Chelsea in profit, but on the field they’re making losses

LIFE is never dull at Chelsea since they became a super club. As the Blues unveiled their latest financial figures, other statistics were being pored over, those that indicate Frank Lampard, club legend and all-round good fellow, could be losing his way at the moment.

There has been paper talk that some players are confused about team tactics, a very worrying signal because when the club’s human equity starts to bleat, the manager tends to go shortly afterwards. Some players, such as Antonio Rüdiger, Marcos Alonso, Fikayo Tomori and Kepa, all seem to have been frozen out of contention.

Lampard will probably be given the benefit of the doubt, even if it is a short-term decision. He is “Super Frankie Lampard” after all, but he is in season two and he is expected to win silverware. That’s why he was given over £ 200 million to build a team in his own image.

As it stands, Lampard’s record makes him very vulnerable at the moment. Since the current golden era began in 2003-04, José Mourinho, Luis Felipe Scolari, André Villas-Boas, Roberto di Matteo and Mourinho again have been sacked in mid-season. Others have left the club at the end of a campaign, sometimes, such as in the cases of Antonio Conte and Maurizio Sarri, following a trophy victory. 

Mourinho 1.0 was let go after a fractious start to the season amid rumours of creative differences. He had won five major trophies in his three seasons, but in his last year, butted up against the Chelsea board.

Scolari was never the right man, AVB was a bold move that a club renowned for having a low threshold of boredom should never have made and Di Matteo, the winner of the Champions League, was always a temporary appointment. Mourinho 2.0 was sacked in December 2015 after a dreadful start to the season with Chelsea in 16th place with four wins from 16 games. He had, supposedly, “lost” the dressing room, which was probably the key factor.

Lampard’s appointment was something of a gamble even though he was being called for by the supporters. He was a managerial rookie, having had just one season at Derby County in which he led the Rams to the play-offs. But the timing was in his favour as Chelsea had been handed a transfer window ban. His support for young players such as Tammy Abraham, Mason Mount and Reece James was also appreciated by the club’s fans. However, the pandemic has taken Lampard’s biggest advocates, the Stamford Bridge faithful, out of the stadium. The value of loyal support for a club hero inside the ground should not be overlooked. 

The shutdown of the game cost Chelsea more than morale support, it also reduced their income by £ 39.3 million. The club managed to make a profit of £ 32.5 million, but the worst is yet to come as far as the pandemic is concerned. Chelsea played their last four home games behind closed doors and as a result, their matchday revenues fell from £ 66.6 million to £ 54.4 million. Obviously, with the current season being played out to empty arenas, the impact is going to be greater. Commercial and broadcasting revenue streams went down by 5% and 9% respectively, again figures that could worsen in 2020-21.

Yet Lampard was so close to real success in 2019-20, losing in the FA Cup final and finishing high enough to qualify for the UEFA Champions League. The addition of fresh talent in the close season was aimed at making Chelsea into title contenders. On paper, the players signed – Werner, Chilwell, Havertz and Ziyech – were among the most coveted in Europe.

This sizeable outlay has yet to reap benefits for Chelsea and Lampard, at least not consistently. Chelsea have not beaten any of the top teams this season and recent results have revealed a team lacking motivation and tactical savvy. Their performances against Arsenal and Manchester City over the Christmas and New Year period were poor. Four defeats in six games have turned Lampard from a reasoned, relatively easy-going manager into a grim-faced man with the world pressing down on his shoulders.

He knows as well as anyone that such a run of games at a vital stage of the season can earn nothing but garden leave. It’s Chelsea, after all, failure is not built into the business model, and failure is not defined at the club in the way it is at other clubs.

This is a huge challenge for Lampard, but equally, this is an awkward moment for the likes of Roman Abramovich and his entourage. Hiring Lampard was public relations 101, but sacking a club luminary will incur the wrath of a lot of Chelsea fans. Will the club care? You need only go back to 2012 when Roberto di Matteo was fired just months after winning the Champions League and FA Cup. For a few weeks, Chelsea fans stamped their feet, chanted their displeasure and gave the caretaker, Rafa Benitez, a really hard time. Actually, Benitez was too much of a professional to be distracted by the abuse and he won the Europa League in 2013. 

