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Premier League clubs are heading towards financial ruin

http://www.teamtalk.com/news/premier-league-clubs-are-heading-towards-financial-ruin

This is a really interesting read. With players like Pickford and Keane costing £60 million... You have got to think that surely there are going to be financial issues in the EPL soon.
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Comments

  • the money getting banded around is ridiculous even in the champ wolves has just laid out 16 mill on a player, i think what will happen is the prem and champ will be constantly the same teams, with the same clubs yo-yoing up and down, on paper now us in the championship would be like a lamb to the slaughter, and skinflint isn't going to spend is he, said it before but fuck modern football, were rich foreign owners playthings now, although life has been a bit better recently that the dozey cow that is katrien hasnt been on the scene.
  • edited July 10
    If the premier league clubs implode so will the rest of football.
    As much as I would like a rebalance of power, if it happens they will take many down with them only they will catch a cold the rest of us will get pneumonia.
  • Football will continue in the same vein for as long as idiots line the pockets of the TV companies that pump ludicrous amounts of cash in to the game.
  • It wont happen. Money will keep piling into PL, as long as there is an international demand to watch it - and that continues to grow, year on year.
    If you look at other sports, there is a overseas desire to 'own' sports that have previously been owned by UK enterprises or individuals, F1 being an example- and I can see a situation where the US giants such as Netflix will purchase PL TV rights (or even maybe a Chinese TV giant) and it will continue to grow financially as it has grown over the past 20 years under Sky - and consequently the gap between leagues will just get bigger and bigger year-on-year.

    I'm very close to just giving up on football altogether - I cancelled Sky this year, and that is the first step that a lot of people are clearly taking what with the incentives Sky are offering recently to remain/return.
    I have no intention of returning, especially as The Ashes is on BT this winter,
  • It is probably the only viable division in the top three divisions of football at the moment. I have not looked but bet every Championship club last year made a loss, some huge. Any larger club in League One the same. EPL most will have made a profit.

    The only issue I see is if streaming games removes the money gravy train from Sky etc. As I am still stuck in the 90's when it comes to IT I have no idea whether streaming can be as well monetised and hence whether it would be a positive or negative for EPL turnover..

    The world has changed hugely in the past 20 years and with the rise of Internet, craving for speed and instant success will drive young fans further towards the top teams IMO.
  • I don't see how they'll be ruined. The spending is obviously based around the tv deals, so if the next one is similar then spending will continue.

    Also "the report claims Premier League clubs lost £2billion in eight years", how much of that was down to Chelsea and City, whose owners literally do not care about money.
  • If the premier league clubs implode so will the rest of football.
    As much as I would like a rebalance of power, if it happens they will take many down with them only they will catch a cold the rest of us will get pneumonia.

    I think it'll be easier for the likes of League One and League Two clubs to recover though.

    They're already operating at a level that sees them barely getting any TV money so have to adapt everything to that... the Premier League and Championship though are splashing so much cash on wages etc. are the ones that'll really suffer - The likes of Diego Costa etc. will still want to be paid stupid amounts of money and with the big clubs unable to pay it they'll be at risk of going out of business as the banks come hunting.

    Of course they've got the big stars to sell to foreign teams and so stay afloat but if the implosion happens worldwide then everyone will be struggling in the same vein (i.e. trying to sell players on five year deals) - The likes of Accrington (picked at random) etc. will be fine in the long run I believe because the majority of Lower League sides offer Contracts on a shorter basis for the very concern that if something long-term is offered then the great financial risk.
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  • Also the numbers are nowhere near as large as the media make out.

    For example the transfer market has a multiplier effect, not unlike that of macro economics. Much of the money in the total on Sky of transfer deadline day is the same sum moving from club to club. It's not all new spending. Only the Agents fees and the wages are going out of football. The rest is just moving from one club to another one, and another one, and another one. The billion pound transfer window could be the same £50m moving twenty times.
  • I don't disagree that the Premier League, and thus English football as a whole, is a bubble that will one day burst. But I'm not convinced that things are quite as dyer as the write-ups of this report make it out to be. The report costs £325, so I will not be buying it to figure out how they came to some of these figures.

    http://vysyble.com/downloads/were-so-rich-its-unbelievable-the-illusion-of-wealth-within-football-2nd-edition

    I still believe that those at the most financial risk are not the Manchester Citys and Chelseas and Uniteds of the world, but rather the clubs spending a lot to stay in the Premier League, or worse yet, those spending a lot just to try to get there. Forest immediately spring to mind, a club with an owner who pumped money in only to become disinterested, who were nearly relegated last season.
  • SDAddick said:



    I still believe that those at the most financial risk are not the Manchester Citys and Chelseas and Uniteds of the world, but rather the clubs spending a lot to stay in the Premier League, or worse yet, those spending a lot just to try to get there. Forest immediately spring to mind, a club with an owner who pumped money in only to become disinterested, who were nearly relegated last season.

