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Mixed financial messages as Middlesbrough begin to prepare for next season
FIVE games of the Championship season to go, and Middlesbrough are finally stirring. A run of one defeat from eight matches has almost certainly come too late to spark a successful push for the play-offs, but recent wins over Brighton, Derby and Birmingham have at least provided cause for optimism ahead of next season.
After almost five months in his role, Aitor Karanka has established a platform to build from. Defensively, Boro look sound, notwithstanding the selection problems that will have to be overcome if tomorrow’s trip to Burnley is not to become a difficult afternoon.
Further forward, the side have discovered how to score goals, and while Danny Graham’s anticipated return to Sunderland will leave a gap to be filled, the creativity that has been apparent in the last few games augurs well for the future.
On the pitch, there are reasons to be positive. It is off it, though, where next season’s promotion race will also be decided, and when it comes to Middlesbrough, the messages are mixed.
Earlier this week, the respected financial football blogger, Swiss Ramble, produced a detailed assessment of the financial results of all 24 Championship clubs in the 2012-13 season. From a Boro perspective, it underlines just how tough it will be to return to the Premier League. Crucially, however, the figures also confirm it should be possible.
Following the introduction of the Football League’s Financial Fair Play (FFP) regulations, which dictate that a Championship club can only sustain an annual shortfall between revenue and expenditure of £8m (£3m as a loss and up to £5m as an ‘investment’ from the owner), there is now a direct correlation between a club’s income and how much it can spend on wages and transfer fees.
A wealthy owner can still influence things to a degree, and the Premier League’s parachute payment scheme means recently-relegated clubs can sustain much greater losses than their rivals in the season immediately following their demotion, but crudely speaking, the more you earn, the more you can spend.
That is not particularly good news for Middlesbrough, as their annual turnover of £14.2m places them 17th on the list of Championship clubs from last season, sandwiched between Nottingham Forest and Ipswich.
Bolton top the list, largely thanks to their receipt of a parachute payment, but Leeds’ huge commercial turnover enables them to finish third despite receiving nothing from the Premier League.
Boro are bottom half, something that should be remembered when their results on the pitch are being assessed. In very simple terms, when it comes to money coming into the club, the Teessiders should not be in a position to challenge for promotion.
Steve Gibson’s commitment to invest to the maximum level permitted by FFP offsets some of the effect of a limited income, as proved by the wages-to-turnover ratio chart for 2012-13 which shows Boro as the fourth-highest club in the league at 146 per cent.
That figure would simply not be possible had Gibson not been bankrolling Boro following their relegation from the top-flight, and it underlines why the push to reduce the wage bill was continued last summer with the departure of the likes of Stephen McManus, Julio Arca, Kieron Dyer, Nicky Bailey and Scott McDonald.
With Gibson’s ability to invest constrained by FFP, it will not be possible to run a wages-to-turnover ratio above 100 per cent for much longer. Neil Bausor and the rest of the recruitment team will have to bear that in mind when they are recruiting players this summer.
The days of a sky-high wage bill are long gone, and while Boro were still tenth highest in overall wage payments in 2012-13 (Bolton, Blackburn and Cardiff were the 1-2-3), it is hard to envisage them retaining a place among the top 12 teams in the division unless revenue levels increase significantly.
Hence the desire to adopt different recruitment models, as evidenced by the tie-ups with clubs in Brazil, Spain and Croatia, and the growing relationship with overseas agents such as Jorge Mendes. While Boro shopped domestically during January’s transfer window, there is every chance they will increasingly look abroad in the future in the hope of exploiting markets where wage demands tend to be reduced.
So far, so problematic. But if an assessment of overall Championship finances proves anything, it is that money alone cannot explain why a team finishes where it does.
Clearly, it has an influence. But it does not simply follow that the three richest clubs get promoted while the three poorest go down.
Of the three clubs promoted in 2012-13, champions Cardiff were 11th in terms of revenue, runners-up Hull were eighth and Crystal Palace, who won the play-offs, were only two places above Boro in 15th. Wolves, who had the second-highest income in the league following their relegation from the Premier League the previous season, dropped into League One.
In terms of wages, Cardiff were third and Hull sixth, so the pair could perhaps have expected to figure in the promotion shake-up. Palace were 12th though, paying less to their players than Boro.
This season’s figures will not be available until the end of the next financial year, but while Leicester City are believed to be one of the highest payers in the Championship, Burnley, who look set to join them in next season’s top-flight, are not. In 2012-13, their wages-to-turnover ratio was exactly 100 per cent.
So while finance is clearly influential, there is still scope for an astute backroom team to assemble and develop a squad capable of punching above its weight.
That scope might diminish in the future if escalating parachute payments widen the gulf between clubs recently relegated from the Premier League and the rest of the division, but for now (and as highlighted by the performances of Wigan, QPR and Reading this season) the gap should not be regarded as a given.
Get it right this summer, and there is no reason why Boro should not be able to mount a viable promotion bid next season. Unless their revenue increases dramatically, however, there is not going to be much room for error in the years to come.
CHAMP OF THE WEEK
Say what you like about Chelsea’s larger-than-life manager, he certainly knows how to win a big game. Mourinho’s first two substitutions against Paris St Germain brought Andre Schurrle and Demba Ba onto the field, and they duly scored the goals that took the Blues to the Champions League semi-final. Would you want to bet against them going all the way?
CHUMPS OF THE WEEK
NEWCASTLE UNITED AND SUNDERLAND
They’re supposed to be the North-East’s leading two teams, but Newcastle and Sunderland appear to be locked in a battle to see who is the more inept. On Saturday, Newcastle shipped four goals at home to Manchester United; two days later, and Sunderland went one better by conceding five at Spurs. A thoroughly shoddy state of affairs.
PERFORMANCE OF THE WEEK
WEST AUCKLAND vs ST ANDREWS
West looked down and out when St Andrews claimed a second-half lead in Saturday’s FA Vase semi-final second leg. However, two late goals from Steven Richardson ensured the Northern League will have a representative at Wembley for the sixth season in succession. Let’s hope West repeat Spennymoor’s triumph from 12 months ago and bring home the cup.
BET OF THE WEEKEND
I’m still riding the crest of a wave after successfully tipping Grand National winner Pineau De Re in Saturday’s Pinstickers’ Guide. From the number of Tweets and Emails I’ve had since, it sounds like a fair few of you were on. It’s the Scottish Grand National at Ayr tomorrow, so follow @scottwilsonecho on Twitter to see if we can complete a notable double. Running total: +43.38
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