Football finance expert and price of football podcast host Kieran Maguire

Money talks: Kieran Maguire revealed 90 per cent of football clubs make a loss

Football finance expert Kieran Maguire told Warwick Business School students that accounting skills and knowledge are becoming increasingly important in the game as clubs navigate new rules on how much they can spend. 

The Price of Football podcast host, who is a regular in the media, gave a talk to students studying BSc Accounting & Finance and revealed how the football industry is unique as 90 per cent of clubs lose money and, unlike all other industries, making a profit is rare and not the primary aim. 

“Football is fascinating from the point of view of accounting because it is so unique,” said Mr Maguire, who also works for the Professional Football Association teaching ex-footballers how management accounting works in the industry. 

“The average losses for clubs in the Premier League in 2021/22 was £42 million a year. In any other business you would just close it down, but football attracts a different kind of owner, who, a lot of the time, are fans of the club themselves.” 

The game’s authorities have in recent years brought in regulations to stop clubs falling into financial difficulty due to poor financial management, with Everton docked 10 points this season for incurring losses that exceeded the threshold of £105 million permitted under the Premier League’s Profitability and Sustainability Rules (PSR). 

Numbers game: (l-r) Price of Football podcast host Kieran Maguire, Jodie Lucas, Associate Professor of Accounting, and Sue Parvis, Assistant Professor of Accounting

Mr Maguire, who shot to fame when he was inundated with calls from the press looking for somebody to explain what a leverage buyout was when Malcolm Glazer bought Manchester United in 2005 for £700 million, explained how Chelsea have used longer contracts and accounting’s amortisation to try to get round the regulation. 

“Footballers are treated as intangible assets in their accounts,” said the University of Liverpool lecturer. “This is because clubs buy the player’s registration certificate, and the contract means they can use that talent for the next x number of years - they have the exclusive rights.

“So, clubs amortise the value of the player over the length of the contract. Chelsea decided to reduce their player costs by offering longer contracts to spread that further, so Moisés Caicedo, who cost them £100 million is spread over eight years, so that is £12.5m a year rather than the usual four years, which would have been £25 million a year. 

“However, UEFA has now closed this loophole with a rule maximising amortisation of players over five years.” 

Kieran Maguire on Nottingham Forest's charges

Mr Maguire also spoke about the PSR charges Nottingham Forest are facing, answering questions from students on the case. 

Due to Forest spending two seasons in the Championship within the latest assessment period, the maximum loss they were permitted was £61 million. 

But the club are insisting the sale of winger Brennan Johnson for £47.5 million to Tottenham should be included despite it falling outside their accounting period that finished at the end of June. 

“Brennan Johnson is an academy product, so his sale is put down as pure profit,” said the chartered accountant. “They are now arguing that it is an adjusting post-balancing event even though he was playing for Forest through that period.  

“Forest say they were committed to selling Johnson before the end of June and they have hired a lawyer, Nick de Marco, the Lionel Messi of football accounting and a good friend of mine, to defend them.”  

He also discussed how UEFA are now bringing in new financial regulations which will limit clubs’ spending. This season spending on wages, transfers and agents’ fees is limited to 90 per cent of the club’s income, reducing to 80 per cent in 2024-25 and 70 per cent a year later. 

“Football is a fascinating industry for professional accounting because of separate rules which go against everything we learn about profit maximising industries. And with the new financial regulations it is getting even more interesting.” 

Jodie Lucas, Associate Professor of Accounting, organised the lecture and said: “It was a pleasure welcoming Kieran to WBS – the audience hung on his every word and engaged with some great questions. 

“It is so important for our students to appreciate what we learn in our financial reporting classes does relate to different sectors in the real world, to see theory and practice in action. 

“Kieran’s insight into the financial statements of football clubs brings to life accounting for intangibles, impairments and profit issues which we have been covering in class and yet elevates our understanding and appreciation of the subject to a different level when it’s linked to the beautiful game itself - we hope to welcome him back soon!”