As Sheffield United get ready for the new season, there remains a sense of uncertainty about the club’s ownership. Talks have been slowly progressing with an American consortium, reportedly led by Tom Page of venture capital firm Vertex Albion, but a deal has not yet been concluded.
The hope was that the new owners would be on board before
the end of this summer’s transfer window, especially after it was reported that
plans had been submitted to the EFL for the owners and directors’ test, but, as
of yet, there has been no white smoke confirming that the club has changed
hands.
In the last few days, there have been reports that John
Textor, the American billionaire, is looking to sell his shareholding in
Crystal Palace and invest in another English football club, which led to Blades
fans speculating that he might enter the “race” to buy United. However, that
rumour would appear to be unfounded at this stage.
Sheffield United’s current owner is Prince Abdullah, who has
been involved with the club for more than a decade and became sole owner in
September 2019 after the High Court ruled that Kevin McCabe had to sell his 50%
share to the Prince. This also triggered an agreement whereby the club had to
purchase the stadium, training facility, gym, hotel and offices.
The Prince has clearly intended to sell the club for a
while, but has so far failed to get a deal across the line, even when the
Blades were a more attractive proposition in the Premier League.
The ambiguity around Sheffield United’s ownership situation
has adversely impacted the club’s finances, leading to some cash flow problems.
As a result, the EFL placed United under a transfer embargo in January 2023.
Wilder is now facing similar issues in the transfer market
to his predecessor, arguably even worse, as many players have left this summer
after dropping back to the Championship.
The club earned decent money on deals, e.g. the sales of
Cameron Archer, Jayden Bogle and Bénie Traoré, but the majority of the players
were simply released or were loanees returning to their parent clubs.
This means that Wilder needs to completely rebuild his
squad, but there have been very few signings to date with money only being
exchanged for Kieffer Moore and Harrison Burrows, as the other arrivals have
been on free transfers (Callum O’Hare, Jamie Shackleton and Sam McCallum). This
has led to a lot of concern among Blades fans, as there are still numerous gaps
in the squad that need to be filled by adequate replacements.
United’s pre-tax loss in 2022/23 almost doubled from £16.0m
to £31.5m, a record for the club, as revenue fell £2.8m (4%) from £66.7m to
£63.9m and profit from player sales dropped from £11.2m to £4.4m. In addition, operating expenses rose £4.8m
(5%) from £91.4m to £96.2m, while net interest payable was up £0.7m (24%) from
£3.1m to £3.8m.
United’s £31.5m loss was the second highest in the
Championship in 2022/23, only surpassed by Burnley’s £36.0m. It was no
coincidence that the two clubs with the largest losses were both promoted to
the Premier League that season, driven by hefty bonus payments.
United only made £4.4m profit from player sales, down from
the previous year’s £11.2m, compromising contingent amounts following the
previous sale of Aaron Ramsdale to Arsenal in August 2021 plus money for the
sale of a couple of players from United’s academy.
2022/23 was the second year in a row that United had posted
a significant loss, so the club lost £47m in the two seasons back in the EFL.
This highlighted the stark difference between England’s top two divisions, as
United had made £29m in the preceding two seasons in the Premier League.
United have not managed to generate much money from player
sales over the years. In fact, they have only made more than £10m twice from this
activity in the last 13 years with many of the gains have been linked to
sell-on fees, e.g. for the likes of Harry Maguire and Kyle Walker.
Loyal fans
United’s average attendance increased from 27,611 to 28,746
in 2022/23. This was around 2,000 less than the 30,869 they registered in the
Premier League in 2019/20, but over 11,000 more than the 2013/14 low in League
One.
United clearly have a very loyal fanbase, as they actually
had the highest average attendance in the Championship in the previous season,
which means that they featured in the top two in the league for the two years
before promotion.
We don’t yet know what United’s wage bill was last season in
the Premier League, but it is likely to be fairly low. In their previous stay
in the top flight, the highest amount that they paid was £78m in 2019/20,
though that covered 13 months (due to a change in the accounting date) and
included a sizeable survival bonus. For any
promoted club, this is a tricky balancing act, as they don’t want to go crazy
with their spending, but the flip side is that low wages make relegation more
likely.
Based on Transfermarkt (plus an assumed 20% for agent
fees), United spent £70m last season following promotion back to the Premier
League, mainly on Cameron Archer (Aston Villa), Gustavo Hamer (Coventry City),
Vinicius Souza (Lommel), Auston Trusty (Arsenal) and Bénie Traoré (BK Häcken). This was one of the lowest in the top flight,
only above Luton Town and Everton (who were beset by PSR problems).
Basically, when a club is promoted to the Premier League,
it’s damned if it does and damned if it doesn’t. If they spend a large amount,
they are likely to have issues with PSR (see Nottingham Forest’s £170m), but if
they spend very little, their chances of survival diminish.
In the last 10 years United’s available cash of £151m has
come from various sources: owner financing £52m, operating activities £50m and
bank loans £49m. Most of this went on
player purchases £81m (net) and infrastructure £58m, including buying the
stadium, training ground and other assets. There were also £11m interest
payments, mostly in the last three years.
Relatively little funding was put in by United’s owners in
the eight years up to 2021, adding up to only £23m. However, £29m has been
provided in the last two years, including the £23m in 2023, subsequently
converted into equity.
United’s financial results for 2022/23 were clearly not
great, given that the club recorded its highest ever loss. It is true that this
was inflated by a sizeable promotion bonus, but even if that were excluded,
United would still have lost a chunky £20m.
More positively, given the club’s frugality in the Premier
League, it is likely that United will have reported a healthy profit last
season, as a result of the significant revenue growth and the relatively high
player sales.
That should have left the club in a better financial
position, but Sheffield United still feels like a club in limbo with a somewhat
uncertain future until the ownership issue is definitively resolve
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