25th April 2022


25th April 2022

Central to our work, whether within a sporting context or working with a more conventional business, is the in-going principle of working from an evidence base.  Such an evidence-based approach is, we believe, a critical foundation stone before any remotely credible analysis of a club (or a company) and wider industry dynamics can be established and understood. Accordingly, we are sceptical of other advisory approaches based on adopting a “vision and/or hypothesis” approach to strategy which is essentially based on inductive rather than deductive reasoning.

Without the evidence, the resulting offer is merely an opinion which, in this social media-driven age, can count for little amidst the din of self-promotion and vacuousness.    

For those that are familiar with our work, we have long held deep and profound concerns regarding the state of football’s finances, its overall economic position and its governance structure.  Again, key to our work is the annual publication of a club’s financial statements and we ensure that any economic profit numbers derived are reconciled back to the published data. 

Several commentators have previously been a little agitated or even over-excited at the use and adoption of economic profit both generally and within a football context.  There is a perfectly good explanation of its construction and relevance on our website.  Suffice to say that as a metric it is completely aligned with the work of the great economist Alfred Marshall in that “value is created by investing capital and generating a return greater than the cost of that capital”. When used correctly, and unlike accounting profit, it includes ALL of the costs of doing business including the cost of equity capital.

Furthermore, some of the truly great CEOs of the modern era including Sir Brian Pitman at Lloyds Bank, Roberto Goizueta at Coca-Cola, Jim Kilts at Gillette, Sir John Sunderland at Cadbury Schweppes and many others have used economic profit as the guiding metric in their strategy development.  The notion that it is somehow inappropriate for a football club in establishing value creation and destruction is wholly incorrect.

Certainly, our experience in other industries strongly suggests that economic profit can act as an early warning indicator.  Our initial work undertaken in the second half of 2016 led us to the firm conviction that structural reform would be a defining theme for the coming years in football, especially with the looming and increasing numbers of private equity consortia entering into the game from US shores.

So, when we postulated the prospect of change in football, we were pilloried by certain sections of the media which to this day refuse to carry any reference to our work.  Initially, we thought this was, to an extent, regrettable but understandable. From our experience in the private sector, company management teams often have a hostile reaction when presented with hard economic facts.  Indeed, we frequently observe the difference between the average and the truly great executive teams once they recover from the shock and quickly move on to the next question which is “what can we do about this?”

Arguably, football’s administrators have never made the leap to the “what can we do about this?” phase and in initiating the Tracy Crouch Fan Led review the government has in our view demonstrated a degree of impatience with the game’s ruling bodies.

Nevertheless, the arrival of Project Big Picture in 2020 vindicated many of our points regarding the financial viability of clubs and the increasing influence of US investors into the game. It wasn’t too long before April 2021 heralded the launch of the European Super League, a competition that we could see years before that would arrive as a direct result of the continuing and long-term economic performance squeeze exhibited by Europe’s senior clubs.  Economic necessity rather than greed was the key driver.  The emergence of the Covid pandemic merely accelerated the financially destructive trends that were already in place.

We could see them well ahead of time, yet even when we warned the ‘game’ that this would happen, we were dismissed as irrelevant and decried for using a measure that was apparently ‘unsuitable’ for football which in itself demonstrates a degree of business myopia rather than sophistication.

Yet here we are just one year after the brief and aborted launch of the European Super League. Memories do tend to be short but the 2018-19 season before the emergence of Covid resulted in record economic losses (£599.54m) for Premier League clubs despite a record level of collective revenue (£5,156.80m). Covid pushed Premier League club economic losses in 2019-20 to a further record of £1,384.90m on a reduced revenue of £4,523.96m. To date with 16 Premier League clubs having released their official accounts for 2020-21, collective economic losses are £977.82m from a collective revenue of £4,379.96m.

Therefore, in the last three years of accounts to date, Premier League clubs have achieved economic losses of £2,962.26m. That’s an average economic loss of £52.89m per club per year or approx. £1m per week.

The economic imperative for the Big 6 clubs in the Premier League to avail of a revised and more lucrative competition structure is all too obvious. Collective economic losses over the same period (2018-21) amount to £1,525.55m. That’s an average of £1.63m per week per club in economic losses. Not only does the weight of expectation in terms of trophies sit within this group but also the weight of economic inefficiency in attempting to do so.

