Sports Finance

Insights 2024
Football Investment Survey
Sports Finance Insights 2024
Football Investment Survey

Welcome to the Sports Finance Insights 2024. For two

decades, we have contributed to the football industry by
publishing the Football Finance Directors Survey, layering our Contents
own financial insights over the data and opinions of financial
leaders from clubs across the domestic professional football A word from Ian Clayden 3
leagues. Recognising that the way we all consume financial
information and thought leadership has changed, we will now Key metrics and headlines 4
focus on shorter, more frequent, and more topical insights Financial health of clubs 5
throughout the year. With no fixed agenda, our ‘annual
campaign’ will give us the freedom to comment on What are clubs’ investment priorities? 9
live and emerging issues across football and
How are clubs affording this increased level of spending? 15
the wider Professional Sports Sector. We
hope you enjoy our first Sports Finance The owners’ dilemma: funding losses and shifting strategies 17
Insight, kicking off with the Football
Investment Survey. How does all this fit in with Financial Fair Play? 20

And what about expanded governance requirements? 21

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

A word from Ian Clayden,

Partner, Head of Professional Sports, BDO

competition from the 2024/25 season, taking control In doing so, for the first time, we have taken a closer Keeping with the theme of headline grabbing, 1. Promotion up the football pyramid
from the FA, and the UK government has endorsed look at a “wages-to-points” league table where we not only have we concluded that the mid-tier clubs (ideally to the EPL) then exit. The ‘hold’
the recommendations of the independent review into see Brentford, Brighton and Bournemouth topping are setting the standard for return on investment in for subsequent ‘commercial enhancement’
the domestic women’s game led by Karen Carney. the 2023 table. We look forward to having this as player wages, but we resolutely conclude that EPL strategy is too long term given:
Amidst all of this, we take our annual deep dive into a rolling data set for future reference as we observe players are not, I repeat, NOT, over-paid. At least i. the already expended investment period
the opportunities and challenges that clubs within how easy, or otherwise, it is to transition between not based on club revenue metrics! The same is to achieve promotion; and
different leagues face, and take a look at how their models following promotion or relegation, and how not said of FLC players. So, a single player breaking
ii. the need to leave something on the table
operating models might be evolving to fit the ever well understood these models are by those making the £1m a week wage threshold, appears not only
for prospective buyers (the classic private
changing financial and regulatory landscape. investment decisions. inevitable, but commercial (for the few clubs that
equity (PE) model).
The quest to remain competitive also plays a key can afford it).
In light of record-breaking revenues, we have had We would not expect the PE investor to fall
the opportunity to question when and if clubs will role in decisions related to infrastructure investment. Player spend comes in two parts of course: wages for the temptations that often trap the profile
transition from principally loss-making ventures to In order not to divert funds away from on-the-pitch and transfers. And whilst wages in the EPL are building investor.
profit making businesses. In fact, with sustainability activities, infrastructure spend needs to come from proportionate to club revenues, transfer fees are now
new or existing investors (shareholders) rather than set apart. The transfer market has become distorted 2. Commercial enhancement of established
It is no surprise that recent headlines around being such an overpowering mantra, we question EPL clubs then exit. But the question here
whether actual accounting profits are even relevant. from operating cash flows. by the levels of transfer fees being paid by EPL clubs.
men’s football have been about financial matters! Whilst much of this is a is zero-sum-game within is who the investor sells to once commercial
Manchester United announced record revenues, We also take some time to share our insights on This creates global investment opportunities where optimisation is achieved. Investors may need to
what now appears to be three distinct operating we are seeing increasingly creative and diverse the EPL itself, where players are selected from lower
only to be swiftly outdone by Manchester City; leagues this creates a very welcome redistribution seek strategic minority investments or sell back
Everton and Nottingham Forest were docked points models throughout the football hierarchy: structures put in place. to the super rich profile builder.
of wealth, the correction of which would actually be
for breaches of the Premier League’s Profitability damaging to English Football League (EFL) clubs. Much of the findings of this report point to the
& Sustainability (P&S) Rules, and all the while power and dominance of the ‘elite’ clubs, the Big 6.
the English Premier League (EPL) broke its own Big 6 (Manchester United, Other EPL Football League When it comes to ownership, I noted above that
clubs are not run for profit, but this does not mean However, there are more than enough reference
UK record by negotiating a new domestic TV rights Manchester City, Liverpool, Championship (FLC) points to market dynamics that dispel the myth
deal, with Sky and TNT Sports paying a combined Chelsea, Arsenal, and and below that they are not run with a view to achieving a
significant return. Institutional investors represent that this dominance is impenetrable. There are
£6.7bn for 2025-28: an increase on the current Tottenham Hotspur) numerous challenger clubs looking to step up and,
£4.9bn 3-year deal. a challenge to super rich, profile-building ownership
in this regard, as they are all about achieving a with a new breed of potential backers behind them,
By way of contrast, in the women’s game the Maximise spending on Optimise player trading to Utilise all available losses and return on their investment. They have a long-term there will be more to follow.
recent focus has been on control and governance. players in search of those outperform the competition in player trading opportunities in plan and an exit strategy. Media rights fees have gone up, transfer fees will
Clubs in the Women’s Super League and Women’s all-important marginal gains getting the most bang for their a gamble to break through to go up, wages will go up (subject to spending caps),
Championship have voted to form a club-owned at the highest level. buck (and more recently in most the riches of the EPL. Institutional investors, particularly from the
US, have two chances to achieve their return, the law of diminishing returns will prevail, and the
cases, offset trading losses). EPL and the FLC will become more competitive
depending on the nature of their target club:
with more clubs vying for the top spots. Maybe!

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Key metrics and headlines

59%
of clubs we surveyed have
been subject to informal or
formal investment (M&A)
inquiries in the last year.
How does player spend strategy
What are the key investment priorities for clubs?
differ across the leagues?
1 Big 6
Maximise spending on players
The balancing act
between type of investment
2
within allowable loss parameters

Optimise (rather than maximise) and competitiveness.

