The authoritative Swiss Ramble has reviewed the PSR position of Premier League clubs.
Looking at the overall result for the Premier League, the £1.5 bln pre-tax loss was more than covered by £1.7 bln in allowable deductions, giving an adjusted PSR profit of £266m. In total, the maximum allowed loss was £1.9 bln, so there was a lot of headroom - for the league as a whole.
However, there is a wide divergence between individual clubs in the Premier League. Many of them had plenty of headroom, led by Manchester City and Brighton.
In contrast, seven clubs were relatively close to the PSR limit, especially Leeds United, Newcastle United, Everton and Aston Villa.
Furthermore, there were a few clubs that had to really scramble to comply, including making last minute player sales in June and employing some “creative accounting”.
Based on the broader definition of secure funding, the Swiss Ramble's expectation is that no Premier League club will fail PSR in the 2024/25 assessment. Most clubs have taken their medicine, so can now afford to post large losses in 2024/25 and still comply.
That said, some clubs are inevitably closer to the line than others, so might still have work to do. The club that looks most at risk is Aston Villa, while Burnley, Everton and Leeds United might also have to box clever.
Villa were £12m below the maximum allowable loss of £105m at the end of 2023/24, so the player sales that they booked in June 2024 were critical for compliance with PSR, which helps explain why the club extended its accounting period from 31st May to 30th June.
In theory, Villa’s PSR challenge was even tougher in 2024/25 as the 3-year monitoring period dropped 2021/22, which was significantly boosted by the big money sale of Jack Grealish, so they will have to restrict their loss to £23m, compared to last season’s £86m.
However, they will benefit from Champions League income, as well as high player sales, though the wage bill will also have grown from contract extensions, performance bonuses and the incoming loans of Marcus Rashford, Marco Asensio and Axel Disasi in January. Duran’s move to Saudi Arabia in January might have come as a surprise, given his goal scoring feats in the first half of the season, but it was very helpful to the club’s PSR position.
More players may have to leave before 30th June.
If we restrict the maximum allowable loss to £15m for those clubs where capital has not been injected by owners, Burnley would actually have to make a profit in 2024/25.
However, for half of the league, there would be no difference in the amounts that clubs could to afford to lose, while the reductions would have little practical impact for many others.
There is little doubt that PSR has influenced the behaviour at many clubs, but that has actually put them in a good position for the 2024/25 assessment.
Based on this analysis, it actually looks like some clubs might be using PSR as an excuse for not being active in the transfer market, when they don’t really face restrictions.
That said, just because a club is not limited by the regulations does not mean that it should automatically spend big on new signings.
Leaving aside the fact that many transfers are not ultimately successful, it has to be remembered that in the real world, clubs are constrained by their budget, i.e. their cash flow, just as much as the regulations.
That is impacted not only by the payment schedule agreed for future transfers, but also the high amount of transfer debt that has already been built up by many clubs.
Labels
Aston Villa Premier League PSR
West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...