Championship clubs’ spending on wages exceeded revenue for a fifth successive season in 2021-22, according to a new report.
Deloitte’s Annual Review of Football Finance found second-tier teams’ combined wages-to-revenue ratio was an astonishing 108 per cent, as clubs continued to chase the dream of reaching the Premier League.
Nottingham Forest, who ultimately succeeded in reaching the top flight at the end of the 2021-22 season via the play-offs, spent almost 200 per cent more on wages than they earned in revenue – £58.6million compared to £29.3m – in their promotion year, according to figures in the Deloitte report.
Championship clubs’ total revenue was up 13 per cent in 2021-22 compared to the season before, reaching £676million.
However, while wage costs fell for a second consecutive year, they remained higher than revenue for the fifth season in a row.
Tim Bridge, lead partner in Deloitte’s Sports Business Group, said: “The glamour of Premier League promotion is spearheading the continual drive for investment in Championship clubs, often in an unsustainable manner, driving some clubs to overstretch financially.
“It is critical that long-term decisions are now made by clubs’ owners and, with the introduction of the independent regulator, focus will turn to improving the distribution mechanism of revenues between the leagues and clubs.
“This must be accompanied by appropriate governance and financial controls to ensure that any proposed solution is suitable and sustainable.”
EFL chairman Rick Parry believes the disparity in revenue between the Premier League and the Championship has created a “cliff edge” between the leagues, and argues parachute payments are also fuelling inequality within the Championship.
Deloitte’s report underlines the value to clubs of reaching the Premier League. Relative to the 2022-23 season, it says revenue from broadcasters is expected to provide a minimum uplift of more than £90m for Luton, approximately £84m for Sheffield United and £54m for Burnley, with both of those two clubs in receipt of parachute payments whilst participating in the Championship.
The report said that should a club suffer immediate relegation, assuming they are not in receipt of parachute payments at that point, under existing arrangements the parachute payments from the Premier League will continue to provide an uplift over the following two seasons of at least £80m.
For a Championship club not otherwise in receipt of parachute payments, the value of promotion will be at least £170m across the next three seasons and, if a club survives their first season in the Premier League, they will be entitled to three seasons of parachute payments and the incremental revenue will be over £290m across five years.
Discussions over a new financial settlement between the two leagues are ongoing. The Government said in its White Paper on football governance that a new regulator will be given backstop powers to impose a settlement if one cannot be agreed, but it is unlikely the regulator will be up and running until 2024-25 at the earliest.
Parry accepts that reform of the distribution package has to go hand in hand with cost control measures, which are also part of the ongoing ‘New Deal For Football’ talks between the EFL, the Premier League and the Football Association.
Bridge believes it is vital for the leagues to see the common ground they share to resolve the dispute on distribution.
“The point I would make is that the longevity of the Premier League and the ability for clubs to move up and down between the Premier League and the Championship and to achieve variety in those clubs is a good thing for the overall brand and the marketing position of English football,” he said.
“Part of the beauty of the Premier League is always that any team can beat any other team. And so at any one point in time, what we really want to see in the English game is a variety and diversity of clubs coming through the league at different points in time, bringing new storylines, bringing new faces to the league because frankly that keeps it fresh.”
Wage spending in the Premier League in 2021-22 grew by £192m compared to the previous season, but this was outpaced by a £586m increase in revenue, meaning the top flight’s wages-to-revenue ratio fell for the second consecutive season from 71 per cent to 67 per cent.
That is still a significantly higher ratio than the average of the three seasons pre-pandemic up to 2018-19 – 58 per cent.
Across Europe’s ‘Big Five’ leagues as a whole however, revenue growth was outpaced by wages, which stood at 12.3 billion euros (£10.5bn).
This comes at a time when the continent’s football governing body UEFA has introduced new financial sustainability regulations, including a cost control rule which by 2025-26 will limit a club’s spending on wages, transfer fees and other player and coach costs at 70 per cent of turnover.
UEFA could go even further in the future, with president Aleksander Ceferin raising the possibility of a Europe-wide salary cap in an interview in April.
Walker: Man City driven on by creating history
Kyle Walker believes Manchester City were spurred on by creating history to a fourth straight Premier League title.
A Phil Foden double and a Rodri strike saw City beat West Ham 3-1 on Sunday as they claimed a fourth consecutive Premier League crown, finishing two points above Arsenal.
In doing so, City became the first team ever to win England's top division four times in a row, and Walker feels that was one of the key motivations behind the team finishing top of the Premier League pile yet again.
When asked if creating history had driven him and his team-mates on, Walker told Sky Sports: "I think so, I think so. We went out of the Champions League, got into the FA Cup final, but to do this, make it four in a row, it made it something special.
"It has been spoken about all year what we can achieve and the history we can make. But it is about the finer details. It was down to just one game and that game was West Ham United. We get past that then we make history, but more importantly we claim the Premier League again.
"It is a very, very tough league to win. I looked at the Italian league, German league, Spanish league, the winners are 10, 15 points clear. Fair play to Arsenal and Liverpool for what they have done throughout the season, making sure they push us right to the limit."