3 Player spend
Other
EPL
player trading principally to be as
competitive as possible
Academy Reserves Investor
Commercial/other real development/expansion FLC, Utilise allowable losses and and loans funding
estate development FL1 have a net gain on player trading
& FL2 strategy to invest in a strong squad

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Financial health of clubs

In our last Football Finance 2.0 Profitability versus financial health How would you rate your club’s current financial position? Source: BDO Survey Results

report, we noted how COVID-19 Based on our latest survey, the overall Very healthy Could be better but not bad In need of attention
had exacerbated the divergence financial health of clubs has improved slightly,
with fewer respondents having finances “in need
in financial health between EPL
2023 2022 2021
of attention”, down to 18% from 30% in our
club finances and the rest of the 2022 survey. However, almost one-fifth of clubs
football pyramid. Fast forward surveyed having finances in need of attention
is still higher than we would like to see.
to this year, and there is still an
That said, looking closely, there are some
obvious gulf between the EPL and 14% 18% 18% 21% 22%
surprising results within each league. It is 32% 29%
the lower leagues both in terms particularly interesting to see a reduction in 33% 33%
37%
of financial stability and growth “very healthy” EPL clubs (down from 71% 50%
to 50%), given the relative financial resources 27%
opportunities. FLC and Football 43% 71%
available to them. However, the largest, and
League 1 and Football League 2 most surprising, year-on-year change has been 55%
43%
50%
(FL1 & FL2) clubs who perceive a reduction in FLC clubs reporting their finances 42% 33%
as being “in need of attention”, reducing to 11% 50% 57%
their finances as “healthy” are 56%
from 55% last year, despite the alarming level of
not necessarily trading profitably, FY23 losses and a widespread expectation that 55%
50%
and there is an increasing losses will increase in FY24 - see opposite. 43%
36%
divergence between the largest 29% 25%
30% 27% 28%
18% 14%
(so called “Big 6”) EPL clubs 11%
and the rest of the EPL.
EPL FLC FL1 & FL2 All Clubs EPL FLC FL1 & FL2 All Clubs EPL FLC FL1 & FL2 All Clubs

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Financial health of clubs

EPL, FLC and FL1 & FL2 How do you expect your profitability When we compared clubs’ views on financial health with
2022/23 profit before tax to change in 2023/24 versus 2022/23? their profitability for FY22/23 and their expectations for the
current year, it is clear that the definition of “healthy” is open to
clubs’ own interpretations. In the EPL, the number of profitable
5% 5% Profit before tax: >£50m More profitable clubs in 2022/23 as per financial statements (profit before tax)
5% 14% Profit before tax: £10m - £50m 14% Around the same was 3 (vs 5 in 2021/22) despite 50% of survey responses for
10% the EPL reporting they are “very healthy”. We note that trading
5% Profit before tax: £2m - £10m Less profitable losses do not necessarily equate to poor health in the eyes
5%
Profit before tax: £0m - £2m
14%
of FLC and FL1 & FL2 clubs either. 89% of surveyed FLC clubs
45% described themselves as having finances that are either “could
20% Loss before tax: £0m - £2m
29%
60%
be better, but not bad” or “very healthy”, albeit the vast majority
25% Loss before tax: £2m - £10m of FLC clubs incurred significant losses in 2022/23 - 65% of
Loss before tax: £10m - £50m clubs reported a loss before tax of between £10m and £50m in
Loss before tax: >£50m their 2022/23 annual report. 71% of FL1 & FL2 clubs surveyed
expected to report a loss before tax in 2022/23, with increased
losses expected next year, whilst 57% of FL1 & FL2 clubs surveyed
described themselves as having finances that are either “could be
better, but not bad” or “very healthy”. Clearly, for football clubs,
33%
72% financial health is assessed on more than just bottom-line results.
65%
57% 20% The loss-making model seen across the football pyramid is
55%
not a new trend, and why would it be given the financial rewards
associated with EPL promotion/retention and a P&S structure
that allows losses (within pre-defined parameters)? Arguably,
22% being profitable is competitively disadvantageous.
20%
Across the spectrum, clubs look to maximise the quality of their
playing squad whilst managing financial performance and cash
EPL FLC FL1 & FL2 EPL FLC FL1 & FL2 flows to stay within P&S limits. Clubs who give their first team
expected* manager the best opportunities, while successfully balancing their
use of shareholder funding, debt factoring and player trading,
*Based on FL1 & FL2 club expectations per survey responses without exposing the club’s finances to undue risk, may be right
Source: Club financial statements - 2022/23 season and to consider themselves ”healthy”, despite their accounting losses.
BDO Survey Results Source: BDO Survey Results These topics are considered in more detail later.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Financial health of clubs

The increasing gulf between Revenue and profit before tax (min, max and average): Big 6 vs Rest of EPL vs FLC Source: Club financial statements 2022/23 season
the Big 6 and the rest of the EPL
The disparity in revenue and profit potential between Big 6 Rest of EPL FLC
the EPL and lower leagues is both inevitable and part
of football’s natural equilibrium. However, this does £900m
not mean that the level of disparity will not continue Average revenue mix for 22/23 season
to be a point of contention. In fact, there is an £800m
increasing divergence between the so called Big 6 EPL £700m Broadcasting
clubs (comprising Manchester United, Manchester £600m
£700m £500m Commercial
City, Liverpool, Chelsea, Arsenal, and Tottenham
£400m Matchday
Hotspur) and the rest of the EPL. £300m
£600m
£200m Other
The analysis opposite shows for the 2022/23
£100m
season (being the latest publicly available statutory £500m -
accounts) the minimum, maximum and average
Big 6 Rest of EPL
revenue and profit before tax for the Big 6, rest £400m
of EPL, and FLC, including only clubs that were in
the respective leagues that year.
£300m
The minimum 2022/23 revenue for the Big 6
was £467m, which was more than £210m higher £200m
than the next highest club. Average Big 6 revenue
(£608m) was a massive £423m more than the £100m
average for the rest of the EPL (£185m).
The chart also highlights the difference in scale -
and breadth of Big 6 revenues, as they benefit from
global fan engagement strategies, additional income (£100m)
streams, lucrative commercial partnerships and
multi-club/academy investment models, which give (£200m)
them a significant financial competitive advantage.
Revenue Profit Revenue Profit Revenue Profit

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Financial health of clubs

Most of the time, this translates into on-field Average revenue in the FLC generally lags
competitiveness due to the sums they are able to more than £150m behind non-Big 6 EPL clubs.
consistently and sustainably invest in coaching The obvious difference lies in contracted
staff and players (investment priorities are broadcasting (media rights) distributions,
discussed in the following section). This creates but this is compounded by FLC clubs typically
a virtuous circle as better on-field performance not being able to attract the scale and breadth
allows for further revenue growth, such as higher of commercial revenues of even the bottom half
EPL merit distributions (based on league position) of their tier 1 counterparts. Simple EPL ratchets
and Champions League qualification/income. in sponsorship contracts make this inevitable.
Another key takeaway from the above chart is Clubs in different positions, and with different
that whilst there is a significant divergence in revenue generating capacity, are forced to
revenues between the different groups of clubs, operate different business models. These
there is a much greater similarity in the profit can be broadly summarised as follows:
situation. All clubs are seeking to max out their
allowable losses in order to optimise their squads.
Player Spend Strategy Goal

Big 6 Maximise spending on players To win EPL and/or qualify for Europe, to obtain
within allowable loss parameters. UEFA revenues and maximise domestic and
international commercial revenues.

