English Premier League clubs bounce back from COVID-19 but financial challenges remain in lower leag

English Premier League clubs bounce back from COVID-19 but financial challenges remain in lower leag

  • 71% of English Premier League clubs describe their finances as ‘very healthy’
  • 55% of Championship Clubs and 25% of Football Leagues 1&2 describe finances ‘in need of attention’
  • Biggest concern is impact of cost of living crisis on match attendance, particularly in lower leagues
  • Only a quarter (27%) of clubs expect to have made an operating profit before player trading in 2021/22

English Premier League (EPL) clubs appear to have bounced back from COVID-19, but lower league clubs continue to face financial challenges, according to a new report published today by accountancy and business advisory firm BDO.

In its latest survey of football club finance directors from the top four English leagues, 71% of respondents from EPL clubs said that their financial position was “very healthy”, compared to just 29% in 2021. However, this compares to just 18% for Football League Championship (FLC) clubs and 33% of clubs in Football Leagues 1&2 (FL1&FL2).

Indeed, over half of FLC clubs (55%) and a quarter of FL1&2 clubs surveyed admitted their finances were ‘in need of attention’. While this was higher for FLC clubs than in 2021 (27%), there was a slight improvement for FL1&2 clubs.

While approximately three quarters of clubs across all leagues expect to make a loss before player trading in 2021/22, there was a significantly lower proportion of clubs in this category in the EPL compared to other leagues.

When asked about the biggest concerns for the year ahead, clubs in the FLC and FL1&2 were most concerned about the impacts of cost of living increases on match attendance. With evidence to suggest that demand for live events is falling below pre-pandemic levels, this is a particular risk for smaller clubs who are heavily reliant on matchday income in contrast to EPL clubs who enjoy significant broadcast revenues.

This also helps to explain why leagues below the EPL said they are focused on growing the domestic fanbase and improving fan engagement, while Premier League sides appear to be targeting growth among their international fanbase.

The most significant concern for EPL clubs was lack of control over player costs. In total, 58% of EPL respondents reported a wages/turnover ratio over 70% with 29% reporting a ratio over 90%. Surprisingly, player wages were less of a concern for FCL clubs, despite 45% of respondents reporting wages in excess of 110% of revenue.

BDO’s report found that English football is continuing to attract overseas interest with 75% of enquirers being non-domestic, particularly from the US, with potential investors particularly focused on EPL and FLC clubs with strong brands. Meanwhile, football club shareholders seeking full or partial exits is significantly higher than last year (43% in 2022 versus 22% in 2021) which suggests a growing appetite for M&A and an opening of the doors to US for full or part ownership.

The report also examines the prospects for women’s football. While England’s win at the Women’s Euros resulted in record attendance and viewing figures, all clubs surveyed said that their women’s football activities are currently loss-making. However, 60% said that they had a specific investment strategy for women’s football, and 30% said that further investment in women’s football was one of their key strategies for growth.

Ian Clayden, Head of Professional Sports at BDO, said:

“While overall financial health is improving in the English professional game, the speed of recovery is uneven across the leagues.

“Many clubs within the English Premier League have recovered to pre-COVID levels with opportunities for growth outweighing current financial threats. The opposite may be the case for clubs in Football Leagues 1 and 2 who are having to closely monitor and control every penny. However, it’s Championship clubs that appear to be under the most financial pressure, spending above their means either in pursuit of the holy grail of promotion to the EPL or to avoid relegation.

Sandi Dosanjh, a BDO Partner who plays an active role in women’s football added:

“Many clubs are now looking at new growth opportunities. England’s recent win at the Women’s Euros has sparked real excitement at the prospects for the women’s game but the challenge now is how to monetise this enthusiasm in a way that is attractive to investors but also protects athletes’ and fans’ enthusiasm and passion for the sport. While there is clearly huge potential for growth, we’re still at the beginning of the cycle, so clubs investing in women’s football may need to be patient to achieve a direct financial return.”

The full report is available to download here

ENDS

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