Premier clubs bounce back from Covid - but it’s a struggle in EFL
NEW ACCOUNTANCY SURVEY HIGHLIGHTS
PREMIER League clubs have bounced back from the pandemic according to a new industry survey – though many clubs in the English Football League (EFL) are still struggling.
A new report by accountancy and business advisory firm BDO suggests 71 per cent of top flight clubs reported their finances to be “very healthy”.
At the same time, more than half of all Championship clubs and a quarter of clubs in League One and League Two said their finances were “in need of attention”.
The biggest concern for clubs right now will be the impact of the cost of living crisis on match attendances, particularly in the lower leagues.
Many Premier League clubs have spent big in the transfer window while some – such as Leicester City and East Midlands rivals Nottingham Forest – are pushing on with big stadium investment plans.
Earlier this year, Leicester City revealed they made a pre-tax loss of £33 million in the 2020-21 season when the pandemic was in full flow and games were played behind closed doors.
The club’s Thai owners said they were as committed as ever.
Forest have just been promoted to the Premier League, and are splashing the cash in a bid to stay there.
City’s other East Midlands rivals, Derby County, are one of the most high profile clubs to get into trouble in recent months and suffered relegation to League One last season after having points deducted for financial difficulties.
Administrators were called in last autumn and the club almost went under before local business Clowes Developments stepped in to take on the club and stadium.
BDO’s survey of club finance directors from the top four leagues found that most in the Premier League said that their financial position was “very healthy”, compared to just 29 per cent this time last year.
That compares to just 18 per cent for Championship clubs and a third of clubs in the bottom two divisions of the Football League.
Finance bosses of Football League clubs, of which there are 72 overall, said their biggest concern would be the impacts of cost of living increases on match attendance, with reports that demand for live events was already behind pre-pandemic levels.
Smaller clubs in particular are heavily reliant on matchday income in contrast to Premier League clubs, which get huge TV revenues.
BDO said: “This also helps to explain why leagues below the Premier League said they are focused on growing the domestic fanbase and improving fan engagement, while Premier League sides appear to be targeting growth among their international fanbase.”
Ian Clayden, head of professional sports at BDO, said: “While overall financial health is improving in the English professional game, the speed of recovery is uneven across the leagues. Many clubs within the English Premier League have recovered to pre-Covid levels with opportunities for growth outweighing current financial threats.
“The opposite may be the case for clubs in League One and League Two, who are having to closely monitor and control every penny.
“However, it’s Championship clubs that appear to be under the most financial pressure, spending above their means either in pursuit of the holy grail of promotion to the Premier League or to avoid relegation.”
DISPARITY BETWEEN ENGLAND’S LEAGUES