Don't the rules say that going into administration means relegation? So the Championship and League One would swap places.
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Don't the rules say that going into administration means relegation? So the Championship and League One would swap places.
You can see why Bournemouth have been so worried looking at those figures. To stay afloat they would have to let their whole playing staff go.Revealed and explained: the 'terrible' state of Premier...
Some key excerpts:
“The accounts are awful,” says John Purcell, the co-founder of financial analysis firm Vysyble. “The numbers had fallen off a cliff for some of the clubs long before this crisis.”
While Dr Dan Plumley, a sports finance expert at Sheffield Hallam University, says the financial shock of COVID-19 has “brought to light just how stretched the industry is and how many clubs live from hand to mouth”.
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Of the 18 teams for which we have up-to-date numbers, only Watford reduced their wage bill year-on-year. If we include the old figures for Palace and Newcastle, which are almost certainly lower than last season’s, the league’s overall staff costs topped £3 billion. This means they spent 64 per cent of their income on wages.
But that is the average. Bournemouth, Everton and Leicester all spent more than 80 per cent of their turnover on staff. In fact, exactly half the league spent more than 70 per cent of their income on wages, a level that automatically raises red flags for European football’s governing body UEFA.
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Travel costs, utility bills, repairs, insurance, paper clips…they all add up and pretty soon they started nibbling into the overdraft. The cumulative pre-tax loss for the 18 clubs to have filed their accounts is nearly £300 million.
“Lots of the clubs are in a terrible state,” says Purcell. “I’m not picking on them but I was not surprised to see reports this week that West Ham are looking for extra financing of £30 million. It’s so predictable.”
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“Football is a part of the entertainment industry and like all other businesses in this sector it will be hit hard by a lockdown. The difference is football has higher fixed costs than most and these are the wages and transfer installments.
“As of last June, the clubs owed £1.6 billion in installments and had £700 million coming in. Some of this money is circulating within the division and some will be flowing downwards to the EFL, but there is a £900 million deficit. The concern is that financial problems in one league could spread throughout the industry just like the pandemic.”
The fees clubs pay for players are actually spread across the length of those players’ contracts in their annual accounts, a process known as amortisation. Maguire points out that if you take amortisation and staff costs together, they amount to 86 per cent of Premier League turnover.
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Unlike most other analysts, Purcell’s firm uses a measure called economic profit, which is all the usual things analysts measure plus the cost of equity or, in other words, the cost of investing in this particular business as opposed to any other.
“We think it is a better reflection of how much money the owners are putting into these clubs every year to keep them afloat,” he says. “If we look at the previous three-year cycle, from 2013-14 to 2015-16, there was a league-wide deficit of £380 million. But with 18 of the 20 accounts now in, the deficit from 2016-17 to 2018-19 is £624 million. We’ve never seen anything like that before.
“Of the 18, only five have posted an economic profit. Since 2009, we believe the Premier League has made an economic loss of £2.74 billion.”
Apologies if it's already been covered- I haven't read all the thread- but when does anyone think we will actually be able to go to matches again? My feeling is August 2021 at the earliest but I'm praying that I'm wrong, and I may be being purposefully negative so I don't get disappointed.
The vaccine could apparently take years. It will take a long time before any kind of 'herd immunity' is built up. The lockdown will end but there will be a second wave; I think restrictions will go back and forth but attending matches will be one of the last things to be lifted seeing as it appears to be a real breeding ground for the virus to be spread. Unless they are very quick in making and distributing a successful vaccine, I think the best option is intensive testing and monitoring, and if we manage to sort this out, maybe my prediction will prove wrong.
The vaccine could apparently take years. It will take a long time before any kind of 'herd immunity' is built up. The lockdown will end but there will be a second wave; I think restrictions will go back and forth but attending matches will be one of the last things to be lifted seeing as it appears to be a real breeding ground for the virus to be spread. Unless they are very quick in making and distributing a successful vaccine, I think the best option is intensive testing and monitoring, and if we manage to sort this out, maybe my prediction will prove wrong.
Good shout, I suspect that League One would also be in just as dire straights and also consider doing the same. At the moment though it's just an idea that's been floated but does show the extent of the concern shared amongst the clubs to even consider it a possible option. But I guess everyone will be happy just so long as the staff weren't furloughed, better to have entire leagues go into administration than have the "shame" of using a government scheme designed exactly to avoid businesses from doing this. Ho-hum.
Yep I agree with your timescales.
I think it might be possible to get the Leagues playing behind closed doors (that will still involve a load of people working in one space and travelling) but for us fans to watch a live game I can't see it happening until Aug '21.
As I typed that something had occurred to me, I fucking hope the illegal streamers are still with us, the monopoly the broadcasters will have over us could be unprecedented and fucked if I'm going to break a habit of a lifetime and stump up paying to watch footy on the Telly (maybe those who have ST's could be given access?).
