The authoritative Swiss Ramble has taken an in depth look at Middlesbrough's recently published accounts. Here are some of his key findings.
Following relegation the club moved from a pre-tax £6.9m profit to a £6.4m loss, as revenue halved from £121m to £62m, though profit on player sales was up £4m to £15m. After tax, the decline was even steeper (from £11.5m profit to £6.6m loss), due to prior year’s £4.6m tax credit.
Boro have only made a profit once in the last 10 years (£7m in the 2016/17 Premier League). In that time they have accumulated £125m of losses. Last season’s £6m loss was significantly lower than the £32m record deficit of two years ago, though this included promotion bonuses.
Although the £6m loss is obviously not great, it’s not that bad if you consider that four of the Championship clubs that have published 2017/18 accounts had losses of £25m or higher. For a long time they did not make much from player sales, but they were boosted by £15m profit on player sales, including Marten de Roon, Jordan Rhodes, Gaston Ramirez and Adam Forshaw.
The £59m revenue decline was very largely driven by broadcasting’s £55m fall from £102m to £47m, as the £42m parachute payment was much lower than Premier League £99m distribution. Commercial also decreased £2.9m (26%) to £8.3m and match day was down £1.6m (18%) at £7.1m. Even so, the revenue is the highest reported in the Championship to date, although likely to be beaten by Aston Villa when they report.
Despite the large fall after relegation, Boro's £62m revenue was £40m more than the last time they were in the Championship. However, the dependency on the parachute payment is clear, as TV accounts for 75% of total revenue. Revenue will drop to £25m in 19/20 (unless they are promoted). Clubs relegated from the Premier League normally get three years of parachute payments (total £91m), but Boro will only receive two years, as they went down after just one season in the top flight. They will get £34m in 2018/19, then zero from 2019/20.
Despite having a reasonably successful season by reaching the play-offs, Boro crowds are unsurprisingly around 5,000 lower in the Championship compared to the Premier League. though the 2017/18 attendance was around 1,000 more than the last time they were in the second tier. They have the 9th highest attendances in the second tier.
Following relegation the wage bill was cut by 25% (£16m) from £65m to £49m, though the revenue reduction was even higher at 49% (£59m), so the wages to turnover ratio worsened from 53% to 79%. The wages to turnover ratio was actually one of the lowest in the Championship, where around half of the clubs have a ratio over 100%. This season, Birmingham City lead the way with a scarcely credible 202%. Wages were around 50% more than the £33m the last time club was in Championship. The club's wage bill is currently the highest reported in the Championship and the 6th highest ever.
The club made an incredible £66m player purchases (including Assombalonga, Braithwaite, Fletcher, Howson, Randolph, Shotton, Christie & Johnson), which is actually more than the £48m spent in the Premier League.
Gross debt fell £1m to £101m, the second highest in the Championship. Almost all of this (£94m) is owed to the owner (interest-free), while there is also a bank loan of £7m. Debt would have been even higher if Gibson had not converted £63m into share capital, highlighting the club’s reliance on the owner. In many was they are the ultimate benefactor club in terms of the persistence and generosity of the owner.
One boro one love
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