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Abstract
This article presents an analysis of the financial performance of English football since the creation of the Premier League in 1992. It demonstrates that despite large increases in revenue, in particular from broadcasting, football clubs in the Premier League and Football League have year‐on‐year collectively failed to post a pre‐tax profit; there have been many examples of clubs in the Football League having to enter into administration; and debt levels have risen. The article argues that, in their denial that the financial crisis in the wider economy will seriously impact the economic health of English Football, many of the industry’s leading figures share many of the same hugely optimistic assumptions of those who seek to play down the significance of climate change. In doing so they overlook the ‘inconvenient truth’ coined by former US Vice‐President Al Gore in the context of the climate change debate, that English football is not immune from the impact of wider financial instability. The article questions whether, given the current economic climate, a failure to implement pro‐active regulatory action to address the problem of chronic unprofitability and unsustainable debt will lead to a major financial crisis in English football.
Notes
1. Gore, An Inconvenient Truth.
2. Deloitte, Annual Review of Football Finance, 34.
3. Ibid., 35.
4. Bryant, ‘English Football is £3bn in Debt, Warns FA Chairman’.
5. BBC Sport, ‘FA Chief Fears £3bn “Club Debts”’.
6. BBC Sport, ‘Burnham Demands Football Reforms’.
7. Conn, D. ‘Burnham Poses Seven Questions for Football’s Authorities’.
8. Gore, An Inconvenient Truth.
9. Hamil, ‘A Whole New Ball Game’, 26.
10. Deloitte, Annual Review of Football Finance.
11. Ibid., 24.
12. Ibid., 59, appendices, 5.
13. Ibid., appendices, 15.
14. BBC News, ‘Football Clubs Owe Tax Millions’.
15. Daniel, ‘Only Sweet Nothings From Sugar’.
16. Szymanski, and Kuypers, Winners & Losers, 291–4. This text provides an excellent, highly accessible introduction to sports economics for non‐economists.
17. Deloitte, Annual Review of Football Finance, appendices, 37.
18. For a useful summary of how the NFL is organized see Staudohar, P. ‘Governance in the National Football League’. In Governance and Competition in Professional Sports Leagues, ed. P. Rodriguez, S. Kesanne, and J. Garcia. Oviedo, Spain: University of Oviedo, 2007.
19. For a more detailed analysis of Manchester United’s business strategy and the challenges it faces see Hamil, ‘Manchester United’. See Deloitte, Annual Review of Football Finance, 59–60, appendices 4–5, for data on Manchester United’s financial performance in 2006/2007.
20. Deloitte, Annual Review of Football Finance, 60.
21. BBC Sport, ‘Liverpool Stadium Plans on Hold’.
22. Rich, ‘Liverpool Leave It Late to Secure a Place in the Next Round of the Champions League’.
23. Conn, ‘Abramovich Digs Deep Again to Cover Chelsea Losses’.
24. Winter, ‘Soap Opera Involving Thaksin Shinawatra and Manchester City Damaging Our Game’.
25. Conn, ‘Hill‐Wood’.
26. BBC Sport, ‘Gretna Relinquish League Status’.
27. For details of the new supporter‐owned Gretna, see http://www.gretnasupporterssociety.co.uk
28. BBC Sport, ‘SFA Chief Wants No More Gretnas’.
29. PriceWaterhouseCoopers, Season 2006/2007 19th Annual Review of Scottish Football, 13.
30. Traynor, ‘Osama Bin Laden Could Buy Out a Scottish Club and Our Ruling Bodies Wouldn’t Bat an Eyelid’.
31. Rotherham United Football Club, Move to Don Valley Stadium.
32. Website of Leyton Orient Supporters Trust http://www.leytonorientfanstrust.com/index.asp. Accessed March 3, 2009.
33. Deloitte, Annual Review of Football Finance, 57.
34. Pickard, ‘Football Clubs Urged to Sell Off Stadiums’.
35. Cass Business School, Rival Football Clubs Should Share Grounds to Ease Financial Problems.
36. Conn, ‘Fear of Bust has Clubs Looking for a Salary Ceiling’.
37. Conn, ‘Financial Nightmare has Disrupted Dream of Club Ownership’.
38. Deloitte Annual Review of Football Finance, appendices, 4–5.
39. Deloitte, Annual Review of Football Finance, 59.
40. Taylor, ‘League’s Boom Could Turn to Bust Says Southgate’.
41. Ibid.
42. Walters and Hamil, All Party Parliamentary Football Group.
43. The Football Association, ‘Keeping Football Together’, March 12, 2004. http://www.thefa.com/TheFA/NewsFromTheFA/Postings/2004/03/Olsson_UEFA.htm. Accessed March 3, 2009.