Yesterday it was leaked that 6 clubs were at the risk of breaking Profit and Sustainability Rules, and might have to sell before 30 June to avoid breaching them.
Chelsea, Newcastle, Aston Villa, Everton Nottingham Forest and Leicester City were the 6 clubs named. And as expected, fans of the clubs (alongside Manchester City fans) blame the rules their clubs signed up for, and the “Cartel 6” – their pet name for the “Big 6”.
Oddly, they include Chelsea as part of that Big 6. But the West London club are one of those facing punishment.
The truth is, these clubs are not being punished for being ambitious. They are being punished for being badly run. The Badly Run 6.
Everton – Last season Everton were hit with 2 points deductions, so it should be no surprise they are on this list.
Whilst their fans followed their red brothers and sisters and played the victims, the truth is they are the worst run Premier League club since Leeds United. And a perfect example as to why PSR is needed.
When Farhad Moshiri became major shareholder in Everton in 2016, their fans rejoiced. The expectation was he was a front for oligarch Alisher Usmanov and the Uzbeki would bankroll them to success.
Huge early spending was financed by sponsorship deals linked with the former-Arsenal owners companies. But huge money signings did not translate to success on the pitch.
As Covid hit, Eveton’s finances were in a mess. In 2022, they “claimed” that Covid had cost them £170m. This was nearly £100m more than the next largest loss claimed – Arsenal’s £86m.
Everton have continued to balance the books and, with Moshri wanting out, they have been taking out monthly loans from private companies to finance their day to day running.
Everton’s net debt increased to roughly £330m at the end of June 2023 up from £141m a year earlier. And that does not include the £200m they owe 777 Partnerships.
Instead of blaming the Premier League, and pointing fingers at clubs that are run better, they should be directing their anger to their owners.
Without PSR, Everton would be in administrations and plummeting down the leagues.
Chelsea – Is it any surprise that Chelsea are on this list?
Their new owners thought they were being clever, spending close to £1bn over the space of a couple of years, handing out long term contracts to everyone. There is a reason why other clubs never exploited amortisation and only gave out 5-year contracts on average.
The Chelsea plan was clear – to spend huge on young players, give them long contracts to spread out the transfer fee, and then sell academy graduates to balance the books.
Last season they raised £75m by selling Mason Mount, Ruben Loftus-Cheek and Callum Hudson-Odoi. This was topped up by cashing in on the Saudi boom.
It was always known that to stay within PSR, Chelsea would have to continue selling academy graduates and this season they will look to raise funds through the likes of Reece James, Conor Gallagher, Levi Colwill and Trevoh Chalobah.
It is an unsustainable model as it relies on academy graduates the calibre of Mount, James and Gallagher to come through each year, become regulars, and be sold for big money.
Chelsea will be in the “have to sell to buy” for years to come due to the contract situations.
Aston Villa – Villa are being upheld as the team who are “being punished for trying to be competitive; with loads of comments about how they sold an academy graduate for a record British transfer fee and are still in danger of breaching the rules.
There is a bit to unpack on this one, so we will start with Jack Grealish.
For years, any time Liverpool made a big money signing, they justified it by saying “we are just spending the Coutinho cash”, instead of just acknowledging they were a big spending club. Villa is becoming a similar joke with the Grealish money.
Grealish left them in 2021 for £100m. that same summer they signed Emiliano Buendia (£33m), Leon Bailey (£30m), Danny Ings (£25m). £88m and, Bailey aside (when fit), very uninspiring. Reminds me of when Spurs spent the Gareth Bale money on a load of rubbish.
To the above, they then added Lucas Digne (£25m) in January.
In 2022, their fans continued to claim they were still spending the Grealish money as they signed Diego Carlos (£26m) and Coutinho (£17m). A fairly quiet summer was backed up by a busy winter as they signed John Duran (£14.7m), Alex Moreno (£13.2m) and Leander Dendoncker (£13m).
Aston Villa are not in their current position because they have been ambitious, they are in the position because they have bought a load of tripe and wasted that Grealish money. And this is a continuation of what they have done since returning to the Premier League in 2018.
Aston Villa have spent nearly £500m since returning to the Premier League. They are the 8th highest spenders with only the “Big 6” and West Ham United ahead of them. Alongside this, they have consistently had a wage to turnover ratio of 80% – IE they spend 80% of their turnover on wages
Villa have “leapfrogged” other clubs who operate within PSR such as West Ham and Brighton through their spending.
