The art of Premier League survival for a promoted club | The Football Boardroom

0:00Henry:Premier League survival for promoted teams. Just how hard is it? Well, I've lived it and I can tell you it's tough. Today, we take a look at just what faces Hull, Coventry and Ipswich this season. Please do not forget to subscribe and we hope you enjoy the show.

0:22CP your old team Aston Villa had a good result starting well in the in the Champions League John McGinn one of your favourite players super John McGinn playing well fantastic to to see but can I take you back to 2019 and when Aston Villa came up and obviously there's so much reflection at the moment on how the promoted club's going to do start of the of the season and the Premier League. What is that period like for you, going from the promotion, the joy, the playoff, the tension in the playoff, and then the next day, presumably, having to sort out recruitment?

0:58Henry:Yeah, it's a big, big moment. There is an interesting little contextual distinction I would draw between clubs that come up automatically and clubs like we did that do so by winning the playoff final. I definitely would take that trade-off because it's the most glorious, exciting, maybe certainly the best day I had in football to win that game, high jeopardy. But it does give you about four weeks less than some teams to get yourself ready. And like you, I have been struck by the way that promoted clubs this summer have gone about their business and tried to think about turning the clock back to the summer of 2019.

1:34Henry:I think the first thing I would say, H, is that it's just an extraordinarily challenging period of time because in most cases, given one, the gulf in quality distinction between the Championship and the Premier League, two, the financial rules and regulations, and three, the fact that you've got to do this all so quickly, it's a really challenging recruitment process. we I think probably more than most teams at that time we had depended quite heavily on the loan market for our promotion season which meant we had a lot of players that weren't our players leaving the building after the final we had a very old squad many of whom were out of contract so really looking back the morning after that playoff final there were probably three players that Dean, the sporting director and I felt would be more than capable of being starting footballers in the Premier League.

2:39Henry:Jack Grealish and John McGinn being the standout too. And in fact, a player who wasn't our player, Tyrone Mings, who we had on loan from Bournemouth and therefore quite obviously needed to try and convert by way of a transfer into being a Villa player. Talk me through how that works in terms of when you have a player on loan. How do you get a player like Tyrone Mings in? What sort of deal is it? Are there bonuses tied up? because you look at the recruitment of the three clubs who've come up they've spent north of£400 million there's a lot of money going on you have to get the recruitment right you got your recruitment right in that season just about what was it£140 million you spent I've read I think it was well there's an interesting point you should know you wrote the cheques okay so this morning I did it I literally went through those 12 players and I could probably rattle them off but I think I'd bore our audience if I did.

3:33Henry:But it was£120 million. My recollection of the exact fee I agreed for those players, £21 million Tyrone Mings, £21 million Wesley, the centre forward, £8 million Tom Heaton, £15 million Dougie Luiz, £12 million Esri Konza. I can go through. It adds up to£120 million. And the reason you're probably thinking it was£140 million is perfectly explicable. that I obviously think about the agreed fee on the nail, but don't include the performance-related bonuses that the day the player arrives obviously haven't been incurred. But like what? What are these? OK, well, classic bonuses would be, let's say, someone like Time Ings.

4:15Henry:It's a long time ago, H, but I am absolutely certain I would have had in the deal with Bournemouth, maybe£21 million of fixed fee, plus, let's say, another million pounds for every 30 Premier League starts. So if that player plays 100 times for Aston Villa in the Premier League, then that might add another two to three million to the purchase price. And that's open-ended. I mean, because Ty is still playing. He is, but it could be capped, it could be uncapped. But an appearance-related add-on is classical. and in a case like Ty Romings actually who'd only played I think 25 times for Bournemouth over four years then naturally we would want to pay more if Ty was to actually land at Villa and have a very good playing record he had actually an absolutely unbelievably good playing record Goals, clean sheets obviously with defenders does it get that sophisticated?

5:14To some extent

5:14Henry:but I would say appearances are by far the most important add-on to these transfers And as I say, normally a block of matches or it can be a percentage of minutes in a Premier League season. But that would explain why now, whatever it is, the best part of seven years later, people are able to compute how many of those add-ons have actually been incurred and paid by Villa. Would England be in there? England appearances is a classical... What would you get that few hundred thousand? I've seen£250 ,000 for an England cap,£1 million for 10 England caps for a player who's never played for England. That is a classic, particularly with a young up-and-coming player.

