Championship 'bubble waiting to burst'

[davieG]

More here - https://www.bbc.co.uk/sport/football/50674331

 

The Championship is a "bubble waiting to burst" because clubs are posting record losses in a "gamble" to reach the Premier League.

Former Wigan chairman David Sharpe, who sold the club in 2018, said the situation is "frightening" - following a BBC Radio 5 Live Investigation Unit analysis of the Championship's finances.

The analysis, conducted with accountants Deloitte and football finance experts Vysyble, found:

• Championship sides ran up a record high total of £307m in pre-tax losses in 2017-18
• Despite the league also bringing in its highest-ever revenue of £749m, overall spending on player and staff wages exceeded clubs' revenue by 11%
• That gap is expected to widen to an all-time high for 2018-19
• More than half of clubs are spending more on wages than they make in income.
• Many teams are recording significant losses over one or two seasons in an attempt to gain promotion to the Premier League

This follows the introduction of new profit and sustainability (P&S) rules by the English Football League in 2016-17.

The EFL told the BBC it has set up a "working group" of clubs to look at possible changes that could help the long-term sustainability of clubs in future.

 

 

[Ric Flair]

It still staggers me how much bunce the likes of Derby and Forest have blown baring in mind they've been stuck in the Championship for years and years, they both must be pushing it to the max.

[mancunianfox]

We were really fortunate to get out of that league when we did. I am a little bit surprised more clubs haven't gone into administration but the saving grace seems to be that there is always the next sucker to come in who is willing to take the gamble on reaching the Premier League.

[Footballwipe]

I can't remember the exact figures, but Kieran Maguire, the well-known football finance guy on Twitter and his new podcast said that to break even Championship clubs should be paying an average of about £5k a week, and the current average is something like £17k a week. Seems like a mixture of parachute payment clubs still able to offer high wages and those clubs desperate to reach the honeypot and gambling as a result. @mancunianfox is right, we got out just at the right time. 2013/14 looked like a difficult enough set of clubs, it's even bigger now.

 

Then the're the whole charade of selling stadia to the owner. Sheff Weds was sold back for £80m and yet West Ham sold theirs for £40m. Prime East London land is only worth half as much than in Sheffield? Still, it's worth as much as the "person" is willing to pay for it, I guess.

 

I hope we never end up back there. Never ever.

[Wymsey]

11 hours ago, Ric Flair said:

It still staggers me how much bunce the likes of Derby and Forest have blown baring in mind they've been stuck in the Championship for years and years, they both must be pushing it to the max.

Agree.

And imagine if Leeds, somehow, failed to gain promotion this season - with Bielsa in charge and the amount they've pumped in over the last few seasons..

They could be in a right mess.

[Fox92]

It's gonna happen sooner or later, and to a historic side too.

 

When you read how close Villa were to administration a couple years back. A club like Villa. It's scary.