Brighton need to improve player sales performance

Brighton and Hove Albion have one of the lowest revenues in the Premier League, but a generous benefactor owner. From his fastness in Zurich, the authoritative Swiss Ramble reviews their latest accounts.

The loss before tax tripled from £22m to £67m, a £45m decline, as revenue decreased by £15m (10%) from £148m to £133m, while profit on player sales of £5m became a loss of £1m, and expenses rose £24m (14%). Monks Farm development worth £0.6m (revenue £9.4m, costs £8.8m

The £5 15m revenue fall was mainly due to COVID, which severely impacted all revenue streams, especially broadcasting, down £24m (21%) from £114m to £90m and match day, down £5m (27%) from £19m to £14m. Commercial £13m (82%) increased from £16m to £29m (Monks Farm development).

The £67m loss is obviously not great, but it is only 4th worst to date in 2019/20 Premier League, beaten by Everton £140m, Saints £76m and last night’s sad victims £68m. Due to the pandemic, it is likely that other clubs will also post substantial losses when they publish their 19/20 accounts

Without COVID the Seagull’s loss would have been £25m lower, but still almost doubling from £22m to £42m. Revenue impact was £26m, mainly broadcasting £20m (rebates and deferrals to 2020/21 accounts) and match day £6m, while £1m savings from deferred player

They actually made a £0.6m loss on player sales, down from £5.2m profit last season. Premier League profits here are lower in 2019/20, but Brighton are the smallest by far. They have made very little money from player sales. In fact, they have reported just £25m profit from this activity in the last 10 years, only twice achieving more than £5m. The 2020/21 accounts will be boosted by the sales of Knockaert to Fulham and Mooy to Shanghai SIPG

In fact, Brighton’s £19m profit from player sales in 5 years up to 2019 was the lowest in the Premier League. In stark contrast, Chelsea and Liverpool made over £300m. Finance Director David Jones said, “Going forward, to reduce the deficit, player trading needs to be part of the business.”

The London-by-the-sea club have only posted a profit once in the last 10 years, in 2017/18 following promotion to the top flight. In that time, the club has accumulated £195m of losses, averaging £19m a year. Profitability has been declining since that first season in the Premier League.

The operating loss (i.e. excluding player sales and interest) widened from £25m to £63m. Very few Premier League clubs make operating profits, but Brighton’s loss is (currently) one of the highest this season.

£133m revenue is still over £100m more than the £29m reported in the Championship promotion season. Excluding £9.4m from Monks Farm residential and commercial development, revenue fell 17% (£25m) compared to 2018/19

They are considering an increase in capacity at the Amex Stadium from 30,750 to around 32,000, as the club has an 8,000 waiting list for season tickets, though the pandemic might have an impact here.

American Express shirt (and stadium naming rights) sponsor was the lowest in the Premier League at £1.5m, though a new £100m 12-year deal (£8.3m a year) started this season.

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

Search This Blog