Other EPL Optimise (rather than maximise) Avoid relegation or steadily improve league
player trading principally to be as position with a view to sustainability.
competitive as possible.

FLC Utilise allowable losses and have To compete for promotion/avoid relegation.
a net gain on player trading strategy
to invest in a strong squad.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’ investment priorities?

The continuing divergence of wealth rears its head in the contrasting investment
priorities throughout the domestic football pyramid, with the desire to reach or
maintain the riches of EPL membership the primary driver.
The varying investment priorities are not just defined by the financial health of a club, but also by its ownership
model, i.e. the priorities of the owners. Based on the latest survey responses, it is clear that the allure of the EPL,
and success within the EPL and within Europe, has meant player spend (wages and transfers) is the top priority
for all EPL and most FLC clubs, who see it as the key determinant of EPL promotion and/or retention.

Investment priorities (top 3) Source: BDO Survey Results

100% Player spend

100%
Commercial and other
real estate development
80%
Investment into other sports
78% (e.g. American football, basketball, eSports)
67% Strategic alliances with overseas Clubs
60%
60% Investment into other commercial ventures
56% (e.g. hotels)
50% 50% 50% 50%
Stadium expansion
40%
40% 40% Academy development/expansion
33% 33% 33% Investment into women’s football
20% 22%
20% 20% 20%
17% 17% 17%
0% 0% 11%
0%

EPL FLC FL1 & FL2

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’

investment
priorities?

Player transfer spend

In recent times we have seen an In the FLC, expenditure increased by 40% from 2021/22 to 2022/23, and 102% from 2022/23 to 2023/24.
unprecedented level of player transfer spend However, whilst FLC club transfer expenditure has increased year-on-year, the league as a whole, and
by domestic football clubs. This is despite, the majority of clubs within, have received a net cash inflow from player trading. A lot of this is driven by
only 29% of EPL clubs and 9% of FLC clubs recently relegated teams selling expensive players.
expecting their transfer budget for 2022/23 to
increase (as per our latest survey), alongside
a consensus view that liquidity in the transfer EPL transfer window total spend Source: Transfermarkt
market was at best unchanged or worsening.
The most recent respondents (who completed Season Summer* Winter* Total*
our survey ahead of the Summer 2023 transfer
window) could be forgiven for underestimating 2020/21 £1,327m £101m £1,428m
the impact of Saudi investment in football
2021/22 £1,165m £288m £1,453m
(which we discuss later) and/or the level
of spending from the likes of Chelsea 2022/23 £1,913m £743m £2,656m
after the takeover led by Todd Boehly.
2023/24 £2,414m £114m £2,528m
From 2021/22 to 2022/23, transfer
expenditure for all EPL clubs combined *Converted from EUR to GBP using average exchange rate
increased by 80%, and the summer 2023
(in the 2023/24 season) window spend of FLC transfer window net spend analysis Source: Transfermarkt
£2.4bn was a record for the EPL, an increase of
over 25% from summer 2022. Since the arrival *Converted from EUR
of new owners, Chelsea have led transfer Season Expenditure* Income* to GBP using average
spending in the EPL, spending over £900m exchange rate
2020/21 £78m £360m
since the summer 2022 transfer window.
2021/22 £76m £127m

2022/23 £108m £213m

2023/24 £218m £503m

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’ investment priorities?

Player wages In FL1 & FL2, player contracts are typically such as AFC Wrexham and Salford City, who have So what does this mean in terms of are not earning a disproportionate amount of
shorter-term or season-long deals and clubs have the financial backing to invest more heavily in wages within the different leagues? their club’s available funds, whereas players in the
100% of FLC clubs surveyed were operating at Financial Fair Play (FFP) Salary Cost Management squads to super-charge their competitive advantage. FLC are. This in turn means that EPL players are
a loss for the 2022/23 season, with two-thirds Protocol restrictions to comply with. As a result, As reported above, clubs in the EPL and FLC are, arguably not being overpaid, despite the absolute
reporting a wages/turnover ratio above 70%, and In the EPL, 50% of clubs surveyed reported a on the whole, spending all of their available
clubs are continuously having to flex squads with level of wages. In fact, it is FLC players that are
55% reporting a ratio over 100%. There is simply wages/turnover ratio below 70%, with none revenues. The lower wage ratio in the EPL compared
restricted player budgets and are more likely to being overpaid (relative to what is affordable for
a base level of wage spend required in order to reporting a ratio over 100%. That said, as EPL to the FLC means that EPL clubs are spending a
focus on alternative player acquisition methods their clubs).
be competitive in the FLC (and more in order to revenues are significantly higher than the lower higher proportion of their revenues elsewhere.
such as free transfers, loan deals or graduation of
achieve promotion) that is currently not supported leagues, and with EPL clubs’ propensity to spend all These statistics also show that EPL clubs are
youth players. However, there are an increasing The first insight from this is, that whilst EPL
by revenues. the incremental revenue they earn, this has fuelled spending proportionately less on wages than they
number of disrupter clubs that have broader wages are often headline grabbing, EPL players
significant wage inflation in the EPL. are on transfer fees. This may be because there is
commercial revenues and access to larger resources,
a different market dynamic between the EPL clubs
and their players, compared with the dynamic in
What is your current wages to turnover ratio (2023/24 season)? Source: BDO Survey Results other leagues. The dynamic between clubs have
many factors, but include increased prices when
selling to perceived rivals (either domestic or
in Europe).
11% 14% 14% In our last report we highlighted the growing trend
17%
Less than 50%
for high profile players to run down their contracts,
often in a bid to earn moves to other clubs on
33% 11% 50% - 60% lucrative terms. Whilst this is still happening, it
61% - 70% seems to have been usurped as a headline by the
record-breaking levels of transfer spend by clubs
EPL FLC FL1 & FL2
71% - 80%
17% 50% and the wages available to players moving to clubs
81% - 90%
11% in Saudi Arabia.
29%
91% - 100%
101% - 105%
43%
More than 110%
11%
17%
22%

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’ investment priorities?

