with the owners and for 2017/18 the rental cost rose 25% to £2.9 million.

Reviewing the profit and loss acount one other major cost for the club is loan interest, which was about £75,000 a week during 2017/18, about half of which was in respect of loans from Messrs Gold and Sullivan.

Selling the Boleyn Ground in 2016/17 generated a one-off profit of £8.6 million for the club, which reduced overall costs (although the new owners, Boleyn Phoenix Limited then seemed to sell it to Barrett Homes immediately for £19 million profit for themselves, this seems strange for such a shrewd property trader such as David Sullivan).

Directors’ pay

A screenshot of a cell phone

Description automatically generated

West Ham’s CEO Karren Brady saw her pay package stabilise at about £900,000 in recent years, reflecting the faith that Gold and Sullivan see in her, although according to some West Ham bloggers she has substantial other income streams too.

By the standards of the Premier League Brady earns about the average amount, although eyebrows will be raised at the lack of payments to executives from some other clubs, with Arsene Wenger and Michel Platini seen muttering ‘financial doping’ to anyone who is prepared to listen.

Profits and Losses

Profit is a bit like love or deciding which is the hardest Tellytubby, in that it is difficult to agree on a universal definition.

Broadly profits are income less costs, and the headline figure for West Ham was an £18.3 million profit last season, or £350,000 a week. This figure is distorted by a couple of factors though.

In 2016/17 the club’s headline profit before tax included the gain on the sale of the Boleyn Ground as well as £28 million from selling Payet and Tomkins. Similarly in 2017/18 the club made £30 million by selling the likes of Andre Ayew, Sakho, Fletcher and Randolph.

Stripping out the above distortions gives something called EBIT (earnings before interest and tax) profit, which is a more balanced look at what recurring profits would be without the one-off impact of player sales and similar non-trading transactions.

A screenshot of a cell phone

Description automatically generated

This shows that instead of a profit, West Ham actually lost about £120,000 a week in 2017/18, as the investment in player wages and the decrease in income combined to reduce profits by about £17 million.

If non-cash costs such as player amortisation are stripped out, the position however improves, and West Ham have an EBITDA profit (Earnings Before Interest, Tax, Depreciation and Amortisation).

EBITDA is an important profit measure as it is the closest to a ‘cash’ profit that analysts use to assess a business and shows how much the club has to invest in player acquisitions from its day to day activities. West Ham have made over £207 million in EBITDA profit over the last six years.

Whilst Gold and Sullivan correctly can claim that they haven’t paid themselves a penny in wages since acquiring the club in 2010, they have lent it money as the previous Icelandic Bank owners went bust. Gold and Sullivan have charged interest at between 4-6 % on these loans since then. They claim that this is less than would be charged by commercial banks, and so they are doing the club a favour. Other ‘local’ owners of Premier League clubs, such as the Coates family at Stoke, Tony Bloom at Brighton and Dean Hoyle at Huddersfield have all lent money interest free.

A screenshot of a cell phone

Description automatically generated

Gold and Sullivan however have charged the club nearly £17 million in interest charges and have taken out over £14 million of this out in the form of cash since August 2017.

Player trading:

According to the accounts West Ham spent over £60 million in 2017/18 on player signings, substantially less than the previous year. This doesn’t necessarily buy you a lot in the present Premier League market though.

A screenshot of a cell phone

Description automatically generated

The net spend was just £3 million though.

Compared to their peer group, West Ham’s spending was at best described as modest in 2017/18.

Since the end of the season the board have backed new manager Manual Pelligrini with a net £89 million on new signings such as Felipe Anderson.

Funding the club

Clubs usually have a choice between third party loans (which attract interest payments) owners loans (which may or may not charge interest) and shares (which occasionally pay dividends).

In the case of West Ham the club have focussed on interest bearing borrowings.

Gold and Sullivan did initially bail out the club but have not lent anything since 2013. Since then the club have taken on overseas investments and also borrowed money on a short term basis which is then repaid when the Premier League forward the first instalment of the annual broadcasting payments.


West Ham’s promises of a financial boost following the move to the London Stadium has not to date materialised, although the uneasy relationship with fans that resulted in hostility towards the board has been reduced to simmering resentment as results have improved under Pelligrini.

Whilst there is scope for income to increase if the capacity of the London Stadium is allowed to reach its maximum potential, realistically the gap between the club’s finances under the present owners, and that of the ‘Big Six’, is likely to result in the annual battle being with the likes of Everton. Leicester and whoever else is showing some short term form (last year Burnley, this year Wolves and Bournemouth) for the less than coveted title of ‘Best of the rest’. Whether fans who have sacrificed their historical home at Upton Park will think this is a price worth paying is yet to be determined.

Brighton 2017/18: What Do I Get?


Tony Bloom, Brighton’s owner, probably heaved a sigh of relief in 2017/18, not just because his team had been promoted, but for the first time in living memory the club made a profit.

Over the six initial seasons that Brighton had played in the Championship at the Amex stadium, the Albion had lost £110 million.

Nevertheless, Bloom still ended up lending the club £32 million in 2017/18 as he underwrote investment in new players and capital projects.

Yet for some Brighton fans this benevolence from Bloom is not enough, and recent tantrums and whines on social media suggest that some fans will always want more, especially if someone else if footing the bill.

Key figures for year to 31 May 2018: Brighton and Hove Albion Holdings Limited

Income £139.4 million (up 378%).

Wages £77.6 million (up 148%) .

Operating profit £12.8 million (previous year loss of £38.9 million)

Player signings £57.5 million

Player sales £3.5 million

Tony Bloom investment £318 million (up £32 million).


Brighton, like all clubs generate money from three main sources, matchday, broadcasting and commercial, and whilst the figures for 2017/18 were a record for the club, they are still relatively low compared to those clubs who are regularly competing in European competitions and have global fanbases.

Love it or loathe it, broadcasting income is the main driver of income for a club such as the Albion, and the difference between clubs in the EFL and the EPL is part of the reason why clubs in the Championship are losing nearly £400 million a season as they seek the end of the rainbow in the division above.

Overseas and domestic broadcasters are prepared to pay top prices for Premier League rights at they have discovered that this is the one product that minimises viewers cancelling their subscriptions.

Only a quarter of Brighton’s income came from TV in the Championship, but this rose to four-fifths in the Premier League, and some clubs are even more exposed to this income source.

A picture containing screenshot Description automatically generated

Many critics of the Premier League claim that broadcast income levels are a bubble and will burst, bankrupting clubs who are dependent upon it in the process, but there is little evidence to support the view that we are near the end of the road for the likes of BT and Sky paying billions to cover the game live.

Selling TV rights at a loss when the Premier League was started in 1992/3 had proved to be a masterstroke, as the value of those rights has subsequently increased to about a billion pounds a year.

Brighton’s matchday income rose substantially in 2017/18, although we suspect that part of the increase is due to changing what is included in the split of matchday and commercial income totals.

