The Stupidest League In World Football

in 1989 Bob Dylan released an up-tempo rock song entitled everything is broken the song is about social Decay and Dylan's despondency with the state of the world but it could just as easily have been about the Sky Bet championship in 2023 you know if it wasn't written in 1989 the championship is often heralded as being the most entertaining and unpredictable league in English football and the highest standard of second set football to be found anywhere in the world that is almost certainly true and it should be given that the finances of no other seconds here come even remotely close to it but it only tells half the story for all of the Thrills spells and the promised land of Premier League promotion and Untold riches that await three lucky teams each season the championship is in fact a bizarre House of Cards which could collapse at any minute the league as a whole across all 24 clubs is technically insolvent that is to say that the total debt of the 24 teams in the division outweighs the combined value of all of their assets that might sound a little bit technical but with it being a technical analysis and all but there are easier ways of understanding the precarity and downright stupidity of championship football over the last decade up to the last set of complete published accounts in the 2020-21 season Championship clubs lost a combine total of 2.96 billion pounds that's enough money to buy 10 Newcastle United's almost a hundred King Power stadiums or four Rishi sunax and akshata Murphy's welcome to normal Island what's more those losses are rising season upon season with the last two seasons with published accounts partially impacted by covid accounting for almost a billion pounds of losses alone in the 2020-21 season according to data and findings by football Finance Guru and friend of the channel Karen McGuire Championship clubs lost on average 476 000 pounds a week per Club that's insane I know it is Mark though the finances of the Premier League are ludicrous obscene and quite frankly unimaginable to anyone who isn't a lizard they are actually well Justified would be an odd way of putting it but relatively proportionate to the enormous amounts of money that the league and its clubs generate through Broad podcast commercial and match day Revenue the same is not true of the championship not even close which faces intense downward pressure from the Premier League and often pays salaries like Premier League clubs but has Revenue which is much closer to those in League one it's for that reason that the efl is currently lobbying the Premier League and will soon get some concessions on greater redistribution from English football's outrageously Rich top flights towards its outrageously indebted and stupid second tier but without further regulation history tells us that money will only be directed to players and agents in the Mindless pursuit of reaching the Premier League so as the championship season kicks off most likely in style and with a bang it is don't get me wrong an absolutely joyous League to watch and follow I wanted to take a little look at the I think tacitly understood but very rarely fully discussed or properly diagnosed Insanity of the Sky Bet Championship the cash hemorrhaging clubs within it the crude and arguably deeply unfair way in which parachute payments distort competition and whether the whole thing is just some kind of mad castle built out of sand that is just waiting to come crumbling down if you ask most people what they love about the championship and it is I think a much more loved institution in the eyes of the English public than even the Premier League the first thing that they typically point to is the unpredictability of it going into any given season there are probably 10 or 12 teams who think that they can get promoted 10 or 12 who know that they could go down and then there is Bristol City and Preston North End that is true to a certain extent but there are some pretty significant caveats the championship is extremely unpredictable if you compare it with the Premier League which is incredibly predictable the rich sex arguably now the rich seven with Newcastle United almost all finished within the top eight each season other than Chelsea repeatedly stepping on rakes last season and for the last half decade at least invariably Manchester City end up winning the league compared with that the championship is a socialist Utopia of equals and each season is as unpredictable as taking a car Journey with Caitlyn Jenner in recent years though as parachute payments have continued to increase there is a bit of a theme starting to emerge back in 2010 when Burnley Hull City and Portsmouth were relegated from the Premier League they received parachute payments of 10 million pounds each still a significant chunk of change by Championship standards but nowhere near enough to even pay off the crippling debts the Holland Portsmouth had managed to accumulate during their time in the Top Flight the following year Burnley finished eighth in the championship Hull finished 11th and Portsmouth finished 16th none were promoted this season after that either while still in receipt of parachute payments and Pompey were relegated to ligue one in the 2019-20 season by contrast so exactly 10 years on when Bournemouth Watford and Norwich City were relegated from the Premier League parachute payments had ballooned to over 40 million pounds in the first season following relegation what for the Norwich one automatic promotion The Following season with 91 and 97 points a piece in the championship meanwhile Bournemouth finished six and lost in the playoffs The Following Season Bournemouth won automatic promotion as Championship Runners up with 88 points that is just two seasons 10 years apart but across the board yo-yoing has never been such a common occurrence of last season's three promoted clubs Burnley Sheffield United and Luton Town only Luton hadn't been recently relegated from the Premier League and weren't in