18th November 2023
What is a Premier League point actually worth in monetary terms? Simple mathematics will tell you that if we use the example of the 2021-22 season, combined Premier League club revenues were £5,461m; a total of 1,052 points was achieved by the 20 clubs during this particular campaign. By dividing the overall revenue with the points total, we arrive at a very loose average of £5.19m per point.
Why ‘loose’? Leicester City’s revenue was £214.59m for the season but in amassing 52 points, the application of the average value would have realised a revenue of £269m. At the other end of the scale, as it were, Manchester City’s revenue was £613.01m vs £482m based on our average value.
However, for Everton the situation is much closer to home. The club’s revenue in 2021-22 was £181.01m and the points achieved was 39, a poor return given Everton’s rich history. Thus, Everton’s revenue per point comes in at £4.64m, which is not too far away from our loose average value of £5.19m.
An independent commission has docked Everton 10 Premier League points for a breach of spending limits which, given our very loose mathematics, is the financial equivalent of £45-52m. Of course, the impact is further enhanced if the club is eventually relegated. The level of safety is usually around the 35-point level, so in effect Everton has just had under a third of the safety margin removed. And let us not forget the financial impact of annual revenues below £70m in the Championship…
In our opinion, this is a pivotal moment in the history of the Premier League and indeed English football. We expressed our view in 2018 that the Premier League’s demise was under way as a result of the increasing economic losses achieved by the Big 6 clubs. Indeed, we said that the potential for a breakaway was clear. How prophetic we were then given the emergence of Super League in 2021.
Today, football is readying itself for the Parliamentary debate over a bill designed to install an independent regulator as a result of the pushback to the Super League concept but the nagging doubt remains for us in that regulators as a breed are largely ineffectual when it comes to matters of real importance and we always return to one of our earliest questions that remains unanswered in that ‘what is an acceptable loss for a football club’ given that fans want owners to spend, spend, spend with usually disastrous consequences.
Everton’s punishment demonstrates a reactionary stance from the powers that be in that the firm hand of justice would appear to have finally grasped the nettle of financial impropriety according to the articles of association and just in time before the regulator hits town. Does this not demonstrate that football can police itself without the need for regulatory oversight? Well, that train left a long time ago but questions remain over the scope and nature of the impending oversight.
Would a regulator sanction the Glazers for failing to keep up with the noisy neighbours across the Mancunian Way or would a regulator investigate the way City Football Group organizes its cross-charging policies between its various club subsidiaries? In both cases, neither practice nor approach is illegal according to the laws of the land and that is the root of the issue. Until the statute is changed to give football clubs a more suitable legal and financial framework to adhere to, a regulator is likely to be nothing more than a vacuous figurehead. And given the brewing scandal over the selection of the chair of Ofcom, the government of the day has to demonstrate the utmost levels of transparency in the process.
Unfortunately, the historically relaxed approach to financial rule-bending by previous Premier League administrations, which included the denial of extensive losses as we have so often highlighted, is now coming back to bite with a vengeance with Manchester City in the line of fire given the 115 charges of monetary waywardness levelled against it along with Chelsea’s apparent hidden payments to various parties during the Abramovich years.
But what of it? Will the change of heart and direction regarding crimes and misdemeanors enhance the Premier League brand as a shining example of fair competition and financial propriety? Hardly. This about-turn follows years of brand protection at all costs. Granted, the Premier League is the de facto Super League that the senior clubs still crave for, but there is always the risk that the Petrostate and American-owned entities will still up jumpers and play somewhere else especially if the money police is starting to get too close for comfort. And it hasn’t gone unnoticed to us that when Super League did appear, not one media company offered a comment as to the prospects of broadcasting such a competition. Silence, volumes etc.
Therefore, Everton’s punishment should not be a surprise given events. The Premier League is in full reactionary mode and has probably realised that the good days are over as a regulator approaches and TV revenues look decidely full and their providers show signs of balance sheet distress. Given what we see in the corporate world, it only takes a couple of wrong moves to sow the seeds of dysfunction and demise. The financial losses are baked in, the rest will follow…
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