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The finances of the top clubs are weird and not wholly sustainable.

By Tony Attwood

It may seem hard to believe but there was a time in the latter part of the 20th century when the Football League Division 1 had a “big four” made up of Arsenal, Tottenham, Liverpool and Everton.   Sometimes that was a big five, because Manchester United were included when they were not malingering in Division 2, but then, after Everton’s golden era of 1984 to 1988 during which they won the league twice, were runners’ up once, won the FA Cup, were runners’ up twice, won the Cup Winners’ Cup and the Youth Cup and were League Cup runners’ up (and I may have missed something, sorry if I did) – their world fell apart.

All that success, all that promise (remember it did include the Youth Cup) and since then, one FA Cup and one Youth Cup in some 30 years.  No one would now claim they were top six, let alone top four.  Apart from by those closely associated with the club, their great days are all but forgotten.

So as the Premier League celebrates having 20 clubs making record revenues totalling £4.827bn in 2017‑18, with all four clubs playing in the two European finals being in the PL (and let us not forget, three clubs all from the same city*) the rest of Europe gets edgy.   Not least because one of the PL’s top six seems might be engaged in some financial hanky panky, while another has an owner who might be losing interest, and yet another is a club that desperately has to stay in the top four just to pay for its new stadium.

It was with this sort of concern in mind that I thought I might put together a little financial table – a table which is a little different from that which has appeared elsewhere.

Like other publications it shows figures for the financial year ending on 31 May 2018 – the latest for which accounts are available from all clubs.  But I’ve included a “Financial” column – not because others don’t mention these details, but because they don’t always put them directly alongside the other factors

Club Turnover £m Wages cost £m Financial Profit for year £m
Arsenal 403 (5th) 240 (5th) No debt; £15m in bank 70 (3rd)
Chelsea 448 (4th) 246 (4th) £1.125bn loaned by Abramovich 30 (4th)
Liverpool 455 (3rd) 264 (3rd) £155m owed to bank and FSG 125 (2nd)
Manchester City 500 (2nd) 260 (2nd) Sheikh Mansour “investment” of  £1.3bn. 10 (6th)
Manchester Utd 590 (1st) 296 (1st) £496m debt 26 (5th)
Tottenham Hots 381 (6th) 148 (6th) £460m debt 139 (1st)

Look at the final column and yes, everyone made a profit – a profit ranging from £10m for Manchester City up to £139m for Tottenham.  And look at the wages and to a fair degree they reflect league position.

But there are, hiding away, little issues.   Like the fact that while Tottenham have a debt of £460m that is nothing to do with the stadium which has been widely reported as costing them £1 billion.  But they have the lowest wages bill which will be hard to sustain if they are to keep in the Champs League.

And all this is far less than the “investment” of Sheikh Mansour in Manchester City – with “investment” still being inverted commas, because investments in the normal sense are set up in order to make a profit.  Quite how that money is going to be returned into profit I am not quite sure.  At the current rate of £10m a year it will take 130 years to pay off the debt – and it will only take that amount of time because no interest is being charged on the debt.

We can’t really say how long it is going to take Tottenham to pay off their stadium costs as we don’t know how much profit they will make – but they, like Arsenal before them, will be dependent on staying in the top four while the stadium is being paid for.  At the current rate of pay it will take about 11 years to clear the debt – but that assumes most of the extra income from the new stadium goes into interest and loan repayments – not into the players needed to sustain their position.

Chelsea of course have a bit of a problem in addition to the £1.125 billion loan, in the shape of a forthcoming transfer embargo, an abandoned stadium project, and an owner who has wandered off into the mists and might not be returning.   And if he does return it is quite possible that he won’t return with anything but a request to have some of his money back.

So what to make of all this?

Each club now  seems to be a special case, and while some special cases can survive not all tend to do.   And that is really my point.  Just as we forget how Everton were for a short time, so we will not quite believe it when one of the current big six get themselves in a tangle, but then they will sink back, and soon their past days as one of the big boys will be forgotten by most – just as Arsenal’s two doubles and the unbeaten season are forgotten by most.   One club – perhaps two – will slip away from the other four… but which one/s is a matter of debate.

And when it has happened it will seem to have been inevitable.   Meanwhile it seems to me Arsenal might not make it back into the top four, but on the other hand they are unlikely to slip back down the league, or go bust.  We’ll see.

* There is a Uefa rule for the Europa League that says that two clubs from the same city cannot play in the same city on the same night.  I presume that means that Chelsea plays the Uefa final on Wednesday and Arsenal on Thursday which should make for an entertaining couple of days.

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