Football Finance expert talks Sheffield United, Leeds, Wrexham and Birmingham City | OneFootball

Dr Dan Plumley has spoken to FLW about the financial situation at a variety of EFL clubs

Football League World caught up with Football Finance expert Dr Dan Plumley in a Q&A session where he spoke at length about the financial situations at a variety of EFL sides.

In conjunction with Bet Ideas, see the full Q&A below:

Just how positive is it financially for the likes of Burnley, Sheffield United and Leeds if they seal promotion back to the Premier League this year?

It’s huge financially – especially if you can get promoted within the three-year parachute payment window. If you look at the numbers, you lose around £60m in revenue when relegated from the Premier League. That’s linked to the difference between the guaranteed Premier League TV payment and the parachute payment.

For Burnley and Sheffield United, they would’ve had £60m less revenue than they would’ve had if they were in the Premier League. If they can bounce straight back up, they can cover that cost within a season.

Leeds are slightly different as this is their second year in the Championship, so they have a slightly greater deficit of around £10m. It’s vital for clubs to be promoted back to the Premier League within three years of demotion; it’s a scrap at the best of times to escape the Championship. As soon as those parachute payments run out, it becomes a real up-hill battle.

Do you have any insight on the Reading FC financial situation right now? How essential is it that a takeover is secured there?

Unfortunately they haven’t published any financial data since 2022.

If you look at where they were there during that time, they were suffering great losses for a club of their stature. They lost £95m during the 2020-2022 period.

The wage bill was higher than the turnover, with huge levels of debt. It’s vitally important that the takeover is sorted sooner rather than later – not just for the club but the community and everything around the club. They’re on the fringes of the playoffs this season which is promising but there’s clearly deep underlying issues there.

Just how big of a boost is it financially for Sheffield United now their takeover has been completed?

A huge impact.

They’ve been successful on the pitch so far; they’re in a great position in the Championship. If they can secure promotion back to the Premier League within one season, that will have a particularly positive impact on their finances in regard to parachute payments.

The owners appear to be doing all the right things - we’ve already seen them splash the money in January with two new strikers, they have long term plans and they’ve tied the manager down to a new contract. With significant wealth and backing from the ownership group, they seem to be on the right path.

Do you think we could see Wrexham splash some cash in this transfer window to try and push for promotion?

Absolutely. From an ownership point of view, we know the situation and we’ve seen them invest heavily to get to where they are. There is no PSR (profit & sustainability rules) below the Championship, so to a degree it doesn’t matter too much in League One and Two.

If they do manage to achieve promotion, the restrictions do tighten and they will have to adhere to stricter regulations. But the intention is certainly there, and I think they’ll continue to spend if they reach the Championship.

It appears Birmingham City have sizeable financial backing, could you see them spending big in the summer, especially if they're promoted?

It’s a similar story to Wrexham, the intention is there and it’s clear the ownership want to invest. They’ll need to be more mindful if they return to the Championship compared to Wrexham because they’ve been there before and have had trouble in the past.

That being said, I think it’s likely we’ll see some spending to get themselves out of League One. Wrexham and Birmingham, in a budget perspective, are blowing everyone else out of the water; they’re too big to be in that league.

Just how damaging financially would it be for Southampton and Leicester if they drop back down to the Championship?

The immediate £60m loss as a result of relegation is a tough hit to take for any club. Looking at the current Premier League table and the Championship table, three of the teams that got promoted and two of the teams that got relegated are in and around the placing positions.

That shows how important it is to bounce back straight away after being relegated from the Premier League. Losing the benefits of the Premier League really does ‘tighten the belt’ in terms of finances and general atmosphere around the club.