Wage spending power of the EPL 22/23 wage spend and ranking Source: Club financial statements - 2022/23 season and EPL 22/23 table
The analysis highlights
Big 6 versus the rest of the EPL the following key trends
Club Final points 22/23 22/23 22/23 22/23 22/23 Wages
Whilst EPL clubs are spending proportionately
total 22/23 wages wages ranking wages per point wages per point revenue %
less on wages than FLC clubs, the absolute spend Big 6 wages are significantly higher
season (£'m) (1-20) (£'m) ranking (1-20) (£'m) revenue
on wages is still far higher. Furthermore, within than the rest of the EPL. The Big 6 are
the EPL, there is a staggering difference between Manchester City 89 536.1 1 6.0 19 877.1 61% compelled to spend at these levels
wage spend at the Big 6 clubs and some of the Arsenal 84 204.6 6 2.4 6 466.7 44% in order to compete with each other,
smaller clubs. Whilst the Big 6 have more available with the Champions League being
Manchester United 75 291.4 4 3.9 14 648.4 45%
funding to spend on wages, are they using this another key motivating factor.
additional resource efficiently and effectively? Newcastle United 71 164.8 9 2.3 4 250.3 66%
Outside of a few outliers, the variation
Opposite, we have analysed the points earned Liverpool 67 330.0 3 4.9 17 593.8 56%
in wages for non-Big 6 EPL clubs is
in the EPL for every pound spent on wages
Brighton and Hove Albion 62 112.2 17 1.8 2 204.5 55% relatively small, and so success is largely
in the 2022/23 season.
Aston Villa 61 168.9 8 2.8 8 217.7 78% dependent on the ability of a club to
invest in the right players and coaching
Tottenham Hotspur 60 218.9 5 3.6 12 549.6 40%
staff. This supports the current sentiment
Brentford 59 86.2 20 1.5 1 166.5 52% that there are 10-12 EPL clubs that
Fulham 52 121.5 14 2.3 5 182.3 67% cannot rule out relegation at the start of
each season.
Crystal Palace 45 114.2 16 2.5 7 180.1 63%
Chelsea 44 352.4 2 8.0 20 512.5 69% Three of the Big 6 were in the bottom
five in terms of most £m spent per
Wolverhampton Wanderers 41 123.8 13 3.0 10 168.6 73%
point earned in the EPL, with Brentford,
West Ham United 40 118.8 15 3.0 9 236.7 50% Brighton and Bournemouth achieving the
Bournemouth 39 87.8 19 2.3 3 141.0 62% best league result based on their wage
spend. In 2022/23, four of the Big 6 clubs
Nottingham Forest 38 129.8 11 3.4 11 154.9 84%
finished in the top 6 places in the EPL.
Everton 36 138.4 10 3.8 13 172.2 80%
Chelsea and Manchester City had
Leicester City 34 172.0 7 5.1 18 177.3 97%
wages to turnover ratios in excess of
Leeds United 31 129.4 12 4.2 15 189.7 68% 60%, but the rest of the Big 6 spent at
Southampton 25 106.7 18 4.3 16 145.5 73% more sustainable levels, below 60%
of revenue.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’ investment priorities?

So what has changed? Academy development

The mid-tier clubs have become smarter in the One of the other noticeable factors over With inflated player transfer costs and wages, Player wage inflation has meant that the same
transfer markets because they have needed recent seasons has been the signing of big competitive advantage can be gained by clubs wage bill affords clubs an ever-shrinking squad
to be. Brighton has attracted a lot of plaudits name players and the friction between with larger scouting networks and academies, size over time, and the combination of packed
for a business model based on unearthing “club signings” and players that the manager multi-club/academy strategies, and more fixture lists with longer, more intensive football
talent and selling players for significant profits. actually wants. The Board or Chair may want effective talent selection tools (for example, matches (now with more injury time) has
But this means there is a continuous need to sign players for commercial reasons, and Brentford and Brighton are regularly cited for placed increased emphasis on academies to
to find new players to replace those sold. then the manager is forced into playing a player their data-driven strategies for targeting and supplement first team squads. This is in addition
who may not be optimal for the style of play. developing players and coaching staff). to those clubs (mainly in the EPL and FLC) who
In 2022/23, as shown on the previous page,
are successfully running academies as profit
Arsenal was the only Big 6 club that was in Speaking of the manager, they may be the single Academy development features in the top
centres, using player trading profits to offset
the top 10 on a wages per point basis. Both most important person at the football club. three investment priorities for 40% of EPL
trading losses elsewhere in the business.
Arsenal and Tottenham Hotspur have wages Jurgen Klopp at Liverpool and Pep Guardiola clubs and 67% of FLC clubs, second only
significantly lower than the rest of the Big 6, at at Manchester City are the two longest serving to player spend in the latter case.
under £220m. Both clubs borrowed heavily to managers in the EPL, having been appointed in
build new stadiums, which would have restricted 2015 and 2016 respectively. Guardiola in particular
their subsequent spending power. But given has brought huge, sustained success to Manchester
the increased competitiveness of the mid-tier City, winning the EPL in 5 of the 7 seasons he has
clubs, this approach may be under threat. been in charge.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

What are clubs’ investment priorities?

