Skip to main content

Swansea owners may need to provide more cash

Swansea have been owned by an American consortium since July 2016, when Jason Levien and Stephen Kaplan bought a controlling interest in the club. They were joined in August 2020 by Jake Silverstein.

Coleman, an investor in MLS team DC United (where Levien is also involved), was appointed Swansea’s chairman, having acquired “a significant shareholding” and taking over day-to-day responsibility for the running of the club, leading to the departure of chief executive Julian Winter.

Only last month, there was another change to the ownership, when the club announced that Nigel Morris, a British businessman (with Welsh heritage), had made an investment into the club and joined the board of directors.

Following this investment, the largest shareholders are now:

  • Swansea LLC (Coleman, Kaplan, Levien and Silverstein) – 74.95%
  • Nigel Morris – 12.59%
  • Swansea City Supporters Trust – 9.42%

Swansea have lost money in four of the five sets of accounts published in the Championship, adding up to £40m. Worryingly, the losses have been getting bigger, so the club’s deficit in the last two seasons alone was a hefty £31m.

This is in stark contrast to the Swans’ time in the Premier League between 2012 and 2018, when they made money in five of the seven seasons. Over that period, their aggregate profit amounted to an impressive £36m.

Swansea’s pre-tax loss widened in 2022/23 from £13.2m to £17.9m, despite revenue rising £1.9m (10%) from £19.7m to £21.6m, mainly because profit from player sales fell £6.4m from £10.9m to £4.5m. There was hardly any change in operating expenses of £42.9m, though net interest payable rose £0.3m to £1.2m.

The main reason for Swansea’s revenue increase was commercial, which rose £3.2m (52%) from £6.2m to £9.4m, which was enough to offset reductions in both match day, which dropped £0.7m (17%) from £4.2m to £3.5m, and broadcasting, down £0.6m (7%) from £9.3m to £8.7m.

Swansea’s large loss is clearly not great news, as the club itself admitted, “The directors acknowledge the difficult financial and operational conditions the company, along with other Championship football clubs, are experiencing.”

This view was echoed by the Supporters Trust, “We are acutely aware that the results we are seeing today are all too commonplace amongst our Championship rivals, where the majority are also seeing mounting year on year losses.”

Player sales

The club said that “at the core of its strategy is a positive player trading model”, which is evidenced by Swansea generating an impressive £183m profit from player sales in the last nine years. Profitable departures since relegation to the Championship have included the likes of Flynn Downes, Joe Rodon, Oli McBurnie and Daniel James.

However, it is worth noting that the profit from player trading has now fallen five years in a row from the £46m peak in 2018, though the 2023/24 results should reverse this trend, mainly thanks to the big money sale of Joel Piroe to Leeds United.

Swansea’s average attendance dropped from 17,389 to 16,821, which was around 3,800 lower than the 20,600 or so that they consistently attracted in the Premier League.  Following the decrease, Swansea’s 16,821 average attendance was in the bottom half of the Championship, far below Sunderland 38,653, Sheffield United 28,746, Norwich City 26,131 and Middlesbrough 26,012.

Wages have been cut by 75% (£74m) since the Premier League peak of £99m six years ago, first falling after relegation to the Championship, then further decreasing after parachute payments stopped.

Swansea’s £12m gross debt was one of the lowest in the Championship, far below the likes of Middlesbrough £159m, Birmingham City £149m and Blackburn Rovers £142m.

Owner funding

In the accounts, the board formally acknowledged “the continued generous financial support provided by the club’s beneficial owners”, which was fair comment, given that they had put in £45m up to June 2023.   Since then, they have made a series of monthly capital injections, adding up to around £27m, which means their funding is up to £72m in total.

In the three years up to 2022/23, their £45m funding was one of the highest in the Championship, only surpassed by five clubs – and one of those was Reading, whose problems might give pause for thought.

The owners will certainly be looking for improvement on the pitch next season to justify their substantial investment, though they might need to again stump up some cash to strengthen the squad, if they want to have a realistic chance of promotion.

 

 

Comments

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

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day income is

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 depl