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
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