Stadium expansion
Maximising stadium income remains a key priority top six is 71% larger than the remaining fourteen
across all leagues. Half of all respondents had it clubs (34,000). As shown, the big differentiator in
in their top four priorities, with half of EPL clubs terms of revenue between the Big 6 and the rest
surveyed having it as their number one priority. of the EPL relates to commercial revenue, meaning increases to come as more
this is an area of targeted growth for most clubs. lucrative commercial and
For EPL teams, this is mainly driven by
It is therefore commercial revenue which provides media rights deals are
increasing capacity and maximising commercial
the best return on investment. The size and appeal signed. Our recent report
revenues, such as recent stadium developments
of the stadium is linked to this, as bigger and better “Catching the rising tide –
by Manchester City, Liverpool, Tottenham Women’s Football
stadiums give the perception of a bigger fan base investing in women’s sport”
Hotspur, Everton and Fulham. The concept The women’s 2023 World Cup in
which in turn attracts higher sponsorship deals, showcased opportunities that
of “Americanisation” of stadiums has since Australia was the latest milestone in the
including the sale of stadium naming rights. exist in women’s sport and how to
been coined, whereby clubs are incorporating continued growth of women’s football globally. take advantage of these opportunities.
elements of American sports venues to heighten Outside of the EPL, stadium investment is In the UK, the final peaked at 14.8m viewers,
fan experience and augment top-line revenue typically more focused on capex investment Outside of investment from within clubs,
with 21.2m watching TV coverage across
generation via premium corporate and commercial and enhancement works. Unless owners have increased financial resources are being directed
the tournament.
opportunities (including non-matchday services deep pockets, lower league clubs are having to to the women’s game via improved sponsorship
and events). It is no surprise that at just over prioritise key stadium upgrades, such as safety This growing interest has been both a result and and commercial deals, and there is also increasing
58,000 fans, the average stadium capacity of the and regulatory/compliance-related improvements. driver of domestic clubs placing greater focus on investor interest in the women’s game.
women’s football as an investment priority.
London City Lionesses, the only fully independent
While only 25% of respondents across all leagues women’s only football club in England’s top two
reported investment in women’s football as a top professional leagues, was acquired in December
three priority, it is clear that it is more of a focus 2023 by American businesswoman Michelle Kang.
for clubs than in prior years (albeit skewed more Kang is also the owner of the National Women’s
towards the top two divisions given there is a level Soccer League’s Washington Spirit, and majority
of investment required to establish and grow a owner of OL Feminine in France. A statement from
professional women’s football team). Importantly, Kang and the London City Lionesses said that Kang
this has also supported more lucrative professional is aiming to build the “preeminent female sports
playing contracts for women footballers. organization in the world” and that “this deal is
Whilst there has been progress in terms of a continuation of Kang’s mission to create a level
contracts and sponsorship, we expect further playing field between men and women in football.”

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

How are clubs affording this increased level of spending?

As discussed earlier, despite clubs Third party debt factoring

finding ways to broaden revenues – It has been a long time since we have seen more In both cases, the lender – who these days is
and our domestic leagues having traditional forms of debt in football; lending to typically one of a handful of EPL-approved
loss-making businesses where there is also risk of specialists, as opposed to high street banks –
a significant competitive advantage relegation and taking security on football stadia are benefits from the funding being an advancement of
over other European leagues – not attractive options for several obvious reasons. a predictable, contracted income source. Given the
many clubs are still unable to be scale of investment required by clubs, and the
Instead, debt factoring has become by far the most
significant sums of money tied to EPL distributions
sustainably profitable (or cash common avenue of obtaining third-party finance
and transfer fees, this is mutually attractive to both
and tends to be used for working capital and player
generative from pre-player trading lenders and clubs.
spend, rather than major investment purposes.
operating activities). This typically takes either of the following forms: Naturally, these terms mean that outside of the
Therefore, where increased financial support is X Advanced broadcasting distributions: a club EPL this funding is largely only available if a club
required - with traditional sources of debt funding is given advanced financing in lieu of future, is in receipt of EPL parachute payments or has
still rarely an option for clubs - the answer most predictable, central funds due from the EPL sold a player to an EPL club (or club in receipt of
commonly lies in the following sources: (including parachute payments) parachute payments). This gives EPL clubs yet
another advantage over the rest of the English
X Funding from owners (see later) X Transfer receivable financing: a club is
football pyramid.
X Third party debt factoring given advance funding secured on deferred
(advancement of broadcasting transfer fees that are due from a buying club
distributions or transfer receivables) (typically those in receipt of central funds from
the EPL). Half of our EPL respondents this year
X Cash flows from player trading.
highlighted this funding strategy as a near
term requirement (shown later).

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

Profit vs net cash flows: EPL player trading Source: Club financial statements 2022/23 season

Net cash flows from player trading Profit on disposal of player registrations

How are clubs affording this increased level of spending?

0m
0m

0m
0m

0m

0m

0m
0m
m
40
60

30
50

20

.0
10

0
0
£0

£2
£1
-£

-£

-£

-£

-£

-£
Manchester City

Arsenal

Manchester United
Cash flows from player trading
Newcastle United
As discussed earlier, clubs are increasingly reliant up-front cost less three years of £2m amortisation) In some cases, where clubs have FFP profitability
on player trading profits to both offset losses and resulting in a profit of £16m. If the player was in mind, it is easy to see why they may choose Liverpool
comply with FFP regulations. However, it is worth sold for only £2m, then a loss of £2m would to hold on to players rather than sell them and
noting that profits are not the same as cash flows, be recognised. crystallise a loss (without immediate cash flows). Brighton and Hove Albion
particularly when player trading is not combined However, the cash flow impact is purely dependant The trend from the table opposite further suggests Aston Villa
with transfer receivable factoring. To highlight the on the timing of instalments. Traditionally, that player trading windfalls (‘profits on disposals
difference, we can walk through the accounting. most high value player acquisitions (relative to of player registrations’) are used at an operational Tottenham Hotspur
Player registrations (transfers in) are initially the club size) were paid for in two or three equal level, for increased squad investment or to balance
recorded as assets on the balance sheet, (typically annual) instalments. However, longer the books. Brentford
valued based on the full amounts paid and payable term instalment profiles for purchases,
selling players for up-front cash (intuitively, a lower As both player trading and third-party debt Fulham
and not expenses. As the purchase itself does
amount than if by instalments), or accelerating factoring appear to be largely used for operational
not immediately appear in the profit and loss
the receipt-profile via factoring (but incurring purposes, when it comes to infrastructure Crystal Palace
account (P&L), it does not matter if the buying
an interest charge on these amounts of course), development, there seem to be three choices:
club pays up front or in instalments. The impact
on the P&L is the future amortisation of this asset are strategies that can be used to accelerate the Chelsea
X Use existing reserves, though there is an
availability of cash resources.
over the length of the contract (assuming no opportunity cost here as this will prevent
Wolverhampton Wanderers
modifications thereafter). Therefore, if a club signs The opposite graph shows the levels of profit investment in the playing squad and impact
a player for £10m on a five-year contract, there is on player trading versus the net cash flows short term competitiveness West Ham United
a £2m amortisation charge per annum. This is one from player trading based on EPL club 2022/23 X Seek traditional loans, if available, though
of the key contributors to the recent trend of EPL statutory accounts. If you take the example of interest costs may again prevent investment Bournemouth
clubs offering increasingly long contract terms. Manchester City, they made a profit on player in the playing squad
trading of c£130m, but had negative cash flows Nottingham Forest
Once the player is sold, the profit recognised is the from player trading of c£96m. In fact, in virtually X Owners/shareholders provide
difference between the consideration receivable all cases profits on player trading were more than additional investment.
Everton
(again, regardless of whether that payment is offset by ongoing installments on players and
in instalments) and the remaining unamortised reinvestment in new players, resulting in significant Leicester City
cost of the player’s registration. So, if after the net cash outflows from player trading. This is likely
third year the player above is sold for £20m, his to be largely a result of the increasing amount of Leeds United
or her amortised cost would be £4m, (i.e. £10m player spend required over recent seasons.
Southampton