    We must be the only club to have an owner that was disinterested right from the start.
  • Good. Can not happen quick enough. I will always support Charlton even in the direction we are heading... so Plumstead Common it is then and bollocks to the rest. Special mention for Palarse of course, who I would like to see pulled apart slowly bit by bit by Satan's imps in the fiery bowels of Hell!
  • SDAddick said:

    I don't disagree that the Premier League, and thus English football as a whole, is a bubble that will one day burst. But I'm not convinced that things are quite as dyer as the write-ups of this report make it out to be. The report costs £325, so I will not be buying it to figure out how they came to some of these figures.

    http://vysyble.com/downloads/were-so-rich-its-unbelievable-the-illusion-of-wealth-within-football-2nd-edition

    I still believe that those at the most financial risk are not the Manchester Citys and Chelseas and Uniteds of the world, but rather the clubs spending a lot to stay in the Premier League, or worse yet, those spending a lot just to try to get there. Forest immediately spring to mind, a club with an owner who pumped money in only to become disinterested, who were nearly relegated last season.

    Blimey, even reports on the Premier League are expensive!
  • SDAddick said:

    I don't disagree that the Premier League, and thus English football as a whole, is a bubble that will one day burst. But I'm not convinced that things are quite as dyer as the write-ups of this report make it out to be. The report costs £325, so I will not be buying it to figure out how they came to some of these figures.

    http://vysyble.com/downloads/were-so-rich-its-unbelievable-the-illusion-of-wealth-within-football-2nd-edition

    I still believe that those at the most financial risk are not the Manchester Citys and Chelseas and Uniteds of the world, but rather the clubs spending a lot to stay in the Premier League, or worse yet, those spending a lot just to try to get there. Forest immediately spring to mind, a club with an owner who pumped money in only to become disinterested, who were nearly relegated last season.

    Blimey, even reports on the Premier League are expensive!
    I want to buy it but I only deal in 50s.
  • edited July 10
    SDAddick said:

    I don't disagree that the Premier League, and thus English football as a whole, is a bubble that will one day burst. But I'm not convinced that things are quite as dyer as the write-ups of this report make it out to be. The report costs £325, so I will not be buying it to figure out how they came to some of these figures.

    http://vysyble.com/downloads/were-so-rich-its-unbelievable-the-illusion-of-wealth-within-football-2nd-edition

    I still believe that those at the most financial risk are not the Manchester Citys and Chelseas and Uniteds of the world, but rather the clubs spending a lot to stay in the Premier League, or worse yet, those spending a lot just to try to get there. Forest immediately spring to mind, a club with an owner who pumped money in only to become disinterested, who were nearly relegated last season.

    Certainly won't be Chelsea, they make so much money selling off squad players these days that they barely even need Abramovich's money any more. Made another 60-65m in the past couple of weeks by selling Ake, Atsu, Begovic, Cuadrado and Traore, not forgetting the 50m+ they somehow got for Oscar last year.
  • JohnBoyUK said:

    Just seen on BBC that Swansea value Sigurdsson at £50m after turning down a bid of £40m, yes £40m from Leicester City.
    Seriously, WTF.

    Was talking about this at work with someone last week.

    Transfer Fees over the years have always risen at a slow and steady pace yet with the Pogba transfer last year its turned into a free for all where figures are being plucked from the sky!!
  • Its beyond ridiculous now.
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  • edited July 10

    JohnBoyUK said:

    Just seen on BBC that Swansea value Sigurdsson at £50m after turning down a bid of £40m, yes £40m from Leicester City.
    Seriously, WTF.

    Was talking about this at work with someone last week.

    Transfer Fees over the years have always risen at a slow and steady pace yet with the Pogba transfer last year its turned into a free for all where figures are being plucked from the sky!!
    But David Bentley once cost something like £20m about a decade ago. And that seemed silly then. Transfers have always been a sort of false economy, something that is difficult to justify. It is getting worse, yes, but I feel like it's only keeping up with the money coming in to the game.

    So I have not worked with Economic Profit, but I'm curious to know how the report classifies "implicit costs." One thing they point out, which I think they are smart to do, is that television deals cannot keep rising in value. I suspect that's true domestically, and that at some point the foreign deals will peak due to market saturation. And that's not counting what would happen if we were to have another economic downturn.

    Part of the problem is, and we are very much a part of this, that these money-losing businesses are bought for tens of millions of pounds, oftentimes with the seller making a profit. And I firmly believe that until that changes, or until a governing body gets serious about FFP, the economic model of the game will not change.
  • JohnBoyUK said:

    Its beyond ridiculous now.

    It's not so surprising though when the TV money in the Premier League is a guaranteed £100m a year if you stay up.
  • Have said for years that Football will implode with the amount of money thats thrown about... It just cant sustain itself forever on this model... Just hope that the Premier League clubs combust in the below order.

