The Premier League has never been so competitive and clubs continue to splash the cash in an attempt to keep up with the frantic pace of the English game.
For some, millions are spent chasing glory, however the vast majority are just trying to avoid the clutches of relegation.
Whether teams are at the top or at the bottom, they are prepared to spend huge sums to compete and, in some cases, avoid being left behind entirely.
However, what adds to the challenge is Financial Fair Play. While the top-flight may be the world’s league of riches, the rules state clubs can only spend what they make and so many are spinning plates, dicing with risk and reward on a daily and annual basis.
Here, we will take a look at how teams are spending, whether or not they are making any profits and who could be in trouble when it comes to FFP.
What is Financial Fair Play?
FFP rules have been set out to ensure clubs do not spend more money than they earn. In practice, this means clubs cannot gain a competitive advantage by overspending or failing to pay creditors in doing so.
The concept was established by UEFA in 2009 and implemented two years later in a bid to prevent clubs from landing themselves in financial trouble and ultimately threatening their very existence.
While clubs are obliged to balance their books, they must also meet each transfer and employee payment at all times.
Premier League FFP Rules
The Premier League FFP rules relate to club finances, good governance and accounting which include paying transfer fees, salaries and tax bills on time.
Clubs are also required to submit accounts annually and disclose payments made to player agents.
When it comes to losses, clubs cannot exceed £105 million across a rolling period of three seasons. If the loss is between £15m and £105m, the deficit must be covered by the club’s owners.
The official Premier League website states that, outside of their regulations, it is up to the individual clubs, their directors and senior executives, to decide how to spend their income.
Premier League FFP Punishment
If clubs fall foul of Premier League FFP rules, they could face a points deduction or in the most extreme cases, the threat of expulsion from the league.
For each case, an independent commission will review any alleged breaches.
Here is a list of possible punishments clubs can face if they fail to adhere to the Premier League’s FFP regulations, as per Sky Sports.
- Suspension from playing games
- Points deduction
- Ordered to replay matches
- Expulsion from the league
- Compensation
- Cancel or refuse player registrations
- Conditional punishment
- Fines
- Make such other order as it sees fit
Premier League FFP Table 2023/24
Premier League clubs, as mentioned, can make a maximum loss of £105 million over three years with special allowances being made for the COVID-19 pandemic.
So, what is the state of play for each Premier League club currently?
Well, while the accounts for the 2022/23 season are yet to be published, we can take a look at the figures for the three seasons previous to give us an indication of where clubs stand heading into the 2023/24 campaign.
| # | Club | 2019/20 | 2020/21 | 2021/22 | 3-Year P/L |
|---|---|---|---|---|---|
| 1 | Liverpool | -£9.5m | £69.1m | £7.5m | £67.1m |
| 2 | Sheffield United | £19m | £9.6m | £17.7m | £46.3m |
| 3 | Burnley | £0.5m | £0.2m | £31.2m | £31.9m |
| 4 | West Ham | £22.1m | -£8.6m | £12.3m | £25.8m |
| 5 | Tottenham | -£83.8m | £70m | £16m | £2.2m |
| 6 | Man City | £2.4m | -£44.6m | £41.7m | -£0.5m |
| 7 | Luton Town | £3m | -£1.9m | -£5.9m | -£4.8m |
| 8 | Newcastle | -£26m | £77.4m | -£70.7m | -£19.3m |
| 9 | Brentford | -£10.3m | -£53.2m | £25.1m | -£38.4m |
| 10 | Nottingham Forest | -£15.9m | -£15.5m | -£45.6m | -£77m |
| 11 | Bournemouth | -£60.1m | £17m | -£55.5m | -£98.6m |
| 12 | Arsenal | -£73.7m | £3.3m | -£45m | -£115.4m |
| 13 | Wolves | -£21.1m | -£112.1m | -£19m | -£152.2m |
| 14 | Crystal Palace | -£58m | -£75.7m | -£24.2m | -£157.9m |
| 15 | Brighton | -£67m | -£117.5m | £24.1m | -£160.4m |
| 16 | Fulham | -£45.2m | -£57.9m | -£94.4m | -£197.5m |
| 17 | Man United | -£92.9m | -£93.9m | -£115.5m | -£302.3m |
| 18 | Aston Villa | -£32.1m | -£274.9m | £0.4m | -£306.6m |
| 19 | Chelsea | -£145.6m | -£142.1m | -£121.3m | -£409m |
| 20 | Everton | -£120.9m | -£354.8m | -£44.7m | -£520.4m |
As you can see in the table above, nine teams have spent over the permitted three-year loss limit of £105 million, with Everton racking up a scarcily believable loss of over half a billion.
However, the league has shown some flexibility regarding the punishments as the 2019/20 and 2020/21 seasons were heavily impacted by the COVID-19 pandemic. That said, Everton are under investigation for breaches of FFP rules, although it’s not clear what the potential punishment may be.
During the same period, Liverpool made an overall profit of £67.1million between 2019/20 and 2021/22 which puts them in the healthiest position.
West Ham and Tottenham also made a profit, albeit small ones, over the same time period, while Sheffield United and Burnley recorded positive tallies in each of the seasons accounted for.
Manchester City made profits in 2019/20 and 2021/22 with the club’s three-year rolling total just shy of break-even at -£500k.
2023/24 Financial Fair Play Report
As the table below shows, the 20 clubs that will play in the 2023/24 Premier League campaign made a total combined loss of -£465.8m in 2021/22
A deficit of close to half a billion highlights the giant cost in pursuing glory and in most cases, mere survival.
