Football’s high finance means money is name of the game

IT’S that time of year, what Sir Alex Ferguson famously dubbed “squeaky bum time”, when the fate of football clubs up and down the country is decided.

For some, nine months of blood, sweat and tears will end in celebration, for others despair. Each season it’s the same roller coaster of emotions and last weekend brought mixed fortunes for those teams in Yorkshire bidding for promotion.

For Doncaster Rovers, whose dramatic win at Brentford sealed their return to the Championship, and Rotherham United, who finished runners-up in League Two, there was unbridled joy, relief and no doubt a few sore heads on Sunday morning among the fans out celebrating the night before.

However, Hull City’s defeat 
at Barnsley, which at the same time gave the South Yorkshire club a fighting chance of avoiding the dreaded drop, means they have to beat champions Cardiff City in their final match of the season on Saturday in order to guarantee their return to the Premier League, putting the champagne on ice.

Tigers fans will be hoping they can muster one more victory because the riches that await whoever gets promoted have never been greater.

Last June, the Premier League sold the broadcast rights from 2013 to 2016 to Sky and BT for more than £3 billion, up from £1.25bn, with overseas rights expected to take that figure beyond £5bn.

Football finance expert Rob Wilson admits the TV deal is “unprecedented.” “If Hull do go up it will be worth around £130m to £140m to them,” he says.

“Last year I was saying promotion was worth around £90m to clubs, but now that’s coming from the TV money alone and on top of that you can add another £30m or £40m from endorsements and bigger sponsorship deals.”

Wilson, from Sheffield Hallam University, says these are conservative estimates and believes for some clubs it could prove to be even more lucrative. “The Premier League is 
broadcast to 200 countries with thousands of hours of coverage each year, so the global exposure is huge and for a club like Cardiff City, which has a Malaysian owner, it could be worth even more.”

This kind of monopoly money is reserved for those at the top table of English football, but what about teams plying their 
trade in the Championship, like newly promoted Doncaster Rovers? “They’ll be looking at a more normalised figure, somewhere between £5m and £6m, so nowhere near the kind of money we’re talking about for being in the Premier League.”

For Rotherham United, their return to League One is worth around £500,000. But for both clubs, this extra incoming money brings its own challenges. Stepping up a league means you’re up against better teams and in order to compete you need to spend more money bringing in new players, which can quickly gobble up the extra cash.

“What you tend to find with clubs that get promoted is a spike in gate receipts as more people want to watch a higher standard of football, but if the results go badly then this quickly drops off. So there’s huge pressure on clubs from fans to invest in better players and it’s those clubs that manage their budgets the most effectively that tend to do better in the long term.”

But while the financial 
benefits to the clubs themselves are obvious, the benefits to the local economy are less clear. A study published earlier this 
year by Cardiff University claimed that Swansea City’s first season in the Premier League had boosted the Welsh economy by around £58m, creating 400 jobs in the process.

However, Wilson is more circumspect about the impact footballing success brings. “You get an upsurge in people going to hotels and bars and restaurants, but most of the benefits go to the football clubs. The economic impact on the local area is broadly neutral based on the evidence we have.”

There have been plenty examples in recent years of 
clubs paying the price for 
over-stretching themselves financially, but Wilson doesn’t believe football’s bubble is about to burst any time soon. “People have been talking about this for a while, but we’ve had double dip recessions and football in this country has outperformed that.”

He’s hopeful, too, that Uefa’s Financial Fair Play rules, 
designed to make sure clubs only spend what they earn, will be good for the game.

“I think we’ll see a steady improvement in football’s finances in the next five to 10 years, which should mean less clubs going to the wall.”