Less fixtures in the division would in theory result in less income, but a combination of increased average attendances (up from 27,966 to 30,403) and higher matchday prices led to a 25% increase.

Unlike most other clubs, Brighton’s ticketing policy includes subsidised travel to and from the Amex stadium for those that want it, so a direct comparison with clubs of a similar ground capacity is not entirely valid.

A screenshot of a cell phone Description automatically generated

Even so, Brighton generated more matchday income than the likes of Leicester, who won the Premier League in 2016, and had £10m more from this source than half a dozen competitors, and this was partially due to the club’s ability to monetise the fanbase compared to previous years.

As a newcomer to the division, Brighton were slightly constrained by existing commercial deals, and according to Nick Harris’s excellent SportingIntelligence website have a very low value shirt sponsorship arrangement with American Express compared to the going rate for the Premier League.

Nevertheless, commercial income rose by a quarter to over £10 million, but the club is a pauper compared to the riches earned by the self-styled ‘Big Six’.

Despite the relative lack of commercial income, Brighton have fared reasonably well in the Premier League overall, finishing 12th in our initial total income table, although this may change as more clubs announce their 2018 results.

What is likely to be the biggest driver of income change for 2018/19 is the club’s final league position, as this is worth £1.9 million for every extra place in the league that the club finishes.


Having a place in the Premier League means that expenses rise too, and the main drivers here relate to players, in the form of wages and transfer fee amortisation.

Increasing a wage bill by nearly 150% would be considered madness in most industries, but football is like no other, and to compete the club has had to pay the going rates.

A screenshot of a cell phone Description automatically generated

There were new contracts given to some of the players central to Brighton being promoted from the Championship in 2016.17, such as Dunk, Duffy, Stephens, Knockaert and Bruno, as well as new signings joining the club whose agents have a rough idea of the going rate for the division.

A screenshot of a cell phone Description automatically generated

Even so, wages rose slower than income, and this resulted in Brighton’s wage/income percentage nearly halving, as the club paid out £56 in wages for every £100 in income, comapred to £107 the previous season (and there were substantial promotion bonuses paid out on top of this sum too).

A screenshot of a cell phone Description automatically generated

As a rule of thumb Premier League clubs are usually deemed to be running well if the wage to income ratio is below 60%, so Brighton have achieved this objective in their first season.

A screenshot of a cell phone Description automatically generated

Relative to their peer group, Brighton seem to have wages under control and have not thrown money at the issue of avoiding relegation.

Married to the cost of player wages is the transfer fee amortisation expense, which arises when a player signs for a club and the accountants spread the transfer fee over the contract life.

Yearly amortisation fees represent a less volatile measure of a club’s transfer policy, which can be distorted by big purchases in one year followed by a period of relative austerity, and so give a better long-term guide to investment in the playing squad.

Brighton’s amortisation cost for the year more than tripled, as the club broke its transfer record many times on Ryan, Propper, Izquierdo, and Locadia over the course of the season. Therefore, when Davy Propper signed for an estimated £10 million on a four-year contract, this works out as an amortisation charge of £2.5 million a year.

By Premier League standards the amortisation cost is relatively low, reflecting that the club is in its first year in the division and has also kept faith with players recruited at Championship prices and therefore lower amortisation fees.

Directors’ pay

It was not just the players who benefitted from Brighton’s promotion. CEO Paul Barber saw his pay package increase to over £1.4 million, reflecting the faith that Tony Bloom has in him and the fact that he was coveted by other clubs in the division, such as Liverpool.

Barber attracts some hysterical reactions from sections of the Brighton fanbase, who seem to think he is the spawn of Beelzebub. His email replies to fan complaints are legendary in length, and whilst his dedication to communication is to be commended in many regards, when fans want nothing but appeasement for the personal slights that they take when some decisions are made, he may struggle to make much headway with their views. Every village has an idiot, and there are a lot of villages in Sussex, all of whom seem to enjoy writing letters of complaint to the Brighton CEO.

The Premier League is a law to itself when it comes to executive pay, there seems to be little indication of what is the going rate, and some of the figures quoted, especially for clubs that purport to give no money to the big cheeses, are best described as ‘unusual’ but are likely to get the investigative journalists at Der Spiegel busy going through leaked emails.

Profits and Losses

Profits/losses are income less costs, and the headline figure for Brighton was a £12.8 million last season, or £350,000 a week. This figure is distorted by a couple of factors though.

Whilst the club kept the vast majority of the squad from the Championship, a few players were sold and this generated profits of £3.4 million, The nature of player sales profits is that all of the profit is shown in the year of sales (unlike player purchases which are spread over the contract) and so create erratic and unpredictable figure.

In 2016/17 the club paid out £9.1 million in promotion bonuses, as Tony Bloom rewarded all employees at the club, not just the playing staff, for taking the Albion to the top flight. Such bonuses distorted the results for that season as they are non-recurring in nature.

Stripping out the above two distortions gives something called EBIT (earnings before interest and tax) profit, which is a more balanced look at what recurring profits would be.

This shows the alarming state of trying to compete in the Championship and gives a more nuanced measure of the benefits of promotion, which are effectively £40 million comparing 2018 to 2017.It also reinforces the view that Brighton would have had to cut back significantly in the playing squad by selling players had they not been promoted the previous season to comply with EFL FFP.

Player trading:

According to the accounts Brighton spent over £57 million in 2017/18 on player signings, a club record. This doesn’t necessarily buy you a lot in the present Premier League market though.

Compared to their peer group, Brighton’s spending was reasonable but unspectacular.

Since the end of the season the board have backed Chris Hughton, with another £50-60 million being spent on new signings.

Funding the club

Tony Bloom’s total investment increase in 2017/18 as he lent the club £32 million. These loans realistically stand little chance of being repaid under present circumstances unless the club starts to make significantly higher profits, although there is little sign of Bloom wanting his money returned. The good news is that the loans, unlike some from directors at Premier League clubs, are interest free.

Whilst fans may scratch their heads at how he had to lend the club money in a year when it made a profit, Bloom repaid the Albion’s overdraft at Barclays Bank (£16 million at start of season), only a fraction of the cost of new players was reflected in the amortisation charge, and the club also spent nearly £10 million in upgrading the Amex stadium and other infrastructure projects.

This takes his total investment to £318 million, in the form of shares and loans.


Brighton’s approach under Bloom of concentrating on the infrastructure first (stadium and training facilities, followed by squad investment) paid dividends in 2017 and the club was able to capitalise with a solid if unspectacular first season in the Premier League.

With the fifth lowest wage budget in the division, a relegation scrap is going to be the order of the day for a few seasons, but provided Bloom keeps his nerve and faith in Chris Hughton, then there is a fair chance of making some progress.

Whether the pitch fork element of the fan base has such patience (and they are not the ones who were subsidising the club for tens of millions in the Championship) is another matter.

