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From record revenues to half of football clubs being in poor financial health

10 September 2020

COVID-19 exposes pre-existing financial weaknesses but could be catalyst for reform

Half of England’s top professional football clubs have reported concerns about their financial health despite starting the 2019/20 season with the prospect of record revenues of more than £6bn, according to a new report from accountancy and business advisory firm BDO.

In total, 45% of football club finance directors surveyed by BDO said their club’s finances were ‘in need of attention’, more than double the 21% reported in 2019 and nearly four times the 12% reported in 2018. Meanwhile 5% said their finances were ‘a cause for grave concern’, broadly in line with the previous two years.

BDO’s annual survey of finance directors from the top four English leagues found that COVID-19 had intensified the financial challenges already facing clubs. Player wages and transfer fee inflation, even prior to the pandemic, were causing around 70% of clubs to be loss-making. This is despite a rise in broadcast income, which now exceeds £3bn per year.

While a quarter of English Premier League (EPL) finance directors reported concerns about their club’s finances, nearly half of Football League Championship (FLC) sides and over two thirds of clubs in Football Leagues 1 and 2 (FL1 and FL2) said their finances were ‘in need of attention’ or worse. Football League Clubs have been particularly hard hit by COVID-19 because they receive less in broadcasting income and are more reliant on match day revenues.

Among other findings:

  • All but two-fifths of the EPL expect to make losses before player trading in 2019/20
  • Only one in five clubs expect to make a profit after player trading
  • Player budgets are expected to be constrained – 60% of clubs intend to decrease their squad size and 74% intend to decrease their salary costs
  • No club is increasing its transfer budget this year with 30% of clubs expecting to let a number of player contracts expire this season
  • 88% of clubs expect to be net sellers in this transfer window.

The survey showed that clubs have taken swift action to address the financial impact of COVID-19. In total, 81% of clubs said they had deferred employment taxes while two thirds deferred VAT payments. All of the FL1 and FL2 clubs surveyed and 92% of FLC clubs said they had used the Coronavirus Job Retention Scheme, although this was significantly lower in the EPL at just 17%.

With many clubs reporting difficulties in sourcing primary debt, a growing number are turning to secondary funding. Leveraging of player transfer fee receivables is increasingly common with one third of clubs now taking advantage of this funding source, up from 21% in 2019. Advances on central funding are also popular, used by 40% of clubs, including 54% of FLC sides.

Despite the financial challenges facing many clubs, interest from investors remains strong, with 43% of clubs saying they had been subject to an approach from potential suitors in the last 12 months, with nearly half of these clubs approached since lockdown started. Over 25% of all approaches were from global institutional investors, with US private equity taking a particularly keen interest in the sport, often forming consortia with high net worth individuals, industry specialists and other sports franchises.

Commenting on the findings, Ian Clayden, BDO’s National Head of Professional Sports said:

“Many clubs were already struggling to balance the books, but COVID-19 has accelerated and exacerbated the problem.

“At club level, as well as working hard to activate new revenue streams, there is a trend towards leveraging future receivables to manage current liquidity constraints. Care needs to be taken of course to secure the future rather than mortgage it and kick the problem into the long grass. Supplementing incomes now will only help in the medium term if action is being taken to dial back player costs – which inevitably takes time.

“If matches continue to be played behind closed doors for an extended period, we may see a number of clubs, particularly in the lower leagues, at risk of insolvency or takeover in the coming year.

“However, while COVID-19 has exposed a number of pre-existing financial weaknesses in the football industry, centrally, football appears to have recognised the COVID-19 situation as a ‘burning platform’ to drive change. The EPL has made arrangements to preserve key revenue streams (though more will be needed to facilitate the transition back into stadia), and salary caps are being introduced across the EFL (albeit with the Football League Championship position still under consideration).  However, there may be a stark rise in Profitability & Sustainability breaches to come and the leagues will need to figure out how to navigate that particular minefield ‘fairly’. 

“While things are likely to get worse before they get better, there is now a real opportunity for English football to carefully reconsider governance structures and the distribution of wealth in the game. This could lead to improvements in the way clubs are operated and financed and make them both more valuable and more sustainable in the long term, creating stronger investment cases along the way.”


Notes to editors

About BDO

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 


BDO LLP operates in 17 locations across the UK, employing 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn. 


Frank Shepherd, PR Manager
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