One of the oldest phrases in football was coined by Celtic legend Jock Stein: “Football without fans is nothing.” Amidst the uncertainty of the year-long global pandemic, we have become accustomed to seeing empty stadiums and hearing fake crowd noise. Clearly the lack of attendance at matches is unsustainable for fans, but is it for clubs?
Anfield at full capacity, from the new stand. It might take a while for us to get back to this. Photo taken 5 April 2017, sourced from Theodoritsis via Flickr.
The financial ruin facing football clubs ranging from Manchester United to Canvey Island has been to the point of near disaster. In recent years we have seen Bury and Macclesfield expelled from the Football League, as well as near misses with Bolton, Wigan and Southend. The clubs down the football pyramid are in the most danger; which should come as no shock given that these organisations generate less revenue, have considerably fewer assets and thus do not attract billionaire owners.
Therefore, stringent financial management, alongside consistent domestic performance and continued financial support from the club’s supporters and owners, is necessary to keep these clubs above water. A certain degree of luck along the way, perhaps a lucrative FA Cup draw or a pay packet from selling a youth prospect, certainly helps to balance the books.
Exeter City sold Ollie Watkins for a club record £1.8m to Brentford in July 2017. This helped to finance a new seated stand at the club. Photo from The Grecian Archive.
This is the case for the estimated 40,000 associated football clubs that are operational in the UK. Only those clubs residing within the Premier League, who live in a financial climate which is so starkly different to any other, are free from this negative financial inevitability. With the Premier League often described as the ‘greatest league in the world’, its television rights were sold for just over £5bn domestically between 2016-2019. When overseas programs and re-runs are included, an astonishing total of £8.8bn is spent on the Premier League broadcasting rights. Given the vast income clubs gain from these deals, alongside countless sponsorship contracts and football owners with money to burn, this leaves me with one key question: how important are the fans to the Premier League clubs?
Revenue Streams that Keep Football Clubs Running
The revenue generated by all professional football clubs can be split into the following three categories: broadcasting, commercial and matchday. Attached below is a snippet from Everton’s 2019 financial statements, explaining how revenue would be presented in a football club’s financial statements.
Fundamentally, revenue across all football clubs in the UK will be treated like this due to the required accounting standards within the UK. Below is the breakdown from Everton’s 2019 financial statements as an example of how this is shown. Other football clubs may choose to disclose their income more specifically to allow more transparency of their performance to the reader.
Financial statements are produced on a yearly basis for Premier League clubs with the very rare exception that a football club may decide to change their year-end (you may have noticed in the image above). Most clubs end their financial year in either May or June which allows us to compare the performance of each football team with a degree of accuracy. An important note to make about a football club’s revenue is that it does not recognise the selling of players. For example, Liverpool sold Dominic Solanke in January 2019 for a reported £19m, yet this figure would have no relevance to the club’s revenue and would be recorded as a separate transaction in the accounts. Because of this, comparing revenue across the league becomes much simpler and avoids any anomalies where football clubs have a year of significant sales.
The graphic above shows the total revenue for the all the Premier League clubs for the 2018/19 season. This season has been selected as it is the most recent full year that included fans and partly because many of the Premier League clubs have yet to release their 2020 accounts. The graph has been ordered based on the 18/19 final league table for the Premier League. One of the key features you’ll notice immediately is the financial dominance of the top 6 in comparison to the rest of the league, this can be highlighted further below:
Commercial:
Average commercial revenue of “Top 6” = £186m
Average commercial revenue of other 14 = £20m
930% difference
Key differentials being the sponsorships with each club, e.g. Arsenal’s “Visit Rwanda” deal which is worth £10m per year, or Manchester United’s shirt sponsorship with Chevrolet which is worth up to £70m per year.
Broadcasting:
Average broadcasting revenue of “Top 6” = £230m
Average broadcasting revenue other 14 = £119m
93% difference
Key differentials being European football, Chelsea earned around £10m from winning the Europa League whereas Liverpool earned around £100m for winning the Champions League.
Matchday:
Average matchday revenue of “Top 6” = £82m
Average matchday revenue of other 14 = £13m
683% difference
Key differentials being price per ticket and capacity of football stadiums, Huddersfield’s most expensive season ticket being £249 a season whereas Spurs was upwards of £2,000.
The key aspect we are looking at is how reliant are these Premier League clubs on having fans inside the stadiums for fixtures. Below is a graphic which shows the importance of matchday revenue for each club.