Testing is key as shown by Germany where the virus has not taken off at anywhere near the same rate.
Burnley figures they only have a few months left in the kitty.
Burnley will run out of money by August if Premier League uncertainty continues, concedes club chairman | Goal.com
Burnley chairman Mike Garlick has admitted the club will "run out of money by August" if uncertainty surrounding the current Premier League campaign continues.
www.goal.com
Perhaps they should have spent less money on getting coffee and smashed avocado toast whilst slagging off Spurs for furloughing staff.
Burnley chairman aims dig at Tottenham and Liverpool for furloughing staff
Premier League duo Tottenham and Liverpool have earned vast criticism for their decision to furlough staff amid the coronavirus pandemic
www.football.london
I wonder how smug they will feel come September? "Sorry guys. You're all sacked but at least we didn't do a Spurs"
If football clubs go pop, and looking at that chart over half the clubs have zero wiggle room, will we all be living in his world. And will this finally set the miser up to sweep the board?
No, we still won't win anything and even worse will spend much less if anything. We definitely need a DOF when action resumes.If football clubs go pop, and looking at that chart over half the clubs have zero wiggle room, will we all be living in his world. And will this finally set the miser up to sweep the board?
That would be easy to fix.
Depending on if you have a home or away season ticket. Spurs TV can give those people free access to all games. Same for the other clubs.
It will stop the TV monopoly.
Burnley have a really poor wage to turnover ratio.Burnley figures they only have a few months left in the kitty.
Burnley will run out of money by August if Premier League uncertainty continues, concedes club chairman | Goal.com
Burnley chairman Mike Garlick has admitted the club will "run out of money by August" if uncertainty surrounding the current Premier League campaign continues.
Perhaps they should have spent less money on getting coffee and smashed avocado toast whilst slagging off Spurs for furloughing staff.
Burnley chairman aims dig at Tottenham and Liverpool for furloughing staff
Premier League duo Tottenham and Liverpool have earned vast criticism for their decision to furlough staff amid the coronavirus pandemic
I wonder how smug they will feel come September? "Sorry guys. You're all sacked but at least we didn't do a Spurs"
How can you compete with a small stadium and no European football with such a high wage bill?
They are always flirting with relegation. It's a very high risk strategy of they do go down.
I reckon it would have all changed after they got into Europe that season.
Dusty trophy cabinet, flashy spread sheet & mediocre signings.Spurs 39% wages to turnover. How does he get away with it
Then you wonder why furloughing 550 staff! Who would do such!
I think the biggest (and probably best) impact COVID-19 Will have on football, is for all of us, fans of EVERY club to realise we're ALL in the shit together... if football goes down the pan as a result, we're ALL fucked!
Regardless of who you support, if there's no football, then THAT'S it.
No rivalry, no 'banter' no nerves on a Saturday morning... no ruined weekends 'cos of a dodgy decision... no NOTHING.... we ALL have the same thing to lose...
It's like religious groups fighting amongst eachother... they ALL believe in a Fairy Tale God... they just choose to argue amongst themselves about which Made Up God is best...
Same with football... people who don't love football will NEVER get it... but we do...we love it, but Will ALWAYS disagree with those who DON'T suppprt OUR team!
But without football, there is none of that.... we're ALL lost, in the same rudderless boat!
Let's stick together, so that as and when football resumes, we can carry on where we left off... and begin hating the 'other lot' again...
Until then, I hope we ALL get through this safely... regardless of who you support.
Regardless of who you support, if there's no football, then THAT'S it.
No rivalry, no 'banter' no nerves on a Saturday morning... no ruined weekends 'cos of a dodgy decision... no NOTHING.... we ALL have the same thing to lose...
It's like religious groups fighting amongst eachother... they ALL believe in a Fairy Tale God... they just choose to argue amongst themselves about which Made Up God is best...
Same with football... people who don't love football will NEVER get it... but we do...we love it, but Will ALWAYS disagree with those who DON'T suppprt OUR team!
But without football, there is none of that.... we're ALL lost, in the same rudderless boat!
Let's stick together, so that as and when football resumes, we can carry on where we left off... and begin hating the 'other lot' again...
Until then, I hope we ALL get through this safely... regardless of who you support.
Misleading tbf. For the last couple of years we’ve been around 50-55% and in the same ball park as our rivals. Those that are 70, 80% have an unhealthy reliance on TV money to survive.Spurs 39% wages to turnover. How does he get away with it
39% merely reflects a massive spike in revenue due to our CL run, which won’t be replicated. So it is an outlier
I'm not sure football could survive as a spectacle worth watching for that length of time with no spectators.
Croatia v England in 2018 was played behind closed doors and it was awful, I gave up midway through the first half.
I'm sure some diehards will watch on TV but I bet a huge number won't be bothered after a little while so subscriptions will nosedive.