How hard is running a football club?

[Dirk Gently]

The amounts of money involved these days has fundamentally changed the sport. I know a lot of people that have turned their backs on the higher leagues. Returned to grass roots where clubs are an integral part of the community 24/7. Not just 23 match days a year. Far cheaper to watch as well.

You say that but it has a trickle down effect, and lower leagues don't get the same advertising and tv money so often have to make up for it with higher gate prices.

Just had a quick look -
Barnet (Conference), £24
Welling United (Conference South) £17 (£16 in advance)
Dulwich Hamlet (Isthmian League Premier Division) £13
Hayes & Yeading (Southern Football league premier division) £12
We're Yeading. We're Yeading, We'll Kick your f*cking head in

You could argue premier league and championship is actually far better value for money given the standards of football involved.

Yeah. Ticket prices seem to be fairly inflexible outside the Premier League, possibly as the match day costs tend to stay the same regardless of division and other revenue streams are lower.

I found a forum post about the running costs of Halifax was £150,000 p/m with the club getting a profit of £13,000 per home game. From what I can find out their ticket prices were £21 for adults at the time and are playing National League football (Halifax are full-time).

Annualised that's £1.8m in running costs and £325k in match day profits (based on 25 matches) - I don't know if those running costs include matchday costs. Regardless, over £1m still has to be made up from sponsorship, prize money, player sales, etc. each season just to break even.

According to The Athletic, the playing budget is typically around £700k for a bottom end side, although top clubs can be nearer £1.5m and Wrexham was up to £3.5m. Dover supposedly got relegated on a playing budget of £700k and the playing budget in the National League regional division is between £350k to £400k (although I believe Dover were part-time in the National League).

Essentially ticket prices are what they are to give the club a chance of breaking even.

You also need to take VAT off your ticket prices - so reduce them by upto 20%. Yes, there'll be some recalim of VAT on purchases and heat/fuel etc, but the majority of outgoings are wages and there's no reclaim back on that.

[Forbury Lion]

Let's imagine a world where every football club is competently run.

In theory that means at our level you have a 3/24 (1 in chance of going up, and a 4/24 (1 in 6) chance of going down.

I think you're confusing running a club competently with all clubs being competitive.
Reading, for example if run competently will break even..... that doesn't mean we can compete with Manchester United as they can break even with a bigger wage bill and transfer pot because they bring in more money.

[Dirk Gently]

There's a well-established calculation that shows that the relationship between spend and success (i.e. league position) in professional football is 87%.

It's that 13% variability that makes the game interesting - this is where managerial brilliance, coaching and tactics, team-dynamics - as well as just plain good or bad luck - come into play.

Important to note, though, that this is spend on wages - there's no proven relationship between transfer spend and league success.

[Forbury Lion]

There's a well-established calculation that shows that the relationship between spend and success (i.e. league position) in professional football is 87%.

It's that 13% variability that makes the game interesting - this is where managerial brilliance, coaching and tactics, team-dynamics - as well as just plain good or bad luck - come into play.

Important to note, though, that this is spend on wages - there's no proven relationship between transfer spend and league success.

If wages include win/success/performance bonuses then you would expect there to be a link between success and the wage bill.

If a team wins every game 5-0 then the wages will be higher than if they lose every game 0-5

[Dirk Gently]

There's a well-established calculation that shows that the relationship between spend and success (i.e. league position) in professional football is 87%.

It's that 13% variability that makes the game interesting - this is where managerial brilliance, coaching and tactics, team-dynamics - as well as just plain good or bad luck - come into play.

Important to note, though, that this is spend on wages - there's no proven relationship between transfer spend and league success.

If wages include win/success/performance bonuses then you would expect there to be a link between success and the wage bill.

If a team wins every game 5-0 then the wages will be higher than if they lose every game 0-5

Win and performance bonuses are just a % or two of the overall salary cost of a club.

[Jerry St Clair]

There's a well-established calculation that shows that the relationship between spend and success (i.e. league position) in professional football is 87%.

It's that 13% variability that makes the game interesting - this is where managerial brilliance, coaching and tactics, team-dynamics - as well as just plain good or bad luck - come into play.

