The Terrible Financial State Of Many Premiership Clubs

The Times produced an excellent  report last week on the finances of the 20 Premier League clubs in England, based on their finances for 2009, and this is their report we have based this article on.

We’ve put the financial statistics of the Premiership clubs into the following table, and we’ll make some comments on them.

ClubRevenue £MWages £MProfit £MDebt £MWages/Revenues
Aston Villa7960.72.771.976.8%
Manchester City8782.689.7094.4%
Manchester United278.512348.2716.544%
West Ham76.16016.255.578.8%
  • Since these figures are for 2009 they may not reflect the extra money the three promoted sides Wolves, Birmingham and Burnley will get this season from the PL TV revenues. So we should take their figures with a pinch of salt because they may look worse than they actually are
  • The sooner Michel Platini, the UEFA President, can bring in some controls on the PL clubs the better, because it looks like they are way over-spending and seem unlikely to put controls on themselves. It’s a bit like the US Banks who brought the global economy to its knees 18 months ago, and still refuse to control their greed for profits – so the US government will soon do it for them
  • There are 10 clubs (half the clubs in the league)  that have wages over 70% of revenues, and that’s far too high when you consider there are also other costs for each club.
  • The clubs are Aston Villa, Birmingham, Blackburn, Burnley, Man City, Portsmouth, Sunderland, West Ham, Wigan and Wolves.
  • Newcastle’s wages last season were about 74% of revenues – so about £74M on revenues of around £100M. Right now they are about £40M and could increase to £50M over the summer, but that will still leave
    Newcastle with a wage bill that is much more reasonable at around 50% of expected revenues.
    The Newcastle club will also be looking to increase the £100M in revenues they got the last season they were in the PL.
  • Burnley have wages that are 118% of revenues – but again their revenues may not include the extra money they will be getting this season in the PL, since they were a promoted side.
  • We’ll not even point out the great and world-famous Manchester United club are now £716M in debt, and no wonder their fans are so disillusioned with the ownership of the American Glazier family.
  • Arsenal (£206.6M), Liverpool  (£237) and Manchester United (£716.5M) , three of the perennial top four clubs in England, have combined debts of £1.16B.
    Chelsea’s debt is listed as zero, but we think that’s only because Russian owner Roman Abramovich has forgiven his loans to the London club.
    Fulham also has a debt of just over £200M.
  • We believe the Arsenal debt is almost entirely for the Emirates Stadium, which was opened in July 2006, and now has a regular home gate at its capacity of 60,000, which is one reason the famous London club has increased its annual revenues to £313M.
  • Expect some PL clubs to become very close to bankruptcy soon, and one of them could well be Hull City, if they don’t avoid relegation for the second season running.

Any reasonable financial person looking at these results has to be alarmed at the financial state of the clubs, and it’s nothing less than reckless financial practices being conducted by a majority  of clubs in the Premiership.

The Premier league club that seems to be in most financial control is Stoke City, which has no debt and a wages to revenue ratio of 55.6%. Stoke haven’t fared too badly this season either, being in 10th place with 42 points from their 32 games.

Stole have certainly looked a much better team from last season, under the savvy management expertise of Welshman Tony Pulis, who’s been managing the Midlands club since 2006.

It’s good that Newcastle are going to keep their financial status in good standing, and we just have to hope we can still attract good players to Tyneside  this  summer.

Comments welcome.

14 comments so far

  • Johno Toon

    Apr 8, 2010 at 12:23 PM

    Comment #1

    As you said need to take figures with a pinch of salt but that is crazy

  • Thump

    Apr 8, 2010 at 12:34 PM

    Comment #2

    Didn’t the Glaziers sign their debt off onto Man U when they took over or something? It’ll be very interesting to see how they deal with it either way, because a club like Man U coming crashing down would be a terrifying reality check for all concerned.

  • Solaidback

    Apr 8, 2010 at 12:35 PM

    Comment #3

    Ed, do we have any idea what the other likely promotion candidates financial setup is like, ie WBA etc, are they in the same boat as the Toon or worse off??