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

The owners’ dilemma: funding losses and shifting strategies

77% of clubs told us they would clubs respectively have reported The message is clear: either these owners believe Alongside this, some owners are exploring The sector continues to attract an array of
in the long-term potential of their clubs or they are alternative avenues with mergers and acquisitions investors, including the usual high net worth
report a financial loss in the 22/23 a loss before tax in their 2022/23 aware that not investing risks relegation and loss (M&A) activity, including obtaining partial and profile-building investors from across the
season, including 50% of EPL clubs, financial statements. Regardless of of shareholder value. Either way, they are willing investment. In these cases, owners are seeking US, Europe and the Middle East (discussed later).
maxing out their allowable losses to fans’ views on their club’s owners to back their club, with 64% of clubs expecting to capital to protect their investments for the However, increasingly, English football is subject
require additional financing from existing owners. medium to long term, raising new capital to fund to institutional interest from US private equity
be as competitive as possible within it is clear that in many cases, they Of all clubs surveyed, only 18% expected to have infrastructure projects and squad development, and consortiums, these days often including other
their respective leagues. In reality, are repeatedly stepping in to fill no requirement for additional debt or equity and/or to re-finance existing debt. As discussed sports franchise investors and the occasional
85% and 95% of EPL and FLC the financial shortfalls. finance in the short term. above, third party loans or equity investment are sportsperson/celebrity backer. This has driven a
the only ways to fund infrastructure investment flurry of M&A activity across domestic clubs since
without putting short-term competitiveness the pandemic.
Do you currently require or envisage requiring in the near future the following types of external financing? Source: BDO Survey Results
at risk.
It remains to be seen whether the proliferation
The price of passion: of private equity and consortium ownership
EPL FLC FL1 & FL2 All clubs models will result in shorter ownership periods,
every club has its price
but surely it must when these investors enter their
100% It is often said in football circles that every club investments with an exit strategy. The difference
90% is for sale at the right price. Based on this year’s here is that sporting and/or commercial success
89% survey, 59% of clubs have been subject to formal will trigger an exit for institutional investors
80%
or informal investment inquiries in the past year, whereas for traditional investors it discourages
70% which echoes our predictions from prior years it (ironically, a lack of success tends to discourage
60% 64% that M&A activity would increase as club trading it too as traditional investors hold out for a better
57% normalised post COVID-19. price in the future).
50%
50%
40% The landscape of M&A in English football is
43%
dynamic and ever evolving. Sports investment has
30% 33% 33% historically been seen as a long-term endeavour,
20% 22% 22% 23% with ever-enduring brand loyalty and business
18% s 17% 17% 18% models largely insulated from the vagaries of
10% 11%
14%
0% 9% 0% 0% 0% 0% 5% 0% inflation, interest rates and debt markets that
0% characterise more “traditional” investments.
Existing New minority Third party debt – Third party debt - Overdraft facility None of the above
shareholder investment shareholder/joint venture loan transfer receivable
(debt or equity) equity investment financing

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

The owners’ dilemma: funding losses and shifting strategies

Football club valuations are typically Football club average valuation revenue multiples to 2023 Source: Publicly available information
benchmarked on revenue multiples,
and – as shown in the chart opposite –
we are seeing a continuous increase in revenue
multiples (and therefore valuations).
Increased M&A demand and climbing revenue
multiples cannot be attributed to just one
factor, but instead are generally owing to Deal Type: Silver Lake Deal Type: Gamechanger Deal Type: 777 Majority
a combination of drivers: Minority Investment Majority Acquisition Acquisition
Multiple: 7.9x Multiple: 3.3x Multiple: 3.2x*
X Increased global visibility and demand
for content
X Predictable and growing recurrent Deal Type: Consortium
income streams 2.10 Majority Acquisition
Deal Type: ALK Capital Multiple: 5.2x
X Arguably more recession-proof 2.05 Majority Acquisition
business models Deal Type: KSE Multiple: 1.2x
2.00 Minority Investment 2.02x
X Many clubs being underinvested and primed Deal Type: Trillion Trophy 2.01x
for commercial expertise (which can be 1.95 Multiple: 4.5x 1.99x
Majority Investment 1.96x
capitalised on by the right investor) Multiple: 4.2x 1.95x
1.90
X A mix effect, with some of the more recent
1.85
M&A transactions involving larger EPL clubs
which tend to attract disproportionately 1.80 1.83x 1.84x
high multiples. 1.80x
1.75
The visibility of the EPL has always been there 1.75x 1.75x
1.70
but, more so now than ever, clubs outside of
the EPL are becoming increasingly attractive 1.65
opportunities, particularly for US investors. 1.60
1.55
Pre 2015 2015 2016 2017 2018 2019 2020 2021 2022 2023
*Deal announced but not complete per media sources at the date of this publication

