Free Report 27 Sep 2021

English Football League – Financial Health League Table

Dr Adam Tucker

Chief Data Scientist

The financial health of Football League clubs has recently been the subject of much debate. In contrast with Premier League clubs, which benefit from ever-higher TV broadcasting revenues, Football League (EFL) clubs have disproportionately suffered from the loss of fans’ attendance during the pandemic. The loss of gate receipts and other revenue has been devastating, with a parliamentary committee hearing that 10 EFL clubs were struggling to pay wages in November 2020. This culminated in the Premier League and EFL agreeing to a £250 million bailout in December, to help struggling clubs weather the storm. In total, this comprised a £200 million loan for Championship sides and a £50 million grant for those struggling in League One and League Two.

The difficult situation facing many lower league clubs was highlighted dramatically last week when Championship club, Derby County fell into administration with estimated losses of around £1.5 million per month. This makes Derby the fifth EFL team to experience financial distress in less than three years:

At Company Watch we analyse the financial strength of UK companies by taking an in-depth look at their balance sheet and profit and loss statements. Our proprietary credit risk score, the H-Score®, measures how likely a company is to go into financial distress over a one-year time horizon. The score ranges from 0 (weakest) to 100 (strongest). Companies with an H-Score® of 25 or less fall in the Warning Area, and are particularly vulnerable to financial distress.

Here, we analyse the financial health of the 72 EFL clubs (not the Premier League), to give a view on which clubs are most likely to survive the pandemic. For each club, we consider the most recent set of accounts filed at Companies House. Where the company is part of a larger group, we consider the highest UK-based parent company with consolidated (group) accounts. Although in some cases the parent’s activities extend beyond the football club itself (e.g. Stoke City are owned by Bet365), we take the view that these group accounts generally give the best overall picture of a club’s financial situation and the likelihood of distress. We summarise our results in a new financial health league table (see below).

Stability and Profitability

Of the 71 clubs included in the analysis (Derby County are excluded because their accounts are too old), 62% are in the Warning Area (42 clubs). This is markedly higher than for the sports industry as a whole, where this percentage stands at 37%. The implications for the clubs’ financial stability are serious: in the sports industry1, a company in the Warning Area is around 7 times more likely to experience financial distress than a company outside the Warning Area. At the extremes, a sports company with an H-Score® of 0 has approximately a 10% chance of financial distress in the next year, while a company with an H-Score® of 100 has around a 0.05% chance.

Not all of the 71 companies filed a profit and loss statement in their accounts: 15 companies across League One and League Two took advantage of exemptions for small companies and filed only a balance sheet. Of the remaining 56 companies, 70% were loss-making (39), casting further doubts on the sustainability of their business models.

Comparison Between Divisions

LeagueNet Assets (£m)Net Sales (£m)Net Profit (£m)Number in LeagueNumber in CW Warning AreaNumber Loss MakingNumber Profit MakingNumber No Profit
& Loss Account
Championship5762.83781.6-148.423161850
League 1640.6266.4-29.124141464
League 2736.7456.81.224147611

(As above –  Derby County (Championship) are excluded because their latest accounts are too old.)

The table above shows key figures for each division. Even after removing the £2.8 billion revenue of Stoke City’s parent (Bet365), the Championship dominates the EFL in terms of financial activity, with total revenue more than double that of League One. Although the total revenue of League Two is seen to be greater than that of League One, this is mainly due to the high revenues of the parent companies of Forest Green Rovers and Harrogate Town (Ecotricity and Strata Homes, respectively). When these clubs are excluded, the revenue falls to £134 million, around half that of League One.

The number of clubs in the Warning Area is fairly consistently high across the divisions (58 to 70%). Only five clubs in the Championship turned a profit, with the largest being the £137 million reported by Stoke City’s large parent. In contrast, Bournemouth and Fulham, who currently sit in the top two positions in the Championship, made the largest losses of £60 million and £48 million, respectively. This may be driven by poor performance and relegation from the Premier League.

Foreign Ownership

Of the 71 companies, 19 are ultimately owned by overseas holding companies whose accounts are not available to us. Care should be taken when drawing conclusions based on the UK companies alone, since these may not represent the financial health of the entire group.

Conclusion

The clubs with the lowest H-Scores and greatest losses tend to be in the Championship. These clubs are often aiming to break into (or return to) the Premier League, and operate a business model built around achieving that aim. Since not all clubs can achieve promotion, it follows that this model is unsustainable in most cases, and many clubs rely on rich owners to prop them up. By contrast, AFC Wimbledon, which is largely owned by fans, sits on top of the financial health league table (below), with an H-Score® of 99 and profits of £12.6 million in the year up to June 2020.

The majority of accounts used in this analysis date from 2020, and will not include the full effects of the pandemic, in particular the loss of gate receipts in the 2020-2021 season. To assess the full impact of the pandemic, it would be interesting to repeat this analysis with accounts covering the 2020-21 season, when they are released.

