The value contrast between Brentford and United

Academic analysis has shown that wage spending is highly correlated with a club’s finishing position over time (with a statistical R² (variance explained) of 90%), as first seen in the seminal “Soccernomics” by Simon Kuper and Stefan Szyminski. Even in a single season (2021/21), we can observe a fairly linear relationship between wages and league position, especially in the bottom half of the table.

Clubs like West Ham, Brighton and Brentford have performed compared to their wage bill. In contras is the extent of Manchester United’s under-performance, as they only finished sixth in the league, despite enjoying the highest wages in England’s top flight.

Manchester United’s £384m wage bill was not only the highest in the 2021/22 Premier League, but actually the highest ever reported in England. Three other clubs paid more than £300m in wages, namely Liverpool £366m, Manchester City £354m and Chelsea £340m.

There was then a big gap of more than £100m to the two North London clubs, Arsenal £212m and Tottenham £209m, so in terms of wages people should really talk about a Big Four, as opposed to a Big Six.

Three clubs had a wage bill below £100m, including two that were relegated (Burnley £92m and Watford £79m). However, lowest of all were Brentford, who got more bang for their buck than any other Premier Club, as they finished in a very impressive 13th place despite wages of just £68m.

The Premier League

By and large, Premier League clubs enjoy wage bills a fair bit higher than their counterparts in the other European leagues, though the two highest clubs overall are actually from France (PSG) and Spain (Real Madrid).

The strength of the Premier League is evident when looking at wage bills, where each English club is paid £180m on average. This was a substantial £83m more than La Liga £97m, while being over twice as much as all the other leagues: the Bundesliga £89m, Serie A £84m and Ligue 1 £75m.

Looking at the figures in England’s second tier, we can see that the top three clubs also reported pretty high wages: Fulham £90m, Bournemouth £61m and Nottingham Forest £59m. This would have placed all of them in the list of Europe’s top 60 clubs with Fulham taking an impressive 38th position. In fact, seven Championship clubs would have been in Europe’s top 80, boosted by a combination of Premier League parachute payments and substantial promotion bonuses.

The leading English clubs generally have pretty good wages to turnover ratios, e.g. four of them are 62% or below, while Bayern Munich also have consistently low figures (53% in 2021/22).

Wage bills are by no means the only driver of performance for clubs, as other factors clearly also play a part, such as good coaching, tactics, team spirit or plain good luck, but it is clearly very important.

In other words, money on its own cannot buy success, but it sure does go a long way in the world of football. The growing financial domination of the Premier League has allowed it to spend much more on wages than other major leagues, thereby recruiting the best players and coaches, which helps explain its recent success in European competitions.

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful. Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy). However, Everton fans have had plenty to moan about on and off the pitch. Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...

The Political Economy of Football V2

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