5:55Henry:Those are two classical add-on bonuses. If we went through that£120 million across those 12 players, I would have had in every one of those deals add-ons, which means the£120 definitely by the end would have been more like£140. and that would be very good business because let's be honest, if Tyrone Mings went up from 21 million to 25 million because he ended up playing and still is playing seven years later, 200 games for Aston Villa, nobody's complaining about those add-ons. So that's just a detail. And by the way, again, for our audience's benefit, after 2018, sometime in, I think it was, I can't remember precisely when, but at one point, the main journalists and the main broadcasters broadcasters decided to standardise reporting because so often were they having a situation where the selling club was saying X and the buying club was saying Y, leaking out the actual transfer fee.

6:51Henry:I think probably helpfully the standard reporting is to include all those add-ons, however remote or unlikely they might be. So these days the figures we see are reasonably accurate, but they do assume all those bonuses are paid. Supporters of clubs who've been promoted this season or this year will look at what you did that year. Just on a technical level, how much do you go into the character of a player when you're going through this recruitment? And how nerve-wracking is that? Because you're in the eye of the potential storm. You have to get it right. It's a very interesting question, and it's why I mentioned the challenges of balancing the sheer volume of players you need to sign, the limitations on what you can spend I'll come back to that and the time that you have to do so and inevitably that is a very different recruitment window than that faced by an established Premier League team and we'll look at how that evolved for me at Villa and for the more recently promoted clubs we spent£120 million on 12 players that's an average of£10 million a player we had deeply ambitious owners with infinite capacity to invest to try and secure Villa's place back as an established Premier League club.

8:13Henry:So that£120 million was their budget for me and the management team to spend over the summer. But crucially, that is constrained for newly promoted teams by the financial rules and regulations at that time. And this is only this summer finished operating under the profitability and sustainability rules. newly promoted teams were only allowed to lose about half as much money as established Premier League teams. If you recall, Henry, you have a three-year total loss. An established Premier League team can lose£105 million over three years,£35 million a year. When you come out of the Championship, you carry with you the limits from the Championship for the first two of those years, which means in that first year in the Premier League, your total losses could only be about£60 million, not£105.

9:10Henry:So if you had unlimited money, if you had an unlimited willingness to spend it on wages, that would be constrained by those rules. And that's what you're solving for. And then, of course, as I've said, we had three players that we felt could comfortably be Premier League starters. So you're looking for seven starters and you're looking for a Premier League squad of over 20 players, maybe 22 players. We did 12. This summer we've seen newly promoted teams do, I think, 17. That was Hull. What were Ipswich? Ipswich were about 17. And then Coventry. Hull was similar. I think Coventry were about 12 or 13.

9:52Correct.

9:53Henry:So you're doing double digit numbers of new players quickly. So inevitably, to answer your question, some of the things you'd like to take your time over in the normal course of business are inevitably going to be compromised somewhat. But I want to land this point for our audience more than anything, that£10 million an average player in the summer of 2019. That was our programme. Almost beautiful arithmetic. 120 million at front end over those 12 players, £10 million average price per player. And I can literally look at their prices. Ty was probably the highest at 20 because we were converting alone.

10:30Henry:Every single person starting with Bournemouth knew he'd been a huge influence on the second half of that campaign when we had, in the first time in the history of our club, 10 straight victories. We sailed up the league and won the playoff final. Bournemouth knew Villa had to buy Tyrone Mings. £20 million was where that deal got done after eight weeks of difficult toing and froing. Most of the players cost in the£10-12 million range. That and very few of those players, I think Tom Heaton was probably the only player who you, writing at the time as a football expert, would have described as an experienced, seasoned Premier League footballer.

11:11Good influence.

11:12Henry:Yes, but my point being, H, When you're spreading£100 to£200 million over 10 to 20 new footballers because you have to build a team that's got a shot at survival, your average price per player is£10 million. I turn the clock forward to the summer of 2026. Hull,£170 million, 17 players. Average price, 10. Now I turn it back to you. Go down the list of those Hull signings. Today, Henry Winter, football guru. How many of those 17 players do you know intimately? Not intimately, four or five in terms of... You've heard of them. I've heard of them. But none of them are seasoned Premier League established footballers.

11:56Henry:So my point is, the summer of new promotion. It's a big check. In my case, seven years ago, 120 million quid. This year, Ipswich, over 200 million pounds. spread across a lot of footballers, which means you're spreading your capital quite thinly. You are shopping in Asda. You are buying footballers. £10 million today buys you lots of things. It could buy you an up-and-comer. It could buy you a vet. It could buy you a player who's, you know, maybe coming back from injury. But what it's not buying you is absolutely proven Premier League quality. Even if you could afford proven Premier League quality, They're not joining a club that's just come out of the championship.

