In his debut article for The Football Front, Olly
Howells takes a look at the difference in finance between the Football League
and the Premier League.
So, how much is the difference between the clubs who
play their trade in the top flight of the footballing pyramid and those who
endeavour to join them? What’s the difference between earning success in the
Premier League and in the basement leagues of English football? How do football
league clubs spend whatever money they have on progressing as a club compared
to the footballing elite? I look into how different the running of clubs is
between clubs from every division of league football.
Income:
Prize money is probably the most understandable way that
Premier League clubs earn more money than lower league sides. With an estimated
£800,000 given for each place, the winner of the Barclays Premier League scoops
an impressive £16,000,000 to go with their title as champions of England.
This is compared to the winner of the Championship, just one tier below, where
the winner only takes £50,000 in prize money. This is then dropped to just
£25,000 in League 1, and an estimated £26,000 in League 2. Then there’s
qualification to continental competitions such as the Champions League to add
to the equation, a competition where clubs receive roughly £15.7m television
rights for competing, with prize money of £7.8m on offer to the winner.
Television rights bring in millions of pounds to the
top clubs in English football, everyone knows that, but how much so? Premier
League winners Manchester City
received a staggering £60,602,289 for television rights in the 2011/12 season,
and this was only for the Premier League, not including the UEFA Champions
League, FA Cup or Carling Cup (now Capital One Cup). The lowest earners in
terms of TV revenue in the premier league were Wolverhampton Wanderers, but
don’t despair for them too much, as they still received an incredible
£39,084,461. There is no sign of these figures shrinking either, with Sky
Sports and BT recently paying £3.018 billion for the right to televise top
flight English football for the next 3 years, over £1 billion a season. Compare
this with the bottom of the football league ladder, where teams are not paid
the cursory £32.5m to each club such as with the premier league, but on a
game-to-game basis, and with a far smaller sum of money, rarely breaking the
£100,000 barrier.
Sponsorships obviously vary from club to club, as
well as league to league, but in the 2009/10 season, Manchester United were receiving
over £14m a year from their shirt sponsors AIG, a figure which will have only
risen when United signed a deal with current shirt sponsors, insurance company
Aon. My club Oxford United are sponsored by another insurance company, Bridle
Insurance, and are extremely unlikely to be receiving a penny over £100k a year
for this deal, although as details are kept much more under wraps than in the
higher levels of the game this figure cannot be confirmed. This is also likely
to be one of the most lucrative shirt sponsorship deals in League 2, due to Oxford
having one of the largest fanbases in the league.
These are the three main sources of income to football clubs
in the English football league, but the most important part of running a club
successfully is how this money is reinvested into the club, whether that be
behind the scenes or in the playing staff, a decision usually varied by what
division the clubs are in due to financial similarities.
Premier League clubs have a clear tendency to spend
the majority of their income on new personnel on the pitch, with a staggering
£508m spent on players in the 2011/12 season, an average of £25.4m per team.
This appears to be a recipe for success in the top flight, with the highest
spenders of the season Manchester City, who splashed out over £76m on players,
coming out victorious, and the three relegated sides were all in the bottom
half of the table in terms of spending. This spending extends into the wages of
these players, with City players receiving an average of £4,486,580 each a
year. Players for one of last seasons relegated sides, Bolton Wanderers,
averaged a salary of over £1.4m a year, a figure that would be larger than the
entire playing budget for a majority of League 2 sides, and even a few League 1
sides.
Championship sides have a different dilemma, due to
the dramatically different financial situations of the clubs in the second
tier. With a much smaller amount of money brought into these clubs through
television rights and sponsorships, finances are a much more pressing issue to
these clubs; especially while clubs outside of the top division seem to be
punished more severely for financial frailty. Premier League giants Manchester
United are said to be in over £423m worth of debt without punishment, while
clubs such as Chester City (formerly of the Football Conference, now Blue
Square Bet Premier), were forced into liquidation due to a debt of just
£26,125. The obvious example of repercussions of poor financial control is
Portsmouth FC, who currently have just 17 players on their books after the club
narrowly avoided liquidation themselves, after poor running of the club caused
the club to enter administration for the second time in three years, with the
club in around £58m of debt. This may seem like an outrageously high figure of
debt, but compared to the £423m of debt that Manchester United find themselves
in, while still being allowed to remain active in the transfer market, it seems
ludicrous that Pompey should suffer so heavily while United remain
unpunished.
