The Secret To Premier League Survival

It is often said that promotion to the Premier League is the greatest prize in world football. With an estimated £40m boost in revenue from TV rights, ticket sales and the like, it is clear that there are significant financial benefits. So, with all the extra revenue generated, why do promoted clubs find it so hard to stay in the top division in English football?

The numbers certainly suggest this to be the case. Of the 59 clubs gaining promotion to the Premier League since its inception in 1990, 42% of teams find their stay in the top division cut to just one season. Over half succumb to the seemingly inevitable disappointment of relegation within two. I cannot remember the last time that I heard any pundit say that more than one promoted team was likely to extend their Premier League stay to a second season.

It is desperately difficult to get out of The Championship – with just one in four teams relegated from the Premier League returning in one season. So there is great pressure on a club to prolong their stay in the top division. But why is it so difficult? I suggest there are two main issues that a promoted club must concentrate on to give themselves a fighting chance of survival.

The first is consistency. Successful top half Premier League teams tend to keep operations as stable as possible. Whether it is changes in management, playing staff or even chairmen, constant unpredictability within a club has been proven to have damaging effects on teams in the top flight. Sir Alex Ferguson, Arsene Wenger and David Moyes are all testimony to the fact that steadiness and stability are concepts around which to build the foundations of a successful club.

Take as a counter example the demise of the Charlton team from the country’s top division in 2004/05 to League One side in 2009. In that time the club went through 11 managers, 20 coaches and 109 players. It was also a period of transition in the boardroom, with three chairmen and 21 directors coming and going in the same period.

It is clear that fans demand success. To turn up every week to see a team underachieve every football fan’s worst nightmare. But the trigger-happy nature of chairmen firing managers in the Football League has hit an unprecedented level. Neil Warnock took QPR to Championship victory in the 2010/11 season, only to be sacked in January 2012 during an intense relegation battle. The club was lucky to stay up in the end, benefiting from some dismal Bolton performances.

The second important asset to a promoted club is the financial model. In the last decade we have seen countless top flight teams plummet to the despairing depths of the football league. The impending liquidation of Portsmouth Football Club is testament to that. Whilst relegation from the Premier League for most of these teams was the most likely outcome, the demise of such clubs into Football League obscurity can, in most cases, be put down to poor financial management.

Take the Norwich team of 2004/05. They found themselves fighting a gutsy battle in the Premier League, with a squad including Robert Green, Darren Huckerby and David Bentley. Just five years later, the club were playing football in League One, with reported £18.8m debt and a wage bill contributing to a daily loss in excess of £10,000.

It is clear that a club promoted clubs from The Championship must spend money to survive. But how have some clubs been so successful in establishing top division stability, whilst so many others have failed? There are three main financial models.

The first is that of my beloved Watford. Promotion in 2006 was used as an opportunity to pay off debts. Watford’s net transfer spend was negative, with the sale of Ashley Young to Aston Villa for around £8m. There was no long term plan for Premier League football, no goals of European football in five seasons, but the prudence shown allowed the club to clear its debts – something almost impossible to do in The Championship. Other recent examples of this financial model are Blackpool, who in 2010/11 kept all salaries below £10,000 per week, and had a net transfer spend below £3.7m.

At the other end of the spectrum there is the all-out, high risk strategy. We all know that with high-risk can come high-reward, but as a long-term strategy it is a very dangerous game to play. The obvious example is Portsmouth. In a seven year stay in the Premier League, fans witnessed an astonishing transformation in the club. In the first five years of Premier League football, with dreams of European football, Portsmouth signed an incredible 57 players at a net spend of around £40m. In 2008/09, when the club did make it to the ‘promised land’ of European football in the shape of the Europa League, it was reported that the wage bill had grown to an eye-watering £4m per month. This, along with debts of around £80m and dwindling league form saw the club relegated from the Premier League in 2009/10.

Official Premier League statistics show that the average Premier League wage is more than £22,300 per week (excluding bonuses). That is over five times the figure in The Championship, reported to be in the region of £4,000. Although signings have a great effect on wage bills of promoted clubs, a greater proportion of increase comes from promotion wage rises written in to the contracts of a high proportion of both playing and backroom staff.

A club currently in the Premier League with this high-risk financial model is QPR. During their promotion – still in The Championship – their wage bill was £29.7m, a staggering 183 per cent of turnover. Once promoted QPR bought 14 players at a net spend of £20.55m, including Newcastle’s Joey Barton, who is reported to be on a wage of £80,000 at the west London club. These figures raise significant questions about the sustainability of the ambitious strategy shown. The club is by no means a certainty for survival this season and relegation could cause severe financial turmoil for the club.

The final strategy is the one of sustained incremental growth, a model that most promoted teams strive to emulate. The ideal example is Stoke. Since promotion in 2008, Stoke’s net transfer spend has fallen between £10m-£17m, a fraction of what has been earned from their successes in the Premier League, Europa League and from reaching the FA Cup final in 2011.

A more long-term example has been Fulham. Since promotion to the top tier in 2001 Fulham has managed to stabilise, and have only finished in the bottom five twice in nine Premier League seasons.

It is clear that there are several factors affecting a team’s relegation chances. But there is a clear correlation between a sustainable financial model and a stable top-division spot. If Reading, Southampton and West Ham can find the right balance between conservatism and growth, this season may see the introduction of a new name in the Premier League for the long-term.