Stoke City 2018: Coat(es) of many colours

Does my bum look big in this?


There’s not a huge number of famous people from Stoke, Stanley Matthews and Robbie Williams come to mind, but then most people may be struggling.

Recent events have brought one person to the public’s attention, and that’s Denise Coates, the main shareholder in Bet365, who own 100% of Stoke City Football Club Limited’s shares.

She was paid £220 million in 2017/18, a record for a private company, which will come as little cheer to Stoke City fans as their club was relegated from the Premier League.

The club was one of the first to publish its financial results for 2017/18.

Key figures for year to 31 May 2018: Stoke City Football Club Ltd

Income £127.2 million (down 7%).

Wages £94.2 million (up 11%) .

Operating losses £30.2 million (up 35.1 million)

Player signings £58.4 million

Player sales £27.9 million

Coates family investment £123 million (up £47 million).


All clubs generate money from three main sources, matchday, broadcasting and commercial. The Premier League is effectively split into the elite, who are regulars in UEFA competitions and have global fanbases who can be ‘monetised, and the remainder of upstarts, wannabes and those just enjoying the ride.

Stoke City are one of the earliest clubs to publish their finances for 2017/18, so the figures in the Premier League tables are from 2016/17 unless the club is labelled 2018.

A screenshot of a cell phone Description automatically generated

Stoke’s total income is where most fans would probably expect it to be, in amongst a group of clubs who are likely to be scrapping for relegation during the season, but not adrift from that particular bunch.

A screenshot of a cell phone Description automatically generated Matchday income from ticket sales rose slightly to £7.7 million. This was partly due to some ground redevelopment that allowed the club to increase capacity at the Britannia Bet365 stadium to over 30,000. .

Broadcasting income fell 7% to £101 million. This was due to Stoke finishing 19th in the table compared to 13th the previous season. Each position in the table is worth about £1.9 million to a club, so giving them plenty to play for even if relegated is avoided with the few matches remaining at the end of the season. The fact that one place higher up a table is worth more to a club such as Stoke than increasing capacity by 1,800 shows how skewed revenue is in favour of broadcast income.

For 2018/19 expect broadcasting income to fall to about £45 million, and if the club are not promoted, £35m and £14m in the two following seasons. The EFL broadcasting deal for clubs presently pays £2.3 million a season in the Championship, and in addition clubs receive £4.5 million from the Premier League deal in what is called ‘solidarity’ payments.

Other income, mainly commercial and retail, fell by 8% to £18.6 million. Those who snipe at Stoke due to their relationship with owners/sponsors Bet365 will point to this sum being inflated. Whilst Stoke are perhaps a wee bit further up the table in this area than one would expect, it’s by a relatively small amount, compared to the more eye-watering deals signed by clubs with friends of their owners less than 50 miles away.


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

The wage bill rose by over £9 million to £94 million. This was due to the club making a lot of signings (who failed to deliver) and a payoff for Mark Hughes when he was sacked in January.

As a consequence, the wage/income ratio rose significantly. Stoke paid out £74 in wages for every £100 of income. The rule of thumb in the Premier League is that clubs are usually aiming for a 60% target.

What’s concerning for Stoke is that if this high cost area is carried over to the Championship it could easily exceed 100%, leaving nothing to pay for the other overheads of running the club.

The other player related expense is that of transfer fee amortisation. This is the cost of signing a player spread over the length of his contract. So, when Stoke signed Kevin Wimmer for £18 million on a five-year contract this works out as an annual amortisation charge of £3.6 million a year (£18m/5years).

Stoke’s amortisation charge rose by 14%, reflecting the investment in the squad during the season. This also shows the inflated prices being demanded by selling clubs when dealing with the Premier League.

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 and shows the impact of the club’s long-term player signing strategy. It’s clear that Stoke City’s board backed Mark Hughes as the amortisation charge is now double that of three seasons ago.

Compared to other clubs of a similar size, Stoke’s amortisation cost is competitive without being spectacular. This suggests that relegation was down to spending money poorly, rather than not having a decent budget.

Directors pay

Much has been made of parent company Bet365 paying their board £330 million in 2017/18. That level of generosity doesn’t extend to the football club, but the £711,000 trousered by the highest paid executive at the club means that they are still able to buy a pack of oatcakes or two for a while.

Profits and Losses

Profits/losses are income less costs, and the headline figure was a £30.2 million loss last season, or £580,000 a week. This figure is distorted by a couple of factors though.

Following relegation, the club reviewed the squad and concluded that it was significantly overvalued. They therefore wrote off £29.4 million of player transfer fees. This is a one-off event that is unlikely to be repeated in 2018/19 unless the club does a Sunderland and slides through to League One. Stoke fans are likely to be able to point the fingers at those players who turned out to be turkeys.

One reason for doing this in 2017/18 is that by reducing player values in 2017/18 it will enable the club to be able to satisfy FFP rules in the Championship should they stay there for a few seasons.

Also, in 2017/18 Stoke sold players at a profit (Arnautovic being the main one) of £22 million. This is another erratic and unpredictable figure.

Since the end of the season the club has sold players at a profit of a further £14 million, the main one coming to mind being Shaqiri to Liverpool.

Stripping out the above two distortions gives something called EBIT (earnings before interest and tax) profit, which is a more balanced look at what recurring profits would be.

A screenshot of a cell phone Description automatically generated

This is a more alarming than the stated operating losses of £30.2 million. Whilst the club lost a similar amount in 2012/13, since then there have been two increases in EPL broadcasting rights, which boosted Stoke’s TV money from £46 to £100 million. The fact that the club has similar losses in 2018 indicates that a lot of money was wasted last season.

Player trading:

According to the accounts Stoke spent over £58 million in 2017/18 on player signings, a club record. This doesn’t necessarily buy you a lot in the present Premier League market though.

A screenshot of a cell phone Description automatically generated

Compared to their peer group, Stoke’s spending was reasonable but unspectacular. The figures reinforce the comments made by Charlie Adam that too many players weren’t prepared to fight hard enough for Premier League survival.

Since the end of the season the board have backed Gary Rowett, with £52 million being spent on new signings, which is a very high figure by Championship standards.

Funding the club

The Coates family total investment increase in 2017/18 as Bet365 invested a further £47 million in the club via loans. These loans realistically stand little chance of being repaid under present circumstances of the club losing so much money. The good news is that with Bet365 making a gross profit of £2.2 billion in the same period there is little chance of the company asking for its money back.

This takes his total investment to £159 million, in the form of shares and interest free loans.

Realistically, the Coates family will have to subsidise the club by a minimum of £10-20 million a year for the foreseeable future, unless promotion back to the Premier League is achieved. The Championship is a bear pit of a division, with practically every club losing hundreds of thousands every month.

A screenshot of a cell phone Description automatically generated


Stoke City are a textbook example of everything that is right and wrong with the Premier League. A good season is finishing in the top half, get a few signings wrong and you’re in a scrap to avoid the drop.