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

The owners’ dilemma: funding losses and shifting strategies

The American dream in English football Nationality of owners - Diverse buyer profiles:
Reported
as at the start of the 23/24 season the tapestry of ownership Player Club
Interest in English football from across the Atlantic wage (£)
continues to surge, accounting for 85% of inquiries. Source: Publicly available information The mosaic of buyers in English football is
American investors discern the value proposition diverse, with an increased focus on sovereign Cristiano Ronaldo Al Nassr 3.4m p/w
UK US Rest of Europe
in English football, thanks to large amounts of US wealth funds including from the Kingdom of
private equity money available to invest post- Middle East Asia Other Neymar Al Hilal 1.7m p/w
Saudi Arabia (KSA).
COVID, the lower entry costs in English football
KSA is already the dominant footballing force Karim Benzema Al-Ittihad 1.6m p/w
in comparison to US sports franchises, favourable
5% 8% in the Middle East and Asia, and with a national
exchange rates, and the potential for new revenue Kylian Mbappe PSG 1.2m p/w
streams through the application of the US brand- 5% strategy to diversify its economy away from oil
25% 6% dependency, KSA intends to utilise football as a
and-media driven model in untapped markets. 2% Lionel Messi Inter Miami 750k p/w
15% vehicle to enact this diversification in the sports
4%
The UK sport model is different to the US in which and leisure space. To achieve this, the Public Sadio Mane Al Nassr 650k p/w
the major sports leagues consist of franchises, Investment Fund (PIF), has begun investing
5% 13%
for example in Major League Soccer (MLS), heavily into buying the biggest names, as well Riyad Mahrez Al-Ahli 580k p/w
and the valuation of these is less dependent 17% as taking ownership of KSA’s four largest clubs
on individual club situations e.g. relegation and the EPL’s Newcastle United. N'Golo Kante Al-Ittihad 500k p/w
and promotion. There are also fewer franchises
available, for example there are 29 MLS franchises, Currently targeting mostly older, established Kalidou Koulibaly Al Hilal 500k p/w
compared to 92 teams in the EPL and EFL. players, KSA offers European clubs an avenue
45% to comply with stringent FFP rules with the Harry Kane Bayern Munich 400k p/w
25%
Evidently, the American approach thrives on the added benefit of selling players on high wages.
strength of brand power. Historically, this has Liverpool, for example, sold Jordan Henderson Source: Radio Times
led to a notable level of interest from the US in 67% and Fabinho to KSA clubs in the most recent
top-tier football clubs. The pursuit of commercial summer transfer window – enabling them to use
opportunities has even led to a change in this the proceeds (and available salary budget) to
trend, with clubs in lower leagues like Wrexham, invest in younger talent.
Ipswich, Birmingham City and West Brom 33%
coming into focus. This dynamic shift towards However, it’s not just the unwanted; the lucrative
25%
exploring commercial potential is reshaping contracts on offer to the world’s best has led to
the football landscape, making previously seven of the world’s ten highest-paid players to
overlooked clubs more appealing to US investors. plying their trade in KSA (see opposite). Only two
EPL FLC FL1 & FL2 of the top ten currently play in Europe.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

How does all this fit in with Financial Fair Play?

Whilst all clubs that responded to our survey say that they will meet FFP profit and In the past, some may have concluded
that clubs are selling players as a desperate,
sustainability requirements for the 2022/23 season and the 2023/24 season, there is last minute action to comply with FFP rules.
an increased reliance on net positive income from player trading in order to comply, However, this should no longer be considered the
with 23% of clubs saying that they will require profitable player trading in 2023/24. case. Trading of players is now considered by clubs
to be a regular income stream and generating
As to be expected, the biggest requirement for player trading income is in the FLC. profits or losses from player trading is just a part of
Do you comply with financal Do you expect to comply with financal club operations, rather than being seen as capital
or asset transactions. In reality, this is a crucial,
fair play/profitability and sustainability fair play/profitability and sustainability
yet normal, part of financial performance and
rules for the period 2022/23? rules for the period 2023/24?
capital management for football clubs.
Source: BDO Survey Results Source: BDO Survey Results As has been the case since the regulations
5% 23% were introduced, a number of clubs have
Yes Yes provided constructive feedback about the aims
and operations of the regulations. The most
common issues include:
X Clubs across all leagues (particularly FLC
and FL1 & FL2) say that the rules do not Thoughts on FFP rules
actually target sustainability
X A general complaint that the rules are not
effectively or transparently enforced. “They neither address profitability nor sustainability. In the Championship very
few clubs ever record a profit. The overriding issue for Championship clubs is
The most common changes that clubs would like
to see are: solvency so we need financial rules that treat that as the number one threat.
X Control over debt levels, either third party The secondary issue is player wages and we need financial rules that stop clubs/
debt or shareholder debt, although many clubs owners from over-stretching themselves but also allow clubs to be ambitious
believe that equity investment should not be and invest in the football pyramid via transfer fees if they can sensibly and
restricted if made up front
demonstrably afford to do so.”
95% 77% X Control over player wages – this needs to be
Yes, but has required net positive Yes, but will require net positive within the means of the club. FLC Club
income from player trading income from player trading.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

And what about expanded governance requirements?

