Dissertation document

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Finances of lower league football, focusing on League
Two and the Conference Premier
Michael Richard Turner
21207606
A research project submitted in part fulfilment of the requirement for
award of the BA (Hons) Football Business and Finance of UCFB in
partnership with Buckinghamshire New University
April 2015

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Acknowledgements
There are people who I wish to thank for their help during the writing of this research
project. My supervisor Dr. Glenn Hitchman, for the feedback he has provided to help
constantly make improvements and alterations. The support staff at UCFB, for
answering all of my questions, no matter how trivial they may have been. And finally
my friends, for constantly bugging me when I was trying to procrastinate.
Cheers guys.

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Abstract
The purpose of this research project is to determine the financial performance of
football clubs, to see where improvements can be made and what the contributing
factors may be. The scope of the study is the English Football League Two and
Conference, as well as two clubs in lower leagues to act as comparative measures.
Ratio analysis was the foundation of the study, providing an objective view of the
financial performance based on public information gathered from Key Note. The
results indicate that the financial performance of the football clubs featured could be
cause for concern, pointing to Szymanski’s theory of irrational exuberance being a
main factor of insolvency, rather than negative shocks. There is an ever expanding
basis of literature around this subject, although it has been noted that it is often
directed at the elite level of European football, with the lower leagues often ignored.
By conducting the research at this level, the results point towards the need for more
knowledge around the area, in order to establish experts in the area to provide
sound financial management for the football clubs.

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Contents
1.0. Introduction 6
2.0. Literature Review 8
2.1. Introduction 8
2.2. Economics 8
2.3. History of Football and Economics 9
2.4. Wages 12
2.5. Sport Management 13
2.6. Football Club Corporate Governance 14
2.7. Financial Fair Play 17
2.8. Football Finance 19
2.9. Further Reading 21
3.0. Methodology 23
3.1. Data Collection 23
3.2. Data Analysis 25
4.0. Findings and Discussion 29
4.1. Return On Capital Employed 29
4.2. Net Profit Margin 30
4.3. Gross Profit Margin 31
4.4. Operating Costs To Revenue 32
4.5. Asset Turnover and Non Current Asset Turnover 33
4.6. Working Capital 34
4.7. Main Discussion 35
5.0. Conclusion and Recommendations 40
6.0. References 44
7.0. Appendices 53
7.1. Figures
7.1.1. ROCE 53

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7.1.2. Net Profit Margin 54
7.1.3. Gross Profit Margin 55
7.1.4. Operating Costs to Revenue 56
7.1.5. Asset Turnover 57
7.1.6. Non-current Asset Turnover 58
7.1.7. Working Capital 1 59
7.1.10. Wages to Turnover 63
7.1.11. AFC Wimbledon 64
7.1.12. Bristol Rovers 65
7.1.13. Forest Green Rovers 66
7.1.14. Grimsby Town 67
7.1.15. Morecambe 68
7.1.16. Oxford United 69
7.1.17. Portsmouth CFC 70
7.1.18. Scunthorpe United 71
7.1.19. Southend United 72
7.1.20. Wycombe Wanderers 73
7.1.21. York City 74
7.2. Tables
7.2.1. Working Capital Key 62
7.2.2. League and Final Position 2012/2013 75
7.2.3. Available Data from Key Note 76
7.3. Appendix
7.3.1. Barnet FC Email 78
7.3.2. Cambridge United Email 80
7.3.3. Return on Capital Employed 82

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7.3.4. Gross Profit Ratio 83
7.3.5. Net Profit Ratio 84
7.3.6. Operating Costs to Revenue 85
7.3.7. Asset Turnover 86
7.3.8. Current Ratio/Working Capital 87
7.3.9. Current Ratio 88
7.3.10. Z Score 90
7.3.11. Wages to Turnover 92

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1.0. Introduction
“It may still be a beautiful, but clearly is an ugly business” (Beech, Horsman and
Magraw, 2008). The generally accepted view of football fans, experts and academics
is that the football industry is not run in a profitable way, apart from football clubs at
the elite level. The purpose of this research project is to look at football clubs within
the Football League Two and Conference to determine if they are run in a way that
could be deemed financially stable. This project tests this and tries to look for the
cause for this lack of profitability, with there being a wide range of contributing
factors, from the historical impact and how English football is set up, to the
philosophy of the football clubs featured and what they are trying to achieve. Based
on quantitative, secondary data, one of the main limitations found in this study is the
lack of comparable data that football clubs have published in the public domain. Out
of forty six clubs looked at, eleven of these had an adequate amount of information
readily available to measure. This does of course, allow for the research to be built
upon in the future, with a number of avenues being feasible. The study is based on
the Statement of Financial Performance (Profit and loss statement) and Statement of
Financial Position (Balance sheet) of football clubs and carries out a number of
profitability and liquidity ratios to provide an objective view of how well the clubs are
performing. Some of the main themes present throughout are based on the views of
profit maximisation vs win maximisation, first proposed by Sloane in 1971 and built
upon by a number of other authors (Andreff, 2011; Dobson and Goddard, 2011;

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Szymanski, 1997). Competitive balance is a theme featured, with comparisons of the
open de-regulated European leagues to the closed and regulated North American
leagues, with the questions being posed that the American model needs to be
emulated in order to create a more economically proficient industry. Insolvency is an
issue addressed in this research project, with it being relevant to the clubs analysed.
There is only one case of a football club in the Premier League entering into the
administration process, Portsmouth FC, and it is fitting that they also feature in this
paper, being in League Two in the 2012/13 season. Also Szymanski could be
considered one of the key figures regarding this topic, having a number of his articles
being cited throughout this paper. Some of the foundation literature that this
research project is based around is Rottenberg (1956) and his theories of competitive
balance, Sloane (1971) and the already mentioned theory of profit maximisation vs
win maximisation, and Neale (1964), with his views on the nature of the sports
industries and the needs for the survival of competition in order to create a better
product for the consumers.

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2.0. Literature Review
2.1. Introduction
“Football has a very poor record of translating strong revenues into bottom line
profitability (Marshall and Tomlin, 2011).” Football club sustainability is all
encompassing and is relevant to a variety of aspects within a football club.
Economics (Neale, 1964), sport management (Guzmán and Morrow, 2007) and
finance are key areas both in general and sporting terms while the recently
introduced Financial Fair Play (FFP) regulations are also important. The history or
football is a common theme when looking at the financial landscape. As well as that
the ownership models (Fallon and Srodes, 1987) and corporate governance of clubs,
in particular for lower league organisations, which is the focus of this study. The Elite
Player Performance Plan (EPPP) could also have an impact on the sustainability of a
club, although this can be considered a separate topic. “Financial sustainability is
achieved when a business is able to deliver products and services to the market at a
price that covers their expenses and generates a profit” (SmallBizConnect, n.d.).
2.2. Economics
The literatures based around economics all mention the ‘peculiar’ nature of the
football industry in a business sense (Guzmán and Morrow, 2007; Neale, 1964).
Ordinary businesses try to create a monopoly in the industry in order to maximise
their revenues. Sporting industries however, require the competitors to be

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challenging in order to make the product, the sport, as attractive to customers as
possible. Neale’s 1964 article is considered one of the pillars of this area of research,
with it being heavily cited in articles related to the issue. The level of readership of
the article could be an indication of its importance, although that is not always the
case. The article involves creating a competitive balance, meaning there is little or no
unfair advantages for companies, which while being universally accepted by sports
economists, has not been thoroughly examined (Nauright and Ramfjord, 2010;
Gratton, 2000; Rottenberg, 1956; Avgerinou, 2007; Wicker, 2014; The Economist,
2007; Dobson, 2007), with Gratton (2000) using evidence from the North American
sports leagues as evidence of the leagues thriving despite relative competitive
imbalance such as the National Football League (NFL). While this is not directly linked
to sustainability, it does have an impact. If audiences do not feel the outcome of a
match is obvious, they are more likely to attend and invest rather than if it were a
forgone conclusion. Comparisons with the open, de-regulated sports leagues of
Europe and the closed and heavily regulated leagues of North America are
commonplace (Nauright and Ramfjord, 2010; Gratton, 2000), with Gratton’s article
suggesting emulating the American model to form a European ‘Super league’, backed
up by findings from Hoehn and Szymanski (1999) to restore the competitive balance
of the leagues. The findings however suggest this would not be the case. Dobson and
Goddard (2011) address competitive balance and apply standard deviation to analyse
the amount of variation within the league, looking at North American sports. This

