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Burnley financial results better than expected

Despite relegation, Burnley actually managed to deliver a £36m pre-tax profit in 2021/22, compared to a £3m loss the previous year. Revenue rose £8m (7%) from £115m to £123m, but the bottom line improvement was very largely driven by profit from player sales shooting up from £5m to £55m.

Burnley’s £36m profit was actually the second best financial performances in the 2021/22 Premier League, only surpassed by Manchester City’s £42m. In contrast, many clubs reported huge losses last season.

Burnley’s profit from player sales rose £50m from £5m to a club record £55m. Many players were released for nothing, but the club got decent money for four departures: Chris Wood and Nick Pope to Newcastle United, Nathan Collins to Wolves and Dwight McNeil to Everton.

This was a deliberate strategy to raise funds “in anticipation of lower turnover next season due to relegation”. The club then used a portion of these proceeds to pay down £20m of debt with the remainder available to invest in the squad and fund operations in the Championship.

This was the sixth highest player trading profit in the Premier League last season, only below Chelsea £123m, Aston Villa £97m, Manchester City £68m, Everton £68m and Brighton £62m.

Unlike most other football clubs, Burnley have a good track record in terms of profitability. In the last six years in the Premier League, they only once posted a loss – and that was only £3m in 2020/21, a season ravaged by COVID. In that period the club has generated an impressive £110m profit.

The club noted that “the reduction in total wages and the influx of cash from transfer fees more than offset the loss of broadcasting revenue due to relegation”, but it is still likely that Burnley will make a loss in the 2022/23 Championship, given the much lower player sales.   However, it will be a different story next season, as the club will once again benefit from the lucrative Premier League TV deal, so they are a good bet to return to profitability.

Despite the growth last season, Burnley’s £123m revenue was still down £16m (11%) from the club’s peak in 2017/18, when they finished in a highly creditable 7th place in the Premier League.  The worsening performance on the pitch has driven a sizeable reduction in broadcasting income, though this still accounted for 85% of total revenue.

Burnley’s financial challenge is very clearly seen by their £123m revenue being the lowest in the Premier League, a full £5m behind Watford £128m and £11m behind Norwich City £134m.  This was miles below the elite, e.g. the top four clubs all earned more than four times as much as Burnley, led by Manchester City £613m, while the gap to sixth placed Arsenal was nearly quarter of a billion pounds.

Burnley’s wages rose £6m (7%) from £86m to £92m, despite not having to pay any bonuses for Premier League survival, as the number of players, managerial and training staff increased from 133 to 152. Presumably this was also inflated by a once-off payment for manager Sean Dyche’s dismissal.  This is the club’s second highest wage bill ever, only surpassed by £100m in 2019/20, though that was exacerbated by the accounting period covering 13 months. Wages have therefore grown by £31m (50%) from £61m since the first season after promotion in 2016/17.

In many ways, it is not that surprising that Burnley were relegated, as their £92m wages were in the bottom three of the Premier League, given the strong correlation between wages and performance.

Burnley more than doubled the amount they spent on player purchases from £19m to £41m in 2021/22, though this was still one of the lowest in the Premier League, only ahead of Brentford, Wolves and Watford.   This was miles below the likes of Aston Villa £204m, Arsenal £188m and Tottenham £160m.  This season was a different story, as Burnley were the biggest spenders in the Championship with £23m, based on Transfermarkt figures.

In the last five years, only Manchester United have provided more money to their owners. In that period, some other clubs received substantial amounts from their owners, including Everton £574m, Chelsea £416m and Aston Villa £351m.

Given the understandable worries of many Burnley fans after relegation, these financial results are a lot better than expected.

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