Hiring popular players as managers doesn’t always work and comes with a warning. Chelsea should know – John Hollins was the Lampard of his time in many ways, but he wasn’t really a manager and he was undermined and then sacked. It felt bad seeing such a great player being shown the door and if it happens to Lampard, people will feel the same way. That’s why it is safe to assume if and when the message comes from Israel to take action, Chelsea won’t dispose of a much-loved figure on a whim. Just think how much positive PR persevering could bring – proving that nice guys might not always win, but they should be given the opportunity to try just a little longer. In this most difficult of times for the nation and the sport, it might be the best – but not necessarily the most fashionable – course of action.

Photo: PA Images

Sunderland: A confusing time to be a Black Cat

SUNDERLAND’s financial report for 2018-19 reflects, to a certain degree, a club that remains one of English football’s great enigmas – an institution with a strong heritage, fanatical support but a barren trophy cabinet. Sunderland, since 1970, have been promoted eight times and relegated on 10 occasions.

After the disastrous double relegation of 2017 and 2018, Sunderland find themselves in a worrying place. Their finances dwarf their League One rivals, but also highlight the fall of the club since Premier League when Sunderland’s turnover was £ 123 million.

Changing hands

The current owner, Stewart Donald, who was previously owner of non-league Eastleigh, wants to sell the club and is looking for £ 37.6 million to end the relationship. He stepped down as chairman on July 18 2019 and is more than aware of the fans’ feelings towards him, and it hurts. According to media reports, Donald is now in a “period of exclusivity” with a potential new owner. Nobody is counting their chickens, for the North-East of England recently saw how a possible buyer can suddenly pull out of a deal.

One of the investors seen as a likely buyer is Hong Kong businessman Sammy Yu, who was previously involved with Birmingham. It is probable he regards Donald’s asking price as too high after two seasons in League One in a climate where club valuations are going down.

Sunderland is still a club that could be successful, though. When they were in the Premier League, were averaging 41,300 at the impressive Stadium of Light stadium, which made them the seventh best supported club. Relegation in 2016-17 saw that figure drop to less than 28,000 in a torrid campaign. The day Sunderland were relegated to League One was an angry afternoon as fans displayed their frustration at the club’s freefall. The atmosphere was toxic.

Money Mackems

A club of Sunderland’s size is out of place in the third tier of the game, but the impact of falling two rungs on the ladder is very clear – turnover is now down to £ 58.7 million and, understandably, wages have decreased from £ 82.7 million in 2017 to £ 26.7 million in 2019. Sunderland’s wage-to-income ratio is 45%, the lowest in the division (Scunthorpe United’s ratio, for example, was 158% in 2019). This underlines the size of the club, for their wage bill, at £ 26.7 million, is the highest in League One by some distance.

Sunderland struggle to be profitable and have made losses for over a decade. In 2018-19 this was due to an “exceptional operating expense” of £ 20.5 million. This hole in the club’s accounts is, reportedly, deterring possible buyers. This hole is basically the club’s money used by Donald to purchase Sunderland from Ellis Short, the previous owner. Donald has removed the obligation to return that cash to the club, but he has committed to repay in the future. One other concern is the loan made to Donald by FFP, a group of US investors that includes Michael Dell. If there is a default on the £ 9 million loan, control of Sunderland goes to FFP.

Since relegation in 2017, the club has embarked on a cost-cutting regime, taking expenses down from £ 150 million to £ 66 million (of which £ 20.5 is the exceptional item). This helps to get a hold on losses and also cushions the blow of lower revenue streams and the absence of Premier football. It may also be a case of getting the club in order before a sale. Sunderland are effectively debt free.

New era

But nobody anticipated that it would be three seasons before Sunderland got back to the Championship, let alone the Premier, but after finishing fifth in 2019 and eighth in 2020, the club is still on the outside looking in.

