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.

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

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl

The Political Economy of Football V2

Search This Blog