Championship clubs depend on their owners

The authoritative Swiss Ramble has now turned his attention to the cash flow of Championship clubs over the last decade. Admittedly there are some gaps in the evidence but no one would disagree when he says, 'The main conclusion is clear, namely the Championship is a division where most clubs require significant financing from their owners, largely to cover operating losses and fund player purchases, as they strive to reach the (wealthier) heights of the Premier League.'

Despite the challenges in the Championship, some clubs have still managed to increase their bank balance over the last 10 years, led by Aston Villa £21m, Wigan £13m, Cardiff City £9m and (maybe surprisingly) Preston North End £8m.

Despite high levels of debt in the Championship, much is provided by owners interest-free with no scheduled repayment dates. In this way, loan and interest payments are only £281m, compared to £1.7 bln in the Premier League.

Thanks to the generosity of owner Tony Bloom, Brighton and Hove Albion have invested a hefty £159m in the Amex Stadium and a new training facility. The next highest capital expenditure is Bristol City £55m for the development at Ashton Gate.

The largest amount spent on funding losses by far was QPR £176m, despite two seasons in the top flight in this period. They are followed by Nottingham Forest £122m, Brighton £109m and Blackburn Rovers £95m.

£1.2 bln of the £2.8 bln Championship cash has been needed to simply cover operating losses, while £734m has been spent on purchasing players (net of sales), £551m on capital expenditure, largely stadium and training ground, and just £281m on loan and interest payments. None of the Premier League clubs had to allocate money to cover operating losses.

Again in contrast to the Premier League, some Championship clubs have player sales as a source of funds (net of player purchases), though this activity is not exactly a money-spinner with the largest earnings at Ipswich Town £13m, Leeds United £9m Blackburn Rovers £11m, Brentford FC £4m.

The scale of owner investment in the Championship is breathtaking with three clubs 'in and around' £300m: Aston Villa £310m, QPR £299m and Brighton £279m. Other clubs over £100m include: Cardiff City £182m, Fulham £178m, and Derby County £156m.

Only seven Championship clubs had positive operating cash flow, led by Norwich City £90m, Newcastle United £70m, Wolves £13m and Wigan £12m. The Swiss Ramble notes, 'The picture would have been even bleaker if we had only analysed the seasons spent in the Championship, as the top four clubs all spent time in the top flight.'

19 of the 24 Championship clubs have sourced between 70% and 100% of their funds from owner financing. In fact, no fewer than 10 clubs got at least 90% of their cash from their owners.

So an incredible 87% of Championship clubs’ cash came from owner financing with just 7% from operating activities. This is in stark contrast to the Premier League with 54% from operations and 42% from owners.