These are all reasons why Championship sides have to find a
successful balance between investing money into playing and backroom staff,
upgrading facilities and keeping their club running smoothly; more so than
Premier League clubs.
League 1 & League 2 clubs have to run even more
carefully, with even smaller financial losses leading to equally severe
consequences. In the ‘basement divisions’, money often isn’t enough to
guarantee promotion or titles, where as we all know how far money will get you
at the top level. Swindon Town’s
recent success in League 2 does appear to completely disprove my point, with
their playing budget for their promotion season rumoured to be an extortionate
£3.4m, more than three times the average playing budget in League 2 of roughly
£1.1m. This has not often been a recipe for success in the lower divisions
though, and is an extremely risky tactic: with wage caps kicking in in a clubs
second season in the division, failure to earn promotion will lead to serious
consequences, with a majority of clubs best players forced to leave clubs in
order to keep wages below wage caps. Rotherham United are looking to emulate
Swindon this season, with their playing budget rumoured to be £2.6m, but will
find it hard going against the likes of Gillingham and Port Vale, even with far
less money being pumped into their playing squads.
Sides in League 1 & 2 often decide to invest more in
behind the scenes details than blow their budgets on players’ wages, none more
so than Crewe Alexandra, who use the youth academy at the club to keep the club
running smoothly through the sales of bright prospects to bigger clubs, and
bringing players into their first team from the academy, run by Dario Gradi.
When Crewe won promotion to League 1 at Wembley in May,
an incredible 9 of the starting 11 Crewe players were
products of this fantastically run set-up. Players that have come through the
Crewe academy include former England international Dean Ashton, Fulham legend
Danny Murphy, current Celtic manager and former Leicester City and Celtic star
Neil Lennon, former Wales international Robbie Savage and current Manchester
City assistant manager David Platt, who went on to make 62 appearances for
England after coming through the youth set-up at Gresty Road. The most recent
player to come from this set-up is current Manchester United player Nick
Powell, who Crewe sold for £4,000,000 at the age of just
18, after he had an impressive first season and a half with Crewe,
including scoring an incredible goal in the play-off final in his last
appearance for Alexandra. In recent years they have also sold current West Ham
forward Nicky Maynard for £2.25m when he was just 21 and Leeds
forward Luke Varney to Charlton Athletic for £2m after he came through this
outstanding system.
Another thing that lower league clubs do to spend money
wisely is work on players that the clubs already have, with many clubs boasting
strength and conditioning coaches, whose job is purely to get the current squad
into the best condition possible. Again returning to my team, Oxford United
have made a huge indent into their cash flow in this area, with new chairman
Ian Lenagan spending £150,000 on fitness and conditioning. This may seem like a
relatively low figure to a top flight club, but in the basement divisions this
is an incredible amount of money to be pumping money into one aspect of a
club.
The route to success in English football really does
differentiate from division to division, severely so when you compare any
league to the Premier League. To summarise, League 1 & 2 have to be run
more like businesses, trying to improve while still desperately trying to break
even with a minimal income, where as Premier League clubs have to look to
reinvest their outrageously high income into their club in a way that allows
them to improve as a team, but breaking even is not such a high priority for
many clubs, with external investment a regular occurrence for the majority of
these sides. The Championship is probably the most difficult division for clubs
to operate in, with boardroom staff having to try their hardest to find a
successful balance between the two, or end up risking their clubs long-term
future if they are unsuccessful.
I’ve barely scratched the surface of this topic, largely due
to clubs outside of the top flight keeping the large majority of their
financial details under wraps, making it extremely difficult to compare clubs
throughout all of the divisions in depth, but I hope I’ve been able to open
your eyes to how clubs strive for success differently throughout the English
footballing ladder.
You can follow and talk to Olly about his article on his
twitter: @ollyhowells