Are promoted clubs able to compete financially in the Premier League?

The Premier League is the richest football league on earth and newly promoted clubs often face the tremendous task of going toe to toe financially with the likes of Manchester City.

Whenever a newly promoted club comes up and puts in a good performance against an established Premier League team, it is always cast as a plucky underdog fighting against a financial powerhouse.

This David vs. Goliath narrative is always entertaining, and probably used to be correct 99% of the time, but is it outdated? Are the clubs coming up from the Championship still as financially inferior as they used to be? Let’s take a look.

These graphs show how the promoted sides, Norwich, Sheffield United and Aston Villa were performing financially in the Championship last season (18/19).

*Data for the graph (top) taken from https://www.transfermarkt.co.uk/, Data for the graph (bottom) found at https://www.statista.com/

Aston Villa seem to fit seamlessly into the Premier League finance table, ranking 3rd for money spent on players and escaping the relegation slots of average wage spend.

Whilst Norwich and Sheffield United look significantly afloat at the bottom of the average wage table, this is more likely to do with contract re-newells that have not yet been done, than the club’s financial might.

What is remarkable is the increase in these three teams numbers, a significant jump from one season to the next.

Here we see how the club’s expenditure on new players as well as the average weekly wage of their players rose as the three clubs moved from the Championship to the Premier League.

It is clear that Norwich kept their financial infrastructure the most similar, typical to their usual technique and an often cited reason for their common yo-yoing between divisions. Perhaps they are the best fit for our ‘plucky’ stereotype.

Aston Villa’s outgoings have clearly sky-rocketed, spending over 100,000,000 more on players and increasing their average wage by around 20,000 a week.

The surprise package is Sheffield, who have been the worst victims of the little team digging in vs the large team narrative, despite the fact they have been playing some great football and the fact they spent over 62,000,000 on players for the season!

So why are teams able to spend so much more once they are promoted?

It is estimated that for Aston Villa, winning the Play-Off finals against Derby County was worth around £170,000,000. The reason for this is the wild amount of money in TV sponsorship deals that Premier League teams are receiving.

Figures from The Premier League in 2018/19 showed that the 20 teams split a £ 2.5 billion deal between them, with each club receiving at least £34,3000,000.

All these graphs and numbers tell us two things, the obvious point is that teams are no longer so financially under-prepared for the Premier League. But what we are also seeing is the huge gulf between the haves in the Premier League, and the have-not’s who sit in the leagues below.

*Data for the graph (top) taken from https://www.transfermarkt.co.uk/. Data for the graph (bottom) kindly provided by Kieran Maguire, a football finance expert at Liverpool Management School.

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