West Brom make loss for first time since 2009

The authoritative Swiss Ramble examines West Bromwich Albion's accounts for 2017/18. The club made a loss before tax of £7.4m, compared to a prior year profit of £39.8m, representing a 'significant' £47m deterioration, as revenue fell £13m (10%) to £125m and profit on player sales was down £8m to £6m. After tax, the club went from a £32.3m profit to a £5.8m loss.

This was the first time that WBA have made a loss since way back in 2009, so they have been profitable eight times in the last decade. Between those two losses, the club accumulated £83m of profits, but around half of this came from 2016/17 £40m alone.

However, larger profits have been due to either high player sales (2014 and 2017) or exceptionals (£8m debt waived 2011). In fact, total £64m profit in last 10 years includes £63m from player sales. 2018/19 will include £16m proceeds (Chadli, McClean and Foster).

The £13m revenue fall was very largely driven by broadcasting’s £17m (14%) decrease from £119m to £102m, due to less prize money for finishing bottom. In contrast, commercial rose £2.9m (23%) from £12.4m to £15.3m and gate receipts were up £0.7m (10%) to £7.4m. TV money from Premier League fell £19m from £114m to £95m, as finishing 20th compared to 10th previous season meant a much lower merit payment (£2m instead of £21m).

Nevertheless, a hefty 82% of revenue came from TV (£102m out of £125m), 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 £125m was the lowest revenue in the Premier League, just below Huddersfield Town £125m, Swansea City £127m, Stoke City £127m and Watford £128m. For more context, they were a quarter of a billion below 6th placed Tottenham.

WBA only made £6m profit on player sales, including Jonny Evans to Leicester City, compared to £14m prior year (Berahino to Stoke City and Chester to Villa). This was one of the lowest gains in the Premier League, in stark contrast to clubs like Liverpool £124m, Arsenal £120m and Chelsea £113m.

After relegation the club will benefit from a £42m parachute payment, but estimated total TV revenue of £45m will be around £55m lower than PL. On the other hand, most Championship clubs only receive £8m. If not promoted, parachute will drop to £34m, then £15m.

Gate receipts rose by £0.7m (10%) to £7.4m, as they hosted one more Cup game and average attendance was 3% higher, but this was still the 5th lowest match day income in the Premier League, only above Swansea, Burnley, Bournemouth and Huddersfield. Average attendance rose from 23,876 to 24,520 in 2017/18, despite their relegation woes. This was partly due to cutting ticket prices in an attempt to bring the fans back after four consecutive years of decline.

The wage bill surged £13m (17%) from £79m to £92m, even though revenue fell £13m. This was more than double the first season back in the top flight in 2011 (£44m). It included costly loan signings and pay-offs to Pulis and Pardew. The wages to turnover ratio climbed from 57% to 74%, but this is more or less the level it has been for the last few years.

This is the seventh highest (worst) in the Premier League, though in fairness eight clubs have ratios above the recommended 70% upper limit. Even so, the wage bill was one of the lowest in Premier League, around the same as fellow relegated clubs, Stoke £94m and Swansea £91m.

The Baggies made a club record £46m player purchases in 2017/18 (including Burke, Rodriguez, Gibbs, Zhang and Hegazy), meaning £83m in the last two seasons. However, to show the size of West Brom’s challenge in the Premier League, this was only higher than Burnley £44m.

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

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Spurs to sell minority stake

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The Political Economy of Football V2

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