Perhaps unsurprisingly, the Top 6 are appearing towards the top end of the chart, with exception of Manchester City. Again, this is linked to high ticket prices and capacities, whilst it is typically expected that Top 6 clubs would play more fixtures in a season than other clubs due to their extended cup runs and European involvement. All of these fixtures count towards that year-end revenue figure.
his graphic for me highlights why so many clubs have survival in the Premier League as their key focus every season. A good example of this being Huddersfield Town, who spent two seasons in the Premier League before relegation in the 18/19 season. Below is a graphic to show their revenue over the last 5 years:
Following promotion to the Premier League, Huddersfield’s revenue skyrocketed from £15m to £125m in the 17/18 season, but the important metric is that the percentage of revenue made up on matchdays fell from 27% in 16/17 to 4% in 17/18. This supports the idea that simply surviving in the Premier League is much more important than trying to entertain fans. Entertainment and survival are very rarely found hand-in-hand in the Premier League.
For roughly half the Premier League teams in 18/19, matchdays made up roughly 5-10% of the total revenue for the clubs. Immediately, this would suggest that most PL clubs are not significantly affected by the lack of fans, financially anyway. However, the key aspect of matchday revenue for football clubs is actually more significant than the simple 5-10% figure would suggest. In fact, matchdays are crucial for maintaining a steady cash flow at football clubs, especially as it is not uncommon for football clubs to be paying out more in players wages than they earn in revenue during a year. Having fans regularly buying tickets, merch and food in the stadium represents a dependable income for all football clubs, but on a larger scale for the country’s elite.
Any excuse to post this masterpiece; sausage, chips and curry sauce all served in cob by Merthyr Town. Post by @FootyScran, image from @twelfthmanfooty
Major streams such as sponsorship deals and broadcasting money are received throughout the financial year in line with each specific agreement. There is potential for football clubs to go extended periods of time with no significant injection of cash during the season, but well-managed clubs would navigate this either through having a cash reserve/loan facility or their owners putting injecting some money into the club. A good example would be Roman Abramovich at Chelsea, who had an existing loan of £71m as at the end of the 18/19 season.
The Intangibles
Using metrics to measure the financial impact of a lack of fans the Premier League clubs is great foe the graphs and charts. However, one of the limitations of doing this is that it only looks solely at matchday revenue and doesn’t consider the impact of having no fans on broadcasting and commercial income. There is no real way to measure this impact, thus these are ‘the intangibles’. A noteworthy example of this is Sky demanding a £330m rebate from Premier League clubs due to Covid-19’s disruption to football. Essentially, the lack of fans in stadiums devalued the product, the match, despite the fact that Sky were authorised to broadcast more live games than initially granted with a greatly inflated viewership in the short term.
The Emirates hasn’t always been full at times, but at least it has a reason for being empty at the moment. Photo by Tim Boyd from Wikimedia Commons.
There are signs that the broadcasting bubble that the Premier League, Sky and BT have built in the domestic sphere is beginning to deflate. The TV deal reached in 2019 saw an 11% fall on the domestic value of the deal to £4.5bn yet significant increases in the overseas aspect still results in an increase for the 2019-22 cycle, valued at an estimated £9.2bn. According to our metrics used earlier, as the broadcasting deal increases, the reliance on the fans to the Premier League clubs reduces. However, the true reality is that fans enhance the ‘product’ that football is, and thus fans are a financial commodity for the Premier League clubs.
A common complaint is that ‘true’ football fans of Premier League clubs are being priced out of football, but safeguards have been put in place to protect fans financially, such as the £30 cap on tickets for away fans. What this doesn’t account for it is that Premier League clubs will continue to increase their prices because there will always be someone there to buy the ticket, an example being Arsenal’s season ticket waiting list which has an estimated waiting time of 11 years. The longer that fans are treated as a financial commodity by the clubs, more and more people will be priced out of football.
Conclusion
Due to the unknown nature of the pandemic, we’re still unsure as to when in the UK we will be able to return to football stadiums in the UK. Clubs in the Premier league will be financially protected until the end of the 2021/22 season under the broadcasting deal. However, the ‘top 6’ clubs could stand to lose up to £100m a season due to fans being unable to attend matches, with the other 14 clubs anticipated to lose between £10-25m a season. In the short term this will be sustainable thanks to the broadcasting agreements, but the sooner the vaccination program can allow fans back into grounds, the better.
Football from behind the camera. Credit Sky Sports/Chris Lobina.
The question I set out to answer in this article was: “Could Premier League clubs survive without fans in stadiums” and the brutal answer is yes; it is viable that Premier League clubs could not have fans attend for years and still be in a financially sound position providing they were shrewd in their spending. As the Premier League has become more commercialised, I feel there needs to be an acceptance of what these football clubs actually are. Often seen as the ‘cornerstone of the community’, football clubs are indeed companies. Whilst they do provide a safe haven for many sports lovers out there, Everton in particular have an owner in Farhad Moshiri who is willing to sacrifice profits and his own money to enhance the club and the community, the harsh reality is that many club’s owners prioritise profits. Ambition in the transfer market is almost always organised around profits, with the Glazers at Manchester United particular culprits of a finance-first approach. However, that could be a whole article in itself.
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