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focusses more on the sporting performance than the business performance, looking
at aspects such as home-field advantage. Another key comparison between the two
is regarding stadiums, and by extension relocation of teams. While in the USA it is
common for public money to be used to build stadiums to attract teams to the cities
(Gratton, 2000), this does not happen in the European market with Berument et al
(2006) looking at the Turkish league to examine the link between a city’s economy
and the performance of a football team and saying “public expenditures to finance
professional sports cannot be justified”. The relationship with sustainability is
obvious with building a stadium being a very costly and time consuming venture
although the long term benefits are substantial, with the commercial and matchday
growth of Arsenal being an indicator (Populous, 2006). The link to insolvency and
stadiums is also apparent, with Beech, Horsman and Magraw (2008) 42.9% of the
clubs in their study had issues with their stadiums when it came to insolvency, if the
football club owns it, and problems if it does not.
2.3. History of football and economics
When considering the state of the football industry financially, it is important to look
at the history to examine the key factors that have developed the industry into what
it is today. The formation of the Premier League in 1992, the restructuring of the
Champions League in 1995, the collapse of the ITV Digital TV deal in 2002, the
Bosman ruling in 1995 and the conversion of top flight stadiums to all-seater due to
the Taylor Report in 1990 are all contributing factors (Emery and Weed, 2006; Hamil

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and Walters, 2010; Platts and Smith, 2010; Gratton, 2000; Szymanski, 2014;
Avgerinou, 2007; Dobson, 2007; Szymanski, 2010; European Commission, 2013;
Dobson and Goddard, 2011). These peaks and troughs in the overall health of the
football industry has led to the current situation, with the Premier League getting the
majority of TV money and the lower leagues getting a small fraction of the prize
money (Dobson and Goddard, 2011). It is also worth noting that there has been an
aversion to the business side of football, with the impact on its culture being
contested by fans (Szymanski and Kuypers, 2000). A quote from Nauright and
Ramfjord (2010), backs this up: “Fears of foreign investment running the traditional
game persist. Some are tied up with xenophobia, while others are genuinely
concerned about the future of the game…”.
Insolvency of companies is something that would normally benefit competitors, but
as previously explored with competitive balance of the leagues, could weaken the
product that football offers, with the potential loss of rivalries of heavily supported
teams and games being un-played which would reduce the value to spectators. Again
because of the ‘peculiar’ nature of the football industry, clubs that do go through the
insolvency and administration process rarely cease to exist. The analysis of Lincoln
City in Emery and Weed’s 2006 article shows that the process of administration
benefits clubs although is published a year after the club and therefore cannot take
into consideration the long term effects. An analysis of the restructuring of the club
after a longer period time would have shown if it was successful or not. The

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European Commission (2013) report highlights the upsurge of football finance,
showing the increase in total number of player transfers and the total value of these
transactions. The comparisons to basketball give a different viewpoint rather than
the comparisons to other leagues and country’s football regulations. This adds to the
argument due to the fact that clubs need to be more cautious with how they invest
their money in particular with player transfers and transfer spending and wages
compared to revenue.
Portsmouth FC are one of the most high profile cases in recent times, dropping from
the Premier League to League Two and going through the administration process
twice (Semke, 2013; DiBella, 2013). The lessons learnt from Portsmouth’s trouble are
certainly about extreme irrational exuberance (Szymanski, 2012) and over-
prioritising the win maximisation (Sloane, 1971) and a look into their recent history
confirms this (Moxley, 2013). In 2013, the club were bought out by a Supporter’s
Trust which is backed up by Supporters Direct, who are strong advocates for greater
supporter influence within football clubs (Supporters Direct, 2013).
2.4. Wages
The escalation of player wages in often linked to the financial landscape of the
football industry with Stewart (2015) noting that “In 2013 Barcelona FC had the
highest salary scale of any professional sporting club in the world, with players on
average salaries of more that USD 8 million.” The impacts of wages is also highlighted

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in Dobson and Goddard’s 2011 literature, both in terms of profit or utility
maximisation and win maximisation (Sloane, 1971). Aspects such as a payroll cap are
common in the North American leagues but are less relevant to European football,
although as mentioned in this literature review, FFP and SCMP are in their infancy
and expected to reduce the effect of wages on turnover. The mention of a salary cap
enforced by the G14 group has little impact as the group disbanded in 2008 although
the principles of a 70% wage to turnover cap were on the right track. Avgerinou
(2007), Emery and Weed (2006), House of Lords (2013) and Marshall and Tomlin
(2011) all talk about the impact of wages on the football industry and how the
increasing wages to turnover figure needs to be addressed. Beech, Horsman and
Magraw, (2008) associate high wages with insolvency saying that when a club is
relegated, it wrongly prioritises wages when costs need to be cut down.
2.5. Sport management
Because of the peculiar nature of the sports and football industries in particular
(Guzmán and Morrow, 2007), it is important for those at the helm of the different
organisations to be experts and for sound management to be in place. Stewart
(2015) backs this up with the growing demand for staff with experience and
expertise in finance and funding being key. Amar (1999) makes a note of this,
pointing out the large gap in academic research surrounding the area and noting that
the application of standard theories around management would have little effect
because “players, coaches, managers and other sport staff” may not be motivated in

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similar ways. This links to sustainability because of the win maximisation versus asset
maximisation theory put forward by Sloane in 1971. With this article being quite
dated, the breadth of research will have no doubt expanded, although there is still
the influence of former players and coaches at management level, something that
Amar says should not necessarily be the case. Winland et al (2012) looks at the need
for non-profit sporting federations need financial models in order to survive and
grow. Although this is not directly linked to the sustainability of clubs, if the
federation that is running the league is not managed properly, there could be
ramifications that affect all of the member clubs. If the governing bodies do not have
a sustainable model in place, it does not set a good precedent for clubs to follow.
2.6. Football club corporate governance
Szymanski (2012) looks at two theories regarding insolvency in English football and
favours the effect of ‘negative shocks’ rather than ‘irrational exuberance’. This
means insolvency does not necessarily happen because of financial mismanagement
but rather through sudden and unexpected problems. The collapse of ITV Digital in
2002 is an example of this, which caused twelve clubs to go through insolvency
proceedings within a year. Relegation could be classed as a ‘negative shock’ as a
football club never goes into a season expecting to be relegated. This lack of planning
and management could be attributed to insolvency as well relegation itself has an
impact. Beech, Horsman and Magraw (2008), note that in their study of clubs going
through insolvency proceedings, 48.5% of the clubs went through the process after

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relegation. The example of Portsmouth CFC is relevant here, with a long list of
creditors being owed close to £100 million (Guardian, 2010).
This is backed up by his claimthat in the decade before insolvency the issue seems to
be more of “stagnation and decline, rather than crash and burn” (ibid.), with clubs
suffering lower league positions and relegation before the financial difficulties took
hold. This means that the regulations brought in by UEFA may not have the desired
impact and unpredictable events being the main catalyst for the majority of
insolvencies.
The ownership model of football clubs is a contemporary issue with different
ownership structures having different priorities for the club, its stakeholders and
shareholders (Wilson, 2013; Emery and Weed, 2006; Marshall and Tomlin, 2011; Bi,
2015; Millward, 2012). While not directly linked to the sustainability of football clubs,
it has a relevance to the issue as each ownership model has a different impact on the
financial sustainability of the club. Hamil et al (2000) focusing on the role supporters
play in terms of financial support and how their influence needs to be formally
recognised so that clubs do not ignore the influence that they have. The Football
Governance Research Centre report (2005) looks at the impact of stakeholders on
clubs as well as different ownership structures available to clubs (Fallon and Srodes,
1987; Trenberth, 2011; Hamil et al, 2000). Supporter ownership is becoming
increasingly significant, especially for clubs at the level looked at, with The Guardian
(2015) noting there are “around 40 clubs” in the UK being supporter owned. Holt