Whilst football does not ‘do’ the mergers and acquisitions dance as seen in other industry sectors, it is nevertheless subservient to the same market and business dynamics that we see elsewhere. The collective market movement of clubs into deeper economic losses is not unlike the general market movements when specific sectors are hit by, for example, recession or an economic shock. In such situations, we would expect to see fluid movement in company structures, closures and takeovers.

In football, this simply does not happen. Therefore, there are only two routes to salvation. The first is operational reform. This has been the preferred route chosen by HM Government with its Fan-Led Review. We have, of course, written previously about this and our thoughts on the gaps between the results of the review and the strategic and economic requirements that the game needs from our perspective. We remain hopeful but unconvinced that enough reformative measures will be imposed.

The second route is structural reform. Whilst the Big 6 clubs may not be well disposed to a Regulator and all the possibilities that such a post may bring, they have already expressed a willingness to disrupt the structural status quo as seen with last year’s Super League fiasco. Indeed, the economic case for such reform has not gone away with the record club economic losses as previously described plus a flat value domestic broadcast agreement up to 2026. In our view, there is little economic resilience in the top levels of English football when clubs go cap in hand to HM Government for furlough loans and make significant redundancies from their support staff.

Despite the legal wranglings currently in play concerning Super League, we stand fast by the economic data that clubs will continue to seek competitive reform. The latest iteration of the qualification criteria for the Champions League is one example. The near-guarantee of entry via historical performance shifts the weight of participation firmly into the lap of Europe’s senior clubs.

Is it Super League by stealth? Probably. The only difference is that UEFA, for now, remains in control. The challenge, as ever, is to create a competitive environment where clubs can be economically profitable on a regular basis. In our view this requires, at the very least, operational reform. The increasing number of US investors, from the evidence so far, see it in exactly the same way except that they also see that the expedient route to operational reform is via a new competitive structure with salary cap rules etc. Perhaps it is the case that operational reform cannot be achieved without structural reform….

One year on from Super League, the economic conditions that brought about the breakaway competition remain. With Chelsea moving towards American ownership, four of the Premier League Big 6 clubs will be controlled by American interests. Don’t be surprised if the football’s existing competitive format is challenged once again in the near future.


18th March 2022Let It Go – With a freeze on Russian assets, Chelsea hits the market following a record economic loss.

10th February 2022Underwater – Manchester United’s share price fails to defy gravity and sinks below its IPO level. Has the market got wise to the club’s poor economic performance?

1st December 2021Fantasy Football – The Fan-Led Review findings fall short of the necessary value-driven approach to regulatory reform.

23rd June 2021Road to Nowhere – Football stands at the crossroads ahead of the Fan-Led Review process. We examine the key questions that it must answer.

11th May 2021Prime Numbers – Football’s elite clubs seek a route to profit as fans yearn for sporting tradition. In between lies a gulf of mistrust and misapprehension.

26th April 2021A Bitter Pill – GSK’s new strategic direction fails to find riches in the middle of a pandemic when other pharma companies have prospered.

25th April 2021The Wrong Stuff – American-style football league won’t wash but the conditions that led to its launch are still present and are likely to get worse.

19th April 2021Super League Arrives – As we predicted, football’s elite breakaway emerges from the shadows.

30th March 2021$hooting B£ank$ – Arsenal’s commercial performance analysed.

22nd February 2021Measure for Measure – Take two financial measures, add pandemic and stir.

18th January 2021The Football Factory – If football was an industrial entity…

8th January 2021The Oil Majors – An Update – A shareholder return performance review of the 4 major oil companies in 2020.

10th December 2020Pump Up The Volume – ExxonMobil comes under fire from an agitated investor.

16th November 2020The Pain Game – Manchester United’s Q1 2021 financial release opens the lid on a Covid-19-affected financial can of worms.

11th November 2020A Tight Squeeze – Football’s Elephant in the Room leaving little space for financial relief.

29th October 2020Form and Function – Proposals-a-plenty for football’s structural reform.

13th October 2020Project Big Profit – Americans come bearing a proposal for football’s structural reform, just as we predicted in 2016.

8th October 2020Game Aid – Football is caught in the crossfire of indecision and financial necessity.

24th September 2020Crisis? What Crisis? – We look back 12 months at the demise of Thomas Cook and its relevance to more recent events.

11th September 2020Distance Learning – New rules and new values as Covid-19 challenges traditional mindsets and misconceptions.

19th August 2020Socked! Marks & Spencer’s Shrinking Value – Retail giant is fast becoming a shadow of its former self.