receipt of parachute payments the season before that it was two out of three again this time with Nottingham Forest as the sole exception alongside Fulham and Bournemouth the year before that it was the same story with Brentford the outliers that time around who won promotion via the playoffs meanwhile Norwich City and Watford continued the rapidly emerging Trend going into this season at the time of this recording before a ball has been kicked Leicester city leads United and Southampton the three teams relegated from the Premier League last season are the three firm favorites to win promotion from the championship at the first attempt I'm not in the business of making predictions and I doubt that all three will make an immediate return but two out of three wouldn't be at all surprising quite possibly via automatic promotion with the one exception only missing out because of the supposed Lottery of the playoffs perhaps however it will take a hat-trick over relegated clubs immediately regaining their Premier League status for the issue of parachute payments to go from The Boardroom of the efl and Championship clubs Executives and for it's a really Striker chord with fans for now the odd Loot and town or Brentford appears to be enough to convince people that Dylan was wrong and everything is not broken or not yet at least the principle of parachutes or solidarity payments would appear to make some sense the gulf between the championship and the Premier League is enormous and knowing that they will have the soft Landing of 55 of their Premier League broadcast Revenue even if they are relegated affords clubs the comfort and willingness to go out and invest following promotion which in return makes the Premier League more competitive and entertaining for the Premier League it makes perfect sense in fact the championship clubs who are not in receipt of parachute payments unsurprisingly it would appear to be distinctly less perfect it is after all and whatever the logic a massive reward for failure and it gives teams whose only achievements other than getting to the Premier League in the first place is getting relegated an enormous financial and therefore competitive advantage over every other club to give you some idea of the scale of that financial advantage relegated clubs now get 44.4 million pounds in Parachute payments in their first season after dropping out of the Premier League the average revenue of a championship Club meanwhile is around 28 million pounds removing the club's in receipt of parachute payments that average Falls to below 20 million pounds it means that the most recently relegated Premier League clubs automatically have a budget at least twice the size of pretty much every other team in the revision no wonder they keep getting promoted it's for that reason that in 2020 the efl's chief executive Rick Perry described parachute payments as quotes an evil that must be eradicated echoing the sentiment of most efl clubs since parachute payments are a solidarity payments that is redistributed by the Premier League though it is Premier League clubs that determine whether or not they should continue and the level at which they should be set given that if relegated Premier League teams would quite like to be in receipt of massive solidarity payments that give them a much better shot at making immediate return to the Premier League they are unlikely to vote to get rid of or significantly reduce them anytime soon so what's our Championship clubs without parachute payments to do well spend money that they don't have of course sometimes that is literally money that they don't have as in the case of Derby or Wigan in recent seasons and sometimes it is money that the clubs themselves couldn't and haven't generated but that is made available to them by owner financing Stoke City for example have spent wildly beyond their means especially since their parachute payments ran out at the end of the 2000 and 2021 season because the Coates family who owned the club have vast resources and have made those funds available even in those instances though and where you can perhaps inflate Revenue somewhat through sponsorship deals from those close to the club though for legal reasons I must stress that I am absolutely not suggesting that is what Stoke or any other specific and litigious clubs might have done the championship just like the Premier League does limit the amount of money that its clubs are allowed to lose over any given three-year period the championship's profits and sustainability rules formerly known as ffp officially prohibit clubs from losing more than 39 million pounds over the past three years compared to 105 million pounds in the Premier League those rules have proved to be scant deterrent for Championship clubs though who have in most cases either gambled on promotion and hit the jackpot therefore dodging any significant efl charges or indeed any at all or and all too often gambled and not hit the jackpot and ended up at the proverbial creek without any arms let alone a paddle last season two out of the three teams relegated from the championship were hit with points deductions Wigan Athletic were docked three points meanwhile reading was stripped of six it marked the fifth successive season in which at least one Championship Club has been imposed with a points deduction you probably don't need me to tell you this but that is not the sign of a healthy football division in almost any given season there are a handful of Championship clubs mired in a series of crises some of which either appear to be or actually end up proving to be existential Derby County came perilously close to extinction West brom's most recent set of accounts spoke of a material uncertainty surrounding the future of the club and just a year before Aston Villa returned to the Premier League under new owners hmrc threatened them with a winding up order those are just three examples of three big clubs with big fan bases and extensive Top Flight Traditions which have all very nearly