From The Athletic. To add a bit of perspective to our business and the bipping about fees received:
If English football’s top table overflowed with its usual Champagne and caviar this summer, most down below were on their knees catching crumbs.
In a transfer window that saw more than £1 billion splurged by the Premier League’s 20 clubs, a lavish spree that seemed to barely give a moment’s thought to the impact of COVID-19, the EFL’s 72 members were left to wrestle with very different recruitment challenges.
Money has been in desperately short supply these last three months and, for most in the Championship and beneath, the spending all but stopped.
Eight of the Championship’s 24 clubs did not commit to a single transfer fee this summer, with 126 players signing across the second tier either as free agents or on loan. Only 37 deals are thought to have required an outlay to another club.
Leagues One and Two had already grown accustomed to such austerity, but this has been the window when pragmatism finally caught up with ambition in the Championship.
“It’s been a tough window, one of the toughest I’ve known,” says one agent, who has spent the summer concluding several deals in the EFL. “I honestly thought this window would have been better because fans are returning and there’s a lot to look forward to. But if anything, we’re seeing clubs running on fumes right now.
“It could take a good two or three years for the market to fully recover and for things to become more fluid with movement and trade. Better days will come but it does show how distorted things are within the pyramid.”
With excuses made for the litany of undisclosed fees announced by clubs, approximately £40 million was spent on transfer fees across the entire Championship this summer. Or, put another way, for every pound handed over in the second tier, the Premier League was to be found parting with almost 28.
The finances in the Championship will forever be dwarfed by its bigger brother one more rung up the footballing ladder but the trend is nevertheless stark. In each of the five summers between 2016 and 2020, spending in the Championship went north of £140 million. In 2017 alone, the figure went as high as £244 million.
And then along came the pandemic, and almost 18 months of diminished incomes.
The Championship’s summer spend collapsed to roughly £70 million ahead of last season and it has fallen dramatically again in 2021. Frees and loans are now the currency of choice.
The one exception to the rule were Fulham.
Their summer commitments to sign players including Harry Wilson from Liverpool and Brazilian club Flamengo’s forward Rodrigo Muniz mean an outlay in the region of £20 million. Give or take a few pounds, it’s a figure the division’s other 23 clubs struggle to top with their combined spending.
Fulham were relegated from the Premier League last season, so are insulated by parachute payments of £40 million in 2021-22 and appear intent on getting back to the top flight right away to earn an even bigger windfall. Nevertheless, they are unique. The two clubs to come down with the west Londoners, West Bromwich Albion and Sheffield United, have not spent a dime beyond loan fees as they readjust to life in the second tier.
For Sheffield United, in particular, it has been a marked realignment. Their two years back in the Premier League saw them spend £105 million, including £35 million in the 2020 summer window alone. This time around? Just four loan signings. And three of those didn’t come until deadline day, when goalkeeper Robin Olsen (Roma) and midfielders Morgan Gibbs-White (Wolves) and Conor Hourihane (Aston Villa) joined the squad. The sale of England goalkeeper Aaron Ramsdale to Arsenal, with a fee potentially rising to £30 million, was not reinvested.
Sheffield United and West Brom were far from alone in their caution among second-division clubs.
Only Middlesbrough, who found £4 million down the back of Neil Warnock’s sofa to sign 22-year-old midfielder Martin Payero from Argentinian club Banfield early last month, could claim to have come close to rivalling Fulham’s level of spending.
Telling was the suffering felt by clubs who had previously rolled the dice in pursuit of a seat on the Premier League gravy train.
Enough became enough.
Derby County, Championship play-off finalists just two years ago, have been the obvious case in point, working under tight recruitment constraints that have allowed only five free transfers to join, including veteran defender Phil Jagielka. Five different rules breaches at Pride Park have resulted in a transfer embargo and a charge to answer from the EFL.
Reading, too, have been unable to spend — on transfer fees, at least. Their financial folly in previous windows has seen repercussions with an embargo imposed for breaching profit and sustainability rules. Danny Drinkwater arrived on a season-long loan from Chelsea and Scott Dann signed a one-year deal after leaving Crystal Palace at the end of his contract, but the club record £7.5 million the Berkshire club spent on Inter Milan striker George Puscas two years ago has never felt further away.
Nottingham Forest, so often among the busiest clubs in transfer windows, are another licking wounds this time. Only nominal amounts were spent reshaping a squad that flirted with relegation last season, then took one point from the first five league games of the current one. Cardiff City and Huddersfield Town, Premier League clubs as recently as 2018-19, were two more not to spend.