Financial Health of Football League Clubs (H-Score® High to Low)

NameLeague League
Position
(22/09/21)
Company Name Accounts
Consolidated
Period End of AccountsTurnover
(£m)
Assets
(£m)
Profit Before
Tax (£m)
H-Score®
AFC Wimbledon League 1 31AFCW PLC Yes 2020-06-304.7332.0912.6399
Coventry Championship4SISU CAPITAL LIMITED Yes 2020-03-311.425.661.0997
Cheltenham Town League 1 33CHELTENHAM TOWN ASSOCIATION FOOTBALL CLUB LIMITED No 2020-05-31 2.96 92
Wigan Athletic League 1 25WIGAN ATHLETIC HOLDINGS LIMITED Yes 2019-06-30 40.6-0.0391
Rochdale League 2 56ROCHDALE ASSOCIATION FOOTBALL CLUB,LIMITED(THE) Yes 2020-05-316.934.191.3691
Hull City Championship22ALLAMHOUSE LIMITED Yes 2020-12-3150.9473.91-2.5686
Rotherham League 1 30ASD LIGHTING HOLDINGS LIMITED Yes 2020-06-3031.5531.880.686
Stoke Championship5BET365 GROUP LIMITED Yes 2020-03-292811.43766.23137.0885
Newport County League 2 60NEWPORT ASSOCIATION FOOTBALL CLUB LIMITED No 2020-06-303.651.60.3181
Mansfield Town League 2 68RSCPBR LIMITED Yes 2019-12-3173.28150.7713.2180
Colchester United League 2 64ASPIRE MEDIA GROUP LIMITED Yes 2020-09-3014.3231.12-0.0979
Portsmouth League 1 39PORTSMOUTH COMMUNITY FOOTBALL CLUB LIMITED No 2020-06-3011.2823.270.2677
Barnsley Championship18BARNSLEY FOOTBALL CLUB LIMITED No 2020-05-3114.2211.86-0.2872
Accrington Stanley League 1 350404 INVESTMENTS LIMITED Yes 2019-12-3157.3851.644.1862
Shrewsbury League 1 46SHREWSBURY TOWN FOOTBALL CLUB LIMITED No 2020-06-305.4518.33-0.7262
Carlisle League 2 61C.U.F.C. HOLDINGS LIMITED Yes 2020-06-304.599.270.7861
Swansea Championship20SWANSEA CITY FOOTBALL 2002 LIMITED Yes 2020-07-3150.5952.792.7955
Burton Albion League 1 34ALBION FOOTBALL CLUB(BURTON-ON-TRENT)LIMITED(THE) No 2020-06-305.687.84-0.0555
Plymouth Argyle League 1 28NATATOMISAM LIMITED Yes 2020-06-307.0510.840.0354
Middlesbrough Championship15THE GIBSON O'NEILL COMPANY LIMITED Yes 2020-06-30215.41418.7-0.0552
Sheffield United Championship14BLADES LEISURE LIMITED Yes 2020-07-31143.8128.418.846
Tranmere Rovers League 2 59TRANMERE ROVERS FOOTBALL CLUB LIMITED Yes 2020-06-306.5632.17-0.8537
Bradford City League 2 57BRADFORD CITY FOOTBALL CLUB LIMITED No 2020-06-30 3.43 35
Harrogate Town League 2 51STRATA HOMES HOLDINGS LIMITED Yes 2020-06-3092.7147.870.8535
Walsall League 2 67WALSALL FOOTBALL CLUB,LIMITED(THE) No 2020-05-315.67.380.0329
Sunderland League 1 26SJD LEISURE HOLDINGS LIMITED Yes 2020-07-3129.2118.16-1.7627
Crawley Town League 2 62CRAWLEY TOWN FOOTBALL & SOCIAL CLUB LTD No 2020-06-30 0.34 27
Bristol City Championship9BRISTOL CITY HOLDINGS LIMITED Yes 2020-05-3127.24107.23-10.0721
MK Dons League 1 27STADIUM MK GROUP LIMITED Yes 2020-06-3017.11100.19-5.9120
Luton Town Championship122020 HOLDINGS (ENGLAND) LIMITED Yes 2020-06-3015.4245.792.7119
Lincoln City League 1 41LINCOLN CITY FOOTBALL CLUB COMPANY LIMITED No 2020-06-306.555.19-0.8917
Fulham Championship2COUGAR HOLDCO LONDON LIMITED Yes 2020-06-3058.04306.36-48.1115
Oxford United League 1 38OXFORD UNITED FOOTBALL CLUB LIMITED No 2020-06-306.65.961.4815
Scunthorpe United League 2 71COOLSILK LIMITED Yes 2020-06-304.5128-5.0715
Forest Green Rovers League 2 49ECOTRICITY GROUP LTD Yes 2020-04-30230.01286.51-3.9114
Exeter City League 2 53EXETER CITY A.F.C. LIMITED No 2020-06-30 4.25 11