    I see even though the Mackems were last sold for £10m, they now have £91m debts, is that from the Keano era & will Ellis Short clear there debts you think??

  • lesh

    Apr 8, 2010 at 12:36 PM

    Comment #4

    This article is well timed Ed and I do hope it helps the many who’ve criticized Ashley for his strategy of reducing the overheads, understand his motivation for doing so.

    The parallel you draw with the US banks is helpful in that it highlights the need for regulatiion in that sector.

    Football is slightly different in that it’s not necessarily the greed for profit with many, not all, of the clubs listed but the instaiable thirst for glory. That thirst is something we’ve witnessed over recent years at SJP and that coupled with inept financial and overambitious stewardship has led to the mess that the club was in.

    There is no doubt in my mind that were it not for Ashley’s intervention, we would have gone the same way as Leeds United and more recently, Portsmouth with more to come I’m sure.

    Ashley has made some monumental errors in his time with us but we can sissue a sigh of relief that despite our sabbatical in the League, we’re back in the Prem.

    But, a word of caution to the almost blindly loyal supporters or Newcastle United, please be patient and appreciate (an I’m touching wood here) that avoiding relegation next season will be a success.

    Onwards and upwards, albeit slowly, but we’ll get there only as long as MA has recognised and learned from his mistakes.

    Have faith all, have faith and no matter what, support the club with all the energy available.

  • Johno Toon

    Apr 8, 2010 at 12:58 PM

    Comment #5

    Well put lesh

  • Captain Beefheart

    Apr 8, 2010 at 1:23 PM

    Comment #6

    Spot on, Lesh, I have just read your piece. It says just about everything I wanted to say, and then some. Well put.

    Ed’s piece is indeed well timed, reality will hit in the next 18 months, and the only question will be just what our bank balance & contractual wage bill commitment is at that point.

    Long term we must be in a position to compete, and as we end our Fizzy pop penance, the ‘sackcloth and Ashley’ season supporters have learned the hard way that there is far more to a successful club than the trophy signings and manager-go-rounds of recent years.

    An informed and educated fan base, I believe, is just as important as the starting XI, the manager or the owner, perhaps more so. Barcelona are blessed with that above all. And I genuinely believe that every one of us supporters has lis a lot wiser about the nitty gritty of football finances after this last 12 months than the 12 years previous.

    At some point we maybe could take control, although judging from the cries for more high spending it is obviously not yet.

    Once again, keep pushing this vital message, Ed, it’s slowly getting through.

  • ToonSnowman

    Apr 8, 2010 at 1:32 PM

    Comment #7

    This is a report that I would like to see more depth to, adding information such as debt for new stadiums or exspansions made to current one, as this is a long term investment and should be seperate to the debt clubs are in.
    I know it is still debt but I am sure the clubs have a long term financial plan to pay back the money they have spent on construction costs

    I would like to see how much of their debt is because of transfers and wages

    I think we all know that clubs like chelsea and man city are the same as newcastle, they may say they have no debt but what that means in teh real world is they owe the current owner a lot of cash and that the real state of their finances will only be known if the clubs are sold.
    Our club is the same, we are not debt free as ashley keeps going on about how the club still owes him around £100m

    I do like it when more financial reports are released, because most of our “soap box” fans go into hiding, the whole anti-ashley brigade seem to shut up for a couple of days until the discussions have died down.

    Ashley is doing a great job financially, the man knows how to run a modern day large business, unlike Hall/Shepherd who clearly were in it for their pay days at the end, they ran the club into the ground creaming big lumps out of the club while doing it

    I would like to see the new rules brougth in to help secure the furture of all football clubs.
    As already said above just think if a club like Man U went out of business, it would be weird for them to not be in football. Some of these clubs have been around for over 100 years and it has taken just over 10 years for idiotic owners to progressively ruin them

    it is funny to see that most of the clubs with managable debts of £20m or less debt are the clubs that have come up in the last 5 years, they are used to keeping their finances in order when in the championship so have not spiralled out of control

    Fuham £200m, jesus this club will be gone from football within 5 years

  • lesh

    Apr 8, 2010 at 1:36 PM

    Comment #8

    Cheers Johno and Cap’n, you’re so right when you say that an informed and educated fan base is just as important as the starting XI, the manager or the owner, perhaps more so.