Why is it needed and The Government believes it will ensure Recent updates on the regulation What does it involve?
what is being proposed? a stronger foundation for the continued
growth and success of English football, As of March 2024, the Football Governance Under the new regulations, all clubs in the top five leagues of English football would
The White Paper by the Department for so that the top, mid and bottom levels down Bill has been introduced in Parliament need to be licensed by the regulator to ensure that clubs are accountable, transparent,
Culture, Media and Sports (DCMS) sets out to the grassroots can all thrive alongside. as it paves the way for the creation of and inclusive in their operations. To do so, they would need to meet the following proposed
the Government’s view that reform is needed an Independent Football Regulator (IFR) conditions, which should be the focus for clubs looking to prepare for the future:
to protect the legacy of English football. The primary priorities for the regulator are for English Football, ensuring fairness,
currently planned to be: transparency, and accountability in the 1. Financial resilience: clubs to: 3. New test for prospective
The White Paper highlighted an unacceptably beautiful game. Supporting documents
X Club sustainability: the financial owners and directors:
high and growing risk of financial failure for legislation, which introduces an X Demonstrate good basic financial practices
sustainability of individual clubs
among football clubs, as well as a lack independent regulator for professional X Clubs to undergo a fitness and propriety test to
X Systemic stability: the overall stability X Have appropriate financial resources to meet
of governance to limit or scrutinise the clubs in the English football pyramid, ensure integrity of owners and directors
of the football pyramid cash flows and financial shocks
powers of club owners, a lack of resilience are available here.
X Protect the core assets of the club – such as X Enhanced due diligence over source of
to financial shocks, and an inability of the X Cultural heritage: protecting the
We will continue to share our views on this the stadium. owners wealth
market to regulate itself, both financially heritage of football clubs that matter
and for the wider social impact of football most to fans. as there are further developments around X A requirement for robust financial plans
clubs on the communities that they serve. the IFR and new rules are introduced. of owners.
This review recommended that the
The Government has proposed the interconnected issues associated with
introduction of a new independent regulator women’s football be uncovered through a 2. Corporate governance: 4. Minimum standard for fan engagement:
for English football clubs across the top separate dedicated review. Subsequently,
X Clubs will be required to apply a new code X Clubs to have a framework in place to regularly
five men’s football leagues (EPL, FLC, FL1 a recent review of women’s football chaired
of governance and report on how they meet a representative group of fans to discuss
& FL2, and the National League). The new by Karen Carney, highlighted four areas
have applied it, to improve transparency key matters at the club
regulator will be a standalone body, separate where minimum standards across the game
from Government and the existing football and accountability X Framework to discuss other issues of interest
need to be lifted, to protect and preserve
authorities and, as set out in the White Paper, women’s football at such a pivotal moment X The code will be applied proportionally, to the supporters
its fundamental strategic purpose will be to in its history: based on the size, league, and complexity X Give fans veto over changes to badge &
ensure that English football is sustainable of a club’s business. home shirt colours and strong protection
X Corporate structures
and resilient, for the benefit of fans and to club names.
the local communities that clubs serve. X Professional environment
X Fan experience
X Grassroots.

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 A word from Key metrics Financial What are clubs’ How are clubs affording this The owners’ dilemma: funding How does all this fit in And what about expanded
Ian Clayden and headlines health of clubs investment priorities? increased level of spending? losses and shifting strategies with Financial Fair Play? governance requirements?

And what about expanded governance requirements?

What are clubs’ views? Thoughts on governance rules Club’s assesment of regulation aspects with most impact
Some of our respondents’ specific views are shared opposite. Financial regulation/management and fair play Corporate governance and administration
Of the clubs surveyed, 64% responded that they were very confident in their ability to Fan engagement and club heritage Others
comply with new regulation requirements (without external support), with all others
“There will just be a greater admin 60%
stating that they are “somewhat confident but may need assistance in specific areas”.
50% 57%
While there may be a period of adjustment for some clubs whilst the requirements are burden for Clubs to demonstrate 40%
being embedded, none of the clubs surveyed responded negatively to the proposals. governance rather than actually 30%
20%
applying these principles.” 10% 14% 18%
Clubs’ ability to comply with the new regulation Source: BDO Survey Results 11%
0%
FLC Club Source: BDO Survey Results
Perhaps unsurprisingly, 57% of club responses reflected that “financial regulation/
36% 64%
management and fair play” would have the most significant impact on them as opposed to
Somewhat confident, Very confident,
corporate governance and administration, fan engagement and club heritage, and others.
need external have the necessary “Needs to be truly independent of
assistance resources in huse As we have illustrated earlier, football is a cash flow driven business and therefore financial
the Football Association, Premier regulation would undoubtedly require a change in many clubs’ operational processes, impacting
League and EFL.” company structuring, material transactions, leveraging debt and financial transparency,
reporting: all of which are currently informal and inconsistent across leagues and clubs alike.
FLC Club
Holding football clubs to account, like corporate entities, is fundamental to achieving
financial and operational stability which in turn protects both fan and cultural interests.
Strong corporate governance application will be central to preserve the integrity of
“With any new regulations, the game as it continues to receive such significant global financial investment and
loopholes and unforeseen interest. Therefore, in our view, in the best interests of fans, football, and investors,
regulatory change should be embraced. However, there will no doubt be a period
consequences will need to be
of adjustment for clubs and regulators where the effectiveness of, and approach to,
carefully reviewed.” regulation changes will need to be continually evaluated and flexed accordingly.
League One Club A consistent challenge to previous layers of regulation has been that these have not
been sufficiently well constructed, have had too many loopholes, have not been
enforced appropriately, and have not necessarily hit their core purpose.

FOOTBALL INVESTMENT SURVEY | SPORTS FINANCE INSIGHTS 2024 22

BDO contributors and contacts

Ian Clayden Simon Hall Sandi Dosanjh Sarah Hilary Harry Stoakes
Head of Professional Sport Deal Advisory - Transaction Services Digital Digital Deal Advisory - M&A
Partner Partner Partner Partner Partner

ian.clayden@bdo.co.uk simon.hall@bdo.co.uk sandi.dosanjh@bdo.co.uk sarah.hillary@bdo.co.uk harry.stoakes@bdo.co.uk

+44 (0)792 191 8459 +44 (0)797 619 8836 +44 (0)784 156 9636 +44 (0)794 905 0953 +44 (0)7785 576325
LinkedIn profile LinkedIn profile LinkedIn profile LinkedIn profile LinkedIn profile

Neville Side Shawn Healy Nick Millward Luke Leney Tom Urquhart
Business Restructuring Employment Tax Transaction Tax Deal Advisory - Transaction Services Deal Advisory - M&A
Partner Principal Director Director Director

neville.side@bdo.co.uk shawn.healy@bdo.co.uk Nick.Millward@bdo.co.uk luke.leney@bdo.co.uk tom.i.urquhart@bdo.co.uk

+44 (0)750 783 3701 +44 (0)779 271 4954 +44 (0) 7870 554 808 +44 (0)779 424 3827 +44(0)796 623 7943
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Toby Ankers Pryank Setia Rebecca Page Bradley Alis Shubham Gandhi
Deal Advisory - Transaction Services Digital Deal Advisory - Transaction Services Deal Advisory - Transaction Services Business Assurance
Associate Director Senior Manager Senior Manager Senior Manager Assistant Manager

toby.ankers@bdo.co.uk pryank.setia@bdo.co.uk rebecca.page@bdo.co.uk bradley.alis@bdo.co.uk shubham.gandhi@bdo.co.uk

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