There is a tight line between being “ambitious” and being “wreckless”.
Aston Villa’s owners took the gamble and got Champions League football as a reward. For them the gamble might have paid off. But for many others taking the gamble it does not. Villa could quite easily go the way of Everton if they are unable to sustain their spending.
Nottingham Forest – Like Chelsea and Everton, it should be no surprise these clowns are on this list.
Since promotion back to the Premier League in 2022, Notts Forst have signed 35 first team players. A further 11 have also joined on loan.
The majority of these players came in on short term deals, with sizeable signing on fees. Many have now left for free having seen their contract expire. It is not sustainable to run a club on signing almost a whole squad every summer, and releasing the same amount of players.
They have already been hit with one points deduction, and it will not be a surprise if they are hit with another. A badly run clubs.
Leicester City – The implosion at Leicester City has been on the cards for years.
After their success in 2016, they continued to building a team off the back of the Champions League money and sales that saw them also win the FA Cup and finish top 6 twice. In 2021 there was talk as to whether they had replaced Arsenal as a “Big 6” side.
But they were being quietly propped up by the income from their owners company – King Power. King Power International Group is a Thai travel retail group. They basically own and operate duty free shops across Asia.
When Covid hit, flights were grounded globally. And no flights meant no income for King Power. This is when things started going downhill for Leicester, and also highlights why the Premier League want to protect clubs from having “above market value” sponsorship deals from companies owned by owners.
In 2023, Leicester City announce club-record loss of £92.5m and their debt peaked in 2023 to £364m – with £194m of that owed to their owners.
Leicester City act as a warning to Aston Villa – ambition is not always sustainable and if you recruit players on big wages and do not maintain your league position, the debts will quickly rise.
“Victims of their owners ambition” is how I would label Leicester City’s current predicament. he club continued to gamble, expecting the income to continue rolling in, and it did not.
2 years ago Leicester were relegated. A warning of what could happen if you rely only on owners ambition, rather than running the club well.
Newcastle United – The final club on the list is Newcastle United. I was surprised they are close to being in breach.
Whilst they have spent big since the Saudi’s came in, it felt like they were operating sensibly and working withing PSR – clearly with one eye on the Manchester City case.
Last season they secured Champions League football. This season they have no European football. And that is maybe why they are sailing close to the winds on PSR.
That will be a £50m+ drop in income from 2023/24 to 2024/25. they now have to finance a huge wage bill without any European income.
Are Newcastle a victim of ambition? I would say no. Are they being held back from signing players due to PSR? Probably.
If anyone was to be against PSR, it would be Newcastle. They want to be where Man City are but can not spend the millions that their fellow PetroClub did.
But what is interesting is it is only their fans moaning about PSR, not the owners or management. This makes me think they are happy with PSR and are looking to grow the club sensibly, for generations to come.
Newcastle fans sum up the “fast food culture” that we live in. They want to be bank rolled to immediate success. They are not willing to wait and grow sensibly.
I do not think Newcastle are that badly run. They just have fans who have ideas above their station.
With all of this, it has to be remembered that PSR effects all clubs.
Fans hit out at the “Cartal 6” yet one of those facing punishment is Chelsea.
In January, Manchester United were unable to recruit due to PSR. Arsenal also pulled out of a deal for Mohammed Kudus due to PSR. Liverpool have also face restrictions on what they spend.
It is also nothing new for players to move to bigger clubs, where they will play on bigger stages, earn more money and have a greater chance of success.
I see fans of Everton, Newcastle, Aston Villa and Nottingham Forest moaning that PSR is the reason why they might have to sell Jarrod Branthwaite, Alexander Isak, Ollie Watkins and Morgan Gibbs-White this summer. But none of these were academy graduates.
Was PSR the reason Branthwaite left Carlisle for Everton? Or Isak joining Newcastle from Sociedad? Watkins joined Villa from Brentfod and Gibbs-White moved from Sheffield United to Nottingham Forest.
It seems fans moan about PSR when it is there player looking to move clubs. But when they are signing players nothing is said.
You can not sit their demanding your club sign X, Y or Z player from clubs below you in the league, then cry foul play when a club higher than you signs one of your players.
I have made it clear that PSR is a good thing. It is needed to protect the future of clubs.
Chelsea, Everton, Newcastle, Leicester, Aston Villa and Notts Forest are not being punished for their ambition. They are being punished because they are badly run.
Ladies and gentlemen, introducing the Badly Run 6.
Keenos
