The Championship has become the division of financial strain
and distress. The majority of its 24 clubs are now conditioned to accept
loss-making. Money spent on wages consistently — and comfortably — exceeds the
collective revenue each year.
Fourteen Championship clubs have already shown they
committed more to wages than they earned in total revenue for 2021-22, painting
the latest dysfunctional picture of life in the Championship. Kieran Maguire,
finance academic and host of the Price of Football podcast, has calculated the
operational losses for last season to average out at a remarkable £476,000
($594,000) a week for every Championship club.
Fulham, Bournemouth and Nottingham Forest, the three clubs
eventually promoted last season, collectively lost £158million on their roads
to the Premier League.
The EFL accepts life cannot go on like this in its marquee
division. It continues to push for a revised distribution model in its
arrangements with the Premier League; one that would increase solidarity
payments to Championship clubs and narrow that yawning gulf between rich and
poor. It would also prefer to see parachute payments — the guaranteed payments
Championship clubs receive for their first three years after relegation from
the Premier League — abolished.
If West Brom are unable to win promotion through the
Championship play-offs next month, next season will be their first without
Premier League money, either through membership of the elite or in parachute
payments, since 2003-04. Though their last accounts showed a pre-tax profit of
£5.4million, they added there was “a material uncertainty” over the future of the
club if cash cannot be raised.
A host of clubs, including Stoke City, Bristol
City, Preston, Blackburn and Cardiff City, are ultimately reliant on the
financial support of their owners, who all oversaw losses of £11million or more
last season. Turn off that tap, and the ship can soon go down.
Rotherham United are a Championship club unwilling to follow
the modern convention of heavy loss-making. The last time they were here, in
2020-21, they fought with a wage bill of £8.2million, which equated to roughly
two-thirds of their turnover. The eventual pre-tax loss of £800,000 would have
been avoided had it not been a season played behind closed doors.
Rotherham’s fate was relegation back to League One in the
spring of 2021 but an immediate promotion, as runners-up behind Wigan, sees
them back punching above their weight once more.
There are high hopes this season will end with Championship
survival after six years spent yo-yoing between divisions but owner Tony
Stewart has done nothing differently. “I take risks but I don’t gamble,” says
Stewart, a local businessman who first took control of Rotherham in 2008. “You
have to run it as if you were running a business. If you don’t put your own
pocket in jeopardy then you’re putting the club in jeopardy.
That refusal to entertain heavy losses has made life
difficult for Rotherham in the Championship. They cannot compete with
neighbours of the size of Sheffield United, now back on their way to the
Premier League but who have received £80million in parachute payments in the
last two years. Rotherham even lost players to League One Sheffield Wednesday
last summer after their contract offers were trumped.
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