been dealt a final blow while competing in the championship it is worth taking a look at the championship table ahead of the upcoming season and asking yourselves which of those teams would be in serious trouble if they didn't win promotion this season there are at least a handful yet only three of them can win promotion as is the case every season on average including teams with parachute payments Championship clubs spend 125 of their revenue on wages alone no you heard that right for every pound that a chance Championship Club generates on average they spend one pound 25 on payroll staff and players that's not far off double the wage to turnover ratio in the Premier League where clubs on average spend a still astronomical but more sustainable 71 of their turnover on wages some Championship clubs in recent years have spent more than 200 percent of their revenue on wages literally a two to one ratio and some of average losses of more than one million pounds a week over the course of a season that's enough money to convince Jordan Henderson to sell his soul to the devil it's Little Wonder therefore the championship clubs are constantly in trouble with the FL hmrc or when things get really bad their own players owe into an inability to pay them when football clubs sell their own stadiums which is often their most valuable and almost always their most crucial asset as has happened in the championship with Derby County Aston Villa Sheffield Wednesday Birmingham city and reading that ought not be viewed as a clever accounting trick even if it has so far turned out like that for at least one of those clubs but as a sign of the sickness of the revision as a whole if you saw saw a man gamble his house at the roulette wheel in a casino whether the ball landed on red or black you'd probably assume that man had a problem and needed help not to keep gambling until his number comes up well Championship clubs are problem gamblers ironically given that so many of them are sponsored by and even owned by gambling firms in stoke's case but their habit is only getting worse and the consequence is more severe you might ask quite reasonably why they don't just stop being so reckless and spend within their means you wouldn't be the first to make that point but the reality is that every team isn't just going to curb the excesses of their spending of their own volition the stakes are simply too high Premier League football and an actual route to Financial Security is at stake here there will always be clubs willing to push the envelope a little bit further and take just that slight extra risk in order to realize their goals and when they do the teams in and around them tend to follow suit creating a vicious circle and given the parachute payments paid out to recently relegated clubs Financial restraint would only result in an even less competitive and more uneven division the efl looks set to increase its concessions in terms of solidarity payments from the Premier League from 15 to 20 percent of the League's Revenue at least if reports are to be believed that will be a sizable increase in revenue for efl and particularly Championship clubs aided by a recent 935 million pound five-year television deal which is a 50 increase on the efl's previous deal with Sky Sports but as I said in the introduction without further regulation or meaningful change to the structure of parachute payments and the wage to turnover ratio at clubs that money will simply filter it down into the pockets of players and agents rather than making clubs any more self-sufficient or secure English football is a little bit like England itself I recently saw it said that England is like Hungary or Romania relatively low-income European countries but with Singapore attached London is Singapore and the Premier League is English football city of London whilstick continues to flourish with ever more obscene finances the rest of the country is like a decaying corpse well the championship is English football's decaying corpse where the analogy falls down is that unlike most of England the championship doesn't appear to be a decaying corpse at least at first glance it isn't a dead High Street with no functioning public transport or decent jobs it is packed out stadiums highly paid players and a wonderfully entertaining products but in some ways it's all just a facade the crowds are real but the stadium has been sold to avoid profits and sustainability sanctions or remortgage to cover operational expenses the players are being paid more than the clubs can ever afford and for the vast majority of teams turmoil is just one wrong turn or slice of Misfortune away or has already arrived you might be thinking well I still love the championship and I do too but the things that we love about it predominantly the atmospheres away days excitement competition and unpredictability none of those are because of the distorted finances Reckless spending and loss of all reality in the league at boardroom level in fact they would all be heightened by better governance and regulation especially the excitement competition and unpredictability if the league became a More Level Playing Field the worst excesses of unfairness in collected by Parachute payments were curbed and fans could concern themselves solely with performances and results on the pitch rather than those off it and having to worry about points deductions and not having a team to support in a year two years or five years time maybe that is the aspect that some fans find fun will my team exist next season but I've never met one and that really would be a damning indictment of the sickness of the revision there will be those of you I can just feel it after I mention those clubs who butt the trend of winning promotion without parachute payments and claim that teams couldn't hope to compete without spending beyond their means who will have been internally screaming what about those clubs then so very briefly let's take a look at them the only team promoted without parachute payments