Relegation to a lower division is a big financial setback for football clubs and an emotional disaster for their fans. We investigate what relegated clubs did wrong, relative to clubs that survived the relegation battle.
Using a sample of English Premier League clubs during the 2000/01 to 2023/24 seasons, we investigate differences in club characteristics (size, newly promoted, past performance) and club decisions (manager changes, transfer expenditure, wages) between relegated clubs and nearly relegated clubs.
We find that clubs that survived the relegation battle generally spent more on wages and had fewer manager changes. If clubs wish to change their manager, this should occur as early in the season as possible. For newly promoted clubs, we find that higher transfer expenditure (summer and winter) helps to avoid relegation, but survival also depends on the transfer expenditure of peer clubs.
These findings provide guidance for football clubs in the battle to avoid relegation. Our analysis also highlights that avoiding relegation involves clubs making decisions about wages and transfer expenditure, not in isolation, but relative to the decisions of peer clubs.