12:42Henry:So it is inherently a really difficult job. Then you throw in the variable of blend, that you're not adding three good ones to an established core of seven or eight. You're basically, in the case of Sunderland last season, you've got seven new starters. What a challenge that is for coaching. You tell me, that feels to me almost as difficult as spreading£200 million across 20 footballers. I mean, they have and still have a very good coach in Reggie Libri who can play the Alchemist. But did you find that with Dean? Was Dean involved in the recruitment? Because he is the one who would ultimately be having to do the blending.

13:21Henry:It's all on the coach. And the answer is absolutely heavily involved. But if Dean was sitting here, he would say, you know, absolutely at a minimum. It's going to take time to bed in those new players to settle, settle in England, settle at Aston Villa for those players coming from abroad. And another observation I would make, we've talked in the past about adaptation risk, how players coming from overseas leagues normally and often take longer to settle, both off the field, maybe with their family life, domestically, on the field, language, culture, but on the field, style of play, the league.

14:01Henry:these add to the potential for them not to settle for them to take time to settle or for them never settling and guess what if you're trying to sped 120 million over 10 12 footballers or this summer Ipswich Sunderland 200 million over 15 footballers we all know that English footballers playing in England command a premium So the temptation is to buy a lot of players from overseas. And that, I would argue, is inherently more risky. Risky in terms of adaptation, risky in how quickly they do adapt. And I would definitely say, and if Dean was sitting here, he would say some of the players we bought from overseas took a little while to settle in.

14:49I mean, you look at the way that Hull's players have settled in. I mean, that's huge credit to the management, to the staff and the recruitment of the individuals themselves. You look at Hull now. I mean, they look, you know, Manchester United, that was, you know, that was, you could see the team, even if it had been thrown together in terms of sort of strangers coming in over the summer. That is, they can do it. You can have that.

15:13Henry:It's an incredibly promising start for a team with that many new players. But too early to judge, is your point? Yes, I think it probably is too early, John, and I'm not in the prediction business and we'll see how that plays out. But coming back to my own experience, that inherent challenge of quantity over quality, plenty of overseas signings to try and spread that capital budget sensibly, which adds to that adaptation risk. having to do so very quickly and the issue of the coach having to get those players to gel and blend quickly. All of those add up to a recipe which makes Premier League survival in the first season extremely difficult.

16:00Henry:And please let me remind you, as I said, all of that with this overarching economic factor that even with unlimited appetite for spending, your ability to spend is thoroughly constrained by rules and regulations. That to me is, I think, the hardest thing that these clubs have to face up to. You love a challenge and I've known you a long time. You also love football, as in the sport, as well as the industry. Can you enjoy games when you've got this and you've got this prospect of you're looking at the pitch, but you're also presumably looking at the balance sheet, looking at the budget, and you're also looking at this chasm, which we've seen before.

16:41in terms of teams that are trying to make the jump?

16:43Henry:Well, you're triggering me a little bit in terms of remembering that season, because that first season back, and fans of Hull, Coventry and Ipswich are listening and watching this today. You know, I've lived that, and the answer to your question is it's absolutely enthralling, adrenalising, exciting, intoxicating, a complete rollercoaster of emotion because for those who've forgotten, we maybe started slowly, we improved, we then had a bad run. Incredibly and uniquely, our first season back, of course, found itself in March of 2020 when we're second bottom in the league because we've played a game less because we're in the final of the Carabao Cup.

17:34Henry:We have COVID. and we find ourselves not playing football until July. And so the last 10 games of our first season back were what's famously called Project Restart. So that's an added variable that I'm quite sure added to my... But the final game, when you had all the Arsenal-Watford tension going on elsewhere. We did. We survived. You were at West Ham. We were away at West Ham. We drew one all. our game finished and Watford who were essentially our rival for clinging on to fourth from bottom were still playing against Arsenal and had they equalised we would have been relegated What was your health like?

18:20Henry:I think those two and a half minutes were the longest two and a half minutes of my life because we had the Watford Arsenal game on our phones our players and Dino were on the pitch gathered round a laptop watching you know we'd had a very good performance we'd had a very comfortable draw there it was a late equaliser by West Ham we'd kind of done more or less what we needed to do and by the way at half time I think Arsenal were beating Watford 3-0 we're safe and then Watford are back at 3-2 and that was genuinely terrifying and the relief followed by the ecstasy in the dressing rooms at the London Stadium I will obviously never forget so for those Hull, Ipswich and Coventry fans watching I wish you all well That was the roller coaster.