So, which clubs currently have issues and who is steering clear of possible FFP sanctions?
Everton, who recorded losses in each of the previous six seasons, including a giant £354.8m in 2020/21, were charged with alleged breaches of Financial Fair Play rules in March 2023 and referred to an independent commission.
The Toffees finances appear bleak and the club will likely have to continue shaving a considerable wage bill in order to adhere to FFP regulations.
Manchester City are another club to have been charged after allegedly breaking Financial Fair Play rules around 100 times over a nine-year period, starting in 2009.
In more recent times, the Premier League champions recorded a profit of nearly £42m in 2021/22. Winning the treble in 2023 pocketed the club a further £294m in prize money, according to The Telegraph, which will give City real wriggle room when it comes to further spending to boost their squad.
Chelsea, meanwhile, recorded major losses between 2019/20 and 2021/22, totalling £409m.
During the 2022/23 season, the Blues splurged more than half a billion pounds on players, with 16 new faces costing a total of £585.5m in transfer fees.
However, despite the frantic spending, the club insists they continue to comply with Premier League financial regulations and so there is no FFP issue.
The Stamford Bridge club were able to sign new players without falling foul of FFP regulations due to amortisation which means, rather than spending big in one go, they have spread transfer fees over a number of years and it is these figures that would be used in FFP calculations.
Manchester United have struggled to repeat the success the club enjoyed under Sir Alex Ferguson but have spent more than £1 billion trying.
Now with United in substantial debts – the club recorded a combined loss of £302.3m in the three seasons between 2019 and 2022 – Financial Fair Play is lurking.
Still one of the biggest clubs on the planet, the Red Devils’ revenue dwarfs some Premier League clubs but they must achieve success or cut costs if they are to avoid FFP ramifications.
Newcastle were taken over by Saudi Arabian state-funded new owners in 2021 and were expected to spend big. The Magpies’ accounts covering 2021/22 showed a loss of £70.7 million, a turnover of £180 million and a wages-to-turnover ratio of 94.6%, well above the previous year’s figure of 76.2%.
This sort of financial report, if repeated, would almost certainly see them fall foul of the EPL’s FFP rules. Competing in the Champions League, having qualified in 2023, will increase money coming into the club, however.
In August 2022, Arsenal were reportedly placed on a watchlist by UEFA after 20 clubs across the continent were identified by the football governing body as at risk of breaching FFP regulations in the year 2021-22.
The Gunners made combined losses of -£115.4m across the three seasons but, according to analysts, narrowly stayed within FFP limits.
Liverpool and Tottenham each recorded a profit between 2019/20 and 2021/22 standing the Reds and Spurs in a strong position both in terms of adhering to FFP rules and having the scope to make additions to their team.
West Ham smartly improved their squad and standing in recent seasons, culminating in the Hammers’ Europa Conference League triumph. The club from the capital recorded a total profit of £25.8m in the three seasons starting 2019/20 and will hope to continue their savvy upward trajectory.
Aston Villa recorded a small profit of £400k in 2021/22 after a loss of -£274.9 and will again be buoyed in 2023/24 after qualifying for Europe for the first time since 2010.
Sheffield United and Burnley built on three consecutive seasons of profit by securing automatic promotion to the Premier League a year later.
As recently as April 2022, Championship clubs had a £39million threshold for losses over a three-year period.
Luton Town spent all three seasons in the second tier from August 2019 to May 2022 and recorded a loss of just £4.8m in that time period.
Winning the play-off final, dubbed the richest game in football, by beating Coventry on penalties to earn a place in the top-flight, Luton stand to make at least £170, following their promotion.
Playing in the big time, all three clubs that went up in 2023 will now have to decide how to take the next step. Some promoted sides will spend vast sums on new players in a bid to avoid the drop, while others will try to remain frugal. It is a giant risk that can lead to a great reward but ultimately, FFP is designed so that club’s don’t put their future on the line for immediate success.
Brighton and Brentford were lauded for how they operated during the 2022/23 season. Handed particular kudos for how they recruit, the Seagulls qualified for Europe while the Bees secured a top-ten finish.
Looking at the figures for 2021/22, it is no surprise to see the two clubs make a £25m profit each.
It must be noted Brighton did make an overall loss between 2019 and 2022 but the East Sussex side have already cashed in on one of their main assets heading into the 2023/24 season and look to have a bright future if they continue on the same track.
Bournemouth, who were relegated from the Premier League in 2020 before securing their return two years later, lost nearly £100m during that time.
Fulham, meanwhile, who won the Championship title in 2022, bouncing straight back to the Premier League after being demoted, were in the red by nearly double the amount of the Cherries, recording three consecutive seasonal losses totalling £197.5m.
Nottingham Forest lost a total of £77m during the three seasons leading to their 2022 play-off final triumph which earned them a place in the top-flight. It will be interesting to see the club’s figures for 2022/23 after signing a total of 30 players during their first Premier League campaign in 23 years.
Crystal Palace are now an established Premier League club and the 2023/24 season will be their eleventh consecutive campaign in the top-flight. However, the stay hasn’t come cheaply with the Eagles recording a combined loss of £157.9m between 2019/20 and 2021/22.
Wolves are another club to make consecutive annual losses in recent times. Earning a profit the season they won the Championship title in 2018, the Midlands club have since lost money totalling £152.2million since 2019/20.
As the Premier League competition continues to grow ever fiercer, clubs will have to wrestle with soaring transfer costs while keeping to the parameters FFP imposes in what continues to be a challenging juggling act.