The good news for Stoke fans is that there’s no sign of the Coates’ affection for the club in the city where he made their fortune waning. The only threat could come if Bet365 were bought out by another company, but there is no sign of that happening.

The Championship is more exciting than the Premier League, if less glamourous, and provided the club remains competitive in the division there’s probably more enjoyment for fans once they get used to the regularity of Saturday followed by Tuesday football, with victories becoming more expectation than hope.

Manchester City and Der Spiegel: Second Skin

The Der Spiegel allegations in relation to Manchester City seem to have tongues wagging at present, but are City’s activities illegal, deceptive or just pushing the boundaries of what is within the regulations?

Never mind that, the good news is that legendary City fan Eddie Large is making a comeback with Sid Little

What are the FFP rules?

The short version is that clubs are allowed to make an FFP loss (which is an accounting loss excluding infrastructure, academy, women’s football and community scheme costs) of €5 million over three years. These losses can be extended to €30 million if the club owner is willing to inject the difference into the club by buying shares.

The long version is 108 pages long and not recommended unless you are on a particularly long train journey or a masochist.

A picture containing sport, water sport, sky, swimming Description automatically generated

What are the punishments for breaking the rules?

UEFA has a full schedule of punishments from finger wagging, fines, wage caps, reduction in squad sizes for UEFA competition to the ultimate sanction of being banned from UEFA competitions.

Are these punishments legal and within EU competition law?

UEFA is confident that the rules are watertight, but they’ve not been tested in court to date. As we’ve seen with the QPR case, which cost the EFL £3 million (and presumably QPR similar) and took four years to resolve, the objective of the legal and accounting professions is to delay and argue as long as possible to maximise their fees. Manchester City were by all accounts prepared to use whatever legal means possible to prevent a competition ban.

Are there weaknesses in the rules?

All rules have strengths, weaknesses and loopholes. The rules were partially created by two employees of Deloitte, Martyn Hawkins and Alex Byars, who were sent on secondment to UEFA. Byars was then recruited by Manchester City in January 2012 and spent three years there, and Hawkins was recruited by City at the same time and is now the club’s Finance Director.

The Independent

It’s common in all industries to recruit from those with expert knowledge, so no wrong doing here from a legal standpoint, but if anyone is going to know where the bodies lie in terms of the weaknesses of FFP it is likely to be someone who was involved in writing the rules.

Smart thinking by City or an attempt to dodge FFP? It depends on which football team you support.

How can the rules be abused?

UEFA did fine City £49 million for FFP breaches in 2013, as well as imposing transfer and wage caps for two seasons. City appear to have accepted and applied these rules, and as a result had a refund of two thirds of the fine in accordance with the terms of the initial punishment.

A screenshot of a cell phone Description automatically generated

If a club thinks it is going to exceed the allowed losses it could, if it so desired, do one of two things.

(a) Artificially inflate income

Clubs have three main sources of income, matchday, broadcast and commercial. The first two are difficult to inflate, but commercial income could be boosted in relation to deals signed with sponsors who are connected to the club owner.

This is what is alleged in the Der Spiegel leaks, in relation to commercial contracts, such as the one with Etihad Airways, where the claim is that of the £60m a year sponsorship from Etihad, £52 million of this was coming from Abu Dhabi United Group, owned by City’s owner, Sheik Mansour. These claims have been denied.

The other claim is in relation to the sale of image rights to another company, Fordham Sports Image Rights Limited. (FSIR)

FSIR had by 30 June 2017 accumulated losses of £74.6 million in five years, which is an achievement for a company with two employees. These losses have been mainly funded by the company issuing shares for £59 million.

A screenshot of text Description automatically generated

At this stage you might be wondering what is the link to Manchester City?

Fordham Sports Image Rights Limited used to be called Manchester City Football Club (Image Rights) Limited and its registered address was the Etihad Stadium in Manchester.

A screenshot of a cell phone Description automatically generated

A look at the list of officers of FSIR includes Simon Cliff and John Macbeath.  They both resigned in July 2013. Simon Cliff is presently the legal counsel at Manchester City and was appointed to the board in May 2013 and John Macbeath is a non-executive director of the club, former interim chief executive and was appointed in January 2010.

FSIR is presently controlled by David ‘Spotty’ Rowland, a former Conservative party treasurer and major donor. Rowland is notoriously camera shy and isn’t known to be a football fan, although he once tried to buy Hibernian in the 1980’s.

Why Rowland would bankroll the losses of a company involved in sports image rights is unclear.

The allegation appears to be that FSIR paid City for the player image rights in 2012/13 when FFP was first applied, as well as other sales to parts of the City group empire, as a means of reducing losses.

City sell image rights

What has happened to the image rights subsequent to the sale to FSIR is unclear, but it is odd that the company has made such huge losses since 2013.

A screenshot of a cell phone Description automatically generated A screenshot of a cell phone Description automatically generated

(b) Reduce FFP costs

Manchester City are a subsidiary company of City Football Group Limited, which also has interests in football clubs in New York, Melbourne, Tokyo and Uruguay. City’s critics believe that this allows the group to allocate central costs (marketing, IT, legal etc) to the other football clubs and reduce the costs borne by Manchester City, helping it comply with FFP losses in the process.

A look at the income and costs of both Manchester City and City Football Group shows the following

Again, the conclusion is likely to be dependent upon your confirmation bias. A City fan would say that Manchester City generates 92% of income due to participation in lucrative competitions and that many overhead costs, such as rent, are fixed, and so would be borne to a greater extent by other members of the City group to a greater extent. Those who think there has been foul play will point out that Manchester City only bear 80.7% of the wage bill, and that the club would surely pay far higher wages than those in the MSL and A-League.


No one comes out of this with reputation intact. For those who are against City and their owners there is plenty of circumstantial evidence that there have been strange relationships and transactions taking place, but in the three days of reporting from Der Spiegel to date, no smoking gun. Some of the activities would be seen as good business practice in other industries, and football has a moral code of convenience whenever deeds are undertaken by a club to which one has a particular dislike.

City themselves, with the effective riposte of ‘Fake News’ to the allegations, give the impression of a club that does not want a light shone on it in terms of transparency and governance. If transactions have been undertaken with third parties that are unusual then the best thing, if innocent, is to show the evidence and the club could come out of this smelling of rose.

Der Spiegel’s allegations, whilst containing a few new snippets, doesn’t reveal any slam dunk information (although at the time of this being blogged only three days out of four of the story have been published).

Football is a grubby industry, and every time you hear about stories such as these which paint the game in a poor light (which apply to many, many clubs) it’s inevitable that you fall a little more out of love with the game, but not enough to stop watching, subscribing, discussing and consuming, and clubs, along with the likes of the Premier League, UEFA and FIFA, are fully aware of this.


