Birmingham City's accounts revealed a significant loss for the 2024/25 season
Birmingham City chairman Tom Wagner (left), director Andrew Shannahan (centre) and chief executive Jeremy Dale (right)
Birmingham City chairman Tom Wagner (left), director Andrew Shannahan (centre) and chief executive Jeremy Dale (right)
View Image
The huge losses being posted by Championship clubs aren’t likely to prevent wealthy owners from betting on promotion to the Premier League.
That’s the verdict of Christian Purslow, the former Liverpool and Aston Villa chief executive, who oversaw the latter’s promotion to the top-flight in 2019.
Birmingham City posted a pre-tax loss of £34.4million for the 2024/25 season when they were in League One.
Owners Knighthead didn’t rein in the spending after relegation from the Championship, instead investing more heavily in the hope of building a squad that could win promotion and hit the ground running in the second tier.
The club’s wage bill climbed to £38.9m – higher than their £35.6m revenue.
Knighthead spent a good chunk of their money on infrastructure improvements to St Andrew’s and the club’s two training grounds – costs which don’t count towards the EFL’s Profit and Sustainability calculations – to increase revenue.
But Blues are among the clutch of second tier clubs who are spending more than they are making and being bankrolled by their owners.
Speaking on The Football Boardroom podcast, Purslow said: “The definition of unsustainable is relying on an owner to fund losses indefinitely. If you were trying to reduce losses meaningfully, I would say the only way to do that is to put control on spending.”
Purslow likens investing in a Championship club to ‘buying a lottery ticket’ because of the huge financial reward of reaching the Premier League.
The broadcasting deal in the Premier League guarantees all clubs in excess of £100m, whereas Championship clubs don’t even get 10 percent of that figure.
Knighthead are intent of reaching the Premier League and, as per Blues’ accounts, are willing to keep footing the bill whilst the club’s in the Championship.
Sky Sports, HBO Max, Netflix and Disney+ with Ultimate TV package
This article contains affiliate links, we will receive a commission on any sales we generate from it. Learn more
Content Image
Content Image
Purslow added: “If you're a Championship club losing anywhere between £5-20m, the one way you're going to get that funding back is if you successfully navigate promotion, successfully establish your club in the Premier League, then maybe realise your investment and sell for hundreds of millions of pounds.
“What happens if you do that successfully is you can in theory see a dramatic increase in the value of the owner's investment, as proven by the fact that in the last 12 months Brentford's owner Matthew Benham has sold a small stake in Brentford that values Brentford at over £400million.
“I promise you when I took Aston Villa to play Brentford in 2018 when I found myself as CEO of a Championship club, nobody in that stadium could have imagined Brentford would be worth £400m.
“To use a business phrase, that is economic incentive and it has huge power in influencing the strategies that are pursued by EFL owners.
“They look at their league and see a possibility - maybe 25 percent or a bit more now they've added a couple of play-off places - of arriving in a league, where if they get there and establish themselves, they may own a football club worth £400-500 million.
“Those people buying into the Championship are going to look at Coventry this year, Sunderland last year, what Wrexham are doing, and they’re going to believe. Regulations, losses, dark clouds… but I can be the guy who proves that all wrong if I can get my management right, my recruitment right, get a bit of luck and find myself in the Premier League. I might be Brentford in a couple of years selling shares in my club worth £400m.”