Football Club Accounts: Explained

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Football clubs have historically been sources of entertainment and symbols of unity in local communities. Today, they are also businesses - and as businesses, they release accounts or financial statements once every year.
But financial statements can be hard to read, so we’ll show you how.
Written by Abhishek Raj. Illustrated by Henry Cooke.
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Tifo loves football. We create In-depth tactical, historical and geopolitical breakdowns of the beautiful game.
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#Finance #Accounts

[@Misoroche]

Could yall do a video about football medicals. Its origins and what normally consists of a player medical.

[@rabidninjacupcake]

Sky did a pretty good video of Jamie Carragher going through a medical that may interest you if you haven't seen it yet

[@lilbaz8732]

@@rabidninjacupcake you have to have a medical to become a pundit on sky?

[@stanleymakafui]

It's something I've been thinking about lately

[@ewan7283]

@@lilbaz8732 no, they did it to show what a medical looks like it was quite recent

[@largezo7567]

Yeah, I'd love to know what the club doctors are looking for

[@eva00r]

Amazingly you can learn Accounting with TIFO football and master them in Football Manager.

[@poeperdhe]

FM should be played by every football (die hard) fan.. experiencing the stress of FM makes you understand football better 🤣😭

[@nekomimi793]

I always have trouble when i gain back-to-back promotion because I cannot keep the wage up to the division standard. So all my star players go away to better clubs with better wages.

[@opinionatortv6457]

@@poeperdhe I just don't have the money to pay for it

[@franalytics5995]

@@opinionatortv6457 just get the torrented version

[@toastedt140]

@@nekomimi793 when games are too realistic so they're slightly less fun

[@iannar399]

Let's us promote peace wherever we may be.🕊️

[@mitchellhengeveld8949]

That's why you need to play FM

[@loading9110]

It's critical on FM and getting rid of those pesky contract bonuses like appearance fee bonus. Especially lower down.

[@lewisblackwiththenicehair]

People still play Career mode?

[@darthvader4338]

Is that even a thing 🤣🤣🤣

[@alfonsohr02]

@@loading9110 National team appearance bonus💀💀💀

[@DailyWord3832]

Business class explanation, Tifo as always.

[@kakuite]

Tifo football, and Tifo IRL might help someone to get UEFA Pro Licesne one day. No joking. They're better than any teachers I've ever had. Absolute goldmine for footballing knowledge.

[@veezeetwothree]

FACTS

[@CowFish7]

I came here to disconnect and forget about my studies for a bit and ended up watching a video about the exact thing I was studying.

[@kindnessallison8669]

This got me laughing to bits

[@becksdennis8339]

Came from an Accounting lecture to watch this video, and as an American being so huge into football (⚽️) it’s interesting to learn a little bit about the business world in European football and see the similarities and differences in this structure and ours over here in the U.S.

[@NazriB]

Lies again? American Education Football Soccer

[@becksdennis8339]

@@NazriB ???? Lol don't really know what point you're trying to prove here

[@lfc-europe]

How to read them: With a heavy dose of skepticism

[@isimelilatabua4199]

Lol

[@samwize28]

What? Financial reports are heavily audited and scrutinised for accuracy. What is reported is pretty much 99% accurate to reality. The only scepticism necessary is for garbage such as FFP.

[@stephenbickerstaffe1062]

I work in finance in Luxembourg. Amazing that you guys cover stuff like balance sheets, haha. Keep it up.

[@neby9218]

Great to see! Now “Business Essentials with JJ Bull ‘the Mallard’ and Jonathon ‘Dog’ Mackenzie” is the video I need next!

[@Aanike09]

All the jiggery pokery involved in the biggest names moving around

[@annagoldman1163]

‘’Courage taught me no matter how bad a crisis gets ... any sound investment will eventually pay off."

[@casinosimsek2027]

Making it out at a young age is quite difficult. I started a side hustle at 17, saved up and made some good investments. l'm 28,live on my own and having a good life for myself. Big ups to you and everyone out there trying

[@frankdouglas1562]

@@casinosimsek2027 Sounds like plan, how do you put money to work?

[@casinosimsek2027]

@@frankdouglas1562 Yes it sure is. I put in money in investments and get profits. That 's how I make more money without working. This does not sound new to you right ?