Bristol City 2017/18: Mezzanine


The insanity of life in the Championship chasing a place in ‘The Promised Land’ ((c) Alan Green and all other unimaginative commentators) is highlighted in Bristol City’s latest financial results.

City were 2nd in the table on 26th December 2017 but were slid to mid table by the end of the season, and with that had to disassemble the squad as the vultures came picking off their best players.

Key figures for year to 30 June 18: Bristol City Holdings Ltd

Income £25.2 million (up 19%).

Wages £27.3 million (up 30%) .

Losses before player sales £24.2 million (up 26%)

Player signings £12 million

Player sales £1.8 million

Steve Lansdown investment £137 million (up £19 million).

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 £25.2 million. To put this in context, the three clubs relegated from the Premier League, Hull, Middlesbrough and Sunderland, each earned over £40 million in parachute payments.

City are one of the earliest clubs to publish their finances for 2017/18, so the figures in the Championship table are from 2016/17 unless labelled 2018.

As far as Championship clubs go, Bristol City are competitive with other clubs not in receipt of parachute payments.

Strip out the parachute payments and City rise to 7th in the income table.

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

Since 2013/14 City’s income has quadrupled, but this hasn’t been enough to stem the losses.

Matchday income from ticket sales rose a third to £6.6 million. This was due to attendances at Ashton Gate increasing 9% from 19,256 to 20,953, but a good cup run added some lucrative fixtures. .

Broadcasting income rose 14% to 6.8million. This was due to the ‘solidarity payment’ paid by the Premier League to the English Football League increasing from £4.3 million to £4.5 million as well as some of the cup matches being shown live on Sky.

Other income, mainly commercial and retail, rose by an impressive 15%. This is mainly due to the completed development of Ashton Gate, the stadium that City share with Bristol Rugby Club.

Additional facilities allow the club to generate extra money from hospitality, conferences, catering etc, and allows the club to be open for more than the 25-30 days a year when home fixtures take place.


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 30% to £27.3 million and have more than doubled since promotion in 2015. The wage/income ratio for City rose to 108%. This means Bristol City paid out £108 in wages for every £100 they generated from revenue, leaving nothing to pay any of the other running costs, unless these are bankrolled by the owner, Steve Lansdown.

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.

A close up of a map Description generated with high confidenceA close up of a map Description generated with high confidence

In the Championship as a whole, this puts the club slightly lower than the average wage level for 2016/17 of £29.8 million, and a wage/income level of 100% for the division as a whole.

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. So, when City signed Famara Diedhiou for £5 million on a four-year contract this works out as an annual amortisation charge of £1.25 million a year (£5m/4yrs).

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

A screenshot of a cell phone Description generated with very high confidence

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 and shows the impact of the club’s long-term player signing strategy. It’s clear that Bristol City’s board have backed the manager to ‘go for it’ to an extent over the last two years, as the amortisation charge is now five times the sum of when the club was in League One.

Other costs:

After spending a lot of money in recent years redeveloping Ashton Gate, the club cut back on capital spending in 2017/18. It does appear to have started work though on new training facilities, (classified here as ‘assets under construction’) for which formal planning permission was granted in September 2018.

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 Sport in Guernsey, but at £109,000 the amount is fairly low compared to other clubs, in an industry where there appears to be no ‘going rate’ as salaries vary between zero and £1.2 million.

Profits (or perhaps more appropriately Losses?)

Profits/losses are income less costs, and were £24.2 million last season, or £465,000 a week. The previous season the losses had been £19.2 million but the sale of Jonathan Kodjia to Aston Villa, for £15 million help offset these. There were no significantly profitable player sales in the year to June 2018.

Over the last six years City have racked up losses before player sales of £94 million, and the highest position during that period was last season’s 11th in the Championship (plus the wonderful League Cup run).

A screenshot of a cell phone Description generated with high confidence

Player sales have reduced these losses to ‘just’ £77 million, but Steve Lansdown still has effectively had to find a quarter of a million pounds each and every week for six years.

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. Over the last three years City have had losses before tax of £47 million, so on the face of things would be subject to FFP sanction, but help is to hand.

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.

Some rough calculations suggest the FFP loss for City was therefore about £35 million over the three seasons, leaving some, but not a lot, of breathing space.

Player trading:

According to the accounts City paid out £12 million in 2017/18 on player additions, just short of the sum paid in the previous season.

This puts City mid-table in terms of the Championship, a division where you probably need to spend £10 million if you want to stand still in terms of maintaining the league position. It is also a division in which striking lucky with loan signings can make all the difference, as was experienced by Huddersfield when they had Mooy and Izzy Brown in 2016/17.

With the club failing to be promoted, it did mean that there were interested parties looking at some of City’s players, and this resulted in net player sales since 30 June of over £13 million as the impressive Flint, Bryan and Reid all departed and Webster, Watkins, Hunt & Eisa arrived.

A screenshot of a cell phone Description generated with very high confidence

Funding the club

Steve Lansdown’s total investment increased further in 2017/18 as he invested a further £19 million in the club via Pula Sports. These loans were then converted into shares, which means relatively little to fans except that shareholders, unlike lenders, cannot ask for their money back.

This takes his total investment to £137 million, in the form of shares and interest free loans.

A screenshot of a cell phone Description generated with very high confidence

Realistically, Lansdown will have to subsidise the club by a minimum of £10-20 million a year for the foreseeable future, unless promotion to the Premier League is achieved.

Whilst £53 million of the debt is technically due to banks it is Lansdown’s wealth and the guarantee given by Pula Sports Ltd that is the reason why the money was advanced by lenders in the first place. Under normal circumstances there’s no way a financial institution would lend to a business that loses £10-25m a year.


Bristol City are a textbook example of everything that is right and wrong with the Championship. Investment in the playing squad showed that the team could compete, on a single match basis at least, with clubs from the Premier League.

At the same time that level of investment cannot be funded from being a Championship club in its own right, and having a benevolent owner is essential to compete in the top half of the table.

The investment in the stadium at Ashton Gate will help generate extra income, but this will not make a serious dent in the operational losses, especially with no sign of wages slowing down in the Championship.

The good news for City fans is that there’s no sign of Steve’s affection for the club in the city where he made his fortune, or sport in Bristol, waning.

He’s invested in rugby and other sports in the city and region and is an excellent example of philanthropy (which I used to think meant he was a stamp collector).

He remains the club’s biggest asset in terms of his generosity but also its biggest risk should anything happen to him, and that’s always an issue for any business which is over reliant upon one individual.

Rangers: Automatic for the people


8pm on 31st October is when I’m usually wondering if I can eat all the fun size Mars Bars that haven’t been vacuumed up by local youths dressed in Freddy Kreuger or Gary Neville fright masks trick or treating for Halloween.

Instead my email inbox pinged, and something came through about Rangers. Initially I ignored it, couldn’t be important surely, as after all the first team were playing high flying Kilmarnock at the same time.