19:03Henry:We did it. It being defined as survival. I would argue, as I've tried to land here with you this morning, H, that, you know, statistically, the odds are against you. I think there's a two thirds probability you're going straight back down. despite spending£120 million, despite signing 12 footballers, despite dramatically increasing the wage bill, you're still more likely than not to go back down. And when you cling on, the sense of relief and then ecstasy are in equal measure. And I will never forget that. And then the game does change. Then the game does change in terms of that summer where it's a very different process.

19:49Going into the second season. Yes. Do you then look more for quality than quantity?

19:54Henry:You do. You can and you do because by definition, you do now have what you didn't have 12 months ago. 12 months ago, you had a collection of players who are championship footballers in most cases or who have been playing in the championship. And now, if you have survived, you have a collection of footballers who have cut it in the Premier League. So take me into that. You then went into, for that, going into the second season. Yeah, we... In terms of recruitment, that was the Watkins summer, wasn't it? Yeah, that summer we took... We set about trying to create a spine that would endure, let's say, five years of Premier League level.

20:35Starting with Emi Martinez.

20:36Henry:So Martinez in net,£17 million from Arsenal. Oli Watkins at centre-forward, 25 rising, 28 from Brentford. Matt Cash actually right back out in Nottingham Forest £12.5 million we bought Ross Barkley in on loan from Chelsea and we bought from Lyon Traore who was Lyon Champions League level and ex-Chelsea so a much smaller volume of players with higher pedigree for higher prices and this is the key thing and we need to focus on this for a second, Henry, on higher wages, because I should have really made the point that in that challenging promotion summer, where I mentioned that the rules are a constraint on your spending, this all assumes, by the way, you've got owners with deep pockets, and not everybody has.

21:33Henry:I was lucky enough to have that. It's the wage side of the equation which bites in terms of regulation, because obviously your wages affect your profits and losses, and those were heavily limited and regulated. So what would the average be in the championship, around 10, 12? Yes, I'd say between 10 and 15, I'd say 12 ,000 pounds a week would be an average championship wage today. Those average wages have actually come down in the last five or 10 years. But you're stepping into the Premier League where it's 50 to 60. Yeah. OK, and so you can immediately see that this is an interesting bit of pure arithmetic.

22:13Henry:Let's say a team like Sunderland, who didn't have parachutes, hadn't been in the Premier League for ages, reasonably well run championship club. Their average player would have been on, their best player might have been on 20 grand a week. They'd have had plenty of players under 10. Let's say, let's give them an average of 10 grand a week. and let's say they need to sign 15 new footballers. Including Granit Xhaka. Well, exactly. Let's say they want 15 new players, 10 to stay, 15 new players. And let's say those 15 new players are going to be on an average Premier League salary of 50 grand a week, not 10.

22:52Henry:40 grand a week, OK? £2 million a year player. 15 new players extra, OK? Maybe from 10 to 50. The incremental wages there are£30 million. I had a look at the data. It would seem that the average increase in wages for newly promoted clubs over the last four or five years is somewhere between£30 and£40 million. £40 probably Sunderland that year because they had a lower average wage because they hadn't been in the Premier League so your Burnleys and your Leeds who are bouncing around they retain a higher wage structure in the championship but Sunderland were the purest example of Coventry by the way similar lower wage in the championship actually giving them a bit more headroom to add wages coming up and boy did they add wages because I think we both know and you mentioned him when you signing a player like Granit Xhaka, Granit Xhaka isn't coming in on 50, 55, 60.

23:52No, I mean, the headline figures for Granit Xhaka were about 110. Wow. But actually, when you consider he's been one of the most significant signings in the recent history of the Premier League in terms of his impact on the club. Obviously, he's a footballer, left foot, absolutely outstanding. But actually, when you buy, and it'd be interesting, you know, when you bought some leaders when you came up, Mings is a classic example, do you often make a sort of like a statement by seems a little bit sort of unfair because he's a fantastic footballer. But when you go and bring in a Granit Xhaka, does that then make it slightly easier to bring in other players because they look at?

24:33Yes, most definitely.

24:35Henry:Well, I think it's both of both of what you're implying. There is the influence, impact on other aspects of those kind of signature signings. And there is the actual, you know, practical on-field impact of having elite players, leaders. And so starting or growing your own business can be intimidating and lonely at times. Your to-do list may feel endless with new tasks and lists can easily begin to overrun your life. So finding the right tool that not only helps you out, but simplifies everything as a built-in business partner can be a game changer. For millions of businesses, that tool is Shopify.