[@frankdouglas1562]

@@casinosimsek2027 Thanks for replying me, I've heard so many people talk about investment but none had said how to do it right.

[@mav3420]

Am hoping on you can explain more on how you make extra income from investments

[@liverpool12thman]

This is something myself and a small minority of supporters within my fanbase have been trying to enlighten our fellow supporters on and I appreciate you doing this story. It can be frustrating to elaborate on topics like this because often the response is, "I don't want to be an accountant, I just want to be a fan." Sports has long transferred from just a game to an actual business that resembles a portfolio credit. The manipulation of books to remain within the laws of the sports business and sometimes the outright disregard of rules or laws is something we all have to hold important if we are to have a game at all to enjoy. Providing people with how the ins and outs of the business work are key parts of that very knowledge needed. Excellent reporting as always. As a fellow journalist this is exactly what they teach us in Journalism school and it sets a bar of well communicated information into a comprehendible format for all levels to appreciate.

[@rothbardfreedom]

PSG's statement: Income: 99.9% blood oil money Costs: 99.9% salaries to mediocre midfielders who will be separated from the main group in 1 or 2 seasons.

[@ismailkar3852]

Qatar is not an oil nation, it's a natural gas nation

[@limpa756]

City are just as guilty when it comes to blood oil money lol. Funny enough Chelsea were the least corrupt prior to everyone dog piling Russia

[@sergiowinter5383]

Truly the foreign legion of football

[@Aleu931]

Without ignorance How is PSG income blood-oil money?

[@finnm4981]

​@@Aleu931 PSG is primarily funded by the Qatari government which has an abhorrent human rights record and continually allows the inhabitants of their country to suffer while putting billions into a football club. By February 2021 over 6,000 migrant workers had died in direct-relation to the construction of the World Cup stadiums... There's similar criticism against the ownership of Manchester City (UAE) and Newcastle United (Saudi Arabia).

[@anirbandey8999]

Great video. New perspective to view a football club. Would love to see more analysis at a club level.

[@candym0nz826]

This was awesome, some might find the finances of football borring, but I find it fascinating. Well done Tifo, absolute top class!

[@philipwalker3300]

Very detailed information, presentation is spectacular gets you really involved in the sport keep up the great work.

[@preciousadesina3525]

Im an accounting major in university and a huge man city fan so watching this was very refreshing and most of this was review but just explained in football terms which was pretty cool 🥶

[@ahmet51197]

I would love to see a comparison video between Bayern München , Barca and Manu

[@sergegaash]

@@MrJoeSomebody at least in Spain, Barças financial statements are public, and I think they are by law. Might be surprising given their situation now, but the overspending was known.

[@charlesray9674]

3:57 My favorite club has made another appearance on a TIFO video!! 🥳😎👍

[@Iron-Bridge]

As an elite Football Manager myself, this was wonderfully educational. 👏

[@mauricerrr]

The debt to equity ratio especially in Football Clubs doesn't tell you as much. If you own your own stadium your debt will be a lot higher than when you rent your stadium, as mortgages are included on the balance sheet but rent payments aren't. But in reality, you're as much dependent on your stadium if you rent it versus when you own it. Clubs with rented stadiums often look more financially healthy but in reality are not

[@neyo4669]

Since 2021 this is the only video you've made that interests me I also miss the hand that used to draw your finance videos

[@muhammedgamal5871]

One of the best videos made here

[@Jubdas]

One thing - the profit and loss statement is not the most important. The cash flow is. Profit can be manipulated, cash cannot

[@Dave-Shearer]

What about if you buy players with Freddo's instead of cash?

[@pianomerchant1830]

P&L is the most important in football because FFP is based on how much loss/profit you’ve made not the car you have

[@samwize28]

''CASH is king'' is always the first lesson learnt in any finance class.

[@jonooflaherty8446]

i agree, but for a football club I think a pnl is more relevant. seeing upfront the revenues - expenses give a good indicator for it's users (those being football fans)

[@imconfused1237]

Exactly. Cash flow is what makes or breaks any business and football is no different. It is why you’re seeing more of this loan-to-buy structuring: it is all about deferring that expense. I see a lot of Tottenham fans a tizz because Levy has chosen to defer purchasing Kulusevski until next summer. But this is exactly why: it is better for their group cash flow.