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(2007) focusses on how the industry is moving away from a traditional hierarchical
model of governance, towards a more stakeholder centric model where elite clubs in
particular are growing in influence. Robson (2006) points out the challenges of
setting up sporting governance, using the example of setting up a women’s soccer
league. The relevance of this to club sustainability is the link Robson explains
between the quality of the sport and the economics of the league. Juventus have
published a sustainability report which talks about the way the club is run financially
and highlights the things that they do to be self-sufficient and to reach the needs of
the stakeholders. The ownership structure of Barcelona FC is an interesting case and
Hamil and Walter’s (2010) article takes an in-depth look at the governance model
and the management of the club, in particular the development of the ownership
structure and an analysis of four strategic areas. It is important to note that with all
the changes Barcelona have made on a corporate level, they are still one of the
wealthiest clubs in the world. With the study focussing on lower league football the
impact of ownership structure is perhaps less significant, as clubs at that level have
similar standards of financial performance , as the results from this research project
show, and are less likely to attract wealthy foreign owners that would drastically
alter the fortunes of the club.

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2.7. Financial Fair Play
One of the findings of Platt and Smith’s (2010) paper is that the first steps for clubs to
becoming sustainable is damage limitation, by trying to eliminate the high levels of
debt and reduce the highest creditors, which is largely attributed to player wages.
UEFA have introduced regulations to try and tackle the sustainability and financial
health of European football clubs, with the Financial Fair Play (FFP) regulations being
implemented for all clubs wishing to compete in European competitions such as the
UEFA Champions League and the UEFA Europa League. Since its introduction in 2012,
there has been a growing amount of literature surrounding the area (Szymanski,
2012 and 2014; Evans, 2014; Geey, 2012; Jemson, 2013; Dimitropolous, 2011;
Wilson, 2013; Lammert et al, 2012; Madden, 2014; O’Toole, 2014; Marshall and
Tomlin, 2011). Many papers surrounding FFP ask the question of whether the
regulations brought in are enough to mitigate insolvency; with Hamil and Walters
(2010) saying effecting measures of governance and monitoring manager’s decisions
are needed in order to maintain its impact. Szymanski’s 2012 piece notes the first
theory of irrational exuberance leads to regulation systems such as FFP. It is worth
noting the UEFA regulations will have little impact on clubs outside of the top
division in the European leagues.
With the focus of the report being on lower league football, it is vital to look at
regulations that will have an impact on League Two and Conference clubs. The
Football League have brought in their own Financial Fair Play regulations known as

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Salary Cost Management Protocol (SCMP) (Financial Fair Play, n.d; Geey, 2012,
Football League, 2012). This involves limiting a clubs “spending on player wages to a
percentage of club turnover” with the overall aim of the club becoming self-
sustainable, much the same as its UEFA counterpart. It is also meant to encourage
investment in infrastructure and youth development, so that clubs are more reliant
on talent they produce rather than bringing players in with large transfer fees. This
all relates to the Elite Player Performance (EPPP), which is a separate topic. Because
both sets of regulations are still in their infancy, it is difficult to determine the
success on the long-term sustainability of clubs, but the general aim is to reduce the
percentage of wage to turnover and for clubs to try and develop revenue streams to
maximise profit. If clubs in the Conference wish to get promoted and compete in
League Two, they would have to comply with the regulations as well.
Many of the pieces of comparative literature between European and North American
soccer suggest the regulation of the open European league, with aspects such as the
draft systemand wage caps being brought in to try and create a more financial stable
environment (Nauright and Ramfjord, 2010).

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2.8. Football finance
There are various articles that analyse the stability of the football industry
(Dimitropolous, 2011; Szymanski, 2010), with it being referred to as a bubble that is
ready to burst and requiring an overhaul of the regulatory systemin order to
proceed (Hamil and Walters, 2010), Szymanski (2010 and 2012), says the external
financial crisis is not an issue to the football industry although in the 2012 piece,
examines if the industry is in crisis due to the imbalance of income and expenditure
and the rising levels of debt, which is also referred to in other sources (Platts and
Smith, 2010), with mention of the growing commercialisation of the game being
significant. The Economist mentions Szymanski, although not a particular paper,
saying that despite the European leagues being unbalanced, the popularity of the
sport has not been affected, with features related to the open league structure such
as promotion/relegation, local rivalries and the chance for underdogs to embarrass
their superiors being able to generate interest for those that do not have the chance
to win the championship. This again refers to the impact of competitive balance and
the need for competition in order to create a product that fans will pay to see.
Szymanski (2010) points out that club have ‘enlightened self-interest’ often giving
support to clubs in financial difficulty because a team needs competitors in order to
operate, and that there is a link between the relative spend on players and the
success of the team, while Avgerinou (2007) highlights the challenges clubs in Europe
face financially, in particular player wages and expenses of the club. Andreff (2011)

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gives an excellent explanation for this, with the combination of the win-maximisation
philosophy (Sloane, 1971) and impact of promotion and relegation meaning clubs
enter into ‘arms races’ for the best players, which may not work out’, which causes
player’s wages and transfer fees to continue to increase. The main difference to
American leagues is that the focus on profit mean clubs will not overpay for a player
to enhance the quality of the team for the win maximisation aspects. Dobson and
Goddard (2011) note a link between competitive balance and profit maximisation
saying if teams are rational about maximising profit the competitive balance of the
league will be more or less equal while Szymanski (1997) notes the relationship
between profits and performance linking to the win maximisation and profit
maximisation theory already mentioned (Sloane, 1971). Beech Horsman and Magraw
(2008) talk about the impact of this in terms of spending to achieve promotion and
therefore perform better financially, or selling or releasing players in order to reduce
costs. When looking at football at the elite level, you can see this may not be the
case, with teams such as Manchester City spending a net total of -£631,427,000 since
the Premier League began (Transfer League, 2015). A common study when looking
at football finance is to compare the sporting performance of a club against its
financial performance (Wilson, 2013; Emery and Weed, 2006; Platts and Smiths,
2010; Szymanski, 2010).There is a direct correlation between the relative spend of a
club and their on field successes. This stems fromSloane’s 1971 article highlighting
win maximisation and utility maximisation. Clubs need to decide whether short term,

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on field success, win maximisation, is a priority, or if long term, off field success and
sustainability or utility maximisation is.
2.9. Further reading
Sustainability in football has an impact on all areas of a football club. Because of this
and with Stewart (2015) saying there are many gaps in financial knowledge, the topic
has many avenues of research to go down, with the financial impact of EPPP being
important. According to Avgerinou (2007) saying the financial innovations of “stock
market listings, strategic media investment, securitisation, player sale and leaseback
arrangement and stadium naming rights deserve more research”. The majority of the
articles researched are looking at the elite level of football rather than the lower
tiers, which this research paper will be focussing on. There are some areas that are
transferrable, such as the Salary Cap Management Protocol regulations brought in by
the football league (Football League, 2012; Geey, 2012), and the financial analysis
carried out by Emery and Weed (2006) being directly linked to this research, albeit at
a different level. Further research into the ownership models of football clubs and
the financial impact of this would also be beneficial. More studies around these areas
are bound to have a positive impact, due to the current lack of shared knowledge
available. As well as that, comparing the English league structure to that of other
countries would be beneficial, with comparisons to the American model being
common because of the stark contrasts between the league formats. By looking at
the financial data of football clubs you can see that there is need for better revenue

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streams, which could be influenced by factors such as an external investor or a
restructuring of the entire league format, although this latter suggestion is unlikely.
The issues covered in Marshall and Tomlin’s 2011 piece also bring to light the
political influences on the football industry with claims that a reformation of the
Football Association is required to overcome mismanagement and poor
representation. Szymanski (1997) backs up the claimof reform by looking at the
football industry before the Taylor Report and the formation of the league in
comparison to the current format.

