The authoritative Swiss Ramble takes an in depth look at the finances of Crystal Palace.
The club posted a £35.5m loss before tax, compared to an £11.8m profit the prior year, mainly due to profit on player sales falling £32m to just £2m, though revenue grew £7.6m (5%) from £142.7m to a club record £150.3m. Loss after tax was £33.4m, thanks to a £2.1m tax credit.
The £8m revenue growth was very largely driven by broadcasting’s £4m (4%) increase from £117m to £121m, mainly due to increased prize money for finishing 11th, while commercial also increased £3.1m (21%) from £15.2m to £18.3m and match day was up £0.3m (2%) to £10.9m. Revenue has grown £48m (48%) from £102m to £150m in the last two years. Most of this growth (£43m) was due to new Premier League TV deal in 2017, but commercial is also up £6m (54%), while gate receipts dropped £1m (9%).
A chunky 81% of Crystal Palace revenue came from TV (£121m out of £150m), though in fairness it should be noted that no fewer than 12 of the 20 Premier League clubs get more than 75% of their income from this source, with Bournemouth 'leading the way' with an amazing 89%.
The £36m pre-tax loss is the highest reported to date in the Premier League (only Newcastle United missing). The Eagles are not alone, as six other clubs lost money, including Watford £32m and Stoke £30m, but others were very profitable, e.g. Spurs £139m.
The main driver for the loss is clear, as they only made £2m profit on player sales 'to protect the quality of the playing squad' against £35m prior year (mainly Bolasie to Everton). This was second lowest in the Premier League.
Palace have now lost money in two out of the last three seasons, though their profits in the five years since promotion to the Premier League in 2013 add up to a healthy £36m, averaging £7m a season.
The Selhurst Park stadium project is expected to cost £100m with work beginning at the end of this season, ready for 2021/22. The club say it 'will offer a step change in revenue potential with over 8,300 new seats, up to 3,000 new premium covers and major opportunities for non-matchday revenue.'
The wage bill increased £6m (5%) to £117m, which the club attributed to 'change of first team management', i.e. Frank De Boer. They added, 'Outside of this, costs remained largely flat', though wages have shot up £37m (46%) in last two years. They were as low as £46m in 2014. The £117m wage bill remains the ninth highest in the Premier League, only surpassed by the 'Big Six', Everton and Leicester. The Swiss Ramble comments, 'This raises obvious questions around wage control, despite the club talking about "a lean and efficient approach to its operations."'
The wages to turnover ratio was unchanged at 78%, which is the highest (worst) in the Premier League for the second year in a row, just ahead of Everton 77%. It is literally twice as much as Spurs 39%, though in fairness eight clubs have ratios above the recommended 70% upper limit.
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