Skip to main content

West Brom loss is smaller than promotion rivals

The Swiss Ramble analyses the 2019/20 accounts of West Bromwich Albion.

The pre-tax loss widened from £7m to £23m, mainly due to promotion bonuses and COVID. Revenue fell £17m (24%) from £71m to £54m, while operating expenses increased £19m (22%), partly offset by profit on player sales rising £19m to £29m. Loss after tax up from £6m to £21m.

The main reason for the £17m revenue reduction was broadcasting, which dropped £12m (23%) from £53m to £41m, mainly due to lower parachute payment, though gate receipts also decreased £2.5m (34%) to £4.8m, while commercial was down £2.4m (22%) to £8.4m.

Despite the fall in broadcasting, this remained the most important revenue stream for the Baggies accounting for 75% of total revenue.  This is followed by commercial 16%, then just 9% from match day.   They will receive much more TV money in the Premier League, e.g. current 19th place would be £102m based on 2018/19 distribution, though they will have to pay £7m rebate as a promoted club in 2020/21total revenue.

The £23m loss is not great, it’s far from unusual in the Championship, even before the pandemic. Three clubs to date have reported larger losses in 2019/20, namely another promoted club Leeds United whose £62m loss was significantly higher.

In fairness, nearly all promoted clubs have had to splash the cash to finance the investment required to get out of the Championship, leading to hefty losses (including promotion bonuses). In fact, the £23m loss is one of the smallest of clubs going up in the last three seasons.

WBA benefited from profit on player sales rising from £10m to £29m, including Salomon Rondon to Dalian Yifang, Jay Rodriguez to Burnley and Craig Dawson to Watford. This is the highest to date in the 2019/20 Championship.   Like many other clubs, the Baggies have become increasingly reliant on player sales with the average annual profit rising to £15m in the last four years.

Up until 2017, the club had not made a loss since 2009, but they have now lost money in the last three  seasons, amounting to £37m. The club had accumulated £83m of profits in the preceding seven years, but around half of this (£40m) came in 2017 alone, under Tony Pulis in the Premier League.

The wage bill rose significantly by £20m (43%) from £47m to £67m, including estimated £17m promotion bonus, an extra month’s wages and loan costs associated with the extended season. Wages down £12m (15%) in three years, while revenue down £84m (61%) in the same period.

The wages to turnover ratio nearly doubled from 66% to 124%, though the Swiss Ramble calculates this would be reduced to 86% if promotion bonus and 13th month excluded. Either way, this is not desirable, but par for the course in this division, where 19 of the 24 clubs are over 100

Labels:

Comments

Post a Comment

Popular posts from this blog

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...
1 comment
Read more

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day ...
Post a Comment
Read more

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 ...
Post a Comment
Read more