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3.0. Methodology
3.1. Data Collection
The purpose of this investigation was to see how well clubs in the Football League
Two and Conference Premier, as well as two teams in lower leagues, performed
financially, and to see if there are any clear problems that need to be addressed. This
was done using quantitative data obtained from Key Note
(http://www.keynote.co.uk/) and assessing the data using profitability and liquidity
ratios. These enable an overall view of the financial performance of the football clubs
to be established, and gives a format for which the clubs can be compared to one
another. KeyNote was used rather than Companies House directly solely for the
reason of funding. While there is a charge for documents from Companies House, the
service from KeyNote is free for academic use, and provides the same information.
All of the data analysed was from accounts posted in 2013 following the 2012/13
seasons. This is the last year where all accounts are published by all of the clubs
involved in the study, although more up to date information may have been released
since. This allowed the majority of data to be collected, as a lot of the clubs had not
posted more recent information. Initially, direct contact was attempted with the
clubs involved in order to get the company details directly. This turned out to be an
extremely time consuming task, providing little success, with a limited number of
clubs replying to the emails. This also points towards a more objective measure of
the financial performance rather than a subjective comparison. If this study were to

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be carried further, interviews could be conducted to test if the same results were
produced and more qualitative findings could be found. During the initial research
into Football League Two and Conference clubs, a number of clubs were not used.
After a secondary search the missing accounts were sought and the results updated
to provide a more full view of the clubs in League Two and the Conference. The study
does include two clubs in lower leagues to act as comparisons, Histon Town in the
Southern League (Levels 7 and 8) and Ely City in the Eastern Counties Football League
(Levels 9 and 10). Of the 46 clubs whose documents were obtained, Aldershot Town
had dormant accounts so could not feature in the ratios. As well as that, only eleven
had all the necessary information, the statement of financial position (balance sheet)
and the statement of financial performance (profit and loss account). There was no
up to date information for Nuneaton Town, Fleetwood Town or Chester while only
the Community Trust accounts for Chesterfield were available online (see Table 7.2.1
for a full list of clubs used). Hartlepool United, Bury, Scunthorpe United and
Portsmouth were relegated to League Two at the end of the 2012/13 season while
FC Halifax Town and Histon were in the Conference North and Welling United and
Salisbury City were in the Conference South. By knowing this, it is easier to judge
whether or not the results in the study can be deemed a success or not, especially
when applied to Sloane’s (1971) win maximisation theory. As shown in the literature
review, there is a limited amount of analysis at football away from the elite level.
While it has been said that a common study is to compare the turnover to the league

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position (Szymanski, 1997; Wilson, 2013; Emery and Weed, 2006; Platts and Smiths,
2010; Szymanski, 2010), there have been few studies of the overall financial health of
clubs at this level. Any results found from this study are more likely to have an
impact than at the elite level.
3.2. Data Analysis
The ratios used were Return On Capital Employed (ROCE) (Appendix, Net Profit
Margin, Gross Profit Margin, Operating Costs to Revenue, Asset Turnover, Non-
current Asset Turnover and Working Capital. For a list of the ratio definitions
according to Jones (2013), and Elliot and Elliot (Jones), refer to Appendices 7.3.3. to
7.3.7. These profitability ratios are included to “establish how profitably a business is
operating” (Jones, 2013). The inclusion of the Working Capital Ratio is also used to
see “how easily a firm can pay its debts” (Jones, 2013). Since this study is looking at
the overall financial health of football clubs, looking at both profitability and liquidity
ratios is important to get a more comprehensive view of how the clubs are
performing. During the study it became apparent that a lot of the previous analysis
around football financial health is centred on wages with Financial Fair Play (FFP) and
Salary Cost Management Protocol (SCMP) being two instances of regulations brought
into English football to limit the rising wage, amongst other things (Stewart, 2015;
Avgerinou, 2007; Emery and Weed, 2006; Beech, Horsman and Magraw, 2008;
Marshall and Tomlin, 2011; House of Lords, 2013). With that in mind, a further study
was conducted to determine the wages to turnover ratio to see how much of an

26
impact on a club’s resources the player’s wages were having. This was done simply
by dividing the wages figure by the turnover figure. As is the case with the other
ratios, some areas of data was missing, meaning with more data, more trends could
have been established. Some problems encountered when calculating the ratios
included Welling United and Portsmouth CFC only having 2013 data. Grimsby Town,
Morecambe, York City and Bristol Rovers did not have a figure for gross profit
meaning the Gross Profit Ratio could not be calculated. For Bristol Rovers, the
administrative expenses figure was not available either, meaning the Operation Costs
to Revenue ratio was not calculable. While the profit and loss statement and balance
sheet were available for FC Halifax Town, it was presented with the majority of
necessary figures missing, the main instances being revenue and any recognition of
liabilities, both fixed and current. These ratios were calculated on a club by club basis
in an effort to present a snapshot of the financial health of each club. Because the
information was available in the public domain, consent was not needed although if
the statement of financial performance for all forty clubs were sought, they would
have to be attained from the clubs directly. The fact that only a small portion of the
clubs had all the required data impacted the study as the more data there is to
analyse; the more generalizable the results and the more conclusions can be made.
Another analysis that could have been carried out is Altman’s 1977 Z-score (Elliot and
Elliot, 2013). This is a more comprehensive analysis and can be used to predict future
success and failures. The literature by Beech, Horsman and Magraw (2008) brings up

27
the fact that these analysis models are self-fulfilling and that many bankruptcies are
down to unforeseen circumstances. It was not included in this study as not all the
information was readily available on the data collected, although if the study was
carried further, it would be beneficial to include this, as it provides a collective
analysis using more than one ratio, rather than each ratio being analysed
individually, as is the case here.
Secondary research was chosen as the main source of data for this project as
because the nature of the research project is financially based, any interviews and
questionnaires would likely have pointed to the same data. This is backed up an
email conversation with the Finance Director of Barnet FC who immediately referred
to the documents available on Companies House (See Appendix 1.1). Also, the
analysis of quantitative data is better suited to this study, as it allows the
comparisons of the different football clubs in a standard way whereas qualitative
research would have proven difficult to analyse based on the opinionated nature of
interviews. Beech, Horsman and Magraw note the differences between a
quantitative and qualitative study in this sector and states a mixed method approach
would yield more information to analyse and set up to see if there is any correlation
between what the hard data from the company accounts show, and the response
from any potential interviews.
Because the data is collected from Key Note, and to a degree Companies House, you
can guarantee the reliability of the information, as the statement of financial position

28
needs to be submitted to Companies House as a legal requirement. There may be
some unreliability in the ratios calculated, as determining the figures for each
calculation can differ, as some clubs post figures under different headings. An
example of this would be the Gross Profit Margin ratio. While the eleven clubs used
had the Statement of Financial Performance, four of these clubs did not have a figure
published for the Gross Profit, while as is the case throughout the study, there was
no data for Portsmouth CFC, as it is a phoenix club and 2013 is the first year of the
new club’s published accounts. The clubs missing from this calculation are Bristol
Rovers, Grimsby Town, Morecambe and York City. This impacts the study as over a
third of the clubs analysed had to be omitted from this particular calculation. This
has been avoided where possible with any outliers in the graphs being recalculated
to see if a mistake had been made. This can be considered the ‘test-retest’ method
posed by Bell (2010) as it could be seen as ‘administering the same test sometime
after the first’.