[@espben360]

Accounting and finance 101 should be title 😂 great video

[@KakashiH318]

Need more videos like this that relate to my studies but in football terms

[@olliolson]

Crazy how underviewed this video is

[@chipperjaunte]

Keepin it consistent lovely

[@joshwilliams0391]

I’m liking your thumbnail for this. It looks like a bit of Grand Theft Auto loading screen artwork. Nice.

[@onjadar]

More like this pls. Thank you Tifo

[@tumiallies8569]

Loved this.

[@FOOTBALLisKNOWLEDGE]

As a united fan I know what's happening along as the glazers are in charge

[@alliffmuhamad]

Nice video!

[@RoyMatzem]

Could we have a standing, showing those data on PL? Like a Health Business standing

[@lilbaz8732]

Thnx. But i'll just stick to reading swiss rambles breakdowns of each clubs finances. Do love a bar graph.

[@sethosore3509]

Can you please do a video on Brighton's Recruitment and how they are steadily on the rise

[@Blank-s]

Nice, I was literally wondering this yesterday whether footballers were assets or liabilities.

[@WithSeb]

As an accounting student looking to get into football , I appreciate this overview

[@Jordan3Retros]

If Tifo could deep dive into Man Utd's books to confirm whether ludacris transfer fees are held on the balance sheet as assets.. that would be great.

[@SRParsonage]

I would contend that the Balance Sheet, Then cash flow is more important. P&L is accounting profits that can be somewhat manipulated especially under GAAP or IFRS. Its when CEO's start talking about EBITDA you should be running for the hills. For example taking one look at CIneworlds balance sheet months ago concluded to me that they were done and would soon go bankrupt, Their troubles have come no surprise to me. Carnival Cruise is a horror story as well (understandably) United's current/quick ratio is the lowest in years and a macroeconomic recession like 08/09 would leave them very exposed. Rising interest rates means no refinancing is really possible.

[@imconfused1237]

Additionally exposed, are Arsenal. They failed to pay down their Emirates debt (approx £200m balance) during the time of cheap money. They have since repackaged this into a £350m structural loan with short expiry. It seems idiotic to me, that Arsenal did not clear down the Emirates balance. Instead they built up a cash reserve but this has since been exhausted in failed efforts to spend their way back into the Champions League. Their finance costs are going to be horrendous.

[@Triclips]

Cool great vid

[@aussieboy77]

2:33 - I think amortization is in the cash flow statement, not the income statement.

[@basharbadrieh2737]

Loved the video, Im making my seminar about the topic of the financial aspects in football and i'd really appreciate it if you would drop the references/articles you used to make this video :)

[@Electroburger]

Could you make a video on Douglas Luiz and the impact that him scoring from corners could have in the Premier League; this season and beyond

[@Hafris33]

This video is more knowledgeable than my Financial Management class during my college years. Lol! 🤣

[@wunnas8135]

Beautiful

[@JK_JK_JK_JK]

Next: Man United Transfer Strategy Explained! 😏👍

[@lfc-europe]

That'll be a KZbin Short I suspect

[@parasadhikari7063]

Do they actually have a strategy??

[@f.b.4795]

@@parasadhikari7063 Yes. Watch rumours and buy everyone who's reach 100k likes on Twitter.

[@ProbablyCarl]

Insert Futurama 'shut up and take my money' meme.

[@parasadhikari7063]

@@f.b.4795 🤣🤣

[@toby1106]

Idk if this would make an interesting video or not but has anyone noticed how most of the transfers nowadays are loans + option/mandatory buy clauses compared to like 5 years ago?

[@KIKK2017]

Tifo, could you explain how Leipzig signs Sezko and Chelsea signs Gravidol for summer 2023 in summer 2022 window? The only similar situation I can remember is United signed Amad in summer 2020 but he joined later in winter. Is this kind of deal allowed in football transfer market? I'm a bit afraid this could be a norm in the future.

[@samking5101]

Also Liverpool did it with Naby Keita and Chelsea did it with Pulisic. They signed them and the loaned them back to their old club straight away

[@shambhav9534]

6:05 Fulham and Norwich: That's me!!! MY REVENUE "GROWTH"

[@fernandocastro6658]

The Athletic is home to the world's best sports Journalists including David Ornstein, Rafa Honigstein, Jeffrey Epstein and of course Harry Potter and the philosopher's stein

[@12thMandalorian]

Best football accounts in England, you’ll never sing that

[@footballmanager1486]

brilliant

[@JK_JK_JK_JK]

Chelsea FC: What's An Account?!?! 🤔

[@A-Port-In-Any-Storm]

man utd*

[@Bork_In_Volcanic]

Wrong. It's applicable for PSG.

