Premier League clubs have bounced back from the pandemic according to a new industry survey – though lower legal clubs are still struggling.
A new report by accountancy and business advisory firm BDO suggests 71 per cent of top flight clubs reported their finances to be “very healthy”.
At the same time more than half of all Championship clubs and a quarter of clubs in Leagues One and Two said their finances were “in need of attention”.
The biggest concern for clubs right now will be the impact of the cost of living crisis on match attendance – particularly in lower leagues.
Derby County, which has been relegated to League One after having points deducted for financial difficulties, was one of the most high profile clubs to get into trouble in recent months.
Administrators were called in last autumn and the club almost went under before local business Clowes Developments stepped in to take on the club and stadium.
Many Premiership clubs have spent big in the transfer window while some – such as Leicester City and Nottingham Forest – are pushing on with big stadium investment plans.
Earlier this year Leicester revealed that they made a pre-tax loss of £33 million in the 2020-21 season when the pandemic was in full flow and games were played behind closed doors. The club’s Thai owners said they were as committed as ever.
BDO’s survey of club finance directors from the top four leagues found that most in the Premier League said that their financial position was “very healthy”, compared to just 29 per cent this time last year.
That compares to just 18 per cent for Championship clubs and a third of clubs in Leagues One and Two.
Finance bosses in the Championship and Leagues One and Two said their biggest concern would be the impacts of cost of living increases on match attendance, with reports that demand for live events was already behind pre-pandemic levels. Smaller clubs in particular are heavily reliant on matchday income in contrast to Premier League clubs who get big broadcast revenues.
BDO said: “This also helps to explain why leagues below the Premier League 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.”
And 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 were loss-making – although 60 per cent said that they had a specific investment strategy for the women’s game.
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, said: “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.”