29
4.0. Findings and Discussion
The aim of this study was to determine whether or not the football clubs in the
Football League Two and Conference Premier are run in a way that can be deemed
sustainable. Based on the ratio analysis of the clubs and then applied to the relevant
literature discussed, any areas that are not up to standard are brought to light to see
if there is an adequate explanation for this. See Figures 7.1.1 – 7.1.21 for the full
results of the study including a club by club comparison.
Based on Saunders et al point (2012) on deductive reasoning, where the theories are
developed first and then tested with research, it is clear that the football clubs
analysed are not run in a profitable way. This is based on the point made by Marshall
and Tomlin (2011), that “financial debt and instability within the game have reached
unsustainable levels”. By carrying out the profitability and liquidity ratios featured in
the study, we are able to determine if this is in fact true and to see if action is
required to ensure the long term sustainability of football at this level is protected.
4.1. Return On Capital Employed
Figure 7.1.1 shows that if a club is making a return on the capital it has employed,
that return is minimal, with only three clubs having a positive return in 2013. Only
Forest Green Rovers experienced over 1% return. Forest Green Rovers and Wycombe
Wanderers are the standout performers for ROCE in comparison to 2012 with Forest
Green Rovers having a 5.9% increase with Wycombe Wanderers having a 3.1%

30
increase. This goes against the trend set by the other clubs who have similar results
for both 2012 and 2013. In this study, the ROCE was calculated by measuring the
profit and loss before taxation against the total assets minus current liabilities figure,
to serve as the figure for capital employed. This has allowed a comparable figure for
each club to be produced. The large differences for Forest Green Rovers and
Wycombe Wanderers can be put down to the difference in profit/loss before
taxation for the two years. Forest Green Rovers had lost £600,000 in a year while
Wycombe Wanderers had lost a vast amount more, a sum of around £4,600,000.
As well as this, the total assets minus current liabilities also has had an impact, with
Forest Green Rovers paying around £2,000,000 more to creditors in 2013 and
Wycombe Wanderers having £500,000 less coming in from debtors the same year.
One other aspect to note regarding the ROCE is that four out of the eleven clubs
featured posted a positive percentage return in 2012 and then a negative return the
following year. While the difference is as little as 0.2% decline it is still a negative
return so should be monitored accordingly.
4.2. Net Profit Margin
From Figure 7.1.2 we can see that only two of the eleven clubs had a positive net
profit margin, and that was in 2012, with no clubs posting a net profit margin in the
following year. With that being said, AFC Wimbledon and Grimsby Town only posted
positive net profit margin percentages of 0.03% and 0.1% respectively so there is still

31
room for improvement. This is because both clubs had an operating loss for 2013
compared to the operating profit the year before. Jones (2013), notes that the
calculation for net profit margin varies because of the different figures that can be
used. Throughout the study, the figure for operating profit/loss was used to
represent a true and fair representation of the clubs. The statistics for Portsmouth
CFC do not reflect reality as there was no data for 2012 and thus the data counts as
zero, although having -1% is still not desirable for a new company as it is one of the
worst clubs financially in the study. Portsmouth CFC and Forest Green Rovers are the
only clubs in the study to have a higher operating loss than turnover, which stands to
reason, as they are two of the worst clubs in terms of net profit margin. Forest Green
Rovers shows the worst net profit margin for both years, which is also reflected in
their gross profit margin percentage explained later on. Of the eleven clubs involved,
only Southend United and York City posted an improvement in 2013. This is down to
both an improvement in operating loss and turnover for both clubs.
4.3. Gross Profit Margin
The main thing to note from Figure 7.1.3 which covers the gross profit margin is the
lack of data compared to the other ratios. Bristol Rovers, Grimsby Town, Morecambe
and York City did not have figures for gross profit in the statement of financial
position while, as in the case for all the ratios, there is no data for Portsmouth CFC in
2012. This means that only seven of the clubs have comparable information, with the
majority of the clubs posting similar results for 2012 and 2013. AFC Wimbledon,

32
Forest Green Rovers, Wycombe Wanderers and Scunthorpe United had a worse 2013
than the previous year, while five of the seven had a positive gross profit margin
percentage. In comparison to the net profit margin, you can see the results are more
spread out, although all clubs have recorded between 1% and -1% gross profit
margin. Jones (2013) states that the gross profit margin is a useful ratio when
examining businesses where inventory is purchased and resold at a marked-up price.
This does not necessarily apply to football clubs as the main product on sale is the
football itself. It could however be interpreted as the investment in young players
who are then resold for a large profit margin. This links into the Elite Player
Performance Plan (EPPP) which is contemporary and relevant topic, but is perhaps
too far from the core topic to be included in this discussion. This is reflected in the
relatively low performance of the clubs involved.
4.4. Operating Costs to Revenue
Figure 7.1.4 shows the operating costs to revenue percentages and as you can see,
none of the football clubs featured posted a positive result apart from Oxford United
in 2012. There are no results for Bristol Rovers as there were no ‘administrative
expenses’ figure that could be used to compare to the other clubs. The worst
performers were Grimsby Town and Portsmouth CFC. This could be alarming for
Portsmouth CFC as they are a new club and to have an operating costs to revenue
ratio of -1.59 and therefore is very inefficient. Put into practical terms, this means
that £1.59 is spent to achieve £1 of sales. Most football clubs had like for like results

33
for both years although Oxford United had the biggest drop from 0.38 in 2012 down
to -0.45 in 2013. While it has already been stated that the results are negative, since
they are all relatively close together, it could be assumed that these results are
common for football clubs and not a cause for concern since each industry differs in
the necessary costs (Taylor, n.d.).
4.5. Asset Turnover and Non-current Asset Turnover
Figures 7.1.5 and 7.1.6 show the asset turnover and the non-current asset turnover.
As you can see, some clubs have done exceptionally well in comparison to others
with three clubs having an asset turnover of five times and four clubs having a non-
current asset turnover of around ten or above for at least one of the years. The main
point to note is while the asset turnover for each club is similar for both years
analysed, there are large differences for the non-current asset turnover for some
clubs. Bristol Rovers improved by thirteen times, Oxford United by twenty nine times
while Wycombe Wanderers decreased by nine times. This shows that football clubs
have low amounts of fixed assets, as the majority of the business comes from match
day revenue in terms of both attendances and commercial revenue from TV
broadcasting. In terms of Asset Turnover, player movement could be a factor.
Football players can be deemed as assets as they are bought and sold on the transfer
market and are certainly current assets as their tenures at football clubs only last a
limited amount of time. One reason why some clubs have high Asset Turnovers

34
compared to others could be down to a busier transfer window where a lot of
players were bought or sold.
4.6. Working Capital
Figures 7.1.7, 7.1.8 and 7.1.9 are the only graphs including all forty six clubs in the
study and show the working capital ratio, also known as the current ratio. There are
two clubs not involved in the study Aldershot Town and FC Halifax for reasons
already mentioned. There are a few outliers in these results, both positive and
negative. The clubs with the best current ratio are Southport Rugby and Grimsby
Town, although Grimsby’s 2013 result is more in line with the other clubs. Southport
have an incredible working capital of 5.23 for 2012 and 8.79 for 2013. This means
that they are able to pay their current liabilities using their current assets 5 times and
8 times respectively. This is shown in the Statement of Financial Position with the
current liabilities for Southport Rugby totalling £36,393 for both years. When you
compare that to Hartlepool United who have total liabilities equalling £26,894,939
for the same period, it is no wonder Hartlepool’s working capital is only 0.04 for 2012
and 0.03 for 2013. While Grimsby Town and Southport Rugby experienced the
highest declines by 2.30 and 3.56 respectively, the club that improved the most is
Rochdale, rising from 0.20 to 1.46.

