British clubs put themselves in financial jeopardy in trying to spend their way out of the Championship to reach the Premier League, according to a report from financial analysts Vysyble.
And reaching the promised land costs an average of £1.32 million a month, says the study, which concludes such spending is unsustainable on revenues that are under a fifth (18 percent) of the money that an average Premier League club earns.
Speaking to ESPN FC in a telephone interview, Vysyble's John Purcell said that former Premier League mainstays Sunderland were especially endangered.
"Trying to gain promotion you are not going to make a profit," Purcell said. "Of clubs who have been promoted to the Premier League in the last eight years, only one made a profit and that was Crystal Palace in the 2012-13 season."
Purcell and partner Roger Bell use the accounting measure of economic profit to measure clubs' financial performance.
"We have Sunderland as third-worst of the 36 clubs who have been in the Premier League since 2008-09," said Purcell. "The worst are Manchester City and Chelsea, and the difference with those clubs is that they are being bankrolled by billionaires ."
By contrast, Sunderland owner Ellis Short has had the club on open sale since last November, and last season as the team plummeted down from the Premier League, manager David Moyes suggested he had not received the financial backing he had expected. Moyes' replacement, Simon Grayson, has to operate on even more of a shoestring budget while Sunderland lie 23rd in the Championship.
Elsewhere, Aston Villa, relegated at the end of the 2015-16 season, have spent significant funds since the drop and declared a loss of £81m for the last financial year in February. Clubs like Blackburn Rovers and Bolton Wanderers, long-time residents of the Premier League who have since been relegated from the Championship are longer-term examples of the dangers of overspending to retain their status and then chasing those losses with even more money.
Purcell said Burnley, currently sixth in the Premier League, provide an ideal financial model for aspirant clubs. After relegation at the end of the 2014-15 season, in which Burnley spent just £11.36m on transfers, Sean Dyche led them to immediate promotion as champions, then survival in the next season.
"Burnley have it down to a fine art," said Purcell. "Contrast that with clubs like QPR, Bolton and Blackburn."
QPR fell foul of financial fair play rules in winning promotion in 2013-14. And once clubs reach the top division, they can then overreach themselves by trying to buy survival. The survival rate of promoted clubs is low, with a third relegated after one season and two thirds within three years. And according to Purcell and Bell, that can be where the trouble starts.
Bell said: "Clubs that financially overexert themselves to survive in the Premier League usually struggle to survive in the longer-term and incur significant damage to balance sheets as they suffer economic exhaustion.
"This then renders any parachute payment ineffective and usually brings with it a prolonged tenure in the Championship or below. Therefore, staying in the Premier League is not a 'wealth creation' scheme, or a solution to a club's financial woes.
"EFL clubs who spend beyond their means are, in fact, risking their futures by chasing a dream that is just that -- a dream, and one that is actually more likely to end up as a financial nightmare."
Vysyble released a report in July that, using their economic profit model, suggested that Premier League clubs lose lose an average of £876,000 every single day.