No Accounting 4 the Love of Football

No accounting 4 the love of football

Our love of the game always comes at a price. But does anyone know the true price?

PQ magazine recently brought together four top experts to talk football finance. University of Liverpool’s Keiran Maguire was our keynote speaker, and he told the packed audience that football was invented in 1992 by Sky!

Since then, he explained retail prices have increased by 108%. The revenue for the Premier League’s 20 teams (it was 22) has increased by 2,600%. And this is – despite Maguire’s lighthearted comment – a mature industry.

So, why has the Premier League been so successful? Maguire explained that the Premier League went to Malaysia, Nigeria, Australia and the United States and said, “we have this great product and we are going to give it to you for free”. British football had a terrible reputation at the time and was in a bad place. But it was from the tragedies of the 1980s that the Premier League sprung.

Those broadcasting rights were given away for five years for free. Then the Premier League went back to the broadcasters and said, “you love the product – now you have to pay!” Maguire felt it helped that English is the world’s second language, and the other benefit is that football is a live action event. That means for advertisers football brings people together live, and we don’t watch a lot of live television any more. It means football rights just keep going up.

But there is one slight problem. During the period in which revenue has increased by

2,600%, wages have increased by 3,600%, and 18 out of 20 Premier League clubs in 2022 (a non-Covid year) lost money. The only two clubs to make a profit. One was Brentford, in their first season in the Premier League, who paid many of their players £30,000 a week, which by Premier League standards is low. The other club to make a profit in 2022 was West Ham United, and that’s down to Londoners paying for their stadium!

So at a top-line level football is fantastically successful, but at a bottom-line level football it is not, stressed Maguire.

If we drop a tier to the English Football League (ELF) Championship the average loss made by clubs is £467,000 a week. That means owners are having to find the money to fill the gap, or clubs must sell their best players each season. Even clubs that benefit from parachute payments are losing money. Sheffield United’s accounts came out recently, showing they are still losing £500,000 a week.

Why do we have this financial conundrum?

Our speakers on the night

• Sofia Thomas, partner in Juno Tax & chair of the International Sports Association

• Patrick Way, King’s Counsel & football tax expert

• Kunal Sajdeh, manager in the Deloitte Sports Business Group & sub-editor of Deloitte’s Football Money League

• Kieran Maguire, University of Liverpool & The Price of Football Podcast