The EFL is ‘broken’ – with clubs in the Championship on track to lose an average of £15million per season and those across the competition set to post annual losses of more than £600m, a Daily Mail Sport investigation can reveal.
Shock figures highlight the desperate state of play outside the promised land of the Premier League, with the staggering sums being lost each year laid bare. So far, 14 Championship clubs have filed their figures for 2024-25 and they paint a stark picture.
Of that group, 13 posted soaring average losses of £14m. That includes league leaders Coventry City (a £21m loss from a profit Oof £8.7m last year), Norwich City (£20.7m) and QPR (£20.1m). Preston North End, who have never played in the Premier League, lost £13.4m. Oxford United lost £17.5m, while Portsmouth lost £4.3m. Plymouth Argyle, relegated to League One, registered a £300,000 profit.
Stoke City, owned by the billionaire Coates family, would appear to be an anomaly. The Potteries club posted a ‘profit’ of £64m however, that only came on the back of their owners writing off a vast £90m loan.
League insiders believe the difference between revenues of the Premier League and Championship, which now stands at a cavernous £5.3bn, had led to irrational behaviour among some of those in charge who are grossly overspending in an increasingly desperate bid to reach the top flight – and that for the latest financial year, the 72 outside the top flight could record staggering combined losses of around £600m.
Today, in English football’s second tier, owners are routinely having to write cheques of around £14m simply to stand still – either loaning their club money or writing off losses altogether.
Sheffield Wednesday have been stuck in administration limbo for five months after Dejphon Chansiri’s tortured reign
Teams like Sunderland have spent big to escape the EFL – but those who don’t get there can end up in serious danger
The spectre of parachute payments, which see relegated sides handed around £100m over three years (should they not win promotion), are also playing a key role according to those within the industry. Between 2018-19 and 2024-25, revenue among Championship clubs rose from £21m to £27m. To those with parachute payments that figure went from £57m to £90m.
‘This is just not a level playing field,’ bemoans one exec. The issue is also exacerbated by a difference in player trading, with parachute clubs in 2023-24 having an average profit of £54m in the transfer market as opposed to £8m elsewhere. EFL bosses believe the payments are a ‘trampoline’ and ‘anti-competition’.
Wage inflation is also wreaking havoc. Kieran Maguire, the respected football finance expert, believes the average salary in the Championship last season was £14,000 a week, while in Leagues One and Two those numbers were an inflation-busting £3,900 and £2,000 a week.
Indeed, between 2018-19 and 2024-25, League One clubs saw revenue rise by just five per cent as wage costs more than tripled. There are now believed to be multiple players in the third tier making five-figure sums each week.
The average Championship wage bill for 2023-24 was £37m, although for parachute clubs it was £71m, and non-parachute clubs £28.2m. Other societal costs including rising energy bills and national insurance have also played a role.
Daily Mail Sport has spoken to executives across the three divisions to seek their views, with each speaking on the condition of anonymity. ‘The system is broken,’ says one Championship official. ‘My owner asked me what we could do to make our club sustainable. When I’d finished laughing I told them it was simple – we could get relegated and live within our means in League One. It’s like the Wild West out there, and the only people profiting are players and agents.’
University lecturer Maguire, of The Price of Football podcast, believes the logic among those who are grossly overspending is fairly simple. ‘It’s like you and I buying a lottery ticket,’ he explains. ‘But unlike you and I, you have a three in 24 chance of winning. There are wealthy individuals who are willing to pay the sums we are seeing to buy that lottery ticket.
‘Southampton stank the place out last season, finished bottom of the Premier League and pocketed £109m, whereas your average Championship side got around £11m.’
Maguire also believes there is a disparity within the EFL itself. ‘There have always been losses in Leagues One and Two and the TV gap is similar (as that between the Premier League and Championship).
‘Southampton stank the place out last season, finished bottom of the Premier League and still pocketed £109m (in top-flight prize money, TV money and other commercial revenue)’
Championship leaders Coventry City look set for promotion – but it’s just as well after they lost £21m last season
Norwich City, who have spent 10 seasons in the Premier League, lost £20.7m last season as they try to get back to the riches of the top flight
‘Clubs in the Championship get 80 per cent of the revenue and 12 per cent in League One – so you have a similar position with some of those in League One overspending to get to the Championship.’