Walker turns 34 later this month but has shown little signs of slowing down, playing an integral role again this season on his way to a sixth Premier League title of his decorated career.
Walker still feels he is capable of playing at the top level, saying: "I feel young. I don't know if that is a good thing or a bad thing. I feel young, I feel great, I still have my pace.
"I come to training every day wanting to learn. Once that goes then it is probably time to pack up, but this group of lads keeps you on your toes. They keep on you to keep improving every day."
Walker has been City's captain this season, making his 300th appearance for the club in the title-securing win over West Ham.
The defender was keen to emphasise that it has been a collective effort this term, though, explaining: "I am the man at the front and I wear the armband, but I don't put myself above anyone else. We are a team.
"There are four captains including myself, and we all pull our weight. I am just the man they've picked to wear the armband which I am very grateful for. To be able to lift the trophy in this scenario, the four in a row, it is a dream come true."
Ancelotti focused on fitness and rhythm despite Villarreal comeback against Madrid
Carlo Ancelotti was unbothered by Real Madrid's failed attempt to defend a three-goal lead against Villarreal, instead focusing on avoiding injuries and keeping their rhythm.
A double from Arda Guler, as well as goals from Joselu and Lucas Vazquez, had Madrid in control at 4-1 up away to Villarreal on Sunday.
Yet Alexander Sorloth, who pulled a goal back earlier on, managed three goals in eight minutes to salvage a 4-4 draw for the hosts against the LaLiga champions.
Despite faltering to a late comeback, Ancelotti was more than pleased with his side's efforts, ahead of the upcoming Champions League final with Borussia Dortmund on June 1 at Wembley Stadium.
"The target was not the points because we don't need them, the target was to play a good game with rhythm, intensity, avoiding injuries. Everything went perfectly," he told a post-match press conference.
"I'm not worried ahead of the Champions League final, this was an open game.
"Maybe we conceded more goals than necessary but that's okay, it doesn't change anything about what the final has to be. In attack, we played well."
Villarreal are set to finish eighth in the LaLiga table, unable to be caught by any team below and incapable of reaching seventh-placed Real Betis.
Sorloth may end with an individual award, though, after scoring his league-leading 23rd goal of the season with the fourth of his quartet of strikes.
"It was a match with a lot of goals, the kind that the fans like," Villarreal forward Gerard Moreno, who provided three assists, told Movistar.
"I'll take the reaction in the second half. We will try to go to Europe next year.
"I hope Sorloth ends up top scorer. He's a fantastic teammate. He deserves it. We're going to try to help him. He's had an incredible season."
Emotional Guardiola lauds Liverpool legend Klopp as Man City rivalry ends
An emotional Pep Guardiola offered his sincerest thanks to Jurgen Klopp for pushing Manchester City to new heights after their relentless Premier League battle with Liverpool.
Klopp's Reds are the only side to have stopped Man City from winning the top-flight title in the last seven seasons, with Liverpool taking the crown in 2019-20.
For all of the Liverpool and City rivalry, there has remained a mutual respect between Guardiola and Klopp, who faced off during their time with Bayern Munich and Borussia Dortmund respectively as well.
Ahead of Klopp's departure from Anfield, the German labelled Guardiola as "the best manager in the world", suggesting no one else could achieve four straight titles with the City side that Guardiola managed.
After lifting a record-breaking fourth consecutive Premier League trophy following Sunday's 3-1 victory over West Ham, Guardiola was moved to tears when asked about Klopp.
"I will miss him a lot," he said as his voice wavered. "Jurgen has been a really important part of my life. He brought me to another level as a manager. We respect each other incredibly.
"I have the feeling he will be back and thank you so much for his words but he knows that behind me there is a lot that this club provides me with, otherwise alone I can't do it. I'm humble enough to understand that.
"He helps me with his team, he has been a huge competitor in my life. I didn't discover the way I can punish them like I can find for other teams. With him it has been so difficult."
City became the first team in English top-flight history to win the title in four consecutive seasons, having won the league in 2020-21, 2021-22, 2022-23 and 2023-24.
The Citizens pipped Arsenal, whose win over Everton mattered for little on the final day, as Guardiola's former colleague Mikel Arteta continues to impress with the Gunners.
Guardiola referenced fellow Spaniard Arteta as he continued in his praise for Liverpool's Klopp, who enjoyed an emotional farewell at Anfield after the Reds' 2-0 victory over Wolves.
"I'm pretty sure Mikel [Arteta] will continue his legacy to drive us to another level," the Man City manager continued. I wish him all the best and hope his final game was special, he deserved it.
"He made Liverpool recognised with his stamp, and the incredible pride of being a Liverpool fan.
"It's not just about titles, there are personalities that when they arrive in one place they stay forever and Jurgen and Liverpool will be part of the level of [Bill] Shankly and [Bob] Paisley and these incredible legends."
SportsMax is the Caribbean sports channel of choice, committed to providing sporting content of the highest quality to the Caribbean, delivered by a team of highly innovative, passionate and qualified professionals.
(876) 619-7629
digitalmedia@sportsmax.tv
