We sat down with Kieran Maguire, Football Finance Expert at the University of Liverpool, to discuss EFL Clubs' biggest inefficiencies.
Maguire, host of the Price of Football Podcast, gave a damning statistic regarding the staggering losses being made in English football beyond the glitz and glamour of the Premier League:
“My latest calculations are that 50 of the 72 clubs are losing money. The losses in the Championship are around £570 million, and those losses have doubled in the last five years.
“The reason that these losses have doubled because owners are becoming increasingly willing to gamble to win promotion to the Premier League, which will grant them the additional money and kudos that the Premier League brings.
“It’s similar to developing a house. You buy a house on the cheap, give it a fresh lick of paint, effectively investing in some players and gambling to get promoted before selling for a profit.”
With so many clubs making significant losses, Maguire highlighted the main areas of inefficiency at EFL clubs:
“Clubs are living on really tight budgets. Having a dedicated scouting department is one area where owners and Chief Executives think that they can make savings.
“That’s where I think there may be a gap, which could be filled professionally by an organisation such as iScout.
“Clubs are singing the merits of data, so therefore they are looking for those players that can last all 90 minutes, not someone who disappears around the hour mark, which will only get worse as he gets older.
“iScout can make a difference because they have the metrics of a player’s age, compatibility. Strengths and weaknesses of individual players which can start to fill in the jigsaw for clubs and that is beneficial to them.
With that in mind, outsourcing to companies such as iScout could become the way forward in the future. Maguire had this to say on the matter:
“Football is a very conservative industry. Traditionally, it has been rather reluctant to adapt to new ideas. Outsourcing is taking place in all other aspects of business relationships, so therefore there is no excuse for it not taking place in football.
“It is certainly taking place in the Premier League, as they can afford their own dedicated data analytics team. iScout can spread those costs and make it affordable for EFL clubs.”
Maguire, who expertise can often be heard on BBC Radio Five Live, also outlined the recent trends seen in the Summer Transfer Window:
“What we have seen, is that the Championship has slowed down, and the reason for that is two reasons. First of all, there weren’t many purchases from the Premier League.
“It took Brighton buying Maupay from Brentford and Webster from Bristol City to really kick start those clubs being able to spend.
“The big driver that we’ve seen this Summer is that FFP is really biting and therefore clubs can’t go out make the purchases that they were making a year ago.
“The transfers between Championship clubs between the £10 and 15 million range has dried up to a large extent.
“I think what the Championship clubs are doing is taking more loan signings from Premier League clubs. The percentage of loan signings has gone up from 8% to 29% over the course of the last 2 or 3 years due to Premier League clubs harvesting players."
You can find Kieran Maguire's excellent insight at priceoffootball.com