Maguire points out that even the fifth-tier National League is not immune, with clubs desperate to punch their ticket to the EFL. ‘Stockport did £5m getting out of it,’ he says. ‘Wrexham won’t have been far off.’
It is a continued, sorry story in the third and fourth tiers. So far nine League One clubs have returned their figures for 2024-25, with losses averaging £8.23m. That is almost double the £4.2m average from the previous year. Relegated Cardiff City lost £35.1m, while Burton Albion posted a deficit of £8.1m and Wycombe lost £9.9m.
In League Two, 10 clubs have posted average losses of £2.44m. That is more than double the previous season’s £1.2m. Bristol Rovers’ number was £6.8m followed by Gillingham on £5.7m and Cambridge United with £3.7m.
When it comes to wages, the average staff costs from the six clubs to have declared is an astounding £13.42m, although that does include Cardiff’s second-tier numbers.
In League Two, six clubs have declared their staff costs with a scarcely-believable average so far of £7.08m. With Sheffield Wednesday now in administration and without a buyer after former owner Dejphon Chansiri refused to continue funding heavy losses, there are grave fears others could go the same way when their own owners get fed up with handing out eye-watering sums with little return.
Historic clubs, institutions of the game, whose very futures now lie directly in the hands of their owners. The influx of American owners at suddenly big-spending clubs such as Birmingham City and Wrexham may well be welcomed by their own fanbases, but the impact their investments have had on wage-spend is being felt elsewhere as others feel under pressure to keep up and to remain competitive.
All of this comes against the backdrop of a continued dispute between the EFL and the Premier League over financial redistribution, which may well see the newly appointed Independent Football Regulator step in. The argument among those in the Premier League is well quoted and fairly simple. Why should they hand over more money to owners who, in some cases, are wealthier than they are so those owners can then use that money to try and take their lucrative places at the top table?
The EFL would point to many of the statistics above. Their view is that all of the madness is being caused by a desperation to get to the promised land and that the promised land should do its bit to ensure the rest of football does not eat itself.
US ownership is rising in the EFL such as at Wrexham, owned by Hollywood’s Rob Mac (left) and Ryan Reynolds, and Birmingham – who count Tom Brady (right) among their investors
Clubs such as Luton Town have shot up through the leagues only for the bubble to burst rapidly and dramatically – the Hatters suffered back-to-back relegations after being in the top flight
The futures of historic clubs, institutions of the game, now lie directly in the hands of their owners
Much will depend on the reading of the situation from IFR chair and former chief Premier League rights negotiator David Kogan. Kogan was at the Premier League shareholder meeting last month, has been visiting clubs and was at the EFL annual summit at the Belfry in March, where clubs unsurprisingly voted to extend the Championship play-offs from four to six. Two more lottery tickets up for grabs.
Kogan has commenced work on his State of the Game Report, and the EFL will hope their arguments feature prominently in his final draft. Should an agreement on redistribution remain outstanding, he would have the power to force the issue via a backstop, but clues were thin on the ground according to those who were at the Belfry.
That said, a hint at an end to the war arrived at the Churchill Hotel last week where Premier League chief executive Richard Masters suggested to top-flight clubs at the latest shareholder meeting that they should aim to find an agreement in months, albeit without prejudicing their own position and ensuring it could not be used as a starting point ahead of a backstop. Perhaps the view now is that negotiation, rather than a forced deal, may be preferable.
For all of the above, the story in the EFL is not all doom and gloom. While financial performance is an indicator which cannot be ignored, other signs point to positivity. Record attendances were posted in 2023-24 and largely maintained last season on the back of a post-Covid boost, with numbers not seen since the post-War boom.
The Championship is the second most-watched league in Europe after the Premier League, ahead of the Bundesliga, La Liga and Serie A. The ‘basic award’ handed to clubs by the EFL has never been higher. With almost a third of clubs now owned by Americans, a growing US interest helped drive a broadcast deal with CBS, which airs more than 250 EFL matches across the Atlantic.
This week EFL officials are in Florida to see how they can grow further in the US. They will be buoyed by viewing figures attracted here for Hollywood pair Rob McElhenney and Ryan Reynolds’ watchalong on Sky for Wrexham v Swansea City which Daily Mail Sport understands attracted a total audience of 424,000 – a significant increase on average viewers for a Championship match.
