Palace are a club on the up

Crystal Palace’s pre-tax loss in 2022/23 slightly widened from £24m to £28m, despite revenue rising £20m (13%) from £160m to a new high of £180m, though this was wiped out by operating expenses also increasing £20m (11%) from £180m to £200m, while net interest payable nearly doubled from £4.4m to £8.0m.

 Profit from player sales was around the same as the previous season at just £331k.  Palace only made £10m from player sales in the last four years, which is rock bottom in the Premier League.

The main reason for the revenue increase was broadcasting, which rose £15m (12%) from £126m to £141m, though there was also decent growth in commercial, which was up £5m (21%) from £22m to £27m. Match day also increased by £0.9m (8%) to £12.3m.

Although Palace’s £28m loss is obviously not great news, this is actually not too bad for the Premier League, as some clubs reported much higher losses last season, led by Aston Villa £120m, Tottenham £95m, Chelsea £90m, Leicester City £90m and Everton £89m.

Palace have now lost money in each of the last four seasons, adding up to £150m. Before the pandemic struck, they had posted profits in five of the previous seven years, which was pretty good going.

Palace’s £180m revenue is still in the bottom half of the Premier League, sandwiched between Fulham £182m and Leicester City £177m.  However, they were miles below the Big Six, as Manchester City £713m were more than half a billion pounds higher, while sixth-placed Arsenal earned more than twice as much with £465m.

TV money is incredibly important to Palace, contributing 78% of their total revenue, which is one of the highest in the Premier League. This helps explain why their strategy is focused so much on avoiding relegation, e.g. keeping hold of their players with the consequent adverse impact on player sales profits.

Palace’s average attendance dropped by 3% from 24,222 to 23,493, though crowds have grown by over 6,000 (36%) in the Premier League. That said, this was the club’s lowest attendance since 2012/13, when they were last in the Championship.

The low match day revenue helps explain the decision to build a new Main Stand at Selhurst Park. Currently, Palace only earn around £0.6m a game, which is significantly lower than Tottenham’s staggering £4.9m after their own stadium development.

The club stated that the new stand would “offer a step change in revenue potential with over 8,300 new seats, up to 3,000 new premium covers and major opportunities for non-matchday revenue.” Parish has reportedly estimated the uplift to be worth an additional £20m per annum.

The development was originally expected to cost between £75m and £100m, though this has increased to an estimated £150m due to inflation. Funding has now been secured, so “the final piece in the club’s strategic plan” is expected to be completed in advance of the 2027/28 season.

Palace’s wage bill increased £7m (5%) from £124m to £131m, though this was still lower than the £133m peak three years ago. The club has managed to restrain wages growth, as it has released out of contract expensive players, replacing them with younger talent on lower wages.

Palace have lagged behind most clubs in terms of the transfer market. In the last five years (including 2023/24), their £256m gross spend was one of the lowest in the Premier League. This was only above Brentford, Sheffield United and Luton Town, who spent much of this period in the Championship.  This is miles behind big spenders like Chelsea and Manchester City, who have both shelled out more than £1 bln, but also less than the likes of Burnley £294m and Fulham £285m.

Palace’s gross debt increased by £49m from £82m to £131m, including £49m bank loans, £43m advances from a funding agreement with Aldermore Bank (secured on Premier League TV money), £38m owed to group undertakings and £1m finance leases.

Owner funding

Owner loans were increased by £30m, while bank loans rose by £16m and the funding agreement by £3m.   Since these accounts, it has been reported that the club have taken out a loan from MGG Investment Group in March 2024. This is apparently secured on future transfer receipts, implying that the club will be making player sales this summer.

Palace’s owners put £30m cash into the club in 2022/23, as they did the previous season.  Subsequent to the year-end, the directors have provided £12m additional loans and £45m equity via a capital call from existing shareholders.

In reality, the £97m funding in the last five years (up to 2023) was not that high in the Premier League. For some perspective, owners at six clubs have put in more than £200m in the same period, including four outside the Big Six, namely Everton £598m, Fulham £456m, Aston Villa £453m and Leicester City £258m.

There is no doubt that Palace have looked like a club on the up in the past few months, so fans should be eagerly looking forward to next season. If they can maintain their form of the last few games, they could be considered as legitimate candidates for European qualification.

However, the challenge now is whether they can keep hold of thrilling young talents like Michael Olise, Eberechi Eze and Marc Guehi in the face of offers from bigger clubs this summer.