35
4.7. Main Discussion
From looking through these ratios, we can see that the majority of football clubs do
not run in a way that can be deemed profitable. When comparing these results to
the theory formed by Sloane (1971) and expanded by Wilson (2013), Emery and
Weed (2006), Platts and Smith (2010) and Szymanski (2010) you could assume that
the clubs are pointing towards a win maximisation model rather than profit
maximisation. However, when looking at the club’s league positions for the 2012/13
season where the financial accounts are from, you can see that win maximisation
was not achieved in every case (Table 7.2.2)(Statto, 2015; Statto, 2015; Statto, 2015;
Football League, 2015). It could be argued that Grimsby Town achieved the best on
field performance, getting fourth in the Conference Premier, although clubs in
League Two could be considered to have performed better, as they are in a higher
division. Kearney (2004) backs up the distinction between win and asset
maximisation; “To be successful, football clubs must balance sport and business.” He
goes on to emphasise the importance of competition and competitive balance. With
the structure of English Football having the impact of promotion and relegation,
competitive balance is ensured with the best and worst performers leaving the
league at the end of each season to compete at a more appropriate level. This
competitive balance does not guarantee profits however, as the results have shown
that the clubs largely do not run at a profit. This contradicts Gratton’s 2000
suggestion of creating a European Super League to restore competitive balance.

36
Because the study is targeted at lower league football, the results may differ when
analysing the elite level, although there is evidence from North American sports that
the leagues can thrive without the competition being balanced.
The theories posed by Szymanski (2012) of irrational exuberance and stagnation and
decline could suggest that a lot of the clubs analysed are stagnating because of their
lack of financial performance. None of the clubs performed well when looking at the
Return On Capital Employed, Net Profit Margin, Gross Profit Margin or Operating
Costs to Revenue. A look at the amount of clubs that have gone through the
administration process (Hereford United, 2014; Salisbury City, 2014) also lends itself
to the theory of stagnation and decline and Szymanski (2012) with Table 7.2.2
showing the league movement for the 2012/13 season. Within the literature by Jim
(2010), there are 23 of the 66 cases of the football clubs that have gone through the
administration process. Since this was published in 2010, the likes of Hereford
United’s 2014 (Hereford United, 2014) and Salisbury City’s 2014 (Salisbury FC, 2014)
financial trouble are excluded. Emery and Weed back this up by noting a high wages
to turnover ratio being a key contributor to financial insolvency. Upon this literature
and others pointing to the impact of high wages, the calculation was tested against
the clubs involved in this study (Figure 7.1.10). Forest Green Rovers had an
alarmingly high wages to turnover ratio for both 2012 and 2013, with an increase in
2013 while all clubs with available data had over 50% of their turnover going directly
to players in terms of wages. In 2012, three out of eight results had a 75% of their

37
revenue towards wages while in 2013, seven out of nine were over 75%. Considering
that the G14 group at the elite end of football were trying to enforce a 70% cap
before they disbanded, this is a worrying issue especially since the revenue levels are
much lower in League Two and the Conference. York City had the worst year on year
comparison, with the ratio increasing by 60%, while Grimsby Town improved by 16%.
Competitive balance does not seemto have an impact on sustainability with the all
eleven of the clubs analysed in the open and deregulated leagues of the Conference
and League Two posting a loss for the financial year in at least one of either 2012 or
2013. As already noted (Gratton, 2000), the establishment of a more ‘Americanised’
league to establish competitive balance and to promote economic returns does not
seem necessary as there is already relative competitive balance due to promotion
and relegation. The findings from Gratton also point out that there is little evidence
that the American model will improve the financial performance of clubs. One way
for the economic performance to improve for clubs at this level is through the prize
money awarded to teams. As already stated by Dobson and Goddard (2011), by
increasing the amount of prize money that trickles down (Marshall and Tomlin,
2011), particularly TV money, lower league clubs will have an increased source of
revenue and will obviously be more financially stable.
Beech, Horsman and Magraw (2008) mention the impact of stadium ownership on
insolvency. From looking at the Statement of Financial Position for the eleven main
clubs involved in the study, six of the clubs have fixed assets over £1.3million, with

38
Morecambe having fixed assets over £8million. This could reasonably be the
ownership of the stadium, and if any of these companies were to enter into
insolvency proceedings, the sale and leaseback of these assets could be a viable
option.
High wages have already been identified as an issue throughout football, including in
League Two and the Conference. Salary Cap Management Protocol has already been
implemented to try and restrict the impact of wages to turnover (Geey, 2012).
Because the regulations are in effect from the beginning of the 2012/13 season, the
same season that the club accounts featured are from, there is a leniency to the first
year of results. Further study into more recent years would provide a view of if the
clubs are complying with the regulations and if any have been sanctioned. The SCMP
only applies to the Football League so the results of the Conference clubs is not as
relevant, although clubs with Football League aspirations will have to be compliant if
they were to be promoted.
The theory of win maximisation vs profit maximisation (Sloane, 1971) is present
throughout this paper and it has been noted that looking at League Two and the
Conference, there are few clubs who are exemplary examples of either. It has
already been mentioned the lack of profits that clubs are posting, which points
towards the theory of win maximisation, but as Table 7.2.2 shows, there are few
clubs who can be considered to have achieved this. This could be down to the points
made by Andreff (2011), saying clubs are pressured into an ‘arms race’ for players,

39
which obviously affects profits and also contains the risk that the transfer may not
work out, which would adversely affect the win potential.
There are views of the football industry as a whole (Szymanski, 2012; Dimitropolous,
2011), suggesting that the industry is a ‘bubble ready to burst’ and that the rising
levels of debt are a concern. The figures point to this with Hartlepool being one of
the main examples, having creditors falling due within a year being over £13 million
for both 2012 and 2013.

40
5.0. Conclusion and Recommendations
From this study we have found that while the financial performance of the football
clubs is not great, the industry percervers and carries on regardless. There are often
case of clubs having large amounts of short term debt, such as Hartlepool United, yet
are still able to compete on the football pitch. You would expect Portsmouth CFC to
be one of the standout performers thanks to the phoenix club being supporter
owned and in its infancy since going through administration, yet this is not the case.
More current information shows signs of improvement (BBC, 2014) yet without a
comparative analysis to go alongside this study, just posting an operating profit does
not guarantee profitability.
If this study were to be carried further, interviews could be conducted to test if the
same results were produced and more qualitative findings could be found. Beech,
Horsman and Magraw (2008) note that a mixed study would be beneficial as a
quantitative study, such as this one or that of Emery and Weed (2006), would be
complemented by the qualitative data as well as individual data to provide specific
cases highlighted from the aggregated data. The example of Buraimo et al (2006) was
given, although that literature was not featured in this project. Some problems
highlighted by Beech Horsman and Magraw (2008) carrying out interviews include a
reluctance to talk about failure which could be present regarding this study, and a
persistent bias by the participant. This could be resolved by posing the questions as

41
“attempts to save the club” rather than the failure to do so, and to have the records
of your data at hand to assess the views posed in the interviews.
In order to have a stronger set of results, more club accounts could have been
gathered, looking at different leagues, both domestic and internationally but, given
that less that 25% of the accounts used had both the Statement of Financial
Performance and the Statement of Financial Position, there may still be this issue if
the scope was widened. As well as that, if more years were looked at, trends for each
club could be established to determine if they were improving or declining year on
year. This would link to Szymanski’s (2012) theory of irrational exuberance and see if
the clubs are perhaps in a period of stagnation and decline and if action needs to be
taken. While carrying out the profitability and liquidity ratios did provide an
adequate view of the financial performance of the football clubs, a more
comprehensive view would allow for more analysis. Altman’s 1977 Z score is a metric
that has been developed to predict future success and failures. This can again be
linked to Szymanski’s 2012 theory, because one issue with the Z score is that a lot of
causes of bankruptcy are Szymanski’s ‘negative shocks’ and are therefore difficult to
predict. Nonetheless, it does provide a good measure for how each company is
performing. More background information into the clubs, such as the ownership
structure and the transfer history would enable the analysis to look at win vs
maximisation theory in more detail (Sloane, 1971).

