Captain Dart
Well-Known Member
Swiss Ramble always does excellent analyses.interesting take on things
Coventry City Owner Doug King and Head Coach Frank Lampard face several challenges in this window as they work to strengthen the playing squad while navigating financial and strategic constraints.
The club is operating at a financial loss, meaning there are limited funds available for new signings. It is a delicate balance between investing in players and ensuring the clubs remains financially stable.
The EFL Financial Fair Play regulations limit how much can be spent on transfers and wages relative to the club’s revenue. Frank Lampard will have identified the most pressing areas for improvement in the squad and target affordable players.
Competing for high-quality players is always a challenge, especially in the January window, when prices are often inflated, and options limited. Convincing players to join with our current league position when other teams are vying for their signature will not be easy. Overpaying for short-term fixes could also hurt the club’s financial stability. Developing and integrating young talent (the current model) requires time and patience.
With funds also needed for stadium-related decisions, whether to secure a long-term lease or move towards ownership, any transfer spending will put additional pressure on Doug King to balance competing priorities.
We must believe that the owner and head coach have a clear and united approach in January, focussing on strategic, value-driven signings that address the squad’s weaknesses without overextending the club’s finances. Creative deals, such as loans and free transfers, will likely play a key role in navigating this challenging window. The competing priorities are to ensure the club is finacially secure as well as competitive in the league.
As we reflect on our near-promotion to the Premier League—falling just a penalty kick short against Luton Town—it’s clear that reaching the topflight is an exhilarating but costly journey. Last season we narrowly missed the play-offs and reached the FA Cup semi-final, raising expectations for the future.
Supporters thought we were going to be promoted this season (me being one), but with the change in management and where the team’s League position sits at the end of 2024, are those expectations fading?
Promotion and the Financial Realities.
As we move into 2025 it’s clearer than ever that success of football clubs requires careful financial management, significant investment, and bold decision-making. With the unwavering support of supporters and strategic leadership, we still believe the Sky Blues can realistically aspire to reach the Premier League.
The financial realities of the Championship are stark. We have touched on this in previous newsletters. Our revenue and payroll position us among the lower end of the Championship sides, but that hasn’t stopped clubs like Luton and Huddersfield from achieving promotion in recent times.
In an ideal world, football club owners are temporary guardians, respectful of the club’s history, mindful of its future, and aware that if the game belongs to anyone, it’s the fans. Sadly, this isn’t always the case in modern football.
Experts like Kieran Maguire (The Price of Football) and @SwissRamble (who recently published The Cost of Promotion: What Price Paradise?) have highlighted the financial challenges of promotion, particularly the disparities caused by parachute payments. Here’s a closer look at some of the numbers in their reports.
It seems clear that higher revenue means a higher budget, so a better chance of promotion. @SwissRamble does make the point that “clubs with low income do have a chance of going up by outsmarting, rather than outspending, their rivals – though a generous owner helps”
The Cost of Promotion in the last 10 seasons
1) Revenue
The revenue of two of the promoted clubs in 2022/23 were Burnley (£65m) and Sheffield United (£64m). Newcastle recorded the highest revenue pre-promotion with £86m (2016/17). However, five clubs in this period have achieved promotion with less than £20m revenue: Luton, Watford, Huddersfield, Brentford and Bournemouth
For comparison our 2022/23 revenue was £20.4m, showing we are within reach of achieving promotion. Not owning our stadium, with the access to 365 revenues, is problematic. The EFL regulations stipulating football clubs need to have a minimum 5 year commitment has been covered elsewhere, but remains a major consideration.
2) Parachute Payments
The disparity in finances in the Championship is widened by parachute payments made to clubs relegated from the Premier League. Relegated clubs receive significant financial advantages: £48m (Year 1), £39m (Year 2), and £18m (Year 3).
In the last five seasons, two of the three promoted clubs each year were in receipt of parachute payments.
3) Wages
Over the last 10 years the promoted teams’ wage bills have average £70m, with the highest being: Fulham (£90m), Aston Villa (£83m), and Newcastle (£80m). Our local rivals Villa spent £29m more on wages than their total revenue that season, losing £84m in their promotion season (2018/19) via the play-offs.
Luton succeeded with £18.4m (2022/23), while Huddersfield (£22m, 2016/17) and Watford (£21m, 2014/15) also achieved promotion on low budgets.
Again, for context, the Championship wage average in 2022/23 was £29.7m. Burnley (£53.6m), Sheffield United (£48.7m), and Watford (£48.7m) topped the list, while Blackpool had the lowest (£13.5m). Our 2022/23 wages were £18.5m, among the lowest in the Championship.
4) Profit and Loss
All the promoted clubs from the Championship to the Premier League over the past 10 years made financial losses. No fewer than 12 of the 27 promoted clubs since 2014/15 lost more than £50m in doing so. The lowest loss was Burnley (£3.6m, 2015/16) and the highest loss Aston Villa (£84m, 2018/19).
In 2022/23 we lost £4.9m, relatively modest compared to many clubs, but costs that need to be covered.
Insights from Recently Published Accounts (2023/24)
A few clubs have already released their 2023/24 accounts, revealing interesting comparisons. Wages for Norwich City were £51.8m, Preston North End (£22m), The promoted sides from League One Sheffield Wednesday (£21.8m) and Plymouth Argyle (£16.8m).
Hull City have also recently published their 2023/24 accounts. Wages rose 25%, from £23.7m to £29.6m. Under new owner Acun Ilicali, wages have doubled since he took over, and £38.5m in losses have been covered with loans. Their Revenue increased to £21.2m (from £18.1m). Hull’s revenue is still approximately £100m lower than their last season in the Premier League, highlighting the vast financial gap between the two leagues.
For comparison, our revenue for 2022/23 was £20.4m.
We await the publishing of our accounts for 2023/24.
Whilst supporters want owners to spend on exciting new players, prudent management of finances is key.
#Keep the faith
Where was this article taken from?