Skip to main content

Boro made a profit in the top flight

The authoritative Swiss Ramble has looked at Middlesbrough's 2016/17 accounts, covering their year in the Premiership. Next season is the last season in which they will receive parachute payments as they were relegated after one season.

Following promotion to Premier League Boro converted a pre-tax of £32.0m loss to £6.9m profit, as revenue increased by £100m to a record £121m and profit on player sales was up £7m to £11m.

The club had the third lowest revenue (£121m) in the Premier League, so from that perspective relegation should not have been a great surprise. They did actually have the highest revenue of the three promoted clubs, ahead of Burnley £121m and Hull City £117m.

2016/17 was first time that Boro had made a profit since 2005, though very nearly broke-even in 2009. Since then, they accumulated £112m of losses in the Championship. They really “went for it” in 2015/16, resulting in a record £32m loss.

TV revenue will fall significantly in 17/18 from £99m to an estimated £45m, despite a £41m parachute payment. However, this was significantly higher than the £8m that most Championship clubs averaged.

Even though a striking 84% of revenue came from TV, this level of dependency is far from unusual in the Premier League. No fewer than five clubs were more reliant on this revenue stream: Bournemouth, Burnley, Watford, WBA and Swansea City.

Gate receipts increased £1.4m (20%) from £7.3m to £8.7m, their highest ever, even though season ticket prices were frozen in 2016/17, as attendances rose by almost a quarter from 24,627 to 30,449.

Following promotion the wage bill more than doubled from £32m to £65m, though it is worth noting that the underlying increase was even higher, as 2015/16 included (estimated) £10m bonus payments. Wages to turnover ratio was cut from 149% to 53%, more or less the level recommended by accountants Deloitte.

Even after the increase in the wage bill to £65m, it was still the third lowest in the Premier League, only ahead of the other promoted clubs (Burnley and Hull City, both £61m). It will reduce in 17/18, due to relegation clauses and departures (player sales and loans ending).

The clubmade £48m player purchases in 16/17 (including de Roon, TraorĂ©, Gestede, Bamford, GuĂ©dioura, Barragan and Fabio), which is only £5m more than the previous (big spending) Championship season. The combined £90m in those 2 seasons considerably more than £14m in preceding two seasons.

Gross debt rose £3m from £99m to £102m. Almost all of this (£93.6m) is owed to owner Steve Gibson, while there is also a bank loan of £8.6m. Debt would have been even higher if Gibson had not converted £63m into share capital, highlighting the club’s reliance on the owner.

Boro have no issues with financial fair play, as they have a total allowable loss of £61m over the 3-year monitoring period (£35m for 1 Premier League season plus 2 Championship seasons at £13m). In any case, the Swiss Ramble estimates they will make a small profit in 17/18 thanks to hefty player sales.

Comments

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...