42
There are a number of avenues to pursue following this research project. As already
established from the literature review, the issue of football club finance has many
contributing factors. Certainly the literature in general around lower league football
needs to be developed. Emery and Weed (2006) backs this up by noting that almost
all journal articles are focused on the ‘elite’ end, the FA Premier League. Specifically,
football club valuation is something that can be adapted, with Markham (2013)
looking at the existing valuation models, before developing a new model. Although it
has not been touched upon in this research project, stadium utilisation is an area
that lower league football clubs could certainly improve on, with the amount of
home matches being played making up a small portion of the year. If there are able
to use the stadium for the remainder of the year, the establishment of new revenue
streams would improve the financial health of the club. Elite Player Performance Plan
that has not featured in this project because it diversifies from the core issue. Having
said that, there is a strong financial impact, especially for clubs at League Two and
the Conference so an analysis into if the costs out way the rewards would be
beneficial. As mentioned, the Salary Cap Management Protocol (SCMP) is still its
infancy, so further analysis into the impact of the regulations would be needed, as
well as the impact on wages and in turn, future insolvency problems. As Amar (1999)
noted, the management of sports companies is largely made up of coaches,
managers and former players, whose motivation and goals may differ from industry
experts. By installing these experts, the profitability of may improve, without

43
hindering the on-field performance. A quick example at the Oakland Athletics and
Moneyball show the impact a business professional could have on a sporting
environment. At the time of writing (2015), The Labour Party manifesto says that
“Labour will give football fans a voice in club boardrooms”. Supporter influence is a
contemporary issue, especially for the clubs in the study, with Portsmouth CFC being
a prime example. A look at the 2014 for Portsmouth CFC shows that supporter
ownership is a sound business model, with the club recording an operating profit for
the first full year after exiting the administration process. Supporters Direct are
strong advocates for more fan responsibility within football clubs and these are two
example that will strengthen their claims. The Guardian (2015) shows the positive
influence of supporter ownership and states “The entire ecology of football benefits
from this kind of activity”.
Word Count: 9,643

44
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53
7.0. Appendices
AFC
Wimbledon
Bristol
Rovers
Forest
Green
Rovers
Grimsby
Town
Morecambe
Oxford
United
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 0.19033304 0.07119278 -4.872184 0.07050761 -0.0654439 -0.8456396 0 0.34462426 -0.1085067 -2.6401788 -0.4722048
2013 -0.0767291 -0.0468742 1.10821817 -0.2962688 -0.1088487 -1.375083 -0.0671047 -0.2959243 0.04013371 0.76857354 -0.5042611
-6
-5
-4
-3
-2
-1
0
1
2
ROCE
Team
Figure 7.1.1 Return On Capital Employed
2012
2013

54
AFC
Wimbledon
Bristol Rovers
Forest Green
Rovers
Grimsby Town Morecambe Oxford United
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 0.039273607 -1.148607738 -1.423218446 0.104762134 -0.210835609 -0.319845984 0 -0.527072148 -0.304242993 -0.127638791 -0.360041048
2013 -0.024448586 -1.369290851 -1.933484562 -0.227850975 -0.316969144 -0.345891679 -1.051086528 -0.63555898 -0.105296462 -0.37421949 -0.106142192
-2.5
-2
-1.5
-1
-0.5
0
0.5
NetProfitMargin
Team
Figure7.1.2 Net ProfitMargin
2012 2013

55
AFC
Wimbledon
Bristol Rovers
Forest Green
Rovers
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 0.041314107 -0.135168702 -0.363516647 0.092570936 -0.212730115 0.056253563 0 -0.424642113 0.036116292 0.578191169 -0.481351819
2013 -0.023240881 -0.353286945 -0.942036563 -0.234546527 -0.328310638 0.10101343 0.543288172 -0.521245216 0.133002639 0.521067925 -0.20173968
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
GrossProfitMargin
Teams
Figure7.1.3 Gross ProfitMargin
2012 2013

56
AFC
Wimbledon
Bristol Rovers
Forest Green
Rovers
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 -10.07332838 -6.462894069 -0.755667136 -0.639490693 -6.538438613 -1.059606649 0 -0.701930675 -1.037469553 -2.370742209 -0.800206112
2013 -7.296172011 -2.642926851 0.94626137 -0.750768114 -4.467965302 -1.11236367 -2.189564487 -0.657356217 -1.153406048 -2.08797876 -0.968526748
-12
-10
-8
-6
-4
-2
0
2
Operatingcoststorevenue
Teams
Figure7.1.4 Operating costs to revenue
2012 2013

57
AFC
Wimbledon
Bristol Rovers
Forest Green
Rovers
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 1.318839233 5.768850883 0.29257354 0.682226714 0.276291166 7.046054138 0 0.454414555 6.520470622 2.858620027 0.392353311
2013 1.190173393 8.471353755 0.346675393 1.035349704 0.287265173 5.643492128 0.020673551 0.393322152 7.910765682 4.12041032 0.588368175
0
1
2
3
4
5
6
7
8
9
Assetturnover
Teams
Figure7.1.5 Assetturnover
2012 2013

58
AFC
Wimbledon
Bristol Rovers
Forest Green
Rovers
Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
2012 2.225568062 34.40558244 0.307631991 1.084061233 0.287486956 10.91894687 0 0.527098643 10.14869271 9.856892383 0.420439098
2013 1.730772018 21.5933259 0.359071298 1.337105555 0.302003829 39.06124929 0.107945192 0.425652571 10.24244767 0.961525864 0.649016772
0
5
10
15
20
25
30
35
40
45
Non-currentassetturnover
Team
Figure7.1.6 Non-currentAssetturnover
2012 2013

59
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
2012 -1.2703392 -0.5595372 -0.0537052 -3.5542718 -0.3821902 -0.1780696 0 -0.6827039 -0.0335493 -0.6032659 -0.1068011 -0.5180442 -1.2102638 -1.3398594
2013 -1.0127156 -0.5031588 -0.0211927 -1.2513574 -0.3654335 -0.3565148 1.41245991 -0.4130161 -0.0355022 -0.2214594 -0.1248235 -0.2447618 -0.5616195 -1.74787
-4
-3
-2
-1
0
1
2
WorkingCapital
Teams
Figure7.1.7 Working Capital1
2012 2013

60
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
2012 -0.445239 -0.352672 -0.428889 -0.08623 -0.404337 -0.578531 -1.480473 -0.697397 -0.51333 -0.846805 -0.040374 -0.058136 -0.620321 -0.303189 -0.203793
2013 -0.25788 -0.529198 -0.17234 -0.10782 -0.421428 -0.816158 -1.735777 -0.359507 -0.479178 -0.118963 -0.02985 -0.051831 -0.634901 -0.343547 -0.843876
-2
-1.8
-1.6
-1.4
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
WorkingCapital
Teams
2012 2013

61
32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
2012 -0.377054 -0.6574775 -1.3641089 -0.0919194 -0.0840994 -0.572591 -3.3957616 -0.1998491 -0.1662706 -8.7872688 -0.4439582 -0.3477726 0 -1.1730791 -0.6286697
2013 -0.3537983 -0.4966596 -0.4962359 -0.1452111 -0.4007003 -0.5718326 -0.2642595 -1.4593603 -0.1952331 -5.2260578 -0.1132802 -0.3898959 -0.1188576 -1.2685738 -0.7214333
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
WorkingCapital
Teams
2012 2013

62
Table 7.2.1 Working Capital Club Key
AFCWimbledon 1 ExeterCity 24
Bristol Rovers 2 Gateshead 25
ForestGreenRovers 3 FC Halifax 26
GrimsbyTown 4 Hartlepool United 27
Morecambe 5 HerefordUnited 28
OxfordUnited 6 HistonTown 29
PortsmouthCFC 7 Hyde United 30
Scunthorpe United 8 KidderminsterHarriers 31
SouthendUnited 9 LincolnCity 32
Wycombe Wanderers 10 Luton Town 33
York City 11 MacclesfieldTown 34
AccringtonStanley 12 MansfieldTown 35
AldershotTown 13 NewportAFC 36
AlfretonTown 14 NorthamptonTown 37
Barnet 15 PlymouthArgyle 38
Braintree 16 Rochdale 39
BurtonAlbion 17 SalisburyCity 40
Bury 18 SouthportRugby 41
Cambridge United 19 Tamworth 42
CheltenhamTown 20 TorquayUnited 43
Dagenhamand Redbridge 21 WellingUnited 44
Dartford 22 Woking 45
ElyCity 23 Wrexham 46