At half-time, having prised myself away from the match on TV, it appeared that Rangers had published their annual results, a good time to bury bad news perhaps?

Key figures for 2017/18

Income £32.7m (2017 £29.2m) Up 12%

Wages £24.1m (2017 £17.6m) Up 37%

Recurring loss before player sales £9.9m (2017 £3.9m) Up 153%

Player signings £9.7m (2017 £10.3m)

Player sales £1.7m (2017 £0.8m)


The club, like most others, generates its income from three main sources. Matchday, broadcasting and commercial.

Rangers didn’t produce accounts for 2011 and 2012 due to the club being in liquidation and the accountants not being obliged to submit them to the registrar.

Matchday income was up 6%, the main reasons for this were:

  • An early exit from Europe, although this still added an extra home match to the season’s total.
  • Higher average attendances which rose slightly to 49,173.
  • Season ticket prices rose from an average of £314 to £328.

Matchday income contributed 70% 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. Rangers are also far more reliant than Celtic for matchday income as the latter had the benefit of Champions League participation.

Ranger’s matchday income was the second highest within the SPFL which places it is an awkward position. Too far behind Celtic to compete financially, too far ahead of other clubs in the division to be threatened, once it comes to term with the standard of that division, a state that hasn’t been reached yet based on results. The former duopoly in the domestic game has not quite yet been achieved.

If the club had been part of the English Premier League, Rangers’ matchday income figure would have placed it ninth in that division.

Broadcast income rose by 22%, to £4.4 million. Part of the increase was due to a UEFA pay-out for all clubs, although for Rangers it is just £650,000.

In 2018/19 this will rise significantly as the club has qualified for the group stages of the Europa League.

In 2018/19 the total prize money in the Europa League, whilst sneered at in some quarters for being the poor relation in UEFA compared to the Champions League, is £495 million

The SPFL TV deal is worth just £19 million a season split between 13 teams.

Even so, compared to the Premier League, where the side finishing bottom still earned £100 million in TV money, Rangers are paupers compared to those clubs, but kings compared to most of the rest of the SPL.

Rangers also benefited with the payments being made in Euros, as the poond continued to be weak following the decline in the UK economy following Brexit.

Commercial income was up by a third as the club made money from a successful pre-season tour and greater sponsorship and catering.

In the last six years, Rangers have earned overall £290 million less than Celtic. Most of this money has been spent but it gives Celtic a significant advantage of terms of investment in the playing squad and infrastructure, which can help generate greater income from conferencing and catering.


The main expense for a football club is in relation to players. These consist of two main elements, wages and amortisation. Wages are straightforward enough, amortisation is how the club deals with transfer fees for players bought, by spreading the cost over the contract life. Therefore, when Rangers signed Alfredo Morelos for £900,000 in 2017 on a three-year contract, this works out as an amortisation cost of £300,000 a year for three years. This is subtracted from income when profits are calculated.

A close up of a map Description generated with very high confidence

The amortisation charge has increased five-fold in the last two seasons as Rangers have invested in the squad since promotion to the SPFL. The problem they have is that Celtic’s amortisation last season was £8.8 million, highlighting the additional spending power they have.

Wages increased by 37% in 2017/18. This is partially due to the investment in new players, as well as giving new contracts to established players who have performed well in the top tier. The wages bill also probably includes the payoff to Caininha and Murty (Kenny Miller’s will be in next year’s accounts).

The problem Rangers have is that whilst their wages dwarf those of nearly every other club in the division, their fans are only focussed on their local rivals, who paid £250 in wages for every £100 paid out by Rangers.

This gap is likely to drop in 2018/19 as Celtic’s wages are likely to fall as Champions League bonuses will not be paid, and the recruitment of Gerrard and new players will increase Rangers’ costs. Even so there is likely to be a significant difference between the two clubs.

Whilst paying higher sums to players does not guarantee better performance, in the main there is a link between wage totals and final league position. It’s possible but rare for this not to be the case, Leicester City winning the English Premier League in 2016 being an example.

Rangers total wage bill puts it about par with a mid-table Championship club in England, as the club has the 37th biggest total in the UK.

A screenshot of a cell phone Description generated with very high confidence

One group who are not benefitting from the higher wage bill are the directors, for the past three seasons they have not taken payment for their roles at the club.

Because wages increased faster than income, Rangers wage control percentage rose from 60% to 74%. This means for every £100 of income the club paid out £74 in wages, this compares to £58 for Celtic.

A screenshot of a cell phone Description generated with very high confidence

A good target rate for clubs is often claimed to be 60% or lower, which Rangers achieved the previous season but were unable to maintain.

Rangers had an additional cost of £3.3 million for 2017/18 in ‘impairment’ costs. This is where the club has signed players in the past who turned out to be pish a bit rubbish, and so the club wrote down their values. Rangers fans will no doubt have a good ideas as to the identity of these flops.

How much Rangers spent in the year on legal fees is unknown, but the club does have a few ongoing cases.

Profits and losses

Profit is income less costs.

There’s no ‘correct’ profit figure, different vested parties will have different viewpoints, so it’s best to look at a few to get an overall picture.

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

A screenshot of a cell phone Description generated with very high confidence

Rangers’ made an operating loss of £12 million in 2017/18, as higher wages, amortisation and impairment already mentioned increased player related costs.

The problem with operating loss is that it can be distorted, especially by player disposals. It therefore makes sense to also calculate profit before player sales and other one-off items such as redundancy payments and contract disputes.

This is referred to 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 as has already been seen.

Stripping out these figures reduced Rangers’ losses to £9.9 million. Over the last six years Rangers have sold players at a profit of £2.5 million, a relatively small sum which reflects that they were playing in the lower echelons of Scottish football during this period.

Celtic have made a profit of over £100 million during the same period (including the Dembele sale this summer), reflecting that they’ve been able to buy better players at a young age and sell on at a profit after showcasing them in Europe.

One final profit figure adds on player amortisation and depreciation of the stadium and other long-term assets to the EBIT total. This is called EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation).

This is the nearest figure to a ‘cash’ profit total, used by analysts when they are working out how much cash a business is generating or haemorrhaging each year.

A screenshot of a cell phone Description generated with very high confidence

This loss of £4.2 million is in many respects the most disturbing, as if a club is losing cash from trading then the owners (or a bank) will have to stick their hands into pockets to fund these losses.

English Premier League clubs average an EBITDA profit of £61 million, on the back of the TV deals south of the border.

Player Trading

Ranger’s player trading is big by Scottish standards but still trails their rivals. They can outbid most other Scottish clubs, but with the arrival of Steven Gerrard also seem to be looking to pick off players from England who are perhaps not getting a game and fancy playing in front of nearly 50,000 people for home matches.

A screenshot of a cell phone Description generated with very high confidence

The board have backed managers in the last couple of seasons since promotion, whether that money has been spent well is still uncertain, although as always for every success there is a turkey.