[@rijosam5278]

Joan Laporta restructured the debts in such a way that the interest rates are cheap AF. So on what basis did you say that Barca are paying high interest rates? Barca Merchandising and Licensing has not been sold either 🙄

[@fimmyk]

The Barcelona situation has been widely misunderstood i think and a lot of misinformation being spread.

[@TheUnashe]

For player sales in the Profit and Loss account, ain't they supposed to be treated like disposal of intangible assets since they are capital in nature?

[@docdk7979]

Correct. Value of transfer fee less remaining balance on player registration (intangible asset) = profit/loss on sale.

[@Geokinkladze]

Capital is the owners stake in a business. Any asset (whether intangible or not) when disposed of will have had a value on the books before disposal. At disposal it's value is now "realised" (made real). The difference between the value on the books and any net disposal value goes to profit and loss.

[@sithmir]

Can't wait to use this info I learned to find out how my favorite club Man United is being ru............. oh god.

[@archipiratta]

3:07 I'm surprised no club uses the simple lightningbolt as its club insignia. It's a clean look; I like it

[@ShekharKumar-jh3uc]

A logo needs to be unique so it's not confused

[@ronanfitzpatrick1261]

It might have connotations - double lightening bolt would be associated with the SS in WWII for example. Think some far right groups might have variants - but it's not really something I've a lot of knowledge on. Just saying it might be part of the reason why not. Would look cool apart from that

[@sergegaash]

Rayo Vallecano from Madrid uses it as part of their badge. In fact, rayo means lightning bolt.

[@aarrneshkapoor6159]

Can Tifo please make a video on Manchester United's financial health?

[@BALHAM69]

The price of football podcast is good for that to :)

[@greatnesstv265]

Balance sheet is called Statement of Financial position

[@JoshPhilp]

James, show us what cards ya got

[@nicktyalus]

Me following keenly yet understanding absolutely zero, good job Tifo

[@stegx2853]

Interesting

[@noahdamski6810]

how come a player contract is an asset, it is a cost that goes against the club's budget

[@espben360]

I am studying business administration, so it’s like the best of both worlds 😂

[@clivedarwell5732]

There is no magic money tree - yes Pep!

[@slackjoelyokel88]

Mo looking like he's ready to roll a joint

[@maxandsouza4163]

Can you make a video about Manchester Uniteds' financials? Covering all the above mentioned parameters? Doesn't look pretty for us TBH!

[@ronanfitzpatrick1261]

I think the owners have realized the need to inject money, like every other top club. Obviously they'll never use their own (leeches) but it might be why there's talk of selling a minority stake/stakes - alternatively might clear some of the principle debt they brought on the club if they cared enough to do so

[@aliukehinde3906]

Go search athletic interest,they did one on united finances.

[@aqeel-3771]

Most of the Assets are players and youths players😊

[@morondes]

Is this all going to be in the exam?

[@ggleonel5173]

Barcelona: we don't do that here 😂

[@MartyD]

wish I had these accounts

[@DemiochMD]

Didnt think i'd get an accounting lesson today lmao

[@ricardocarrillo621]

all this info is on your book

[@shaqtaku]

Can you please do a video on - Mose Jourinho - Mionel Lessi - Lank Frampard - Didier Drogba - Mason Mount - Paul Pogba Thank you and god bless

[@Otekos]

Putting Salah as the thumbnail for views is tight!

[@jarretc110]

touting liverpool's financial acumen like they didn't win the transfer lottery numerous times...

[@yamnayaseed356]

Watch Bayern Munich smash all of these ratios 😆

[@hoggybhoy1967]

See the way everyone of us have a credit rating and we all have a score... Is this possible with football teams?

[@swifteh1780]

I love how Man Utd fans are giving it the big'n online, but blind, or in denial, of the fact that the club is on the verge of financial collapse. There's no way that club can sustain that amount of spending.