    (1st) Crystal Palace | (2nd) Chelsea... Couldn't care less about the rest

    I don't think it's necessarily about money being spent but lack of a business model. Those clubs that don't have to rely on owners continually investing large sums of their own money to survive but those who spend in excess of receipts will go bust (and should).
  • Have said for years that Football will implode with the amount of money thats thrown about... It just cant sustain itself forever on this model... Just hope that the Premier League clubs combust in the below order.

    (1st) Crystal Palace | (2nd) Chelsea... Couldn't care less about the rest

    I don't think it's necessarily about money being spent but lack of a business model. Those clubs that don't have to rely on owners continually investing large sums of their own money to survive but those who spend in excess of receipts will go bust (and should).
    Except they never seem to. Remember when West Ham were *this* close to going to the wall? And Portsmouth (admittedly even closer)? And Liverpool under Hicks and Gillette? The teams that do go under are the ones further down the leagues.

    I'm not saying this is a sustainable business model, quite the opposite. But then there's another part of me that's like "if it KEEPS working against all logic, then maybe it's a sustainable business model." Capitalism FTW.
  • The 25m Everton paid Palace for Yannick Bolasie was the final straw for me. I don't pay to watch the EPL on TV now because I can't stand the thought that even a penny of my money contributed to financing that deal. Crazy money for a player like him.
  • Sometimes I wonder if it may be better if the whole thing did emplode and start from scratch again.
  • unfortunately we are a long way away from football imploding. the next TV deals will see Facebook and Amazon bidding for the rights which will push the price up further. Eventually the big 5 clubs will breakaway and have their own deals - this may lead to the European super league that they all want.

  • edited July 11

    unfortunately we are a long way away from football imploding. the next TV deals will see Facebook and Amazon bidding for the rights which will push the price up further. Eventually the big 5 clubs will breakaway and have their own deals - this may lead to the European super league that they all want.

    It might, but I suspect that they won't like it even if they do want it. The top teams need to be winning - both games and trophies. The top leagues (England, Spain, Italy and Germany) have four league titles and four cups to win each season between them. Put the top four or five from those nations into one Super League and there can only be one title each season and one cup (presumably the Champions League, that already exists). It would mean that teams that are used to winning something almost every season will go years without a trophy.

    Teams that have been used to being in the top handful of teams for decades will, suddenly, be bottom half of their division. The TV audiences will fall away as there will be many, many fewer big, important games. Imagine the Manchester derby between the 8th and 11th placed teams - who out of Manchester will be interested in that? The gates at these clubs would start to fall when they end up losing most weeks because the competition is tougher than the domestic sides. I can see issues with marketing the league to the TV audiences too. I don't think the Champions League is anywhere near as 'in demand' in the UK (or around the world) and the Premier League is.

    It is just conceivable that the European Super League could end up paying its teams less than the Premier League teams receive. Imaging Stoke outbidding Arsenal for a player!

    Ultimately I think the goal of these big clubs will be to just increase the differential between the top placed team and those below it. I believe that this season Chelsea received c. £150m finishing top and Sunderland received c. £97m finishing bottom. Make that bigger, I.e. Chelsea get £200m or £225m and Sunderland get £50m or £25m and that will ensure that the top sides stay in the Premier League, and those at the bottom will just have to be grateful for the £25m or they can drop down into the Championship and get £6m.

    It also doesn't matter to the established Premier League sides if those at the bottom go bust (or Administration) as they will fall down the leagues like Portsmouth and be replaced by a Bournemouth or a Huddersfield who will be super grateful for their new TV windfall and who's fans will be happy 'Just to be there' until they also overspend and fall out of the league to be replace by someone else.

    There will never be a shortage of greedy Chairman that think that having their club in the Premier League is worth seeing dozens of other clubs face extinction - and they will never realise that it will be their club 'next'!
  • The few superstars in football - Messi, Ronaldo and the like are probably worth the money. (In massively over-priced polyester*, replica shirt sales to the gullible at least.) But take out the few genuinely "world class" players and you're left with a lot of dross. Paul Pogba? Really? It's all built on hype. And the public, in the terms of Sky subscriptions, pay for it, for the moment. But saturation TV coverage might switch on boredom more quickly than Sky imagine. But at least we'll have the opportunity to laugh at Rooney for one more season. (Just how much are Everton paying Wayne to walk around the pitch and trap the ball further than I can kick it?)

    It will all end in tears. It's just a question of what comes first: English football's bubble bursting; Russia invading Ukraine; North Korea sending us all to hell in a handcart; food running out; or, according to Stephen Hawking, Donald Trump turning the Earth's atmosphere into a replica of that of Venus.

    * And pre-used recycled polyester at that; not even new stuff!
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