Our seventh annual survey of football club finance directors has been published and one of the strongest themes is evidence of increasing financial pressure on the English Premier League (EPL) clubs. While all clubs are starting to feel the bite of the credit crunch on their sales of tickets, merchandising and corporate hospitality, the EPL FDs are reporting a more widespread set of financial challenges and pressures than in previous years.
To download a copy of the football survey please click here.
Football survey podcast
Keith Morgan, corporate recovery Partner from the Cardiff office, talked about football stadium financing on Five Live’s Wake Up To Money
To listen to the podcast please click on the link below.
The podcasts are saved in MP3 format and a transcript of Keith’s interview is available below.
Five Live – Wake Up To Money – transcript
Introduction: Good morning, you’re listening to Wake Up to Money with Mickey Clark and Dominic Laurie on Radio Five Live and Radio Scotland. Coming up in the next half hour……We’re talking sport and money on today’s programme. The English football Premiership kicks off tomorrow – the UK’s richest league by far, or on the face of it, seems in better financial health than ever with TV and radio deals at the eye-watering levels we’ve been getting used to. But if you scratch a bit under the surface, even some clubs at the top level seem to be starting to struggle, especially when one of them starts the season with no shirt sponsor.
Question 1: Well, Keith Morgan is a partner at the business advisers PKF, which recently ran the numbers on the financial health of football clubs. Just to start with, Keith, are some of the top clubs in the English Premiership starting to discover the financial constraints that perhaps many in Scotland and the lower English leagues have always experiences?
Answer 1: I think so, outside the so-called big four within the English Premier League there are some difficulties, financially.
Question 2: Ten years ago, there’d have been a lot of dreaming among the lower league English clubs, in part that they could get to this top table and perhaps see their financial fortunes change dramatically. But do you think they’re now getting a bit more realistic about managing their money, sticking to budgets, perhaps?
Answer 2: It’s difficult to say. I think the Holy Grail of reaching the Premiership was really the attraction of the Sky TV money, which provided a substantial wind-fall for clubs being promoted from the Championship into the Premiership. I’m not quite sure, though, if some of those clubs aiming to reach that Holy Grail appreciated how much it would cost to get there.
Question 3: Some Championship teams will have seen a few of their colleagues fail quite spectacularly over the years and suffer as a result so perhaps some are starting to not want to over-extend themselves too much?
Answer 3: I think so. Having said that, our survey indicates that a number of clubs still feel that they are being stretched and pressurised by items such as player wage costs.
Question 4: What about the Scottish Premier League? Is the financial situation changing in Scotland or is the reality still that the big clubs, not only on the football field, but also in financial matters are very dominant as well?
Answer 4: I think so. What you have to remember is that the model there is slightly different in that, for instance, the substantial levels of money coming into the Premiership are not duplicated in the Scottish system. Their levels of income from such sources are considerably lower. However, it’s quite clear that the old firm of Celtic and Rangers do dominate in terms of things like attendance, television exposure and therefore general levels of income.
Question 5: But what about everywhere, England, Scotland, all sorts of clubs. How is the revenue mix changing for these clubs? Sponsorship, TV deals, ticket sales; are we seeing income streams change compared to five, ten years ago?
Answer 5: I think since the advent of Sky into television and the English Premier system, there’s been greater dominance at the top level of reliance upon the income from TV and radio, but primarily TV. It’s less so in the lower divisions where of course their income streams from those sources are considerably lower.
Question 6: Are other sports managing to survive if they’re clever with all this money and interest going into football?
Answer 6: I think they’re managing to survive. I think they’re becoming less optimistic about their prospects. I think less and less football clubs are expecting to make a profit in the forthcoming year, for instance. But there is a more robust income stream in football than there is in, for instance, dog racing.
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