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...

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 ...

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

The Political Economy of Football V2

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