Wealthy Premier League clubs and extravagant transfers such as Manchester United’s world record deal for Paul Pogba may hog the limelight, but canny investors are increasingly taken by England’s less glamorous teams.
Four in 10 clubs in the three divisions below the top flight fielded approaches from potential investors in the last year, and that figure rose to 73 per cent for the fourth tier – League Two – alone.
That interest came from overseas as much as domestic suitors, say accountants BDO, who report the findings in their annual survey of football finance directors, published today.
Investors have been attracted by the potential for future growth in the medium to long term as clubs enjoy greater financial stability following the successful adoption of cost-control measures.
Premier League teams’ new era of profitability is underlined by BDO’s research, which found that 88 per cent of top-flight sides expected to be in the black for the coming season, which starts on Saturday.
That too has been driven in part by self-regulation in the form of so-called financial fair play rules, as well as rocketing income from domestic and international broadcast contracts.
A new three-year TV deal taking effect this season guarantees top-tier clubs £100-£150m each, allowing the richest outfits such as United to spend £89m on France midfielder and marketers’ dream Pogba.
The picture is less rosy in the fiercely competitive Championship, English football’s second tier, where 23 per cent of clubs said their finances were in need of attention or a cause for concern.
It is worse still north of the border, even among the biggest teams, with that figure rising to 40 per cent for respondents from the Scottish Premiership.
In an indication of their appeal, clubs from England’s third and fourth tier field far healthier responses. No League One clubs deemed their finances in need of attention, while those from League Two said they still expected to meet so-called financial fair play requirements.
“We appear to be witnessing a greater distinction between the three different sub-sectors of English football,” said Ian Clayden, head of professional sports at BDO.
“The healthy international brands of the Premier League are a contrast to the still very attractive, but financially precarious, Championship clubs. Meanwhile, Football Leagues One and Two are operating a financially stable business model, attracting significant global investor interest.
“The wealth gap between these divisions may be widening but, with increasing stability, the financial gap within individual leagues appears to be narrowing.”