    Like you, I believ that the vast majority of us are wiser after recent events but people being people do sometimes have short-term memorys.

    Let’s not forget and go forward having learned from history – I hope!

  • Laposna

    Apr 8, 2010 at 5:06 PM

    Comment #9

    Sign on free:

    Cacau (28 or 29) – Stutgaart
    Kevin Kuraniy (29) – Schalke

    Both have 3 good years in their feets


    Apr 8, 2010 at 7:00 PM

    Comment #10

    Ed did you add the interest payments for the debt some of these clubs are in?Arsenal though there debt looks bad,they still have places to sell and as they are selling these apartments there debt will go down dramatically.As for man utd i think there bang in trouble you see a profit of 48.2 million but that falls way short on there interest payments alone,so id say they are losing at least 40 million per season which will get worse as the debt grows.As for fulham well what can i say but RIP.On liverpool i see you have them at a 6 million profit for the season but with interest payments on there debts means they are losing 24 million per season minimum which will be a lot bigger next season, when they miss the boat for champs league football.Portsmouth what can you say about them bar, say hello to leeds as you drop down the divisions,conference football here comes pompey.Sunderland have there head just above water but not by much and dont think they have a life jacket with them.Birmingham and blackburn both skating on very thin ice.Think aston villa have gone as high as they can, dont think there gamble on champs league football is going to pay off expect them to start to drop off and sell 1 or 2 players.West ham with there 2 clown owners the future looks very bleak for them 2,they are gambling everything that they will be able to lease that new stadium in london,if they dont lease that its trouble for them.Bolton are also on very thin ice.

  • CAToon

    Apr 8, 2010 at 8:59 PM

    Comment #11

    Great article Ed and the comments have been really enjoyable to read.

    The summer will be interesting. What big name players are coming on the market, and will they be able to command large transfer fees and wages, or will they too have to readjust their compensation in this new football economy. I suspect we will hear a lot more about performance-based incentives this transfer season.


    Apr 8, 2010 at 9:14 PM

    Comment #12

    The blog of the day ED keep up the good work.

  • Hirdy_81

    Apr 9, 2010 at 12:05 AM

    Comment #13

    Very very interesting article. Lesh I totally concur with your assessment. Club owners need to be far more prudent nowadays in regards to the state of finances. I cannot remember exactly who wrote this article that I read about 12-15 months ago but it stated that Man U and Chelski had a combined debt of 1.1 billion. I may not have liked how MA treated this club initially but now I am glad that he is still here because we would have disappeared. We will be better for it and I think in years to come that more clubs will follow suit with caps. The A-League in Australia – all clubs have a salary cap to ensure that debts do not spiral out of control. The other football codes such as AFL and NRL have had salary caps for many years and this has meant more of a level playing field. It may be extremely difficult to appply a salary cap ruling to the Premiership but Platini could get his wish when he sees these figures!

  • jasonbourne

    Apr 9, 2010 at 12:17 PM

    Comment #14

    Actually I feel kind of sad on behalf of Manchester United and Liverpool, because this used be rich clubs with healthy economy. Well before the yanks came in and took over. The glazier family bought the club for one reason only, use it like a trashcan to make profit for themselves (took out £18 mill in profit last year according to reports).They bought it with junk-bond with ridiculous high interest rate and over night Man U suddenly had a debt of total £400 mill and still rising.

    That’s maybe one reason I don’t hate Ashley the way other Newcastle fans do. I think we have good owner with a nose for the future. There’s a reason that has become so rich in the first place. Patience is the key word here, and we will by time become a top club.

    Howay the lads!


You must log in to post a comment.