Important to note, though, that this is spend on wages - there's no proven relationship between transfer spend and league success.

Is there a comparison with higher scoring sports such as rugby, cricket, baseball basketball?

My assumption has always been that football is a low scoring sport which means that the impact of the 13% variability is all the greater. Shock results are much rarer in cricket and rugby.

[Lower West]

Say that one of us won £100m on Euromillions, the Couhig deals falls through and it's a case of us buying the club or it going bankrupt.

Even out of administration you have to spend something like £30m to buy the club, stadium and training ground.

You're then presented with the current running costs which require you to put in another £10m a year to break even.

Would you then just appoint business and football experts and step away and let them get on with it? I'd argue that that's a harder proposition than it sounds. You've invested a lot of money into a club that you have a lot of passion and ideas for. Do you not want to be involved in at least some of the decision making? Maybe you love an old manager and want to bring him in, over the head of your director of football. Maybe you want to freeze season ticket prices or make them cheaper, and take that decision over your finance director. There's probably a thousand and one things where you would struggle to just sit on your hands and stay quiet about.

It would take a very patient and stoic person to do so.

Bearwood cost £40 million in total.

As for the ground.By way of comparison Brentford's new stadium was £71 million for the construction.

£30 million won't buy you much.

[stealthpapes]

There's a well-established calculation that shows that the relationship between spend and success (i.e. league position) in professional football is 87%.

It's that 13% variability that makes the game interesting - this is where managerial brilliance, coaching and tactics, team-dynamics - as well as just plain good or bad luck - come into play.

Important to note, though, that this is spend on wages - there's no proven relationship between transfer spend and league success.

Is there a comparison with higher scoring sports such as rugby, cricket, baseball basketball?

My assumption has always been that football is a low scoring sport which means that the impact of the 13% variability is all the greater. Shock results are much rarer in cricket and rugby.

Dirk's not quite correct - the observed relationship does change with 'era' and there's similar studies for other leagues. IIRC there's a follow up study that includes second tier and that's observed to be more random, which I think is at least qualitatively consistent. He's also not quite correct on 'no proven relationship' on transfers, there's some relationship, it's just much, much weaker (transfer spending explains ca. 30 % of results, off the top of my head (and yes, the two numbers can add up to > 100% as they're not independent of each other)).

Anyway, popped by to say most of the analysis I've seen focuses on American sports, so look there for your answers.

[SCIAG]

Let's imagine a world where every football club is competently run.

In theory that means at our level you have a 3/24 (1 in 8 ) chance of going up, and a 4/24 (1 in 6) chance of going down.

I think you're confusing running a club competently with all clubs being competitive.
Reading, for example if run competently will break even..... that doesn't mean we can compete with Manchester United as they can break even with a bigger wage bill and transfer pot because they bring in more money.

I was assuming at our level there wouldn't be huge differences in income. I think we probably would have more income than most but we wouldn't be able to buy the league.

Say that one of us won £100m on Euromillions, the Couhig deals falls through and it's a case of us buying the club or it going bankrupt.

Even out of administration you have to spend something like £30m to buy the club, stadium and training ground.

You're then presented with the current running costs which require you to put in another £10m a year to break even.

Would you then just appoint business and football experts and step away and let them get on with it? I'd argue that that's a harder proposition than it sounds. You've invested a lot of money into a club that you have a lot of passion and ideas for. Do you not want to be involved in at least some of the decision making? Maybe you love an old manager and want to bring him in, over the head of your director of football. Maybe you want to freeze season ticket prices or make them cheaper, and take that decision over your finance director. There's probably a thousand and one things where you would struggle to just sit on your hands and stay quiet about.

It would take a very patient and stoic person to do so.

This is a fair point.
I personally think I'd find people who shared my philosophy - financial prudence, player development, patience, and entertain rather than succeed - and be happy to leave them to get on with it. I'd be upfront with the fans that we were trying to survive financially rather than compete.

As soon as one of them says "maybe a National League side shouldn't be spending 160% of its turnover before player sales on a Category 1 academy" though...