Just how ‘insane’ is the world Pompey are now part of?
Chief executive Andy
Cullen has talked about the ‘insanity’ of the Championship, the league Pompey are returning to in 2024-25.
And director Eric Eisner has been equally scathing of a ‘system where everybody in the second-highest division is losing money, every single year.’
So, how ‘insane’ is the Championship? Let’s take a look…
2013-14 – A decade ago, Championship clubs’ wages to revenue percentage was 106%. To put that in more simplistic terms, for every £1 a second tier club received – from all sources of income – they paid out £1.06p in wages.
2014-15 – Championship clubs’ wage costs rose by 4% to £541m. Despite a reduction in the overall wages/ revenue ratio, clubs spent almost as much on wages as they generated in revenue. According to football finance experts Deloitte, that was ‘an unsustainable level of spending without the support of owner funding’.
Wage costs were greater than total revenue at nine clubs, with AFC Bournemouth (234%), Nottingham Forest (186%) and Brentford (164%) having the largest wages/revenue ratios. Only two clubs reported a ratio below 70%.
Compare that to the Premier League, where Burnley’s wages/revenue ratio of 37% was the lowest in the Premier League since Manchester United recorded 33% in 1998-99.
2015-16 – The aggregate wage costs of Championship clubs again exceeded total revenue, resulting in a wages/revenue ratio of 101% the third time in four seasons that the wages/revenue ratio had exceeded 100%.
Championship clubs’ wages/revenue ratios ranged from 59% (Leeds United) to 173% (Nottingham Forest). Only three clubs had a ratio below 70%, and wage costs were greater than total revenue at 13 Championship clubs.
2016-17 – The wages as a percentage of turnover dropped slightly to 99 per cent. Newcastle
United’s wage costs alone (£112m – yes, £112m in the second division!) made up a staggering 16% of the Championship total, with the club spending 82% more than the second highest spender, Aston Villa.
Excluding Newcastle, the other 23 clubs recorded a combined wages/revenue ratio of 95%
2017-18 – The wages as percentage of turnover increased again, up to 106%.
Aston Villa had the highest wage costs in the Championship in 2017/18 of £73m, with Burton ( just under £10m) the lowest. Villa’s wage bill was the third highest ever recorded in
the Championship, behind Newcastle’s £112m in 2016-17 and QPR’S £75m in 2013-14.
2018/19 – The wages as percentage of turnover rose once more, to 107%.
The average wage spend per club was £35m, up from £33m.
Villa again had the highest wage cost with £95m, more than 12 times that of Rotherham (£7.8m)
Only five clubs reported wage to revenue ratios of less than 100%. Of these clubs, three – Cardiff, Swansea and Huddersfield – were in receipt of Premier League parachute payments.
The other two clubs (Barnsley and Charlton) were involved in a relegation battle with Barnsley just avoiding relegation on the last day and the Addicks going down.
2019-20 – Wages as a percentage of turnover shot up to 120%, though the season ended early due to the pandemic.
For the first time since 2003-04, wage costs of Championship clubs fell compared with the previous year (down 3% to £813m), primarily due to a different club mix (consistent clubs’ wages increased 4% to £35m on average per club).
2020-21 – Wages as a percentage of turnover was up again, to 125%.
But because the majority of games were played behind closed doors, due to the pandemic and subsequent stadium capacity restrictions, clubs’ revenues dropped considerably. Matchday revenues, for example, were only £16m, compared to £166m in 201819.
2021-22 – Second tier clubs’ spending on wages exceeded revenue for a fifth successive season, this time at 108%.
Nottingham Forest, who won promotion via the playoffs, spent almost 200 per cent more on wages than they earned in revenue – £58.6m compared to £29.3m. A classic case of splashing the cash to chase the dream.
Clubs that participated in the Championship in both 2020-21 and 2021-22 reported operating losses of £322m, an increase of 17 per cent.
Operating losses reported by Championship clubs overall decreased by 10% to £361m in 2021-22, an average loss of £15m per club.
So yes, insanity is a very good word to use!