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Financial issues and championship football clubs starting with "B" seem to go hand in hand.
Take Bolton Wanderers and Blackburn Rovers, two of England's historic football giants. Famous old Northwestern clubs and founding members of the Football League with 10 FA Cup between them.
Yet in recent days, one faced a liquidation and the other recorded record losses just a few years after their loss of place in the elite of the Premier League.
And then there is Birmingham City, which was deducted Friday from nine points for violating the rules of profitability and sustainability.
Kieran Maguire, a football finance expert, explains in seven charts how the three clubs have come to this point and asks if there are lessons to be learned from other clubs.
Blackburn Rovers
"The club records were broken, bridges were built and memories were created," Blackburn Rovers' account statement announced last week.
After all, the club won the League One promotion in 2017-18.
But a record that the club may not be so proud of is a loss of £ 17.5 million this fiscal year – a record for League One. Although some clubs have not yet announced their results and others choose not to publish detailed earnings figures, Rovers' losses are greater than those of the other six clubs that reported to Rovers. this day.
When Venky bought the Blackburn Rovers in November 2010, the club ranked 14th in the Premier League and had an annual income of more than 57 million pounds. Since then, the owners have overseen a club that has been relegated twice while its turnover fell below the £ 9 million mark as it finished the season as a Ligue 1 finalist against Wigan Athletic.
Under Venky, Rovers had operating losses of £ 153m in eight years, losses partially subscribed by player sales, but mostly by the owners themselves, who had lent the club £ 109m without interest at the end of the year. June 2018.
The reason for these losses is simple.
Since Blackburn was acquired by Venky, the club has generated revenues of £ 237m and player costs of £ 305m, which means that other operating costs as well as a sizeable proportion of the costs of players were funded by the owners.
Indian owners have been unpopular and a fan base with #VenkysOut appearing regularly on social media, the club having been relegated in 2011-12 and having managed to finish twice among the top of the league in five seasons, despite the parachute payments of the Premier League. , designed to mitigate the financial shock of falling high-end, for three of these seasons – before finally being relegated in 2016-17.
Bolton Wanderers
A few miles from Blackburn, Bolton Wanderers fans wondered whether or not they had a team to support while their club was facing a HMRC liquidation order regarding unpaid taxes on Wednesday.
The vagrants' finances matched to some extent those of Rovers, with a volunteer owner, Eddie Davies, who acquired the club in December 2003.
Bolton finished eighth in the Premier League in 2003-04 and maintained his champion status until 2011-12 – but that was a significant financial cost.
While Bolton was initially making profits, recruiting players such as Nigerian superstar Jay-Jay Okocha, French internationals Yuri Djorkaeff and Nicolas Anelka and Spain and Real Madrid's Fernando Hierro have resulted in higher costs than the revenues and costs of the players. When Davies arrived, his income was slightly more than half of his income.
Soon the club was paying more in player fees than it was generating in revenue.
While the Trotters finished eighth, sixth, seventh and sixth from 2004 and qualified twice for the Uefa Cup, Davies decided to make up for the losses of the club because, as a rich fan, he wanted to give some thing in return.
Even in the Premier League, the club was losing money and had lost nearly £ 100 million in its last six seasons in high flying.
The losses continued in the championship despite the benefits of parachute payments and Davies subscribed them, but a combination of failing health and a small but loud critical element within the fanbase brought him to cut links with the club and stop funding losses. with HMRC threatening to liquidate the club for unpaid taxes.
To make the club attractive to new owners, Davies wrote off £ 170 million of loans he had made over the years to cover his losses. In addition, some real estate badets were sold to generate cash to hold creditors at bay.
With the club close to the administration, Davies sold it to former player Dean Holdsworth and businessman Ken Anderson in February 2016. Since then, Holdsworth has broken up his relationship with the club, leaving him in the hands of Anderson, a former banned football officer company director in the UK for eight years from 2005, he pbaded the EFL Owners and Administrators test at the end exclusion.
Davies died in September 2018 and lent an additional £ 5 million to the club four days before his death.
There were numerous liquidation orders and accounts of unpaid employees and suppliers, which resulted in another attempt by the HMRC last week to have the club liquidated for unpaid taxes. The club has a two week reprieve, Anderson trying to find new homeowners ready to finance daily operating costs.
The city of Birmingham
As for Birmingham, which has been competing in the league since 2011, their financial figures have changed dramatically in the last two years.
After a period of relative austerity, Birmingham began recruiting players for substantial fees, as well as borrowing and signing Bosman.
The level of spending sanctioned by the owners of Birmingham since 2016-17, which seemed to be described as random and spendthrift, has led the club to be imposed a slight embargo on transfers by the EFL to the US. summer 2018.
The signature of Danish defender Kristian Pedersen, who was registered by the EFL while the club was theoretically unable to recruit players against a commission, further aggravated the initial crime.
£ 1m or £ 100m? The choice against the championship clubs
The three clubs play this season a division where the loss is considered the norm, the promised land of wealth of the Premier League being on the horizon.
The 17 clubs reporting to date record collective operating losses of £ 366 million. With Fulham, Sunderland, Sheffield Wednesday, Brentford, Derby and Bolton, who have not yet announced their results, the Championship could report a total loss of more than half a billion dollars. pound sterling.
The reason why clubs in the division struggle is a lack of control over the costs of players in terms of salaries and transfer fees.
Anyone who chooses to badume the responsibility of running a championship football club will, realistically, be prepared to pay huge sums every month to keep the club afloat, in order to keep it from Ligue 1, where the clubs earn a circulation income of around £ 1m or to be promoted in the Premier League where they can earn a minimum of £ 100m.
But as we have seen in Birmingham, pushing the boat too far can have consequences.
EFL's nine-point penalty imposed on Birmingham will create a precedent that will be taken up by supporters and critics of the rules. The cheerleaders who claim that this will have a chilling effect and encourage better management.
Alternatively, the conspiracy theorists claim that it is unlikely that Birmingham will get a place for the play-offs or be relegated before the decision and that, realistically, nothing has changed as a result of the punishment, so that the club is not worse off than before.
Kieran Maguire is a senior lecturer in football financial badysis at the University of Liverpool, where he teaches the MBA course in Football Industries.
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