[@natsudama4604]

I think the only one here who is blind is you because all of them want the owners gone And plus, we are getting ucl football, with Qatar coming in i think we'll be settled

[@sergegaash]

You should have done this video 4 years ago for FC Barcelona fans.

[@almahdialsharef6066]

All i want to know is how on earth Liverpool wages are 325M pounds half of that money probably the players wages .. where's the other half goes too

[@firestarter1888]

£6.25M per week wage bill inc bonuses £6.25M x 52 = £325M

[@marcelanoryadi9110]

Chelsea miss Marina. She made profits selling fringe players

[@tcrwn4350]

Barcelona executives be watching this.

[@muhammedanwar8018]

As a Chartered Accountant and a Man Utd fan myself...the honourable mention of 'leverage' involved in Man Utd made me laugh in pain because of the clowns who are managing my boyhood club... 💔

[@leoulmesfin9384]

ለምን ጉግል ትራንስሌት?

[@tremensdelirious]

So why don’t Man City get any income from TV, sponsorship, doing well in the UCL etc yet we’re apparently bankrolled by the Sheikh. Could you do a video on that please

[@natsudama4604]

"apparently" mate, you always were 💀

[@tremensdelirious]

@@natsudama4604 so we get no money from TV or frkm winning stuff? We do it for free?

[@Ryder....]

Its Still A Little Bit Confusing For Me 😅

[@lilbaz8732]

Swiss ramble does a good breakdown of each clubs finances on twitter. Sets it out so it's easily understandable.

[@pavelr4752]

So this is the jiggery-pokery everybody is talking about?

[@liam00]

Why are Chelsea signing so many defenders? Also, why are they allowing a player they sign for 90m to remain on loan at his current club. Surely you would pay much less for that?

[@RoyMatzem]

They have 10 defenders now, but they usually use 5 on the starting XI, so i dont think is too many, the weird thing is 4 of them being LB, maybe is a reflect of Chiwell injury being so impacting on the last season

[@imconfused1237]

It’s Gvardiol’s agent. He wants either the player to move now or his client to sign a huge new contract with a release clause for next summer. RB don’t want to sell and are talking about a €150m release clause, if they’re to offer him a huge new contract. He ain’t going anywhere.

[@imconfused1237]

And surprise, surprise: Gvardiol signs a new deal with RB. Not leaving exactly as I said. Don’t believe all of Romano’s BS 😉

[@imconfused1237]

‘Amortisation’ is an internal method of accounting. A 5yr contract does NOT mean the purchasing club pays 1/5th annually to the receiving club. This is nonsense. If the selling club wants to be paid up front, that IS expensed immediately. If they want two instalments, it’s expensed at agreed staged payment dates. Either way, money leaves. It is invoiced and paid. If the purchaser wants to amortise the gross investment over its expected life: 3, 5, 7yrs or whatever, that’s up to them - it’s wooden dollars.

[@thequestion3953]

That’s what he said. He never said amortisation means the buying club pays in instalments over five years. He just said a five year contract will appear differently on the two different financial statements.

[@docdk7979]

Timing of cash payments doesn’t equate to an expense. That’s fundamental. Players play over the length of the contact and so the purchase price is spread over that length. Cash flows are important for other reasons - like not going bust - but they dont drive timing of income/expenses

[@catsIdontknow]

You misunderstood that part of the video, but I do love it when someone is overly confident & completely wrong, so thanks for that

[@ILikedGooglePlus]

@@docdk7979 Honestly, it's so satisfying on a deep - almost visceral - level

[@imconfused1237]

@@catsIdontknow Lots of weird, misplaced triumphant energy here. I don’t even know who you are (but don’t let that stop you 😊) So tell me, what bit have I “misunderstood”?

[@marioohiwerei5746]

Accounting 101

[@redracing95]

You can really tell Liverpool is the healthy way of running a football club

[@natsudama4604]

Still no midfield or ucl qualification 😭😭😭😭😭

[@jzilla1234]

Where is kieran maguire when u need him?

[@mikestepz3945]

Early bird gets the worm

[@jackhakken]

Well profit good loss bad.

[@jazzzzzz5626]

Rich owners like city and psg.

[@ugoeze7360]

Why get an MBA and Sports Management degree when you got Tifo ? 🧐

[@Cityeditz69]

i thought they were gonna talk about football clubs twitter acounts 😅😅