The Wrecked ‘em Effect
Lower league losses, GB athletes' golden thread and Gary Neville's threads
One week until the football league kicks off. Wrexham AFC will hog the League One spotlight, just as their Hollywood story dominated League Two and the National League. Much has been said about the positive ‘Wrexham effect’, but it’s not all pre-season friendlies against Chelsea in California and sponsorship from global brands for lower division teams. Many may yet find that Ryan Reynolds’ and Rob McElhenney’s venture indirectly wrecked ‘em.
The sport analytics team at consultancy LCP has just published its second annual study of English football club finances. Their analysts have crunched the 2022/23 accounts of the 92 clubs in the top four divisions and, as last year, paint a picture of a fragile system with clubs heavily indebted to their owners and each other. 86% of teams were loss-making. Net debt across the system increased by 27% to £7.1 billion.
Most striking in this year’s LCP report is the deterioration in the financial health of Leagues One and Two clubs. Within two years, aggregate annual losses in League One almost trebled from £44 million to £121 million and in League Two jumped from just £2 million to £35 million. The authors attribute this in part to a ‘Wrexham effect’ with club owners striving to match the ambition of the Welsh team’s celebrity backers.
“The gambling for promotion culture previously seen primarily in the Championship, now seems to be spreading to Leagues One and Two, where losses and debt levels are spiralling.” LCP
Take a look at the list of Wrexham’s sponsors. They include United Airlines as shirt sponsor and HP as ‘global technology partner.’ Average attendance across all matches in Leagues One and Two last year was around 9,000. No wonder you don’t find global tech giants clamouring to back the other 47 teams in these divisions.
"HP was born in a garage in 1939 and has become one of the leading technology brands in the world. Wrexham Association Football Club was born in a bar in 1864 and is on its way to great things. We could not think of a better partner on this ride, for the club and community. Plus, our tech game really needs an upgrade. Pretty sure we still have flying toasters as screensavers on some of our computers.” Ryan Reynolds and Rob McElhenney
One architect of the LCP report tells me he believes that the Wrexham phenomenon is not all bad given the boost in interest it has generated for the lower divisions. But he does fear for the sustainability of clubs given the recent surge in their losses and debt levels.
I would add that these trends also strengthen the Premier League’s hand in resisting pressure to funnel an increased share of its TV revenue down into the EFL. The leading clubs have already been arguing that any extra money may simply be squandered on players. LCP’s data can only reinforce that line of resistance, highlighting as it does the propensity of owners to chase short term sporting success at the expense of their clubs’ long-term health.
It seems certain now that an independent football regulator will be established over the coming months. Although it might seem perverse for an industry revolving around the pursuit of victory, the new regulator’s core task will be to protect supporters from over-ambitious owners with shallow pockets. There is clearly a growing list of lower league clubs in urgent need of such protection.
LCP’s football sustainability report is rich in detail. If you have an interest in any of the 92 clubs it is well worth a read (or you could just close your eyes to your team’s balance sheet and simply focus on the pitch - your call!). You can find a summary and a route to read the full report here
Golden thread reaches purple track
Athletics nostalgists in Britain often wax wistfully about a past generation of heroes, but in truth there is a strong golden Olympic thread weaving through the decades.
In my athletics-watching consciousness, Olympic champions stretch from Dame Mary through the Cold War warriors Coe & Ovett, Daley, Alan Wells and Tessa Sanderson, to Sally Gunnell and Linford in Barcelona, Denise and Jonathan Edwards four years later, and then onto the twenty-first century run of Dame Kelly, the ‘04 4x100 relay men, Chrissie O in Beijing, Super Saturday’s trio of Greg and Dame Jessica with Sir Mo, who doubled up again in Rio.
City AM last week flagged an Ipsos poll showing athletics to be the most popular Olympic sport among Britons with 38% interested in following it. Details here
Only twice have there been as many as four British golds over these 13 Games; four times the GB team has failed to top a podium, including at Tokyo 2020. And this in the most competitive of all Olympic sports - after all, World Athletics has 214 member nations.
How exciting then to have a clutch of possible winners when the track action in Paris starts on Saturday. In the second edition of Sport inc., on the eve of Tokyo, I wrote that those were the first Games since 1988 when GB didn’t have a single favourite going into the competition, and that the team looked primed to peak four years hence. So it transpires. Now there are arguably three British favourites - Keely Hodgkinson, Matt Hudson-Smith and Josh Kerr - and others with genuine chances of victory, especially Molly Caudery.
Britain’s track & field team tends to bag between four and eight medals at Olympics and World Championships. There’s every reason to believe its athletes could test and even break through the top of that range next week. After all, the 2023 World Champs saw a ten medal haul. Get close to that and this would indeed signal a golden generation shining as brightly as all those that have gone before.
Feel free to wallow
If Olympic nostalgia is your thing, do listen to this Best and Worst of the Olympics pod and take a look at the book of the same name. You’ll find links here and here
Sold down the river
On a train home from the Edgbaston test match on Friday, one passenger gave us a lively running commentary on the Paris opening ceremony which he was following on his phone. It’s fair to say that drink had been taken.
“What are they going to put the Chinese on? An aircraft carrier?”
“Look, the Marshall Islands are on a speedboat!”
“Literally my favourite part of the Olympics is seeing all the athletes walking into the stadium. This is making me angry!”
Let’s hope he’s been cured of his ceremony blindspot and is dazzled instead by the sport in Paris - which, let’s face it, is what it’s really all about.
And on the subject of the opening ceremony. I assume Britain’s sports minister was in the Parisian deluge as, contrary to the belief I expressed last week, we do indeed have one. Stephanie Peacock was appointed on 9 July with apparently minimal fanfare. Hoping her time in office is a long, loud and sharp-elbowed one!
Don’t scare the kids
Lots of fancy dress in evidence at Edgbaston - count those Scooby Doos! None spotted a week earlier at Trent Bridge. The Notts crowd had clearly taken the county’s website warning to heart.
“We request that you refrain from visiting our venue whilst clothed in inappropriate fancy dress outfits that are liable to cause offence to children and young families.”
Impressive use of ‘whilst’, but I do feel we should be given more detailed ‘offence’ guidelines ahead of future internationals at the ground. After all, if I’ve paid good money for my ticket…
Track and balls
I’m off to Paris on Sunday to chase possible GB middle distance medals and watch three ball sports: table tennis, beach volleyball and basketball. A nice warm-up for my main event: the Paras. Will report back in next week’s Sport inc. Hope to see some of you there!
Renaissance man
Gary Neville - co-owner of Salford City (‘overall weakest financial score’ in League Two according to LCP). Never liked him as a player, love him as a pundit, really enjoyed him on Dragon’s Den. But would any of these personas make me want to ape his dress sense? Nah! One Jermyn St clothier clearly hopes otherwise though. Strange world we live in.