Monday 23 September 2019

How should the Championship’s play-off winner spend their newfound wealth?

Dr Rob Wilson is an expert in football finance – here’s what he thinks newly promoted clubs should do with their TV money.

The Championship play-off trophy is lifted in the air
The Championship play-off trophy is lifted in the air

By Max McLean, Press Association

The Championship play-off final is often branded football’s richest game, and with hundreds of millions of pounds up for grabs, rightly so – but what should the winner do with all that money?

This year’s final takes place between Aston Villa and Fulham, who will both be hoping to benefit from the riches of the Premier League once again next season.

Dr Rob Wilson might be able to advise on how they should spend it, as an expert in football finance at Sheffield Hallam University, but first, just how accurate are the figures that get mentioned at this time of year?

Myth-busting the numbers

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“What we often read is that, in the (Championship) play-off final for example, the winner will earn somewhere between £180 million and £200 million,” said Dr Wilson. “That’s not entirely accurate.

“Guaranteed earning next year is going to be £120 million, so that’s the TV payment and then a little extra for sponsorship and match-day ticket receipts.

“Where most people take it up to £200 million is by adding in the three years’ worth of parachute payments,” he continued. “They’re assuming relegation.

“My argument is that we plan to succeed, so if we’re going to talk about the bigger figure we should be talking about £240 million for two years’ worth of Premier League payments, or £360 million for three years.”

So how should the winner spend their cash?

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“The danger is that you try and spend all of that additional revenue on transfer fees and wages,” said Dr Wilson. “What we know is that tends not to work.

“You might want to invest about 50% of that TV revenue – around £50 million – in the transfer market. That would be in terms of transfer fees and paying off wages for the year that you’re in the Premier League.

“Any new club in the Premier League should be looking at performance-related contracts,” he continued. “So a basic wage but with a Premier League-status retention bonus that maybe doubles or triples their salary.

“By the same token they should factor in relegation clauses that would take weekly salaries back down to a level that was stable in the Championship.”

But it’s not all about new players and bigger wages. Some money should be set aside for more long-term ventures.

“The other £50 million or so should then be spent on improving infrastructure,” said Dr Wilson. “Premier League clubs tend to invest more heavily in things like sport science, in making sure that players are better prepared to recover from games.

“Then a bit should go into the academy to try and strengthen behind the scenes to generate some long-term sustainability.”

What should we look out for?

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Being a Premier League club is great, but for clubs getting used to being a part of one of the richest divisions in the world, beware cheeky vendors and wealthy opponents.

“Selling clubs know they (Premier League clubs) have got those riches at their disposal,” said Dr Wilson. “There will also be lots more competition for players, as every single club in the league is earning at least £100 million out of the TV deal.

“These clubs should know what they are prepared to pay for a particular player and not be scared to walk away from the negotiating table,” he continued. “Have the bottle to say: ‘actually we don’t want that type of player at the club, we want someone playing for the badge’.”

A corner flag at West Brom's stadium

Overspending is just one potential pitfall – aiming to not only stay in the Premier League, but also climb its rungs, can overstretch a club.

“You start competing with those naturally bigger teams so you have to then overpay for players,” said Dr Wilson.

“Each place in the Premier League is only worth about £1.2 million, so you spend £10 million on a striker to try to get yourself into 10th, but the only return you’re ever going to get is £1.2 million per position.

“You’re almost better off accepting that you want to finish fourth from bottom and trying to attract players who are going to give you a fighting chance at the lower end of the league,” he continued.

“I know that doesn’t sound great for fans but the reality is these clubs should be looking at three-to-five year projects.

“Retain your Premier League status, grow a position each year for two or three years, and then start to build more incrementally.”

PA Media

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