Regardless, the feeling is that we are hurtling towards a tipping point and the concern is that those who keep paying millions for lottery tickets without tasting success will eventually decide to cut their losses, and take centuries of history with them on their way out of the door.
‘The backstop cannot come quick enough,’ says another exec. ‘It cannot carry on like this.’ In an op-ed published with this report today, EFL CEO Trevor Birch outlines the frightening reality of the situation. ‘The clock is ticking,’ he says.
CASE STUDY 1: CHAMPIONSHIP – ARMAGEDDON AT SHEFFIELD WEDNESDAY
It may seem odd, given that the aim was to save money, but the first thing administrators did when they arrived at Sheffield Wednesday was order 40 laptops.
‘You can inherit a distressed operation, and quite quickly identify issues that you have to fix,’ explains Paul Stanley of Begbies Traynor, the firm handling the sale of this historic club. ‘If you were to take over at a factory that was pumping waste into a river – you would be legally responsible if you allowed that to continue.’
Sheffield Wednesday fans endured 10 years of Chansiri in charge and their ownership uncertainty isn’t over yet
Protests were common before Chansiri finally gave up the club last October – with fans even invading the pitch during a match
Of the many issues they found under the bonnet after Dejphon Chansiri had pulled the plug, a ‘complete lack of investment in anything other than the first team’ was one of the more damning.
‘Some of the computer equipment was older than some of the staff,’ Stanley explains. ‘That put the club at risk of breaching various requirements. There was also a lack of traceability in all departments, from the ticket office to accounts, which was needed from a business perspective. It quickly became clear that there had been almost zero spend on infrastructure.’
Stanley is a veteran of a number of administrations in football, most recently at Wigan Athletic. The names of the clubs change, but the story is often the same. ‘Chansiri probably invested around £160m,’ he explains. ‘The club was losing around £10m to £12m and the vast majority of the income was going on player wages. Wigan was similar.’
To Stanley, these are examples of a wider issue: ‘The system is broken. When Wednesday drop into League One the TV money will go from around £11m to £3.5m, but a lot of high-earning players leave. The flip side is if you get promoted all the agents know your financial position and the extra money just goes on wages again.’
Stanley reveals that Wednesday actually lost money for opening the doors for their derby with city rivals United, when season-ticket revenue is put to one side. ‘Season tickets were sold 15 months ago, so you’ve got 17,000 people coming in whose money has already gone.
‘Then you’ve got the stewards, the heat and the light to pay for. Then the bill from the police is in the tens of thousands. Then £600 for someone to stand next to the lift in the disabled section just in case it breaks down in and needs a manual override. There are hundreds of things that people tend not to think about.’
Stanley believes those in the industry stopped treating football as a business a long time ago.
‘Very occasionally someone will do well, like a Mike Ashley at Newcastle,’ he explains. ‘But to most owners it’s a hobby and they love the glamour. There’s an Aldi near Hillsborough which probably turns over as much as the club but is there mass media interest every time its manager changes?
‘There are people around the world who want a piece of the action and who are prepared to lose fortunes chasing a place in the Premier League. The problem comes when they don’t get there, as they haven’t here, and they get sick of writing cheques.’
CASE STUDY 2: LEAGUE ONE – THE SUCCESS STORY THAT LOSES £3M A YEAR
‘When I arrived nine years ago,’ says Liam Scully, chief executive of runaway League One leaders Lincoln City, ‘we had modelling that told us on a wage budget of 10th-12th place in League One or League Two, we would keep losses to around £1m-£1.5m before player trading and cup runs.
‘Now, with a 17th-18th placed wage budget in League One we’ll lose around £3m. That’s how much it has changed in less than a decade, even after we have grown revenue by over 250 per cent in that period. The whole water line has risen.’
Lincoln City are running away with League One – but are losing £3m a year
And yet Lincoln continue to rise above it, and, barring disaster, will soon swim to a bigger pond. The Imps, despite that modest budget, could well find themselves at the Tottenham Stadium next season.
‘Everyone tells me it’s success,’ Scully adds. ‘But when you’re losing £3m it sometimes doesn’t feel like it! Fortunately, we have owners who know how much it is going to cost and who will stand it.
‘(PFA chief executive) Maheta Molango said we don’t have to do pay inflated wages. ‘He’s right, but then do you want 12,000 people screaming at you for what they would see as a lack of investment? Nobody doesn’t want to be successful, but we’re all chasing success in what is now an inflated marketplace.’
