Looking at the Deloitte analysis of “Annual Review of Football Finance 2022” the correlation between wage costs and league position is still very strong. Overall wage costs actually increased by 5% to £3.5 billion in 2020/21 eventhough clubs had agreed to wage cuts with the impact of COVID-19. However with revenue outstripping the growth in wages, the division’s wages/revenue ratio has reduced from 73% in 2019/20 to 71% in 2020/21.
Notable points from the graph are:
- Big 6 clubs (Manchester City, Manchester Utd, Liverpool, Tottenham Hotspur, Arsenal and Chelsea) increased wages by 7%.
- Manchester City has the biggest wage bill and revenue level.
- Leicester were the biggest spenders outside the top 6
- Fulham (relegated) and Crystal Palace had the highest wages/revenue ratio at 98% & 95%.
- Sheffield Utd and Tottenham Hotspur had the lowest wages/revenue ratio at 49% & 57%
- Both Sheffield Utd and West Bromwich Albion were relegated and spent the lowest on wages – £57m and £77m. Burnley was the next lowest at £86m but managed to avoid relegation by finishing 17th.
- The big six accounted for 51% of EPL wage costs.
- The wage gap between 6th place (Tottenham Hotspur) and 7th place (Leicester City) was £13m.
- *Spearman’s correlation coefficient increased from 0.66 in 2019/20 to 0.87 in 2020/21 – means a stronger correlation between wages and league position.
*Spearman’s rank correlation measures the strength and direction of association between two ranked variables.
Source:
Deloitte “Annual Review of Football Finance 2022”
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