“It’s not a healthy time below the Premier League, let’s be honest,” says one agent. “There will be the odd exception, like Fulham this summer, but clubs that would typically be spending, like Forest and Derby, just can’t do it anymore. The money isn’t there.”
The usual suspects might have closed their chequebooks but there has still been room for new money and, they will hope, savvy investment. Peterborough United owner Darragh MacAnthony tweeted that his League One runners-up had spent £2.2 million on transfer fees since winning promotion. Barnsley and Luton Town, too, have spent more than most.
One problem in the second tier has been the meagre amount of money trickling down to its clubs from transfers into the Premier League. Twelve months ago, top-flight clubs spent a record £260 million hoovering up the best EFL talent but the focus was primarily towards the continent this time around.
Only four players — Nathan Collins (Stoke City to Burnley), Adam Armstrong (Blackburn Rovers to Southampton), Michael Olise (Reading to Crystal Palace) and Ramsdale — made moves to the Premier League for anything more than £3 million. Arnaut Danjuma’s £21 million switch from Bournemouth to Spain’s Villarreal and the transfer of Matheus Pereira from West Brom to Al Hilal of Saudi Arabia for a similar fee were the only other highlight sales to bring in significant funds.
“With reduced activity from Premier League clubs acquiring from the Football League, the financial challenge of running a Championship club is going to be tougher than it ever has been,” says Dan Jones, a partner in Deloitte’s Sports Business Group, which estimates total spending in this past window was less than a quarter of the 2019 summer.
“This is perhaps indicative of Premier League clubs being less willing to take a risk on players unproven at Premier League level, in conjunction with a plentiful supply of more established talent not only in the Premier League but across Europe’s top tier football leagues.”
“The Premier League is the only league with money,” adds one agent. “Even in Europe, clubs have found it very hard.
“We’ve had Adam Armstrong going to Southampton, Nathan Collins to Burnley and Danjuma to Villarreal but Bournemouth underline how tough it is. They’ve dealt only with loans and that’s with having money in the bank — not just Danjuma but Nathan Ake (who moved to Manchester City for £41 million last August) as well. They’re not in a position where they can go gung-ho.
“We’re seeing it less and less where clubs are prepared to take that chance to play Premier League football.”
It all begs the question of where the Championship — and the EFL — go from here.
Supporters are back in grounds this season to restart key revenue streams but the last 18 months have undeniably taken their toll.
Eight clubs (Derby, Reading and promoted Hull City in the Championship, Fleetwood Town and Gillingham in League One, and Oldham Athletic, Scunthorpe United and Swindon Town in League Two) are currently listed on a “dedicated Embargo Reporting Service page” of the EFL website and only the fortunate have avoided taking on debts to weather the COVID-19 storm.
“The sustainability of clubs has become of paramount importance,” says one established agent. “Players don’t like hearing it but financial prudence has needed to come first.”
The Championship has battened down the hatches, knowing this storm is far from over.
The best Twitter football financial expert gives his analysis on our last financial performance figures. For some reason there's no mention of the tens of millions taken out out of the club by the owners. Can't imagine why.
Swansea City’s 2019/20 accounts covered a season when they finished 6th in the Championship under head coach Steve Cooper, thus reaching the play-offs, but were eliminated in the semi-final by Brentford. Some thoughts in the following thread #Swans
Accumulated losses of more than £130m in their most recent results. Plenty on here would be happy to see us in the same situation as long as it satisfies their calls for "ambition" or "clout" or whatever they want to dress their demands for the club to spend more than it can afford as.
Reading’s accounts have been published for 2019/20...
Total accumulated loss of £138 million
Spending 211% on wages than they’re getting in revenue
With more than a dozen players falling out of contract in June, players that are likely to still be on big wages for the most part, it could be a busy close season. Just looking at some of the names there (Baston, Carroll, VdH) you'd have to think that at least £200,000 per week will be coming off the payroll. A lot more if Ayew goes too.
With Leon's recent comments about the club's new recruitment structure primarily targeting the next window (hence us mostly using Cooper's links to add some depth for now), it all seems to suggest that we're just biding our time now ready for a big revamp come the summer.
The last occasion we had so many gaps in our squad was the summer of 2002. Let's hope this time around we're a lot better prepared.
Little Nath has to be up there on the list of best "pound for pound" signings we've made in the last 25/30 years, and for the most part of that we did some good business (if we went a bit mental in the last year or two in the Prem).
Free - Trundle, Robinson, Britton, Tate, Monk, Martinez, Fabianksi Less than £100k - Scotland, Bodde, Dobbie, Rangel, McBurnie, James Less than £1m - Ash, Dyer, Sinclair (initially) Less than £3m - Michu, Flores, Routledge, Cork