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Crystal Palace 'have been run sensibly'

The authoritative Swiss Ramble reviews the (13 month) 2019/20 accounts of Crystal Palace.

The club swung from £5m pre-tax profit to £58m loss, mainly due to profit on player sales dropping from £46m to only £0.5m. Revenue fell £13m (8%) from club record £155m to £142m, partly due to COVID.

The £142m revenue was 11th highest in the top flight, though the gap to the Big Six is enormous, as Palace are more than £200m behind Arsenal £343m. For more perspective, it’s less than a third of Manchester United £509m, Liverpool £490m andManchester City £478m.

Although the £58m loss is obviously not great, it is only mid-table in the Premier League, as all clubs have been adversely impacted by COVID with no fewer than nine of them posting higher losses than the Eagles in 2019/20,

Main driver of the revenue reduction was broadcasting, which fell £11.7m (9%) from £124.4m to £112.7m, while match day dropped £2.8m (19%) from £14.6m to £11.8m. However, commercial rose £1.4m (9%) from £16.4m to £17.8m.    Even after the steep decrease in broadcasting income, this was still by far the most important revenue stream for Palace, accounting for 79% of total revenue, followed by commercial 13% and match day 8%

Without COVID, revenue would have been £11.7m higher at £154m, due to broadcasting rebate and lost match day income. Along with £14.1m extra costs incurred for additional month in accounts less £0.7m net cost savings, this would have resulted in a smaller loss of £33m.

However, the main reason for the worse bottom line was profit on player sales, which declined from £46m to just £539k, as prior year included lucrative Wan-Bissaka transfer to Manchester United. This was 3rd lowest in the Premier League, far below Chelsea £143m.

Since promotion to the Premier League in 2013, Palace have made money in four out of seven seasons, though they have made an overall £52m loss in that period, due to the hefty deficits in 2018 (£36m) and 2020 (£58m).  The Swiss Ramble comments, ‘It is clear that the club have been run sensibly, effectively breaking-even in the top flight before the pandemic hit.’

Despite the decline in 2020, revenue has still grown by £52m (57%) since 2014 from £90m to £142m, their first season following promotion to the Premier League. Much of that growth is due to new Premier League TV deals, but commercial has also shot up.

The reported £133m wage bill was 9th largest in the Premier League, probably higher than most fans would expect.   The wages to turnover ratio increased from 77% to 93%, 4th highest in the Premier League, though this would fall to 86% based on 12-month wages. If we further adjust for the COVID £11.7m revenue loss, the ratio would fall to 79%, though still in top 10.

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