New financial highs at Burnley

The authoritative Swiss Ramble has analysed the latest financial results for Burnley. He comments, 'Profit before tax improved by £18m from £27m to £45m, as revenue rose £18m (15%) from £121m to £139m and profit on player sales was up £29m to £31m. After tax, profit increased from £22m to £37m. The club set new record highs for both revenue and profit. Only Spurs, Liverpool, Arsenal and Chelsea had bigger profits, all driven by player sales.'

Burnley have made good profits each time they have been in the Premier League with last season’s £45m even better than £35m in 2014/15. They kept losses low in the Championship and even delivered a small profit in 2012. In the last four years, they have £102m cumulative profits.

The £18m revenue growth was very largely driven by broadcasting’s £17m (16%) increase from £105m to £122m, largely due to increased prize money for finishing 7th, while commercial also increased £1.5m (15%). TV money from the Premier League increased £19m from £101m to £120m, due to a higher merit payment from finishing 7th instead of prior season’s 16th. However, they were adversely impacted by only being shown live 10 times, the contractual minimum (facility fees).

The £139m revenue is very nearly £100m higher than the £40m they generated in the Championship two years ago. The vast majority of this growth (£92m) came from TV, which now accounts for 87% of total revenue (the third highest dependency in the top flight), though commercial grew by £6m (doubled). However, the gap to the Big Six is enormous, as they are £240m below Spurs £381m.

Match day revenue slightly fell by £0.2m (4%) to £5.6m, as they had two fewer home games. This is the third lowest in the Premier League. For some context, Manchester United and Arsenal earn more from this revenue stream in two games than Burnley do in an entire season. Average attendance rose slightly from 20,558 to 20,688, which represents an increase of almost 4,000 compared to season 2015/16 in the Championship, but is the fourth lowest in the Premier League. These are the highest crowds of any Premier League season, just ahead of 20,654 in 2009/10.

The wage bill increased by a third (£20m) from £61m to £82m, mainly due to bonus payments for the high league finish. Since promotion, it has tripled from £27m in the Championship (and up from £29m in 2014/15 PL). It is the third lowest in the Premier League and will probably fall in 2018/19 due to lower performance bonuses. The wages to turnover ratio increased from 51% to 59%, which is still perfectly respectable.

Burnley have recently made more money from player sales: annual average increasing to £15m in last 3 years against £3m in previous seven years. Player purchases totalled £44m. the lowest in the Premier League to date.

If the club do end up being relegated this season (I think they will stay up), the financial blow would be cushioned by £91m of parachute payments (year 1 – £42m, year 2 – £34m, year 3 – £15m).

The Clarets are essentially debt-free (except for £77k of finance leases), having used money from previous period in Premier League to repay directors’ loans and external loans. In fact, the club has £34m net funds, which is testament to their sound financial management. They are in the best debt situation of all Premier League Clubs.

The Swiss Ramble concludes, 'Burnley have done well to survive (and be competitive) in the Premier League, while still maintaining a sustainable model, despite their financial challenges.'

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...

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...

Millwall punch above their weight

Millwall’s season was overshadowed by the tragic death of owner John Berylson following a car accident. The American had been an exemplary owner, beloved by the fans for his leadership, passion and generosity. Millwall’s finances had been pretty good during his tenure, which we shall explore by looking at the most recent accounts from the 2022/23 season, when the club narrowly missed out on a place in the play-offs after finishing 8th. Millwall’s pre-tax loss slightly reduced from £12.6m to £12.2m, as revenue rose £0.8m (4%) from £18.6m to a club record £19.4m and player sales improved from a £0.1m loss to £2.5m profit. However, other operating income dropped from by £1.1m from £1.3m to £0.2m, while operating expenses increased £1.7m (5%) from £31.6m to £33.3m. The main driver of the revenue increase was broadcasting, which rose £1.1m (12%) from £9.1m to £10.2m, though match day was also up £0.4m (7%) from £5.8m to £6.2m. In contrast, commercial fell £0.7m (19%) from £3.7m to £3....

The Political Economy of Football V2

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