FootBiz newsletter #169: Football's week of financial consequences

Congratulations on the success. Or I’m sorry that happened.

And, given not everyone in football can be a winner or a loser, to those in the middle we are thinking of you too.

But now it’s all over, there’s no more convincing people this could turn around. The league positions we see now are the ones that go into the record books and with them come their own rewards and punishments.

Where to start? Well, we’ve discussed Arsenal and Manchester city plenty in recent weeks and months but the champions deserve one last mention. In short, Arsenal made a ton of money winning a first league title in 22 years — £200m in PL distributions alone — and they can flex their muscles globally again. This is a club that counts on strong fanbases in Africa, Asia and North America, and they have capitalised commercially while activating an ever-deeper merchandising partnership with Adidas that might be the best in football. A retail behemoth and now an on-field product to match, the cash will follow.

City, Manchester United, Aston Villa and Liverpool join them in the Champions League. Villa managing to qualify for Europe’s top-tier club competition via their league position while also competing in Europe is notable, it’s the sign of a strong-enough squad to compete with the elite and testament to Unai Emery’s ongoing excellence. Their wrestling with the SCR rules will be something to watch.

Bournemouth and Sunderland will play Europa League football. The former were superb under Andoni Iraola, but face a summer of change with Marco Rose taking over and some players bound to leave in order for them to satisfy UEFA’s stricter financial regulations (they had the highest SCR in the league this season). Black Knight have bought well enough that evolving the squad shouldn’t be a concern, but at ownership level the priority has to be finding and growing revenue streams to allow them to be back here in future. The underlying metrics suggest Sunderland were very fortunate to qualify for Europe, but the newly promoted side will surely bank the most PL prize money above what had been budgeted for, netting an estimated £170m. If they had projected themselves finishing 19th, that’s about £50m extra. It’ll help boost their valuation now that the club is on the market, but the squad will need more depth regardless.

Chelsea are one of the season’s big losers, lurching from one embarrassing crisis to the next. Their Premier League prize money will actually be roughly the same as what they made finishing fourth last season under Enzo Maresca, benefitting from league-wide increases, but the financial reckoning is coming. Potentially breaching their settlement with UEFA could lead to future exclusion from continental competitions — though they insist it won’t happen — and their huge squadron of players under contract will need to be hacked back severely with no Europa or even Conference League to look forward to. The bright spot is Xabi Alonso.

Brentford’s promising season tailed off severely, with just one win in their final 10 league games meaning a Champions League-chasing campaign ends with no Europe at all. Fulham and Everton could say the same, with weak finishes ending their hopes of continental football next season after being well positioned.

At Leeds, staying up comfortably constitutes a great season. For the 49ers-Red Bull project at Elland Road they will look to kick on next year but with £145m in the bank from this campaign, the bean-counters will be happy to just have another one of those with some extra juice from new TV deals.

Crystal Palace and Nottingham Forest both struggled to deal with the multi-tasking of Europe, but Forest’s dalliance with relegation feels like far more of a cautionary tale for Sunderland and Bournemouth than Palace’s fun-filled European tour that could end in a trophy this Wednesday night. Brighton will be hoping to have as much success on the continent as their rivals when they play the Conference League next year. For a team now 10 years strong in the Premier League, a first trophy in their history will surely be the priority.

Tottenham survived, just. Back-to-back 17th-placed finishes is simply not good enough but the club won’t have to contend with European football and has the money and talent at Roberto De Zerbi’s disposal to finish at worst in the top half next year.

For the relegated teams it promises to be a tough road back. The Championship is a slog at the best of times and there are some big clubs in there these days. Wolves and West Ham will be two of the biggest, but the former feel far further along their road to rebuilding than a Hammers team whose relegation came so late that they don’t even have all the questions yet, let alone the answers.

Among the questions though: What is the plan for getting David Sullivan out of the picture? Will Nuno be staying? Who is making transfer decisions this summer? Will Jarrod Bowen still be there in September? When is someone going to take a proper look at that Pablo transfer?

Now that the season is over, these clubs have decisions to make. The best-run clubs will be the best-prepared, and even the chaotic ones will likely have a grip on which players’ agents have already been working on moves away for the past few months.

If we were to guess at this early juncture, the biggest fee spent might be Yan Diomande, who is set to fetch £70-80m when a Premier League club (likely Liverpool) buys him from RB Leipzig. Someone will overpay for Elliott Anderson in the same price bracket. Anthony Gordon will probably be the biggest Premier League sale, with Bayern widely expected to get their man.

One trend we are watching for is the players who get stuck. An unintended consequence of the stratification of football finances is that when you’re trying to offload a player you spent £30m+ on without making a loss, there are very few off ramps now. If another Prem club won’t help you out then the best you can hope for is a loan to help maintain (or even increase) their value. Notionally, Chelsea could raise £300m in sales this summer and fix a lot of their issues but the reality is a lot more challenging than that. Some very good players may be stuck in purgatory come September.