Close connection between salary budgets and sporting results
Analyzes from both international and Danish football over the past decades have shown that there is a clear correlation between players’ wages and sporting results. The Danish Institute for Sport Studies (IDAN) has shown that staffing costs of Super League clubs can explain more than 4/5 of sporting results since the turn of the Millennium. In conclusion, the clubs that, over time, can maintain the highest salary budget for players, coaches, healthcare staff and administration, just wins the most. However, it is far from all Super League clubs that have been equally skilled and effective in managing their financial resources. Some clubs, such as FC Nordsjælland, FC Midtjylland and Hobro IK, have been sporting significantly performing, while other clubs such as Brøndby IF, OB, AGF and AaB have underperformed over the past five seasons.
PARKEN Sport & Entertainment A/S is much different from FCK
There are currently only two candidates for the Danish Championship 2019-2020: FC Midtjylland and FC Copenhagen. Over the past 20 seasons, FCK has been absolutely superb in Danish club football with a total of 12 Danish Championships and only one season (2017-2018) has the club not won medals. FCK is also the only Danish club with success in international football with repeated participation in both Champion League and Europa League group tournements since the turn of the Millennium. It is TV-revenue from these tournaments and not least PARKEN Sport & Entertainment A/S’ “side business” in the form of the holiday centers “Lalandia”, which has created financial resources for player purchases – and thus also labor costs – which is a nice piece over the nearest competitors. However, based on the financial resources available to the club’s sporting management, FCK’s sporting results in the Super League over the past 5 years have not been impressed – rather, on the contrary. It has turned into 3 Danish Championships , but winning the FCM this year’s championship, which in my opinion is most likely, FCK has actually underperformed in the Danish Super League in relation to the club’s financial resources. By contrast, FCM has outperformed the Super League since its incumbent Matthew Benham, who also owns the English Championship club Brentford, in 2014 acquired the majority of FCM’s shares in the event of a looming bankruptcy. The “Wolves from the Heath” won the year after the club’s first championship, which was recovered in the 2017-2018 season. And today, in my opinion, the club is also a big favorite to win the club’s third championship and thus the fifth medal in just 6 seasons. In addition, the club has also outperformed the transfer market with the sale of players such as Pione Sisto, Aleksander Sørloth and Paul Onuachu. Talent development at the club’s academy has throughout the history of FCM been one of the club’s core services. And this with great success, as the academy has developed players such as Simon Kjær, Winston Reid and Erik Sviatchenko.
FC Nordsjælland is clearly the best at buying, developing and selling players
FC Nordsjælland has also been extremely skilled at developing talents through the Super League for sale to foreign clubs. In 2015, the club was acquired by an investor group – “The Pathway Group Limited” – including Tom Vernon, who had previously started in the football academy “Right to Dream” in Ghana. The purpose of the collaboration is for FCN to be self-sufficient with players from FCN’s local community clubs and, not least, young players from Africa who will use the Super League as a springboard for a career in the major European leagues. This has been very successful, as FCN has just been awarded top marks – the “highest international class” in Danish Football Association’s licensing system. Like the FCM, the club has made a lot of money in recent years – more than 250 million DKK – on transfer income, including on players like Emre Mor, Mathias Jensen, Andreas Skov Olsen and Mikkel Damsgaard. Transfer income in both FCN and FCM has also “offset” significant operating deficits in the two club’s accounts. At the same time, it is impressed that every season FCN has qualified for the “Top-6-play”. I think that will be the case this season as well, with FCN being my favorite for the bronze medals.
“Tradition clubs” underrepresent, both on the field and in the accounts
However, there are also super league clubs such as Brøndby IF, OB, AGF and AaB, which has underperformed in the past five seasons in relation to the financial resources of the clubs. The reasons for this fact are diverse and complex: “Poor” buying and selling of Danish – and especially foreign – players, lack of quality and continuity among players, coaches, sports directors and the board, weak talent development strategy, declining spectator and sponsor interest and much, much more . Especially Brøndby IF has been a really bad business both sporting and financial. It is only astronomical financial “donations” of 50-80 million DKK annually from the main shareholder Jan Bech Andersen, who has kept the club “above the water”. Wage costs have been towering compared to most other super league clubs and over the past decade, the club from “the Western part of Copenhagen” has been without Danish Championships and “only” won two silver medals and three bronze medals.
Other traditional clubs in Danish football such as AGF, OB and AaB have also had very poor results in recent years. The football pride of Funen – OB – already has two remaining matches in the basic game with no chance of qualifying for “the Top-6-play”. Despite one of the league’s highest budgets, OB has only managed to qualify once among the Top-6 teams in the past five seasons. In terms of sporting results, only AGF performed poorly during the same period. However, “The Whites from Fredensvang” surprisingly everything and everyone with an impressive half season in the fall of 2019, when the team finished in a 3rd place. AGF’s start in spring 2020 was – with a draw against Hobro at home and defeat to Silkeborg – anything but flashy. Just a draw in the postponed match against Randers FC, however, will secure AGF a place in “the Top-6”, which has not happened in the past 8 seasons. “A swallow does not make a summer, however,” so in my opinion, the AGF should qualify for “the Top-6-play” at least 3 out of 4 seasons going forward from the club’s financial resources. The same expectation should be given to North Jutland’s football pride – AaB – which, after Danish Championships in 2008 and 2012, has had a very difficult time achieving results stability. The club has been without medals for the past five seasons and the battle for the last place in the Top-6-play” may well accrue to Randers FC – at the expense of AaB. Randers FC, which is actually one of the clubs that, based on a relatively modest economy, has shown great sporting stability as a super league club over a number of years.
Esbjerg fB, Silkeborg IF and Hobro IK look like three relegations
Perhaps the biggest dramas in the Danish Super League 2019-2020 await in the relegation tournement, with the entire 3 clubs becoming “buck”. Among the relegation candidates is Hobro IK, who has actually outperformed markedly sporting with the past 6 seasons, with the club having the supremely lowest budget of all Super League clubs. The club’s salary costs this season make up only 1/10 of clubs like FC Copenhagen, Brøndby IF and FC Midtjylland. However, I do not think Hobro IK – and Silkeborg IF – avoid relegation this season. And then another traditional club – Esbjerg fB – has to show far better games in the remaining matches to avoid the last relegation spot. The consequences for all three relievers will be a loss of revenue – primarily in the form of TV money and sponsorships – of 30-40 million DKK. This knowledge is also known in clubs such as AC Horsens and SønderjyskE, which can also jeopardize relegation.
Based on the economic development, in both Danish and international football, everything indicates that very few league clubs in the coming seasons will become richer and richer, while the “poor” clubs will get more and more difficult – in result over a whole season – to surprise and challenge the most money-laden competitors. That is why I believe that the battle for Danish Championship in football in the coming years alone will be a matter between FC Copenhagen and FC Midtjylland. Then the rest of the super league clubs have to fight for the bronze medals or…. relegation.
You can find more information about finances in Danish Super League clubs and international top clubs on the following website:
Steen Houman’s blog – https://steenhoumann.com
The Danish Institute for Sport Studies – https://idan.dk
Off the Pitch – Football, Business and News – https://offthepitch.com/