A screenshot of a social media post Description generated with very high confidence

Since June 30th Rangers have also spent a further £6 million on additional players.


Rangers’ previous financial history means that the club finds it difficult to borrow from banks, and so is dependent upon directors and friendly parties to lend the club money to make up the shortfall from regular operations and player trading.

Over the last six years the board has funded the club by pumping in over £53 million.

At 30 June 2018 the loans element had risen to £21 million.

The net debt (borrowings less cash) total has risen significantly since Rangers promotion to the SPFL. It will have halved following the share issue recently, but has a high chance of returning to an upwards trajectory as the running costs under Steven Gerrard are likely to exceed income, unless relative European success is achieved.

Rangers fans who had hoped that the club had generated over £12 million from a much publicised share issue will be disappointed.

90% of the share issue was used to convert loans to shares, which is swapping one piece of paper for another, rather than generating fresh money for the manager. The club did borrow a further £2million but this will require repaying.

The audit report gives a warning signal about the future.

Rangers need to raise over £7.5 million during the next two seasons to stay afloat. That money could come from (a) loans from owners, (b) a successful run in the Europa Cup, or (c) player sales. The uncertainty makes planning for the future very uncertain.


Rangers are in a tricky situation. Fans have been patient to date but will expect regular silverware at some point. The club is dependent upon a board that is still given to infighting and a lack of unity, apart from when it comes to picking a dispute with outsiders (such as Sports Direct and the Takeover Panel). Chairman Dave King, who seems to have modelled his stewardship of the club using the handbooks of Ken Bates, Mike Ashley & the Oystons at Blackpool, but without the pleasant element of their characters, seems to have a smoke and mirrors approach to the club’s troubles.

How much additional funding is available is uncertain, but unless Rangers repeat their achievement of 2008 in making it to a UEFA cup competition final (a match I attended as live in Manchester, which will stick in the memory for a long time for the sights in the centre of the City at 6am when I went to work), or at least make major progress in the competition, then it would appear that significant further funds will be needed to keep the club trading.

If the owners are willing to continue to provide such funding then all is good, if not then the Gerrard experiment may have a limited shelf life, and the club could be plunged into another financial crisis.

The numbers

Norwich City: In the Country


Norwich City Football Club Ltd announced its financial results for the year ended 30 June 2018 recently.

Norwich are the third team in last year’s Championship to produce their results, following Hull and Birmingham. It may be a new EFL rule that clubs whose name ends in ‘City’ are legally obliged to publish their accounts before any others, or it may be coincidence, though with Shaun Harvey in charge anything is possible. Any tables for the division as a whole use figures from 2016/17 for other clubs.

Norwich finished a forgettable 14th in 2017/18, which, given their financial performance, will have been seen as a bit bobbins by fans. Manager Daniel Farke doesn’t seem under too much pressure at present, despite a win ratio that is lower than predecessor Alex Neil.


Income down 18% to £61.7 million

Wages down 1% to £54.2 million

Recurring trading losses down 9% to £9.5 million

Player purchases down from £19.9 to £15.5 million

Player sales up from £18.4 to £54.8 million


Every club must split its income into at least three categories to comply with EFL League recommendations, matchday, broadcasting and commercial. Norwich go a bit further but what is very evident is the part played by parachute payments in terms of its contribution to total income.

Norwich’s matchday income rose by 7% last season to £9.8 million last season. The club sells out most matches at Carrow Road, and season ticket sales only fell by 2% to 20,557. Average attendances have been a constant 26-27,000 over the last few years.

A screenshot of a cell phone Description generated with very high confidence

Norwich managed to extract more money from fans than the previous season, this is mainly due to better cup progress and ties against more glamourous opposition in the form of Chelsea and Arsenal than the previous season.

Broadcast income for clubs in the Championship varies significantly due to parachute payments. Clubs now receive these for three years (two if relegated in first season following promotion) and this is tapered as 55%, then 45% and finally 20% of the equally shared element of Premier League payments. However, if a club is promoted to the Premier League and then relegated immediately it loses the third parachute payment.

A screenshot of a cell phone Description generated with very high confidence

For clubs who are not in receipt of parachute payments, they receive about £6.5 million in the Championship for broadcasting. About £4.3 million of this comes from ‘solidarity payments’ from the Premier League as a share of the PL TV deal, and the remainder from the EFL’s own deal with Sky.

The EPL, being the sneaky scamps that they are, have changed the formula in relation to how it calculates payments to EFL clubs from 2019/20, which is likely to result in a further decrease.

New TV Distribution Rules: Everyone’s A Winner. – Price of Football

A screenshot of a cell phone Description generated with very high confidence

The reduction of about £30 million this season in broadcast income will make belt tightening and player sales paramount if the club is not promoted.

Parachute payments are a double-edged sword, clubs need to have them as an insurance policy when in the EPL as even with relegation wage clauses many would go into administration if they were unavailable.

The research suggests that they are worth about 6-8 points of an advantage on average to clubs who are receiving them. This has not stopped clubs in recent years being promoted whilst not in receipt of parachute payments though, as fans of Huddersfield, Brighton, Blackpool, Watford and Palace etc. will testify.

‘Other’ income fell by 15% to £13.1 million. The main contributors to this are catering (no idea who might be behind that) and deals with commercial partners.

A screenshot of a cell phone Description generated with very high confidence

The contribution made by this income source again helps make the club competitive in the division.

A screenshot of a cell phone Description generated with high confidence

Overall Norwich are likely to have had one of the highest income levels in the Championship last season, but the lack of parachute payments in 2018/19 is likely to put then down to the level of the likes of Brighton and Derby in the graph below. A screenshot of a cell phone Description generated with very high confidence

Norwich therefore had £62 million coming into the club last season, which may make some fans wonder what they did with it, leading to an analysis of…


Player costs

Norwich’s main costs, like those of nearly all clubs, were in relation to players, in two forms, wages and amortisation.

Norwich’s headline wage bill, at £54 million, initially suggests that the club has ignored the impending income crisis arising in 2018/19, but there is more to it than meets the eye.

A screenshot of a cell phone Description generated with very high confidence

Norwich’s wage bill meant that the club paid out £88 in wages for every £100 of income. Included in the wage cost is £12.2 million of ‘charges relating to contracts of certain players whose registration value is impaired and whose contracts have been classified as onerous’.

What this means in English is that the club signed a load of duffers who aren’t worth the money they were being paid. In order to get rid of the players (and Canaries ITK have suggested this could be the likes of Nasmith, Jarvis and Wildshutt) have paid up their contracts as otherwise no one would want to buy them.

The good news for Norwich fans is that the wage bill for 2018/19 will be considerably lower as a result, which will become increasingly important as FFP rules start to bite.

Wage control in the Championship is poor, with clubs on average paying out £100 in wages for every £100 of income. This means there is nothing left over to pay for transfers, rent, ground maintenance and other overheads, resulting in most cases in owners having to fund these costs or the club relying on player sales to break even.