Phil Parkinson, appointed in October 2019, was the seventh Sunderland manager in five years. So far, he has a poorer record than his predecessor, Jack Ross, but he is currently trying to overhaul his squad and has targeted a number of priorities. The club has pledged to improve its youth development and also to adopt an analytical and date-driven process for acquiring talent.

Sunderland’s recruitment head, Tony Coton, along with Richard Hill, head of football operations and the head of the Academy of Light, Paul Reid, all recently left the club. Reid departed after two years in which Sunderland lost a number of promising youngsters and their development teams struggled. Hill and Reid were both at Eastleigh when Donald was chairman of the club.


Sunderland would figure many lists of the top 25 clubs in England, but the glory days are now firmly embedded in the past – even the FA Cup win of 1973 is almost half a century old, as the statue of Bob Stokoe outside the stadium testifies. The last league title was in 1936.

The club should be in a far better place, but with the right ownership model, a long-term vision, managerial patience and local support, Sunderland could be in a position to look their traditional peer group in the eye once more.

Although the area has often been badly hit when there have been economic downturns, the value that a successful football club could bring to a place like Sunderland is significant. A crowd of 40,000 in a city of 271,000 is a high percentage of people holding an interest in the club. English football needs a successful team from the north-east in order to provide balance and alternatives to the London-Manchester-Liverpool axis. Perhaps the sale will herald a new era, but how many false dawns have Sunderland AFC envisaged over the past 50 years?

Photo: PA Images

The case for Liverpool (and City) domination

LIVERPOOL’s 2-0 win against Aston Villa gave the newly-crowned Premier champions 89 points from 33 games, a record win rate of 87.88% and points per game of 2.7 – all astonishing figures. While Manchester City have slipped a little from their highs of 2018 and 2019, other members of the so-called “big six” have certainly lost ground on the front two. The gap between second-placed City and Leicester City in third is now 31 points, underlining that Liverpool and City really are the dominant forces at present.

Over the past three seasons, City have accumulated 264 points from 109 games in the Premier, while Liverpool have notched-up 261. The nearest to the top duo are Manchester United on 202 and Chelsea on 199. That’s some way behind.

The big six – past three seasons

  Pts Win rate Trophies
Man.City 264 78.0% 6
Liverpool 261 73.4% 2
Man.Utd 202 54.1% 0
Chelsea 199 54.1% 2
Tottenham 193 53.7% 0
Arsenal 182 47.7% 0

Source: GOTP


At a seminar held within University of London at the back end of 2019, a well-known football journalist forecast that City and Liverpool would stand astride the game over the coming three to five years due to their financial advantages and business acumen. Given these clubs have managed to acquire not only top class squads, but also, the best managers in the business, it is no surprise they are flourishing at the moment.

It is important to understand that Liverpool are very different to City in terms of the money that underpins the club. City’s backing, as we all know, comes from Abu Dhabi, but Liverpool are owned by the Fenway Sports Group, who took the club over in 2010 for £ 300 million.

US investors are different from the type of owner that throws large sums of money into a club in order to fast-track success. Clubs like Paris Saint-Germain, City and Chelsea all fall into this category. US owners want success, but they also want a solid business model that delivers good returns.

It was somewhat revealing that Liverpool missed out on Leipzig’s Timo Werner because they couldn’t justify the outlay when they had asked players and staff to take pay cuts during the coronavirus crisis.

The US approach always make owners popular with the fans – an example would be Stan Kroenke at Arsenal and, to some extent, the Glazers at Manchester United.

Liverpool, however, appear to hit on the right approach and a Champions League win followed by their first league title since 1990 will undoubtedly have done FSG no harm with the fans.


In 2009-10, Liverpool’s revenues totalled £ 184 million and their wage bill was £ 121 million (66% wage-to-income ratio). In 2018-19, turnover had broken the half billion barrier for the first time (£ 533 million) and wages had risen to £ 310 million (58% wage-income ratio). This was the third highest in the Premier League after Manchester United (£ 332 million) and Manchester City (£315 million).

