Bournemouth's revenue 28th highest in world

The authoritative Swiss Ramble takes a look at Bournemouth's 2016/17 accounts. These covered a season when they finished in a record high position of 9th in the Premier League, securing a 3rd consecutive season in the top flight.

The club more than quadrupled profit before tax from £3.4m to £14.7m, as revenue rose £49m (55%) to a record £136m, though they made a £1m loss on player sales compared to an £11m gain the previous season. After tax, the club made a £14.0m profit.

Profit before tax of £15m is obviously a fine achievement, but to place it in perspective it is only the 13th highest in the Premier League. In fact, 18 of 19 clubs that have published 2016/17 accounts to date have reported profits, mainly thanks to spectacular TV money. An astonishing 91% of revenue comes from TV (£125m out of £136m), which is the biggest dependency in the top flight, though it should be noted that 12 of the 19 clubs that have reported to date are above 75%.

Since promotion to the Premier League in 2015, Bournemouth have been profitable. Before that they reported four consecutive years of losses, totaling £69m, including a staggering £39m deficit in the 2014/15 promotion season.

The £49m revenue growth was almost entirely due to new three year Premier League TV deal, which increased broadcasting income by £49m (66%) to £125m. However, the other revenue streams both fell: commercial was down £0.5m (7%) to £6.8m, while match day slipped £0.2m (4%) to £5.2m.

This is the lowest in the Premier League, just behind Burnley. For some perspective, Manchester United and Arsenal earn more from this revenue stream in two games than Bournemouth do in an entire season. The club has acquired a site for a new stadium with the aim of this being built for the start of the 2020/21 season.

The £7m commercial income is second lowest in the Premier League, only above Watford £6m. 2017/18 will benefit from new deals: shirt sponsor M88 ('biggest in the Cherries’ history'); first sleeve sponsor Mansion; kit supplier Umbro.

Nevertheless, Bournemouth had the 13th highest revenue (£136m) in the Premier League, sandwiched between WBA £138m and Stoke City £136m. However, they were around £35m behind Everton and nearly £50m lower than West Ham and Southampton. In fact £136m was the 28th highest in the world, according to the Deloitte Money League, only £12m less than Champions League semi-finalists AS Roma, but ahead of clubs like Benfica, Ajax, Sevilla, Lazio, Celtic and Europa League finalists Marseille.

The club experienced significant cost growth. The wage bill rose £12m (20%) from £60m to £72m, which would have been around £78m on a 12-month basis. Wages to turnover ratio was cut from 68% to 52%. The wage bill was the fourth lowest in the Premier League.

In the six seasons since Demin arrived, Bournemouth's main source of funds has been £74m from owners (£53m loans and £21m preference shares), though club now generating cash in the Premier League. Two-thirds (£53m) spent on players with £12m on infrastructure.

Gross debt was around the same at £53m, but net debt doubled from £20m to £40m, as cash fell from £34m to £13m. Debt is all owed to club’s owners: (a) Russian Maxim Demin’s company AFCB Enterprises Ltd £33m; (b) 25% minority owner, Peak6 Holdings, a US private equity firm £20m. The £53m gross debt is by no means the largest in the Premier League, but it has increased by almost 600% in five years.

The loans provide by #AFCB owners are interest-free (with no fixed repayment date), which gives them a competitive advantage against those clubs who have to pay largish amounts of interest, e.g. West Ham £5m, Hull City £4m and Watford £4m.

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The Political Economy of Football V2

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