22nd May 2020You’re Gonna Need a Bigger Boat – An assessment of the double financial whammy of potential relegation from the Premier League and Covid-19.

30th April 2020Home, Alone – Initial indicators from the wider economy point towards economic and financial downsizing in sport.

6th April 2020Board Games – Government, football clubs and players adopt separate ‘brace’ positions as Covid-19 crashes the sports economy.

27th March 2020Markets, Mayhem and Manchester United – A look at the questions posed by the share prices of publicly listed businesses.

15th March 2020When Saturday Goes – Football has come to a halt. We take stock of the game’s position and ponder its return.

10th March 2020Futureworld – The potential economic effects of the COVID-19 outbreak.

19th February 2020 – Lemon Law How Financial Fair Play can give a misleading view of football club finances.

8th February 2020Hammered – Our financial perspective on some of the clubs involved in the Premier League relegation battle.

12th December 2019The Cost of Chasing Gold– In collaboration with the BBC, we look at the high price being paid by clubs to gain promotion into the Premier League.

7th November 2019Where to Next for M&S? – November 2019 results suggests the retailer is losing its way

10th October 2019 Red Mist – Manchester United’s 2019 FY numbers and the stagnation of England’s biggest revenue-earning club.

7th September 2019Not Just A Loss But… – A detailed look at the decline in Marks & Spencer’s fortunes.

29th August 2019Telling It Like It Is… – What really happened when we talked to the English Football League.

5th July 2019Chopping Board – Knives out for former Tesco chief.

25th May 2019 –Repeat Prescription – Few believed us the first time around regarding football’s financial plight…

19th March 2019Stuff and ‘Nonsense’– Why the Economic Profit metric is the most transparent measure of business performance.

13th March 2019Financial Fair Play – Guilty as Charged? – Our thoughts on FFP schemes and their key weakness.

18th December 2018Long Division – The Post-Ferguson years at Old Trafford have come at the expense of declining economic and on-pitch performance.

20th November 2018The Relegation Game – Tales of woe and economic performance at the wrong end of the Premier League table.

9th October 2018A Different View – Why fans ought to be acutely aware of football’s financial dynamics.

17th August 2018The End of the Beginning – La Liga heads west to conquer new worlds.

9th August 2018Reaching for Sky – the sequel – Latest offer price for satellite TV company is good for shareholders, less so for prospective owners.

8th August 2018American Dreams – English Premier League economic dynamics and American money – is a Euro Super League the next step?

3rd August 2018Mall Administration – Retail Property Co. bonus payouts at odds with increasing shareholder value.

20th April 2018Goonernomics Part Deux – The departure of Arsene Wenger…

18th April 2018The Price of Everything – Tesco’s latest numbers offer little in value.

12th April 2018Say What? – WPP’s very mixed message.

14th February 2018In Case of Emergency – Premier League’s UK TV rights auction comes up short.

7th February 2018 – Lost in Transmission – Top Premier League clubs look beyond domestic TV rights.

4th December 2017A Billion here, a Billion there… – The Premier League reaches a major milestone, quietly…

25th November 2017Getting out of Toon. – Is Mike Ashley pitching the sale price of Newcastle United at the right level?

16th October 2017 – Goonernomics. How the ‘Bank of England’ club falls short of its North London neighbour.

25th September 2017 – Highlights. More record-breaking numbers from the biggest football club in the land, but no economic profit…

23rd September 2017Football’s Economic Back Pass. A guest blog for the Soccernomics website.

12th September 2017 – Crystal Balls-up. Changing strategic direction is not a good idea when you haven’t looked at the economics.

27th July 2017Football’s Summer of Money and the £65 pint of beer. The sport that just can’t spend enough.

11th July 2017Football Special. Observations following the launch of ‘We’re So Rich…’

9th May 2017Illuminating, non? Political energy lacks vision and power.

2nd March 2017Claudio’s Burden. The price of failure outweighs the price of success.

12th January 2017Shopping for Godot. A never-ending quest for value in Retail.

27th December 2016Reaching for Sky. Is Rupert Murdoch’s £10.75 per share a fair price?

6th December 2016Auld Lang Syne. A reminder from history of the damage that poor financial planning can cause.

1st December 2016Fork Handles? Four Candles? Tesco’s blurred strategic vision.

27th November 2016Football’s Instant Replay. Financial warning signals for the top English Premier League clubs.