Accountancy firm BDO reports that global interest in domestic game continues to grow with record-breaking revenues of £6.4bn in the Premier League in 2024, rising club valuations and a surge in interest in women’s football. Clubs face persistent high costs, with wages representing 63% of revenues in the Premier League and 93% in the Championship, and over 90% expect to incur pre-tax losses in 2025, with the nearly the same proportion stating that they will require shareholder funding in the near future
Player transfers hit record highs in 2025, but separate
analysis from Twenty First Group highlights that the correlation between spend
and on-field results is surprisingly low (just 57%, and a mere 35% when you
exclude ‘superclubs’)
Despite financial challenges, investor interest in clubs
remains high with two-thirds of clubs saying they have received an approach
from prospective investors in the last 12 months There is widening financial disparity both
between and within the English professional leagues
Valuations for English professional football clubs are
continuing to rise amid growing global interest in the domestic game. But,
sustained trading losses, spiralling transfer fees and wage costs, and widening
financial disparities between and within leagues are raising fears that
football’s trajectory is not financially sustainable, according to a new report
from accountancy and business advisory firm BDO.
BDO’s report, entitled Defying Gravity: The
Ever-expanding Football Universe, found that despite very positive indicators
such as the record breaking revenues of £6.4bn in the English Premier League in
2024, the surging interest in women’s football and the rise in club valuations,
90% of clubs across the top four English professional leagues are expecting to
report pre-tax trading losses for 2025 (noting that this is after including
profits from player trading).
In a survey of club finance directors across the top four
professional English leagues, more than half said the financial health of their
clubs ‘could be better, but is not bad’, while over a quarter flagged that
their finances ‘were in need of attention’, with responses to this question
showing a worsening trend in recent years.
However, these responses may even be overly optimistic as
nearly 90% of clubs also stated that they would need additional shareholder
funding in the near future, with just under half recognising this may require
some form of shareholder dilution, due to minority or joint venture investment.
Sourcing external debt has become the norm, particularly in
the Premier League and Championship, with clubs using transfer payable financing,
advancement of broadcast distributions and transfer receivables with
traditional loans now also becoming more commonplace.
Despite these financial challenges, appetite from
prospective investors remains strong, with over two thirds of clubs surveyed saying
they had received approaches within the last 12 months.
Ian Clayden, Partner
and Head of Professional Sports at BDO said:
“By some measures, the English professional game is in rude
health – with record breaking revenues in the Premier League, new commercial
opportunities for women’s football and sustained high levels of interest from
international and institutional investors.
“But, below the surface, clubs are facing significant
financial pressures, due in large part to the persistently high costs of wages
as a proportion of overall revenues, and borrowing more. Ever-increasing
player transfer fees may well be masking this trend. In any other industry,
this combination of elevated costs, sustained losses and high borrowing would
be ringing alarm bells.
“Yet interest in the domestic game continues to defy
gravity. The question is whether the football universe will continue to expand
infinitely, or whether at some point we may see a contraction, reversal or even
a big crash.”
The report also highlights the growing financial disparities
- both between the leagues and also within the leagues - and the distorting
effect this has on the prospects for clubs being promoted or relegated.
Analysis conducted by BDO found that the average number of
points achieved by the three clubs promoted to the Premier League has been on a
steady decline since 1996 – and for the past two successive seasons all three
clubs promoted to the Premier League have gone straight back down in the
following season.
However, the reverse is true for clubs relegated to the
Championship where there has been a gradual increase in the points haul by
relegated clubs. These trends reflect the disparity in the cost of competition
(wages and transfer fees) between the two leagues, as well as the distorting
impact that parachute payments make for clubs leaving the Premier League.
While player transfers broke records in 2025, separate
analysis from Twenty First Group examines the relationship between player
spending and on-field performance, finding that the correlation between spend
and results is just 57%, and a mere 35% when you exclude the ‘superclubs’.
Twenty First Group looked at how well a team spends its money, with clubs with
high spending efficiency able to outperform an average club on the same budget
by well over 10 points per season and by as many as 20 points versus a poorly
run club.
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