Scully believes that spiralling salaries are the key issue. ‘We did a new broadcast deal last season and wages went up 57 per cent,’ he explains. ‘You get the American owners at Wrexham and Birmingham City – and I’m not knocking them for a second because what they are doing is great for those clubs – but not long ago, if a player wanted to earn £10,000-a-week they would have to get to the Championship. Now there are lots in League One on five figures every week and there’s a new baseline.
‘It won’t go backwards and the clock will not go back, despite the fact those two clubs have now been promoted.’
So how do Lincoln succeed? ‘From a pure business model you would like to break even but I think there’s a recognition that you just wouldn’t be competitive,’ says Scully. ‘Our challenge if we got promoted would be how are we competitive on revenues of £18m against £30-40m?
Lincoln could even end up playing at the Tottenham Hotspur Stadium next season – but how on earth are they meant to compete with revenues of £18m?
‘We don’t think we have the blueprint for football but we have been working on who and what we want to be for around eight years, gradually building. You bring in good people in each department, and you don’t deviate from the plan over a long-term period. You know who you are and what you are good at.
‘Luton were a great example of that when they went up through the divisions. Yes – you’re going to be judged on what happens on Saturday but you have to keep the long-term picture in mind. And you have to recruit well. Make sure you take as many bumps out of the rollercoaster as you can.’
Scully also believes there are huge positives for the game outside the Premier League, despite the financial picture. ‘It’s a paradox in the EFL at the moment,’ he says. ‘On the one hand you can look at the losses and think it’s in a bit of a state. But then on the other, interest and attendances have never been higher. Lots of people want to be on board as fans, partners and sponsors.
‘We were openly looking for investment not long ago and there was a hell of a lot of interest in Lincoln City, so if that’s the case for us then think about what it must be in the bigger clubs.’
CASE STUDY 3: LEAGUE TWO – THE COST OF GETTING BACK IN
When Oldham Athletic faced Southend United at Wembley in the National League play-off final last June to decide which of the two would return to the EFL, Latics chief executive Darren sat next to his father, Joe, two Royles in the Royal Box.
‘Dad got us promoted to the First Division (now Premier League) in 1991,’ Darren explains, ‘but I remember thinking that this almost felt bigger.’
Oldham prevailed 3-2 after extra time – but the return came at a staggering cost. ‘That season we lost around £3.8m and £3.1m of that was player salaries,’ Royle explains. ‘The clubs at the top of the National League have wage bills around 50 per cent higher than many of those in League Two.
‘The agents get a feel for a club’s budget and they know how desperate the bigger clubs are to get in. Then there’s a premium to persuade players to drop into the National League and it’s a beast of a competition to get out of.’
Oldham Athletic celebrate promotion back to the Football League last year – but the return has come at a staggering cost
Oldham fans also protested on the pitch during a match in 2022, before they were rescued by the local Rothwell family
Oldham, former founder members of the Premier League, are alive again. On Tuesday night more than 9,000 flocked to Boundary Park for their clash with Notts County, with an upturn in form suggesting an outside shot at the play-offs.
Had it not been for the intervention of a local family, when the club was in its darkest hour having dropped out of the league under disastrous previous ownership in 2022, it could have been a very different story. Royle explains: ‘If it wasn’t the Rothwells it was either asset strippers, liquidation or National League North under a sustainable fan-owned model.’
The Rothwells – flat-capped patriarch Frank, wife Judith and children Luke and Su – run a well-established Portakabin business whose profits surged on the back of the pandemic and a huge increase in demand. Having bought the stadium and the land and funded close to four seasons they are already in for north of £20m.
‘We’re blessed and lucky to have them,’ says Royle. ‘They are decent people who are loyal to the town and who are loving the journey. They’re also well aware of what the cost is. We’re probably an outlier because we’ve had to reverse 30 years of decline and decay. There’s already been more than £1m spent on the stadium alone to get it to a point where it was safe. The infrastructure was broken. But the wages have been the biggest cost, like they are for everyone.’
Royle believes the role of the Independent Regulator is key. ‘Everyone is waiting with baited breath,’ he says. ‘Will the backstop come in? When will the talks happen? There’s an opportunity here. If there is increased revenue there’s no point just blowing it on wages. It should come along with regulation. We have the most revered pyramid in the world and it needs to be protected.’