Stevenage League 2 69STEVENAGE FOOTBALL CLUB LIMITED No 2020-05-31 4.28 10
Sutton United League 2 66SUTTON UNITED FOOTBALL CLUB LIMITED No 2020-05-31 0.99 10
West Bromwich AlbionChampionship3WEST BROMWICH ALBION HOLDINGS LIMITED Yes 2020-07-3153.7586.5-23.829
Morecambe League 1 42MORECAMBE FOOTBALL CLUB.LIMITED No 2020-05-312.868.02-0.329
Sheffield Wednesday League 1 36SHEFFIELD WEDNESDAY FOOTBALL CLUB LIMITED No 2020-07-3120.8654.63-24.088
Gillingham League 1 44GFC HOLDINGS LIMITED Yes 2019-05-317.036.8-0.768
Hartlepool United League 2 54HARTLEPOOL UNITED FOOTBALL CLUB LIMITED No 2020-07-31 0.43 7
Barrow League 2 63BARROW BLUEBIRDS LIMITED No 2020-05-31 1.23 6
Port Vale League 2 55PORT VALE FOOTBALL CLUB LIMITED No 2020-06-30 3.8 5
Swindon Town League 2 58SWINDON TOWN FOOTBALL COMPANY LIMITED No 2020-05-31 0.35 4
Cardiff Championship10CARDIFF CITY FOOTBALL CLUB (HOLDINGS) LIMITED Yes 2020-05-3146.04123.75-12.263
Doncaster Rovers League 1 48DONCASTER ROVERS LIMITED No 2020-06-30 2.53 3
Blackburn Championship6VENKYS LONDON LIMITED Yes 2020-03-3115.8450.12-20.82
Millwall Championship17MILLWALL HOLDINGS PLC Yes 2020-06-3016.4324.3-10.862
Cambridge United League 1 37CAMBRIDGE UNITED FOOTBALL CLUB LIMITED No 2020-06-30 1.72 2
Wycombe League 1 29WYCOMBE WANDERERS FOOTBALL CLUB LIMITED No 2020-07-31 2.86 2
Crewe Alexandra League 1 45CREWE ALEXANDRA FOOTBALL CLUB COMPANY,LIMITED(THE) No 2020-07-314.052.06-0.542
Fleetwood Town League 1 40JAYMEL LIMITED Yes 2020-06-3013.714.42-2.922
Oldham Athletic League 2 72OLDHAM ATHLETIC (2004) ASSOCIATION FOOTBALL CLUB LIMITEDNo 2020-06-30 1.83 2
Northampton Town League 2 52NORTHAMPTON TOWN FOOTBALL CLUB LIMITED(THE) No 2020-06-305.383.11-0.572
Leyton Orient League 2 50LEYTON ORIENT FOOTBALL CLUB LIMITED No 2020-06-30 2.12 2
Bristol Rovers League 2 70BRISTOL ROVERS (1883) LIMITED Yes 2020-06-305.895.52-1.12
Bournemouth Championship1AFC BOURNEMOUTH LIMITED No 2020-06-3095.38166.52-60.091
Blackpool Championship19BLACKPOOL FOOTBALL CLUB HOLDINGS LTD Yes 2020-06-306.5912.2-3.091
Birmingham Championship11BIRMINGHAM CITY PLC Yes 2020-06-3022.8368.06-18.171
Huddersfield Championship7THE HUDDERSFIELD TOWN ASSOCIATION FOOTBALL CLUB LIMITED No 2020-06-3052.7464.97-8.221
Bolton Wanderers League 1 32FOOTBALL VENTURES (WHITES) LIMITED Yes 2020-06-309.3429.3-3.891
Charlton Athletic League 1 47CHARLTON ATHLETIC FOOTBALL COMPANY LIMITED No 2020-06-3015.3743.86-1.131
Salford City League 2 65PROJECT 92 LIMITED Yes 2020-06-303.426.19-3.771
Peterborough United Championship21PETERBOROUGH UNITED FOOTBALL CLUB LIMITED No 2020-06-307.244.98-3.470
Preston Championship16DEEPDALE PNE HOLDINGS LIMITED Yes 2020-06-3012.5648.92-10.10
QPR Championship8QPR HOLDINGS LIMITED Yes 2020-05-3118.322.47-16.390
Nottingham Forest Championship23NF FOOTBALL INVESTMENTS LIMITED Yes 2020-05-3125.7762.58-17.540
Reading Championship13RENHE SPORTS MANAGEMENT CO LIMITED Yes 2020-06-3019.68110.47-45.030
Derby County Championship24SEVCO 5112 LIMITED Yes 0
Ipswich Town League 1 43IPSWICH TOWN FOOTBALL CLUB COMPANY LIMITED Yes 2020-06-3010.6325.47-5.250

1 Includes the operation of sports facilities (SIC code 93110), activities of sports clubs (93120) and other sports activities (93199)

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