⚽️ “Follow that lemming!” A detailed and worrying report on the parlous financial state of men’s football in England. If these numbers were reported for the banking industry, construction, retail etc, I suspect we’d be seeing urgent Govt intervention to prevent systemic failure. It is SO important that the women’s football game learns some quick lessons from all this and finds its own sustainable path, rather than copy & pasting the warped economics of the existing football madhouse. Perhaps the most pressing area to look at and regulate in the women’s game is the market distortion caused by the top WSL teams receiving big handouts from their men’s PL clubs. The levels of subsidy cannot be matched by the vast majority of women’s teams, creating a breakaway group of outliers, undermining competition. But crucially, the handouts themselves create a reliance on the men’s club who can (and historically have) suddenly turn off the tap.
LCP have released today our second annual report on the financial sustainability of men's football in the English football pyramid - covering all 92 clubs in the top four divisions. A detailed summary of our findings can be found here: https://lnkd.in/eFgtDG7J. If you'd like to receive a full version of the report, including details of where all 92 teams in the Premier League and the EFL lie in LCP's innovative Sustainability Matrix (measuring both financial sustainability and sporting success), leave a comment below or send me a DM on LinkedIn. The findings that particularly jumped out at me when working on the analysis with colleagues in LCP's Financial Analysis team were: ⚽ Men’s football in England is booming, with increased revenues and investor interest across the pyramid, fuelled in part at lower league levels by the "Wrexham effect" ⚽ It is also, however, becoming significantly riskier, with higher losses and greater reliance across the pyramid on wealthy owners to fund them. ⚽ There seems to be a risk of the game overheating, with the “gambling for promotion” culture spreading down from the Championship into Leagues One and Two, where losses and debt levels have increased significantly. ⚽ As a result, across the pyramid, clubs which operate sustainably are finding it increasingly difficult to compete for promotion – and are often pushed by their fans to spend more. ⚽ There are potential systemic risks resulting from clubs owing money to other clubs, with a "house of cards" collapse a distinct possibility if there were ever to be a shock to the system ⚽ The ability and willingness of individual owners to continue financing ongoing losses is currently crucial to the survival of many clubs - which are important members of their local communities. Over the next year the landscape of football governance is set for significant change as we will see the establishment, through the Football Governance Bill, of the Independent Football Regulator (IFR). This will be a pivotal step when it comes to safeguarding the financial health of men’s football clubs. We recommend in our report two key features for the new regulatory environment: 💡 A strengthened Owners and Directors Test, which includes looking a both the ability and the legal obligation of owners to fund losses in downside scenarios (eg relegation) 💡 An improved financial flow system that incentives and rewards clubs for "good behaviour" Finally, big thanks to my colleagues in the LCP Financial Analysis team who did lots of valuable work analysing club accounts and preparing the report, John Parnis England, Tom Gillespie and George Bassnett. And also to Ashley Mould in our Sport Analytics team, and Alex Stewart from outside LCP, who brought lots of value to the report from his knowledge and experience working in the football industry. #footballfinance #footballanalytics #lcp
Partner, LCP - Head of Sport Analytics and Advisory practice
8moThanks for reposting Charlie - and I can't agree more with your comments about the position of the women's game.