in the 2018-19 season was Sheffield United who massively overachieved under Chris Wilder securing automatic promotion to the a premier league just two years after the club had been in League one finishing above clubs with much bigger budgets like Aston Villa and West Brom was rightly heralded as a sensational achievement and one which had been achieved without ever breaking the bank in a championship context that is all true but one look at Sheffield United's accounts that season paint a slightly different picture the blades lost 21 million pounds the season that they won promotion to the Premier League an average of over 400 000 pounds a week up from a loss of two million pounds the previous season reflecting as the club themselves put it quote the exceptional cost of promotion to the Premier League end quote those losses were justified by promotion and it wasn't the kind of Kamikaze spending that we have seen from a lot of other Championship clubs but it was still enough losses that if they hadn't won promotion Sheffield United it would have broken profits and sustainability rules without slashing their budget or selling players The Following season and they have the six highest losses in the championship That season in the 2019-20 season Leeds United were the only promoted Team without parachute payments under Marcelo bielsa who had for the most part transformed the squad that he had inherited at Ellen Road rather than being given license to go out and buy a new one they lost an enormous 62 million pounds that season partly due to covid but only very partly up from a 21 million pound loss in the season before that they had the second highest losses in the entire division That season trailing only Aston Villa and spent an eye watering 144 of their turnover on wages no stop in 2020-21 it was the fairy tale story of Brentford arguably the best run Club in the land they secure promotion via the playoffs despite having routinely sold their best players for enormous profits for the preceding six or seven years so surely surely Alfie they didn't make a loss I'm afraid I've got some bad news Wiley old Brentford and I don't mean to diminish that rise it has genuinely been remarkable I am just illustrating that all of these supposed outliers who spent within their means perhaps aren't quite what they seem the bees lost 8.5 million pounds the season that they went up and 9.1 million pounds in the season before that without the sales of Ollie Watkins and side banrama they would have posted losses of more than 44 million pounds the 2020-22 season was the turn of Nottingham Forest to break the parachute payments hegemony and this time it probably won't surprise you to discover that they spent and lost a shed load of cash in the process and I really do mean a shed load Forest losses tripled from 15.5 million pounds the previous season up to a massive 46.2 million pounds spending an almost laughable 202 percent of their turnover on their wages up from 197 the previous season the Ace of your sleeve I bet some of you will have been thinking is lutantown the hatter secure promotions of the Premier League last season with the most modest budget of any promoted club for at least the last six years having risen from non-league football to the Premier League in just nine years with a net spend of around 7 million pounds of profits on transfer first during that time so surely a long last they must be the exception to the rule well luton's 2022-23 Financial accounts haven't yet been published so we can't say for certain but we can get a decent idea in the 2021-22 season Luton lost 6.4 million pounds up from 1.9 million pounds this season before that and they spend 111 of their turnover on wages up from 101 this season before that it is almost certain therefore the luton's losses and the percentage of their turnover that they spent on wages was even higher last season and their NetSpend was also around 1.75 million pounds higher on transfers to be clear Luton still won promotion on a shoestring budget and deserve every ounce of adulation that they have received but if even the best run Club in the division and Luton Town the awe-inspiring underdogs who did the unthinkable are still forced to incur significant losses and spend more than their entire Revenue solely on salaries in order to compete in the championship it shows what a broken division it really is the penultimate rhyming couplets in Dylan's everything is broken reads broken pipes broken tools people bending broken rules are reiterate the song wasn't written about the state of the championship in 2023 obviously but it really might as well have been the systems of transference are broken the tools available to clubs are broken and almost everyone is bending broken rules A system that broken can only last so long so enjoy the opening weekend of the championship season I know that I will assuming the whole city don't get battered away at Norwich it is a fantastic division but it's also a broken Division and so long as everything is left unresolved at some stage a hard rains are gonna fall that is it for today's video but thank you all very much as ever for watching hit the like button if you enjoyed it or found it informative in any way shape or form or are just feeling generous let me know your thoughts Down Below in the comments and of course make sure that you are subscribed and have notifications turned on both the hitc7s and for my second Channel both of which should be on your screens now along with a couple of videos that you might fancy watching after this one you can also find me on Twitter or Instagram via the username at hrtc7s on both should you wish to do so

Channel: HITC Sevens

Views: 647,223

Keywords: HITC Sevens, Football, Soccer, Championship, Sky Bet Championship, Broken, Stupid, Finance, Finances, Leeds United, Leicester City, Owners, Money, Debt, Premier League, Documentary, League, Sunderland, Hull City, Sheffield Wednesday

Id: nTj-5knBPu4

Length: 26min 57sec (1617 seconds)

Published: Sat Aug 05 2023