63
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
AFC
Wimbledon
Bristol Rovers Forest Green
Rovers
Grimsby Town Morecambe Oxford United Portsmouth
CFC
Scunthorpe
United
Southend
United
Wycombe
Wanderers
York City
WAgestoTurnoverratio
Figure 7.1.10 Wages to Turnover
2012
2013

64
ROCE Net Profit Margin Gross Profit Margin
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 0.190333044 0.039273607 0.041314107 -10.07332838 1.318839233 2.225568062 -1.270339228
2013 -0.0767291 -0.024448586 -0.023240881 -7.296172011 1.190173393 1.730772018 -1.012715556
-12
-10
-8
-6
-4
-2
0
2
4
AxisTitle
Axis Title
Figure7.1.11 AFCWimbledon

65
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 0.071192784 -1.148607738 -0.135168702 -6.462894069 5.768850883 34.40558244 -0.559537188
2013 -0.046874213 -1.369290851 -0.353286945 -2.642926851 8.471353755 21.5933259 -0.503158806
-10
-5
0
5
10
15
20
25
30
35
40
AxisTitle
Axis Title
Figure7.1.12 BristolRovers

66
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 -4.872183954 -1.423218446 -0.363516647 -0.755667136 0.29257354 0.307631991 -0.053705207
2013 1.108218172 -1.933484562 -0.942036563 0.94626137 0.346675393 0.359071298 -0.021192678
-6
-5
-4
-3
-2
-1
0
1
2
AxisTitle
Axis Title
Figure7.1.13 ForestGreen Rovers

67
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 0.070507606 0.104762134 0.092570936 -0.639490693 0.682226714 1.084061233 -3.554271791
2013 -0.296268838 -0.227850975 -0.234546527 -0.750768114 1.035349704 1.337105555 -1.251357425
-4
-3
-2
-1
0
1
2
AxisTitle
Axis Title
Figure7.1.14 Grimsby Town

68
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 -0.065443926 -0.210835609 -0.212730115 -6.538438613 0.276291166 0.287486956 -0.382190155
2013 -0.108848731 -0.316969144 -0.328310638 -4.467965302 0.287265173 0.302003829 -0.365433513
-7
-6
-5
-4
-3
-2
-1
0
1
AxisTitle
Axis Title
Figure7.1.15 Morecambe

69
-5
0
5
10
15
20
25
30
35
40
45
ROCE Net Profit Margin Gross Profit Margin Operating costs to revenue Asset Turnover Non-current asset turnover Working Capital
Figure7.1.16 Oxford United

70
Operating costs to
revenue
Asset Turnover
Non-current asset
turnover
Working Capital
2012 0 0 0 0 0 0 0
2013 -0.067104676 -1.051086528 0.543288172 -2.189564487 0.020673551 0.107945192 1.41245991
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
AxisTitle
Axis Title
Figure7.1.17 Portsmouth CFC

71
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
Figure7.1.18 ScunthorpeUnited

72
-2
0
2
4
6
8
10
12
Figure7.1.19 Southend United

73
-4
-2
0
2
4
6
8
10
12
Figure7.1.20 WycombeWanderers

74
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
Figure7.1.21 York City

75
Table 7.2.2 League and Final Position 2012/2013
Club League 2012/13 Final Position2012/13
AFCWimbledon League Two 20th
Bristol Rovers League Two 14th
ForestGreenRovers Conference Premier 10th
GrimsbyTown Conference Premier 4th
Morecambe League Two 16th
OxfordUnited League Two 9th
PortsmouthCFC League One 24th
Scunthorpe United League One 21st
SouthendUnited League Two 11th
Wycombe Wanderers League Two 15th
York City League Two 17th

76
Club Statementof
Financial Position
Statementof
Financial
Performance
AccringtonStanley 
AFCWimbledon  
AldershotTown
AlfretonTown 
Barnet 
Braintree 
Bristol Rovers  
BurtonAlbion 
Bury 
Cambridge United 
CheltenhamTown 
Dagenhamand Redbridge 
Dartford 
ElyCity 
ExeterCity 
ForestGreenRovers  
Gateshead 
GrimsbyTown  
FC Halifax Town 
Hartlepool United 
HerefordUnited 
Histon 
Hyde United 
KidderminsterHarriers 
LincolnCity 
Luton Town 
MacclesfieldTown 
Mansfield 
Morecambe  
NewportAfc 
NorthamptonTown 
OxfordUnited  
PortsmouthCFC  
PlymouthArgyle 
Rochdale 
SalisburyCity 
Scunthorpe United  
SouthendUnited  
SouthportRugby 
Tamworth 
TorquayUnited 
WellingUnited 

77
Table 7.2.3.
Available data from Key Note
WokingTown 
Wrexham 
Wycombe Wanderers  
York City  

79
Appendix 7.3.1 Barnet FC Email
Andrew Adie <aadie@barnetfc.com>
Wed 04/02/2015 15:48
Inbox
Michael
All the information requested is publicly available at Companies House.
Good luck with your project.
Kind regards
Andrew Adie
The Barnet Football Club Group of Companies
The Hive
Camrose Avenue
London
HA8 6AG
Web site:
www.barnetfc.com
www.thehivelondon.com
**********The information contained in this message is confidential and is intended
for the addressee only. All contents should be viewed as without prejudice and any
offers whether intentional or implied are subject to contract. If you have received
this message in error or there are any problems, please notify the originator
immediately. The unauthorised use, disclosure, copying or alteration of this message
is strictly forbidden. Internet communications are not secure and therefore the
author does not accept legal responsibility for the contents of this message.
**********
From: justtellus@thehivelondon.com
Sent: 04 February 2015 15:43
To: Andrew Adie
Subject: FW: Dissertation help
Natasha
REPLYREPLY ALLFORWARD
Mark as unread

80
Michael Turner
Thu 29/01/2015 11:25
Sent Items
To:
tellus@barnetfc.com;
Dear Sir/Madam,
I am a student at the University and College of Football Business (UCFB), studying
Football Business and Finance and would like to ask for your help with
my dissertation. My research project is based around the sustainability of League
Two and Conference football clubs and to do that I would need access to the club's
balance sheets and profit and loss statements. I am looking at data from the 2012/13
season. Would it possible for you to allow me access these documents, as it would be
of great help into my research. All the results from my research will be kept
confidential to protect all the club's identities and I will allow access to my results
upon completion if you wish.
Thank you very much for your help,
Michael Turner

81
Appendix 7.3.2 Cambridge United Email
Dear Michael
More than happy to help. Presumably you have already obtained copies of our accounts
from Companies House for the last few years. Last years accounts are being finalisedand
will be distributed to our shareholders at the AGM next March.
I am more than happy to give you an overview of the sustainability and financial
challenges facing this club.
Regards
Dave Doggett
From: Michael Turner <m.turner1993@hotmail.co.uk>
Sent: 17 August 2014 17:48
To: Dave Doggett
Subject: Dissertation Research
Hi Dave,
Would you and Cambridge United be able to help me with my dissertation research for
university please?
Regards
Michael Turner
Below is a sample of the email attachment sent to the football clubs:
Dear Sir/Madam,
I am a student at the University and College of Football Business (UCFB), studying
Football Business and Finance and would like to ask for your help with
my dissertation. My research project is based around the sustainability of League
Two and Conference football clubs and to do that I would need access to the club's
balance sheets and profit and loss statements. I am looking at data from the 2012/13

82
season. Would it possible for you to allow me access these documents, as it would be
of great help into my research. All the results from my research will be kept
confidential to protect all the club's identities and I will allow access to my results
upon completion if you wish.
Thank you very much for your help,
Michael Turner

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