The Political Economy of Football V2

Football finance guru Kieran Maguire reckons that Rotherham United are one of the best run clubs in the EFL, but they will nevertheless be hit hard by relegation to League Two,  It's only recently that they were in te Championship and the financial gap between the two divisions has become wider:  https://www.rotherhamadvertiser.co.uk/sport/football/rotherham-united/words-of-caution-for-rotherham-united-from-one-of-footballs-top-finance-voices-8545580

The Swiss Ramble takes a look at the finances of Rotherham United.  This is a summary of some of his main points.   Much more detail is available on his Substack page. While the frequent transition between England’s second and third tiers is probably a source of frustration, this review of the finances will underline the challenge Rotherham face in bridging the gap and competing with much better resourced clubs. Rotherham United have been owned by Tony Stewart, the founder of ASD Lighting, since 2008, when he rescued the Millers from a crisis. The club had twice entered administration, being deducted a total of 37 points as a result of their various financial issues, while there were also problems with the stadium. As a self-made businessman from Sheffield, Stewart has adopted a strategy of sensible financial management, which makes a lot of sense, given the club’s troubled history, but makes life difficult in a world where many owners seem happy to fund constant lo...

It wouldn’t be unfair to say that Rotherham has had its economic and social challenges since the decline of the steel industry.   It is very much in the shadow of a more vibrant Sheffield. ‘Rotherham has been ranked the unhappiest place to live in England according to a survey. Rightmove asked 21,000 people to complete a study based on their overall happiness with their area and what makes a place feel like home. Out of 221 cities, towns and villages surveyed, Rotherham came bottom of the list.’ Many years back after seeing Charlton play an early kick off at Huddersfield, some of us went over to see Brighton play at Millmoor, Rotherham United’s then ground.    I thought it was a typical old style Third Division North ground, atmospheric but not 21 st century. Now the Millers have a smart new stadium, the New York Stadium (actually named after a local area), but they keep yo yoing between the Championship and League One, although the training ground is a swa...

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 wou...

Rotherham’s 21/22 accounts show revenue down 19% due to relegation previous season. Wages were down 19% due to relegation clauses.  Losses up 94% to £1.7m.  Player signings £825k. Player sales £1,225k. Rotherham owe £2.2m to EFL for COVID loan used to pay PAYE during lockdown which is interest free. Rotherham could receive up to £600k in add ons from player sales. Club earns £1m in sponsorship from owner Tony Stewart company and pays £1m in rent to another of his companies. Broadcasting money previous (lockdown impacted) season was 65% of total. This was down by £5m despite parachute payments but will rise again in 22/23 due to return to Championship.

Football finance guru Kieran Maguire has been commenting on the financial implications of the end of the League One season.    Last season clubs in the division were losing £1.9 million a week between them in a pre-Covid economy, he states. Maguire adds: ' If lower league clubs are to survive post Covid they will need to cut costs. For those clubs who do show details (frustratingly too many are opaque on this) on average 83% of income went on wages in League One. UEFA have a 70% 'red line'.' Congratulations to my local EFL club Coventry City on winning the League One championship.  Hopefully, they can return to the Ricoh. I can understand the pain felt by clubs who might have won a play off place, not least Sunderland, but congratulations also to Rotherham, a well-run club.

Preston move from a profit of £2.6m in 2018 to a loss of £14.2m in 2018/2019 due to no significant player sales and big increase in wages, reports Kieran Maguire of the PriceofFootball. Preston player spend of £4.2m was lower than average in division of £14m but figures distorted by some clubs at the top of table. Preston owed Trevor Hemmings £43 million interest free at 30 June 2019. Since the end of 2018/19 the Preston owner has lent club a further £4.1 million. Preston have the third lowest matchday revenue in Championship. For every £1 paid in wages Preston fans paid 18 pence via matchday revenues. Preston had the seventh lowest wage bill in Championship but the sixth highest wage to income ratio. Combining wages and transfer fee amortisation costs meant that Preston spent £166 on player costs for every £100 of income in 2018/19. Preston average weekly wage £9,156, compared to average for the division of £16,014. For clubs to break even average wage would have to be £4,424 a we...

After three years of losses Rotherham made a £1m operating profit last season, reports Kieran Maguire of the Price of Football. The Championship average was a loss of £24.2 million or £465,000. Rotherham income was up to a record £13.9 million from £10m on the back of higher broadcast revenues following promotion to the Championship. Of course, they were relegated to League One. This led to some savings as Championship bonuses did not have to be paid. The club feels 'that the players could have done no more to secure their cherished Championship status. Match day income in the Championship was up by 17 per cent to £2.6m. Average attendances increased by 16 per cent from 8,514 to 9,885. Season tickets sales were up by 8 per cent. The big increase was in 'central distributions' from the Premier League and Championship, up 233 per cent at £7.5m. Commercial income was £3m. Rotherham paid £56 in wages for every £100 of income in a division where the average is £107. A...