Sharp Blades

The authoritative Swiss Ramble has examined the recently published reports of Sheffield United and comments, 'There is much to admire about their self-sustaining business model. Despite their financial limitations, they are punching well above their weight, as they have established themselves “as genuine contenders in the race to achieve promotion to the Premier League.”'

One potential fly in the ointment is a High Court battle between the club's joint owners: the McCabe family, who have put in around £100m since the 90s, and Prince Abdullah, who joined the club six years ago by taking a 50% share of Blades Leisure Ltd.

The Blades have consistently lost money since relegation from the Premier League in 2007. They twice reported profits because of special factors: 2009 £10m due to the £18m Carlos Tevez legal settlement; 2014 £31m due to £35m waiver of inter-company loan. There have been £20m total losses in the last four years.

The £2m loss this time (down from £5.7m) is actually one of the better results in the Championship. In fact, three clubs reported losses just under £40m: Cardiff City £39m, QPR £38m and Birmingham City £37m. As Blades manager Chris Wilder said, 'You’ve got people who are taking risks and not being sensible.'

The clubs's bottom line was boosted by £8m profit on player sales, mainly due to sell-on fees for Kyle Walker, Harry Maguire and Jamie Murphy. The board noted that player trading 'represents a key element of our strategy to be a self-sustaining club.' It is worth noting that the lower loss is essentially driven by higher profit on player sales, which rose £5.6m to £8.4m. If this is excluded, the loss was actually larger in the Championship than League One.

The club has no FFP issues, as they have adopted 'a cost-conscious playing model that ensures that we remain well within the constraints of the financial fair play rules whilst remaining competitive with the league.' The Academy is a fundamental part of the club’s strategy.

Since 2013 the club's available cash of £35m has largely come from new shares/owner loans £25m, though a further £10m is from net player sales. Most (£19m) has covered operating losses, while the club also spent £10m on loan/interest payments, plus £3m on infrastructure investment.

Sheffield United have had net sales in 11 of the last 12 seasons, breaking-even since 2018. Although this theoretically places them at a competitive disadvantage, manager Chris Wilder argued, 'I think we’ve shown, with good planning and intelligence, we can try to make up the gap in different ways.'

The club spent just £4m on players in 17/18, one of the lowest in the Championship and only slightly more than the previous season’s £3m in League One. As a comparison, Boro splashed out £66m, while the majority of clubs that have reported to date spent between £12m and £17m.

Even after the worsening of the club's wages to turnover ratio to 95%, this is actually not too bad for the Championship, where around half of the clubs have a ratio over 100% with Birmingham City leading the way with an extraordinary 202%. Despite the steep increase, the Blades' £19m wage bill is one of the lowest in the Championship, around the same level as Ipswich Town £18m. To underline how much the club has outperformed under Wilder, it is miles below Boro £49m, Cardiff City £48m, Birmingham City £39m.

Disappointingly, commercial income was unchanged at £3.2m, comprising retail £1.6m, academy £0.7m, facility £0.6m and Superdraw £0.3m. This is one of the lowest in the Championship.

Attendances have risen by over 50% since the 17,507 low in League One in 2013/14. The club’s potential is shown by the 30,000+ crowds in the Premier League back in 2006/7.Average attendance of 26,854 was the 6th largest in the Championship, also higher than six clubs in the Premier League. Ticket prices were frozen for 2017/18.

Promotion to the Championship quadrupled TV revenue from £1.6m to £8.1m, including £4.5m Premier League solidarity payment and £2.3m EFL central distribution. Boosted by being shown live 13 times (seven home at £100k and six away at £10k). The Premier League would be worth at least £170m.

The club's £20m revenue is firmly in the bottom half of the Championship. As the club said, 'The league is highly polarised in terms of revenues with several big teams receiving significant parachute payments following Premier League relegation'.

Wilder could not hide his unhappiness with the situation: 'Parachute payments are not used to bail clubs out. They are transfer funds. Nothing more, nothing less for the vast majority. They’re not being used as a safety net for those who have slipped down the divisions.'