A screenshot of a cell phone Description generated with very high confidence

Norwich’s wage bill last season was not in line with a club finishing 14th and even if the payments to the useless ones are excluded they are still close to the top of the table.

A screenshot of a cell phone Description generated with high confidence

One group of people who didn’t do too well out of the season were the salaried directors. Norwich used to pay amazing sums to their execs, but this has come down sharply in recent years.

A close up of a map Description generated with high confidence

The previous season Jed Moxey had earned £417,000 for a half year of mediocrity (plus kerching-ing £772,000 as a payoff when asked to vacate his position), but this season the highest paid director ‘only’ earned £108,000.

Player Amortisation and impairment

Amortisation is the accounting nerdiness for how a club deals with player transfers in the profit and loss account. This is achieved by spreading the transfer fee over the life of the contract signed. For example, when Norwich signed Grant Hanley for £3 million on a 4-year contract, this works out as an annual amortisation cost of £750,000 for each year of the contract. The amortisation cost in the profit and loss account represents the total for all players signed for fees in previous seasons.

Norwich’s amortisation cost nearly tripled in 2017/18 fell slightly as some players were sold.

The increase in amortisation charge meant that Norwich’s charge in 2018 was higher than that of promoted Brighton and Huddersfield the previous season.

To add to Norwich’s player costs there was an impairment charge of £9.4 million. This arises when a player is signed for a fee and the club then conclude that he’s overvalued, so write down the transfer fee. The good news here for Norwich is that by accelerating the player write down it reduces amortisation costs in future years.

Adding amortisation, wages and impairment together gives a total player cost of nearly £64 million. This exceeds Norwich’s income for the year, although some of these costs are non-recurring in nature.

Profits and losses

Profit is income less costs, but it contains lots of layers and estimated figures. Norwich, like all clubs, show a variety of profit measures in their accounts so they need a bit of explanation.

Operating profit is income less all the running costs of the club except loan interest. It is a volatile figure as it includes one-off non-recurring costs such as profits on player sales and redundancy packages for managers that make calculating the underlying profit figure difficult.

Norwich had a headline operating profit of £19 million for the year to 30 June 2017/18.

A screenshot of a cell phone Description generated with very high confidence

The £19 million profit looks superb, only exceeded by Hull, also relegated an in receipt of parachute payments, especially in the context of a Championship which made total operating losses in 2016/17 of £260 million, but there’s more to this profit figure than meets the eye.

Stripping out player sale profits and other non-recurring items (redundancies, legal cases, debt write offs etc.) gives a more valid profit measure called EBIT (Earnings Before Interest and Tax).

Norwich has profits on player sales in 2017/18 of £48 million. Whilst fans will think of the sales of Jacob Murphy and cheeky scamp Alex Pritchard during the season, it looks as if Norwich have also included the sales of James Maddison to Leicester and Josh Murphy too. This is because both these deals went through before the club’s year end of 30 June 2018. There’s nothing wrong with such an approach, but if Norwich fans were banking on a big profit on player sales in 2018/19 they’re going to be disappointed.


A screenshot of a cell phone Description generated with very high confidence

Norwich’s operating profit of £19m therefore becomes an EBIT loss of £9.5 million, or about £190,000 a week, once the player sales, impairments and accelerated wage figures are stripped out.

Nearly every club in the Championship has significant EBIT losses, which were £392 million in 2017, as many owners gambled on spending big to try to secure promotion to ‘the promised land’ of the Premier League, which Norwich fans will probably admit is in reality celebrating getting a corner in a routine pasting at the Etihad and getting out the cigars when defeating Burnley and Bournemouth.

If non-cash costs such as amortisation and depreciation (depreciation is the same as amortisation except this is how a club charges a cost for other long-term assets such as buildings) are excluded then another profit figure called EBITDA (Earnings Before Income Tax, Depreciation and Amortisation) is created.

This is liked by professional analysts as it is the nearest thing to a cash profit figure, and it is more likely to be a positive figure than the likes of EBIT.

Adding back these costs, Norwich moves back into profit

A screenshot of a cell phone Description generated with very high confidence

In addition, if a club has loans then the loan interest is then deducted to arrive at profit before tax. Norwich’s interest cost in 2018 was about £10,000 a week.

FFP losses

A few clubs (Birmingham, Villa, Sheffield Wednesday, Derby) have been subject to gossip and rumour in relation to breaches of FFP rules in the Championship in recent months, but Norwich have not been amongst them.

Under EFL FFP rules, a club is allowed a maximum loss over 3 seasons of £39 million. However, FFP starts with profit before tax but the losses exclude the following

  • Infrastructure costs such as depreciation
  • Academy costs
  • Women’s football costs
  • Community scheme costs

Norwich have a category 1 academy, which is estimated to cost about £4.5 million a year, so looking at the three years to June 2018 gives a rough FFP profit of £49 million

This is excellent news for Norwich as it means that whilst they will suffer significant income deductions in future years if still in the Championship they should be within FFP limits for a few years.

With clubs such as Norwich abiding by the rules, it’s clear that the EFL will be under pressure to punish those that have taken a cavalier approach to FFP, so there could be points deductions in the Championship soon if rumours are true.

Player Trading

Norwich spent £15.5 million on new players in the year to 30 June 2018, which is reasonably high by Championship standards. The club also had player sales of £54.8 million, although these do include Maddison and Josh Murphy in June 2018.

The large spend on players is why the amortisation charge in the profit and loss account is so high. Fans often point out that clubs also sell players and that net spend is a better measure of a club’s investment in talent.

A screenshot of a cell phone Description generated with very high confidence

Norwich have historically aimed to broadly break even in terms of their player trading budget, but it looks as if the sales in 2017/18 were done with the aim of ensuring the club has sufficient cash to survive without parachute payments.

Most big transfers are paid in instalments these days, and Norwich were owed £42 million from other clubs for outstanding payments at 30 June 2018, but only owed £14 million themselves. The receipt of these instalments should ensure the club can survive financially in the short to medium term without any major crises.

Hidden at the back of the accounts is a wee note showing that since 30 June 2018 Norwich has signed players on loan deals, with a total loan fee of £4.2 million, plus a further £9 million, presumably if the club is promoted.


Club owners can invest three ways, sponsorship, lending or buying shares.

During 2017/18 Norwich went to fans and borrowed £4.8 million to develop the academy, plus the directors threw in £250k themselves. It meant that at the end of the year Norwich had over £16 million in the bank, enough to tide the club over for 2018/19.


Norwich’s finances for 2017/18 are a bit weird, the club seemed very keen to accelerate both good news (player sales) and bad (player write-downs and contract write offs). Clearly Ed Balls and co are keen to communicate the message that there’s no money spare. This seems a prudent approach, but as we’ve seen in the wider economy, austerity, once started, never seems to end.

Data Summary