There are two eternal struggles in the English Premier League: the battle at the top to secure a ticket to the UEFA Champions League and the battle at the bottom to avoid relegation. This year’s relegation fight has heated up with six weeks left in the season.
The financial shock of being relegated is significant when teams move down from the EPL to the Championship. Relegated clubs will receive 45% less of the share of EPL’s lucrative broadcast revenues in the first year after relegation, 55% less the second year and 80% less in year three. They may lose sponsors along the way as well.
Five teams are currently at risk of getting chopped. At the very bottom are Southampton and Leicester, followed by Nottingham Forest and Everton, the eighth most valuable team according to Sportico’s latest valuations. Leeds United, the 11th most valuable EPL team, is right above these four teams.
Everton may be the most notable on the at-risk list. The Liverpool-based team is one of six EPL clubs that have never been relegated from the Premier League since its creation in 1992—along with giants Arsenal, Liverpool, Manchester United, Tottenham and Chelsea. Also noteworthy: The team is in advanced negotiations to secure the next stage of funding for a new stadium at the Bramley Moore Dock, according to the team’s financial statements.
All EPL teams release their financials by the end of March. Everton reported revenue of $225 million despite the suspension of all commercial sponsorship agreements with Russian companies. Last season, Toffees received $143 million from the league’s broadcasting revenues. That’s the good news.
The bad news: Everton announced losses of $55 million (£45 million) for the 2021-22 season. While the loss is significantly reduced from the previous year’s $149 million, the combined losses for the past three financial years totaled $379 million. Everton’s British-Iranian owner Farhad Moshiri has provided $87 million (£70 million) in financial support since the 2021-22 accounting period ended.
Leeds United, meanwhile, reported a $46 million (£37 million) pre-tax loss, despite revenue rising 11% to a club-record $235 million. The team’s total expenses increased to $282 million due to front office wage increases and playing squad spending. At the same time, Leeds’ share of broadcast revenues fell to $144 million due to their finish last season, when they avoided relegation on the last day of the season.
Relegation could cloud Leeds’ future ownership plans. The venture arm of the San Francisco 49ers NFL franchise, 49ers Enterprises, own a 44% stake of the team, and Andrea Radrizanni, the founder and chairman of Aser Ventures, owns the controlling 56% stake. 49ers Enterprises reportedly has the option to buy the Italian businessman’s stake, according to someone familiar with details but who was granted anonymity because the matter is private. The 49ers boosted their minority stake in the team twice: in January 2021, to 37%, up from the 15% original equity they took in 2018, and again later that year when they upped their stake to 44%.
Both teams have critical games this weekend: Everton faces John Textor’s Crystal Palace, while Leeds United will play Fulham, controlled by Jacksonville Jaguars owner Shahid Khan.