This week’s massive relegation six pointers did not go well. Whatever Scott Parker might have said publicly prior to facing Brighton and Hove Albion and West Bromwich Albion in the space of four days, Fulham needed more than just two points from those two games. The club are now staring at the possibility of a third relegation since Shahid Khan took over in 2013 and the impact of another drop from the top flight on this squad, the club’s overall finances and Financial Fair Play regulations would be considerable.

Heading back to the Championship would necessitate another summer rebuild. Fulham’s current side is heavily built around loan players, who would all leave. It is fanciful to think that Joachim Andersen, Ademola Lookman or Ruben Loftus-Cheek would be eager to play in the second tier and their current deals would make them too expensive in any case. The same certainly goes for Alphonse Areola, who on the basis of his excellent displays in a Fulham shirt would feel confident of finding a new club in one of the continent’s top divisions. The likeliest player to remain at Craven Cottage might be Mario Lemina, but that appears a stretch – especially with Genoa rumoured to have been interested in taking him back to Italy earlier this month.

The best of Fulham’s permanent playing staff would look elsewhere as well. Andre Frank Zambo Anguissa has already far exceeded the level of his previous performances at Craven Cottage, attracting both praise from the pundits and envious glances from elsewhere. Given the length of his contract and the impending financial pressures, a cut-price sale post-relegation could prove too tempting to resist. There’s a real chance that Aleksandar Mitrovic, despite his lack of form to date this term, could leave as well. He’s a proven goalscorer at international level, probably has his peak years ahead of him and the club would find it difficult to carry his wages in the Championship. Others might head for the exit too. Tosin Adarabioyo has reportedly caught the eye of Juventus already. Why play alongside Cristiano Ronaldo when you can take on Lincoln on a rainy Tuesday night?

Therefore, Fulham would be faced with the sort of enforced reshaping of their squad they have had to go through before. An aging and rather uninspiring squad, with many members of the ‘old guard’ coming to the end of their contracted years, would be asked to make an immediate return from the Championship – and we all remember just how tough a league that is. The club would surely have to bring in new signings, constrained by a limited post-Covid budget without any of the revenue earned from a sustained spell at English football’s top table. They might turn to youth, but an influx of too many youngsters risks both competitiveness on the field and stalling promising careers, as we saw under Felix Magath.

The Premier League revenue distribution model means that clubs generate incredible sums of broadcast revenue simply from participation in the competition. A finish in the relegation places can still be worth circa £100 million. Here is how the funds were distributed in Fulham’s last Premier League campaign, 2018/19:

Premier League 2018/19 payments to clubs
Credit: Premier League

Fulham’s 2019 accounts show that in 2018/19, Fulham generated £108.98 million from broadcast revenue streams, a 403.4% increase on the 2017/18 season prior, in which the team competed in the Championship and earnt just £21.65 million from broadcast revenue. It can, therefore, be assumed that these figures would be reversed on relegation. However, Fulham would receive £45 million in parachute payments from the Premier League to try and plug this gap. In the second season, parachute payments would drop to £35 million before vanishing completely for the third season as Fulham would have only completed in the Premier Division for one season before relegation.

The club would also suffer a relatively large drop in commercial income, as sponsors often hold clauses to reduce payments or even exit the sponsorship deal entirely. This is because sponsorship becomes less desirable with less visibility, decreasing the price that the club can demand. Fulham’s accounts show that commercial revenue increased 2.1 times upon promotion to the Premier League in 2018/19, from £8.47 million to £17.73 million, meaning that dropping out of the top flight may likely have the reverse affect.

Finally, matchday revenue would also theoretically decrease due to decreases in ticket prices and attendances. Matchday revenue is the most important revenue stream for football clubs, despite usually being the smallest, as its regularity allows clubs to pay operating expenses during the season. However, COVID-19 has meant that clubs have not been able to generate any matchday revenue for almost a year, setting aside a single game against Liverpool in December. Therefore, any change on matchday revenue from the 2020/21 season would be good, as it means that fans are back in stadiums and spending money.

Dramatic decreases in revenue may cause concern over Financial Fair Play (FFP). FFP is a set of financial regulations put in place by the Premier League and EFL, designed to ensure that clubs are living sustainably within their means by limiting the losses that they can make over a 3-year period. If Fulham are relegated come the end of this season, the FFP limit for 2021/22, measured from 2019/20-2021/22, will be £61 million. This is because for each Premier League season, the club can lose up to £35 million as per the regulations, whereas in the Championship, this drops to just a £16 million loss per season – which is especially tight when considering the much lower revenues.

To see just where Fulham lie in relation this £61 million FFP limit, the club’s main costs must be analysed. Just with any football club, Fulham’s main costs are the ‘total staff costs’, or wages, PAYE and pension payments. The 2019 accounts show that Fulham spent a whopping 141.8% of revenue on wages in the 2017/18 championship season, spending £54.3 million on staff costs compared to just £38.3 million revenue. In 2018/19, after the £100 million splurge, this had increased to £92.6 million. This shows just how wildly out of control the staff cost spending is, even with relegation wage drop clauses inserted, it would likely be much higher than turnover.

Fulham’s other major cost is the ongoing amortisation of transfer fees. Amortisation is an accounting process which spreads an initial cost, such as a transfer fee, over a set period of time, such as the player’s contract. If the player’s contract is extended, any remaining cost is spread over the extension period.

I have attempted to work out Fulham’s ongoing amortisation costs with the Fulham squad, using Transfermarkt’s reported transfer fees. Note that this is an estimate and that figures will be incorrect due to estimated fees and unknown amounts of depreciation and impairment.

By my estimation, the amortised cost of the current squad for the 2021/22 FFP period, without any incoming or outgoing transfers between now and the end of 2021/22, is a mind-blowing £119.34 million. The big 2018/19 spend really is coming back to bite us, explaining the shrewd spending this summer as well as the lack of any movement so far this January window.

For Fulham to pass the FFP regulations next season, if relegated, the club must generate enough revenue to come within £61 million of the total costs. This seems like a mammoth task. Fulham have already been stung by FFP, suffering a transfer embargo in 205 as a result. However, this time around, it would likely wreck even more havoc due to the costs that the club faces, threatening to send us back to the dark ages of battling relegation to League One under Kit Symonds.

So what is most likely to save Fulham this financial heartache? A strong run of results in the second half of the season, as remote a prospect as that appears on this particular Sunday morning, would be ideal. Failing that, a summer fire sale of some of our leading assets and a spot of creative accounting would be the best option. Now, where are those six wins coming from …