“Gambling” The Only “Rational” Strategy For Football League Championship Clubs Seeking Promotion

New Research From The Birkbeck Sport Business Centre (BSBC) Demonstrates How Inadequate Financial Regulation In The English Football League Championship Makes “Gambling” The Only Rational Strategy For Clubs In The Championship in the Previous Season Seeking Promotion To the Premier League 

Drawing on an analysis of the financial statements of clubs in the English Football League Championship, for financial periods corresponding to each of the fifteen seasons from 2004/05 to 2018/19 inclusive, the latest research from the BSBC quantifies the extent that clubs in the competition adopt the conventionally economically irrational decision to ‘gamble’ by overspending on playing talent in the hope of achieving sporting success. Co-author Dr Richard Evans comments:

“The research found that this gambling strategy was both endemic, and the most successful for clubs in the Championship in the previous season to achieve promotion.”

A gambling strategy may pay off if a club gets promoted, however the finding that so many clubs in the Championship in the previous season sought promotion by overspending on playing talent whilst only three clubs in the league could actually achieve promotion in a season, and they are also in competition with the three clubs that were relegated from the Premier League the previous season, made gambling essentially a pre-requisite for clubs in the Championship in the previous season to achieve promotion. This has two deeply problematic consequences. Co-author Sean Hamil comments:

(1) “`Unaffordable’ overspending may cause financial distress for the football club and this could result in non-payment of the club’s debts or even the collapse of the football club with all the resulting financial, social and sporting consequences, as in the recent cases of Bolton Wanderers, Bury FC and Macclesfield Town.”

(2)  “Even if a club is able to finance the deficit, the amount is sufficiently large to be considered as resulting in an ‘undue’ advantage in the sporting competition.  In this case the integrity of the sporting competition is undermined by the ‘off field’ economic competition for financial resource.”

The recent controversial plans for a European Super League resulted in the UK Government bringing forward the fan-led review of the governance of English football, which aims to explore ways to improve the governance, ownership and financial sustainability of clubs in English football. Notably, one of the key elements of the review is to “Investigate ways league administrators could better scrutinise clubs’ finances on a regular basis” ( The Birkbeck Sport Business Centre research directly addresses this objective. Co-author Professor Geoff Walters comments:

  • “This research exposes the failure of the EFL to effectively regulate the extent of this behaviour and supports the conclusions of previous Birkbeck research* that past EFL financial regulation has been implemented in a way so as to be accepted by member clubs whilst having minimal impact on their gambling behaviour.”
  • The current financial crisis in the league highlights the fact that this approach is no longer tenable, and the league needs to adopt more effective financial controls.”
  • “A league that’s approach to regulation legitimises gambling by its clubs as the most rational strategic choice invites financial crisis.”

The study highlights the needs for further research investigation of what might constitute a more effective financial regulatory regime for the Football League competition.

* Evans, R.; Walters, G. @ Tacon, R. (June 2019). Assessing the effectiveness of financial regulation in the English Football League: “The dog that didn’t bark”. Accounting, Auditing & Accountability Journal. Vol. 32, Issue 7.

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