Interestingly, while the current narrative around football wages says players are paid too much, it is worth noting that in 1990, Liverpool’s last title pre-Premier, their wage-to-income ratio was 72% and in 1988, the first year of the Barnes-Beardsley-Aldridge team, the ratio was a surprisingly high 85%.

Liverpool’s revenue growth rate over the decade has been 289% and over the last five years, the club’s 79% increase in revenues is the highest among Europe’s top clubs – City, for example, saw a 52% rise, while Manchester United grew by 59%.

Arsenal, the straggler among the “big six” English clubs, only rose by 19%. Tottenham and Barcelona are the only clubs to come close to Liverpool, a rise of 78% and 74% respectively.

Liverpool lost money on an annual basis between 2010 and 2013, peaking at £ 50 million in 2012-13. But in four of the past five seasons, they have made impressive profits, notably the £ 124 million pre-tax generated in 2017-18.

Key to Liverpool’s growth has been the rise of TV monies, with an increase from £ 86 million to £ 261 million. The club has also enjoyed a near trebling of commercial income, climbing from £ 62 million in 2010 to £ 188 million in 2019. Matchday revenues, undoubtedly boosted by an 11,000 increase in average gates at Anfield, have gone from £ 43 million in 2010 to £ 84 million in 2019.

The redevelopment of the stadium accounted for much of the £ 30 million injected into the club by the owners, a relatively modest figure compared to some rivals.

Liverpool key figures

Year Turnover
Pre-Tax Profit £m Wage-to-income ratio
2019 533.0 33.4 58%
2018 455.1 124 58%
2017 364.5 39 57%
2016 301.8 (21.4) 69%
2015 297.9 58.6 56%

Source: LFC Financial Statements

Market activity

Liverpool have not been afraid to spend on new talent in the Jürgen Klopp era, but they’ve also been exceptional at trying to keep net expenditure down. Over the past five years, their net spend has been £ 108 million, which places them very low in the Premier League and represents only a fraction of the net spend of most of their peer group. Manchester City’s net outlay has been £ 601 million, Manchester United £ 485 million, Paris Saint-Germain

£ 368 million and Barcelona £ 319 million. Even local rivals, Everton, have a higher net spend (£ 225 million). In five seasons, Liverpool have made around £ 300 million in player sales, notably the huge profit made on Philippe Coutinho in 2018.

Big six transfer activity (2015-16 to 2019-20)

  Spent £m Recouped
Man.City 887.49 285.51
Man.Utd 752.49 267.62
Chelsea 663.84 550.16
Liverpool 515.59 408.02
Arsenal 479.65 209.16
Tottenham 382.05 275.43

Source: TransferMarkt


There was talk that Liverpool may not be tempted to bolster their squad this summer, but they would be foolish to be complacent, however good their core squad might be, as six members of their team are 28 or older. In theory, the first choice side is arguably at its very peak – like City, the average age is over 27.

But Liverpool could benefit from what could happen to Manchester City if their appeal against a two-year European ban is unsuccessful. The impact of being excluded from the UEFA Champions League may compromise the club’s ability to add fresh talent to their squad. Money talks at the end of the day, but if a player is in his late 20s and cannot play in the Champions League, it may deter them from joining City. Regardless, you have to fancy that 2020-21, when it does eventually arrive, will be Liverpool versus Manchester City part three.

How the Liverpool and City squads compare

  Liverpool Man.City
27.2 27.6
home grown 9% 2.9%
expats 72.1% 81.9%
Av. months per player 39.2 42.7

Source: CIES Football Observatory

It’s clear that Liverpool have established the optimal set-up around their playing resources – the unsung heroes of the club right now are people like Michael Edwards and Mike Gordon, who are influential in the acquisition of new players. But they’ve also got a genuinely charismatic and people-orientated manager in Klopp, a man that will surely be on every major club’s shopping list over the next couple of years. When you add that to sound financial management and a long-term perspective, Liverpool have clearly developed a model that will not only mean regular visits to the trophy cabinet, but also show other clubs that a move towards balancing the books can yield spectacular results.