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Guru questions Burnley's financial model

Burnley’s game against Sheffield United this evening is being shown on terrestrial television and if the Clarets win they will be promoted to the top flight.

This would be the second promotion under American Alan Pace’s reign, which began with a leveraged takeover like that of the Glazer family, who saddled Manchester United with debt when they bought the club in 2005.

ALK took out a substantial loan from MSD Holdings while also using the club’s own money in the bank to fund the £170million deal to buy Burnley. The club’s most recent accounts from 2023 show bank loans of £70million. Burnley also owe other clubs up to £65million in transfer fees or bonuses. Failure to win promotion this year would put pressure on the club because parachute payments for teams that are immediately relegated last for two seasons rather than three.

“My big issue with Burnley is that they do have substantial debt,” Kieran Maguire, the football finance guru, said. “It is dependent upon either Premier League broadcast revenues and parachute payments to service that debt and once those disappear, then you sort of have to have, well not necessarily a ‘fire sale’ of players, but you have to use player trading as a means of generating money.”

Do not expect much of a splurge next season then if Burnley go up.  “If we look at their spending in the Premier League, it was never big and last season I think it was fairly modest,” Maguire said. “The model appears to be get promoted, and they have a sort of a semi-airshot would be my description in terms of survival.”

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