There are three jobs that nearly every person in England believes that they can do better than the current incumbent - manage the England Football Team, run their local pub, and manage the football club that they support – it just goes with the territory of being a football supporter.
Just how difficult can it be, they ask? “You don’t know what you’re doing” they chant. But the truth is that it’s astonishingly difficult which is why so many football clubs end up in financial difficulty.
And, in general, though not always, it’s not because their owners and directors don’t care but more likely because eventually they run out of either money or patience, or both (ask Simon Jordan who we might remember poured £40 million, almost his entire fortune, into Crystal Palace between 2000 and 2010 only to see it collapse into administration at the end of his tenure. Or more locally Sir Seton Wills, who pumped close to £15 million into Swindon Town between 1991 and 2007 but never lost his love for the club.
The ‘financial fair play’ rules that have been progressively introduced in the English Football League over the past 15 years (and in which I had a hand in forcing through) have undoubtedly gone some way to limiting the chance that a club will actually go bankrupt, but they don’t massively alter the economics of football for those in the lower echelons of the EFL.
Accounting firm Deloitte have over the past 30 years become well known for their “Annual Report into Football Finance”, and the latest edition makes grim reading for anyone outside the Premier League.
The average annual turnover of a club in League Two is just £5.4 million, what that means is that the total income of all 24 clubs in League Two is less than the smallest club in the Premier League, AFC Bournemouth. Wage costs in League Two average 73 per cent of turnover, so there is very little left to cover the other operating expenses.
The average loss per club is £1.5 million per annum and I’d be surprised if a single club in League Two made a profit, all of which means that club owners are having to reach into their pockets each year to close the gap. And don’t think that promotion to a higher division is the answer to your financial woes, even if it’s what we all want, because although the average turnover of a League One club is nearly double that in League Two, the average loss per club is three times greater at £5 million per annum. Needless to say, the Championship is even worse with the average loss climbing to £13 million per annum.
Naturally, all owners dream of reaching the top of the pyramid, the Premier League, but only 51 clubs including Swindon Town have managed it in the 32 years of its existence and, given that seven places are occupied by the ‘permanent residents’ such as Arsenal and Manchester United, it is 95 clubs competing for just 13 spaces!
Of course, it’s not impossible. That’s what makes the English football pyramid so compelling, we can all remember that in recent years the likes of Brighton, Bournemouth and Brentford have made it from the bottom to the top, passing through the County Ground on their way but in each case, it has cost their owners hundreds of millions of pounds which they are unlikely ever to recover.
So, what does that mean for the Team Managers, Chief Executives and Chairmen who are faced with this challenge each day? Many owners will talk of achieving sustainability – it’s difficult to know what that means given the figures above - but let’s assume that it means break-even (no profit, no loss), is it achievable?
Well, it demands a good slice of luck, a good cup run (think of Newport County, the giant killers of the past decade) and even selling your best players in order to try and balance the books.
Managers must constantly search for players who provide good value and that doesn’t just mean in footballing skill – a fantastic player who is injury-prone can be a real problem for clubs at this level. If you analyse the cost per minute played of each player in the squad you would be shocked at how expensive some players are, and what good value even a highly paid player who can play 90 minutes week in week out really is. And given that the Chairman may have to decide to sell the best young talent at the end of, or even mid-way through, the season the Manager has to accept that next year he may have to start all over again.
For the Chief Executive it is a constant treadmill of looking for additional ways to raise funds – bill-board advertising, sponsorship, and corporate events are all part of this but most important are the people who support the club each week by turning up – imagine what a difference an extra 1,000 people through the turnstiles each week means.
So, what does the future hold for all of us who support teams in the EFL? We can dream that eventually those who control football in our country will finally attempt to redress the inequality between the top and the bottom, but don’t hold your breath, they have been talking about it and delaying for years (the subject for another rant in the future).
And, despite the noises made over the last couple of years don’t expect the UK government to step in to sort it out particularly as they have recently been warned by UEFA that if they interfere they risk the exclusion of the England team from the next Euros in 2028.
Sadly, the only answer may be for ordinary fans to keep on turning up and paying for their tickets, dreaming the dream and hoping that the owners have a plan, the patience to see it through – and deep pockets!
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