Birmingham City's accounts for 2016/17 have been subject to an in depth forensic analysis by the author of the Swiss Ramble blog and he concludes that they 'do not paint a pretty picture'. They are the first to be produced with Trillion Trophy Asia as custodians of the club.
Losses went up before tax by £5m to £16.4m. After tax, they were £18.1m. This was in spite of revenue growing by 19 per cent to £17.6m. All revenue streams increased, but there was a particular boost in broadcasting revenues because of enhanced Premier League solidarity payments. Attendances increased from an average of 17,571 to 18,650.
Commercial income at £6.1m is not great, but not out of line with the norm for the Championship. Leeds do best, earning £17m a year.
Almost all Championship clubs lose money (Wolves are one of the few exceptions) but the loss was one of the highest in the division and the highest at the club since 2008/09. The Blues have only made a profit once in the last five seasons and then largely because of player sales.
Wages were up by £7.2m, but part of that was due to termination payments to Gary Rowett (surely a bad decision) and Gianfranco Zola. The wages to turnover ratio is 128 per cent, way above the recommended level of 50 per cent. However, it puts Birmingham City mid-table in the Championship with clubs spending to chase promotion. Fifteen clubs had a ratio of over 100 per cent in 2015/16.
Revenue has dropped by two-thirds in the six years since the club left the Premier League. Parachute payments were received for the first four years, but these came to an end in 2016.
Overall debt is £33m, but it is owed to the parent company and is relatively small by Championship standards.
The club will need funding of £49.5m between July 2017 and December 2018. This is more than the total funding for the last seven years. The auditors note 'a material uncertainty' about its ability to operate as a going concern.
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