Luton Town’s success is a fairy tale, but beware the Premier’s big bad wolves 

WHAT A marvellous tale the rise of Luton Town is. Whether you have affection for the club or not, to climb from non-league football into the Premier League in around 14 years is a considerable achievement and the sort of romantic yarn the game had almost forgotten how to create. 

This is a club with one of the lowest wage bills in the Championship, with a sub-10,000 average gate, and a modest revenue generating platform that earned £ 17.7 million in 2022. Line that all up against Manchester United, Manchester City and the other big fish and Luton Town are definitely being cast in the role of David against a whole room full of Goliaths.

Luton were last in the top flight in 1992, the summer that saw the birth of the Premier. They had enjoyed a prolonged period in the first tier, developed a lot of players that went on to enjoy very fruitful careers and even won a trophy in 1988, beating Arsenal 3-2 in the Football League Cup final. When they drifted down the leagues and, after a harsh points deduction, into non-league football, it looked as though Luton would never see the bright lights again.

Kenilworth Road, their home ground, has long been on the threatened species list and the club has been trying for decades to move to a new stadium. At present, their capacity is restrictive for revenue growth and although the atmosphere is first class, the ground is something of a much-loved throwback. A new stadium, Power Court, is currently on the agenda, a 23,000 arena close to Luton railway station that should be completed by 2026 regardless of the status of the club. 

The real bonus of Premier football will be, inevitably, the extraordinary broadcasting money. Over three years, this could run to more than £ 170 million, but even failure is well rewarded in the elite division. Luton’s £ 17.7 million of earnings in 2022 could easily exceed £ 120 million in 2023-24. A good benchmark is Brentford, whose revenues rose from £ 15 million in 2020-21 to £ 141 million in their first Premier campaign.

Naturally, wage bills will increase but they are unlikely to account for 101% of income as they did in 2021-22 (2020-21 was even higher, 111%). Commercial income will surely increase, too, but without a price hike, matchday income cannot rise too much with the current structure of Kenilworth Road. Football Finance expert Kieran Maguire calculated that one season of Premier football will be the equivalent of 17 seasons of income combined, that’s how lucrative promotion can be.

If Luton can stay in the Premier for a few years, the financial benefits have the potential to place the club on a stronger financial footing. But there’s the rub, for staying there is as hard as getting there in the first place. However, the recent trend is not for instant ejection after one year. In 2022-23, for example, none of the teams promoted in 2022 went down, but this has happened only twice in the past decade. In 2021-22, Norwich and Watford, who had been promoted in 2021, both suffered relegation. Overall, 13 of the last 30 promoted teams have lasted one season.

Luton have shown, however, that they are well managed, pragmatic and realistic about their aspirations. They are only too aware their collapse was attributable to being poorly run in the past. In today’s football, small clubs – and Luton are just that – have to adopt smarter strategies to survive and this includes player trading, community interaction and youth development. Luton’s players trading profits in 2021 and 2022 were £ 1.1 million and £ 2.2 million respectively, so there is a very obvious upside in this revenue stream.

Nothing drives loyalty and passion like existential threats and Luton’s demise certainly generated a lot of affection for the club. Hence, the play-off victory at Wembley was greeted with waves of emotion for the Hatters. Their return to the top of the English game could have a good moral-boosting effect on a town that has had some hard times. Luton’s industrial decline has been compared to that suffered by some northern towns even though it is in close proximity to London and a short drive from affluent places in Hertfordshire.

With over a quarter of a million people and a growing airport, hosting a Premier League club should not be too much of a problem. Nevertheless, Luton Town have punched above their weight to get this far, but in recent times, clubs like Burnley and have demonstrated there is a place for small-to-medium sized football clubs. It may be a struggle when they kick-off later this year, but Luton Town and their fans, will, undoubtedly, enjoy being back among the crème de la crème of English football once more. 

Bounce-back Burnley look ahead to the Premier

BURNLEY’s tremendous campaign in 2022-23 means the club will surely overcome any hardships from suffering relegation a year earlier, although the accounts for the season just ended will reveal an inevitable drop in revenues. 

The club has just published its financial report for 2021-22 and, despite falling through the trapdoor into the Championship, Burnley made a pre-tax profit of £ 36.1 million, bettered only by Manchester City, on turnover of £ 123.4 million. It is likely the club’s income will be less than £ 100 million and probably closer to £ 80 million in 2022-23.

Now that the EFL’s transfer embargo has been lifted, Burnley will go into the Premier with no small amount of optimism; they were worthy and impressive winners of the Championship, losing only three games and running-up a staggering 101 points. Vincent Kompany, their manager, won the hearts of the fans in his first season and has now signed a contract that takes him to 2028. This may seem a bold gesture on the part of the club, but the way Burnley played suggests they could acclimatise quite well in 2023-24 and Kompany is, after all, a sought-after asset. 

Burnley’s last Premier League season underlines the importance of TV and media income to the clubs. Burnley’s £ 123 million (an increase of 7.2%) included £ 105 million from broadcasting, representing 89% of overall revenues. Matchday earnings totalled £ 7 million, a relatively small figure compared to many Premier members but one of the highest recorded by the club, while commercial activity raised £ 11.5 million, better than 2020-21 but some way below pre-pandemic figures.

Burnley were relegated with a wage bill of £ 91.9 million, slightly lower than 2020-21 but still 75% of income, a ratio that was at the higher end of the Premier League. Two seasons earlier, the club’s wages totalled £ 100 million. Burnley’s player wages remained among the lowest in the division in 2021-22.

A number of players were signed in 2021-22, notably Maxwel Cornet (Lyon £12.8 million), Wout Weghorst (Wolfsburg £ 12 million) and Nathan Collins (Stoke City £ 12 million), but with relegation, Collins was sold to Wolves for £ 20 million, Dwight McNeil moved to Everton for £ 20 million and Cornet went to West Ham for £ 17.5 million. Burnley made a profit of £ 54.7 million on player sales, only marginally less than the four previous seasons combined.

Burnley’s net debt increased from £ 14.8 million to £ 53.2 million. They were taken over in 2020 via a leveraged buyout, which loaded £ 65 million of debt onto the club. This method, while undoubtedly convenient for investors, is an unpopular strategy with supporters. Some of the club’s debt had to be repaid after relegation, hence the club offloaded some players to bring down costs.

Kompany was hired in June 2022, two months after the iconic Sean Dyche was sacked. In the summer, Burnley signed no less than nine players from Belgium clubs including Anderlecht, Standard Liege, Cercle Brugge, Antwerp, Union Saint-Gilloise, Charleroi and Westerlo. In total, around 25 players joined Kompany’s revolution. The new-look side drew a few games at the start of the season, but then settled down to show their pedigree, sending a signal to their rivals with a 5-1 win at Wigan. At Turf Moor, Burnley won 16 of their 23 games and lost once in their penultimate home fixture against QPR. 

Kompany’s Burnley, who could be an attractive away team, will face their real challenge next season. Can they adjust to life in the Premier and avoid the relegation battle that often comes after promotion? Does the former Belgium international have what it takes to manage successfully in the top flight? He has been smart enough to resist any would-be employer, perhaps aware that the step-up can be a steep one. Last time around, they had a couple of good years before struggling and even tasted European football. With that experience in mind, will Burnley, with their modest financial profile, be adequately resourced for the return to the Premier?