In his latest analysis of a club’s accounts the authoritative Swiss Ramble features the Football League club geographically closest to me, Coventry City. Better times are here for the Sky Blues on the pitch. They are back in the Coventry Building Society stadium (formerly the Ricoh). There is discussion about a possible future move to a stadium built on land owned by Warwick University.
Coventry City’s 2020/21 accounts saw the loss widen from
£3.4m to £4.7m, due to squad investment after promotion to the Championship.
Revenue rose £6.7m to ££11.8m, despite COVID, but expenses up £6.5m and player
sales down £1.9m.
Some good news in the
accounts
Coventry £4.7m loss is actually one of the better results in
the Championship, much better than the likes of Bristol City £38m, Reading £36m
and Middlesbrough £31m in 2020/21. They did well to restrict the size of the
deficit, given there was a full year of the pandemic.
Coventry have only reported a profit once in the last 10
years – and that was just £13k in 2019. That said, they have managed to keep
the losses low with their conservative model, averaging less than £3m a season
since 2015.
The good news is that Coventry have secured two promotions
in recent years and are competing strongly in the Championship. However, given
their financial disadvantages compared to most other clubs, they would have to
punch well above their weight to reach the play-offs.
Coventry loss widened from £3.4m to £4.7m, which club said
was “not unexpected”, due to increased investment in the squad after promotion.
Revenue rose £6.7m from £5.1m to £11.8m, despite COVID impact, but expenses
increased £6.5m and profit on player sales halved to £1.9m.
Despite the impact of the pandemic, Coventry revenue has
tripled to £11.8m from the £3.8m low in League One to 2014. This is also higher
than the £10.8m generated the last time the club was in the Championship in
2012.
Even after this growth, Coventry £11.8m revenue is lowest in
the Championship, just below Barnsley, Millwall and Preston. To highlight their
challenge, this is around a fifth of clubs benefiting from parachute payments
which have a severe distorting effect in the Championship.
Coventry revenue increase was mainly due to higher
broadcasting money in the Championship. This rose £7.2m from £1.7m to £8.9m,
while commercial was also up £0.8m (44%) from £1.9m to £2.7m. Playing behind
closed doors meant match day fell £1.2m from £1.5m to just £0.3m.
Coventry have not made much money from player sales, as
these have only generated £22m in the last decade, though nearly half of that
(£10m) came in the last three years. This season will also be on the low side.
Coventry average attendance this season is just over 19,000,
which is three times as much as 6,677 two years ago, largely due to the club
returning to Coventry instead of having to play games at St Andrews in
Birmingham. This is 7th highest in the Championship.
The wage bill
Coventry
wage bill doubled from £6.5m to £13.2m, due to contractual increases following
promotion together with bonuses for winning League One. This is £3m higher than
the last time the club was in the Championship in 2012. Even after this growth Coventry £13m wage
bill was still one of the lowest in the Championship. To put this into
perspective, this is over £50m less than clubs with parachute payments.
Coventry
wages to turnover ratio decreased (improved) from 128% to 111%. This would have
been better without COVID revenue loss, but is still one of the lowest in the
Championship, where most clubs have ratios well above 100% (four more than
200%).
Coventry spent £3.5m on player purchases, which was their
highest for many years, including Gustavo Hamer, is relatively small for
Championship, but only just below Nottingham Forest.
Debt and the
owners
Coventry
gross debt rose £2m from £39m to £41m, mainly £39m from the owners (SISU
Capital and Arvo) plus £2m from the EFL. The club also includes £11m interest
on the loans in accruals, which would give a total of £51m outstanding.Coventry
£41m gross debt is not that large for the Championship, far below the likes of
Stoke City £187m, Blackburn Rovers £156m, Middlesbrough £129m and Birmingham
City £116m.
In the
last 10 years Coventry’s available cash has come from the owners £19m, player
sales £16m and sale of a subsidiary £5m. This has very largely been used to
cover £32m operating losses with very little spent on infrastructure or
interest payments.
The
owners have provided £25m funding in the last 11 years, though almost all of
that came between 2011 and 2014 with only £3m since then. SISU saved the club
from administration in 2007, but have come under fire from supporters for their
frugal approach
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