Relegated Clubs Have No Choice But To Go For Broke

New financial figures emerged this week showing that Newcastle United spent a record £112m on wages during 2016/17 in order to secure an immediate return to the Premier League. To put that into some perspective, the eventual Championship winners spent roughly the same as Huddersfield and Brighton — the other two promoted clubs — combined.

The Newcastle model

The story of Newcastle’s return to the top flight teaches us two important lessons. The first is that it is in fact still possible for clubs to punch above their weight in the Championship, even though next season around half the league participants will benefit from some amount of parachute payment due to a prior relegation. Failure, it seems, has never been so lucrative.

But the more important point is that relegated clubs should really go for it financially in the season immediately following a relegation. Newcastle lost close to £100m that season and bought a dozen new players for around £50m, but in the end it was well worth it.

There are clearly risks to this approach, but think about the different scenarios and how they could play out. Parachute payments offer limited access to additional funding unavailable to other clubs in the league, so it is clearly rational to take advantage of such a benefit. Financial Fair Play rules are held up as the main argument against splashing out like Newcastle, but there is one inherent flaw in these rules: They can’t stop a club going on a spending-spree during the summer window immediately following their relegation, before any sanctions are applied.

Indecision: the biggest risk

If I was in the front office of a recently relegated Premier League club, I would adopt a 10 for £10m approach – sign ten top quality players with a blend of youth and experience that I’d be confident could dominate the division. If I was content with some of my current squad I’d be open to reducing the number of new signings.

A transfer ban has little impact on a club that has the squad it needs to get promoted. The problem today is that too many clubs relegated from the Premier League don’t commit to a strategy of really going for it. Strategic indecision is the biggest risk to these clubs, not the prospect of failing to comply with Financial Fair Play rules. Not to mention none of the clubs relegated last season will be promoted back this year.

Is it a risky approach? Absolutely. Any sport has an element of unpredictability — and this is why we love it — so promotion cannot be guaranteed. But my argument is that the other approach taken by the majority of clubs is no better, and in a lot of cases, is detrimental.

My own first-hand experience of watching this was with Blackburn Rovers. The club invested in its first year in the Championship, but not sufficiently enough to secure promotion. The squad still had alarming weaknesses in key areas like centre midfield. However, Blackburn was caught in a position where it ended up breaking the Financial Fair Play rules, incurring a transfer ban, then eventually dropping down to League One.

If Blackburn had gone the other way, the 10 for £10m way, I’m confident they would have been promoted if not in the first season, but probably the second or third.

Instead, the financial muscle is gradually squeezed out of former Premier League clubs to transition them to the world of the Championship, a football graveyard for some of yesterday’s giants.

An arms race in the Championship?

There is a separate moral question about whether an approach of all out financial war in the Championship is in line with ideas of fairness. If more clubs adopted such an approach, would it not lead to an arms race in the Championship? Would it reduce the likelihood of fairy tales like Huddersfield happening?

These are good questions but none that enter the mind of Newcastle United fans, currently planning for their second season in the Premier League. I applaud the approach Newcastle took to the Championship and would recommend any recently relegated Premier League club follow a similar path. Just ask Sunderland fans how they feel.

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