Skip to main content

Relegation would lead to loan repayment challenge for Burnley

Burnley face a significant loan repayment over the next year if they are relegated this season, reports The Athletic.

ALK Capital took over the club in December 2020 via a leveraged buyout, borrowing a substantial fee from MSD Holdings — which was due for repayment in December 2025.  From the club's official accounts the value of the loan was confirmed as £65 million.

As it stands, Burnley only have to pay interest on the loan. However, the document also explains that dropping out of the Premier League would move the repayment schedule forward — with a significant proportion of the capital loan value required shortly after the end of the football season.

Burnley are currently 16th in the Premier League but just two points clear of the relegation zone.  I hope they survive as I have always enjoyed my visits to the atmospheric, old style Turf Moor.  One Burnley fan invited me to celebrate his 60th birthday (a 2-0 win over Hull in the second tier).

That would be a significant blow to the club's finances. If Burnley are relegated TV revenue, which makes up a huge part of their revenue relative to other Premier League clubs, would decrease significantly and their cash in the bank has already decreased from £80 million to £50 million.

If Burnley remain “in a continuing relegation scenario”, according to the accounts, they would have to pay a further “significant” section of the balance.

Chairman Alan Pace has maintained throughout his time at the club that plans are in place if relegation occurs and that the takeover purchase was reasonable and sustainable.

Along with parachute payments, relegation wage cuts among players and staff as well as player sales are predicted to ease the financial burden but quick promotion back to the Premier League would be important.

Burnley posted a small loss of nearly £3 million with revenue down from £134 million to £115 million as the effects of COVID-19 continue to factor into football's finances.

Sacking Sean Dyche was controversial, but it may have encouraged the team to greater risks in attack as happened in the win over Watford.

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

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

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....
Post a Comment
Read more