A glorious period for the Blades

The Zurich-based Swiss Ramble blogger casts his authoritative eye over the 2018/19 accounts of Sheffield United. He comments: 'Apart from the pandemic, this has been a glorious period for Sheffield United. There is much to admire about their strategy. Despite their financial limitations, they have delivered on the pitch under Wilder, even with board room issues, and are genuinely competitive in the Premier League.'

These accounts cover the final year of co-ownership between Kevin McCabe and Prince Abdullah. Since then the High Court has ruled that McCabe must sell his 50% share to the Prince for £5m. As a result, the club will purchase the stadium and training facility for £43.5m.

The club's loss increased from £2m to £21m, reflecting the “exceptional cost of promotion to the Premier League”. Revenue rose 4% (£0.8m) to £21m, while profit on player sales was up £6m (69%) to £14m, but this was more than offset by £26m of cost growth. Although the £21m loss is obviously not great, most clubs lose money in the Championship and the other two promoted clubs lost far more: Aston Villa £69m and Norwich City £39m.

The loss would have been higher without £14m profit on player sales, mainly David Brooks move to Bournemouth. The board said player trading “represents a key element of our strategy to be a self-sustaining club.” However, returns are a lot lower than Bristol City £38m, Boro £33m and Swansea £30m. The profit from player sales has increased in the last two years, totaling £23m, including sell-on fees for Harry Maguire and Kyle Walker. This is almost as much as the previous eight years combined (£24m). However, the club said transfer fees only contributed £4m in 2019/20.

The Blades have consistently lost money since relegation from the Premier League in 2007. In fact, they only reported a profit once in the last decade – and the £31m profit in 2014 was thanks to a £35m loan write-off. Excluding that adjustment, club has made £76m losses in those 10 years.

Revenue of £21m is almost twice as much as the £11m they reported in League One just two years ago, but this will pale into insignificance compared to the £150m+ that they should get in the Premier League (COVID-19 permitting). The last three clubs promoted to the Premier League saw an average increase in their revenue of £112m, though Wolves £146m growth might be a better comparative for the Blades, as they were the only club without parachute payments (and they also did very well in the top flight).

Despite the increase in 2018/19, the £21m revenue was firmly in the bottom half of the Championship, less than a third of clubs benefiting from parachute payments, such as WBA £71m, Stoke City £71m and Swansea £68m. This makes their promotion achievement even more impressive.

Championship revenue is hugely influenced by Premier League parachute payments with WBA, Stoke and Swansea leading the way with £43m. Wilder is not a fan: “They are not used to bail clubs out. They are transfer funds. Nothing more, nothing less for the vast majority.” If parachute payments were excluded, the club's £21m revenue would have still placed them in the bottom half of the Championship. In fact, their revenue would have been less than half of Leeds United £49m and Aston Villa £43m.

Attendances (somewhat surprisingly) fell from 26,854 to 26,177, though this was still around 50% higher than the 17,507 low in League One in 2013/14. The club’s potential is shown by crowds approaching 31,000 in the Premier League this season. The average attendance of 26,177 was the 5th largest in the Championship. It was also higher than six clubs in the Premier League. Ticket prices were increased by 11% following promotion, but still cheapest in the top flight.

The wage bill more than doubled, rising from £19m to £41m, because of investment in the squad and “bonuses payable due to the success of this investment”, namely promotion. Wages were four times as much as the £10m paid two years ago when they won League One. Despite the steep increase, the £41m wage bill was still only the eighth highest in the Championship. To underline how much the club has outperformed under Wilder, it was miles below Villa £83m, Stoke City £56m and Canaries £51m.

Sheffield United cannot be accused of buying success, spending just £7m on players in 2018/19, one of the lowest in the Championship, including John Egan and Oliver Norwood. As a comparison, Stoke City splashed out £67m. In fact, United only spent £14m on players in the four years before promotion.