Can Eagles soar even higher?

Crystak Palace’s consistency is fairly remarkable, especially for a club with relatively limited resources, as they have finished between 10th and 15th eleven years in a row following their promotion to the Premier League in 2012/13.

This is even more impressive, given that the club has emerged from some dark days financially, as was noted by chairman Steve Parish, “This club’s been in administration twice (in 1999 and 2010) – that’s an overriding concern, always. We need to make sure the club will be OK.”

Palace’s pre-tax loss widened from £28m to £33m in 2023/24, despite revenue rising £10m (6%) from £180m to a new club high of £190m, though this was wiped out by operating expenses also increasing £11m (5%) from £200m to £211m, while net interest payable was up £6m (70%) from £8m to £14m. 

Low profits from player sales

Profit from player sales remained very low, only rising slightly from £0.3m to £1.3m.  They could have improved their bottom line with more player sales, but opted to retain their talent instead of cashing in, as the Palace hierarchy believes that this increases the club’s chances of surviving in the Premier League.

Indeed, looking at the last five years, Palace’s £12m profit from player sales is the lowest in the Premier League, even below newly promoted Luton Town £18m. For some perspective, four clubs generated more than £200m in this period, namely Chelsea £509m, Manchester City £437m, Brighton £300m and Everton £217m.   The club expects a net profit at the end of the current campaign, thanks to a couple of profitable player sales.

Palace finally cashed in on one of their young talents his season, selling Michael Olise to Bayern Munich in a big money deal. This was backed up by the sales of Joachim Andersen to Fulham, Sam Johnstone to Wolves and Jordan Ayew to Leicester City.   The authoritatives Swiss Rambl eckons this should produce a substantial profit from player sales of around £80m.

All three revenue streams were higher in 2023/24, setting new club records in the process.  Broadcasting rose £4m (3%) from £141m to £145m, while commercial increased £4m (16%) from £27m to £31m and match day was up £1.5m (12%) from £12.3m to £13.8m.

Palace’s £33m pre-tax loss was firmly in the bottom half of the Premier League with only five clubs doing worse last season, though three of these lost more than twice as much as the Eagles, namely Manchester United £131m, Aston Villa £86m and Bournemouth £66m.

Palace set a new club record for revenue for the third year in succession, so their £190m was £35m (22%) more than the pre-pandemic peak of £155m in 2018/19. In fact, this is now more than twice as much as the £90m revenue in 2013/14, which was their first season back in the top flight after promotion from the Championship.  Broadcasting is the most important revenue stream with 76%, followed by commercial 16% and match day just 7%.

Despite this growth, Palace’s £190m revenue is still in the bottom half of the Premier League, with a fairly large £33m gap to tenth placed rivals Brighton £223m.    For some context, they were miles below the Big Six, more than half a billion pounds below Manchester City £715m, while sixth-placed Chelsea earned more than twice as much with £468m.

Nevertheless, Palace’s revenue was enough to secure them 26th place in the Deloitte Money League, which ranks clubs globally. The Eagles have been in the top 30 eight times in the last ten seasons.

Palace were hurt by only being broadcast live on 15 occasions, leading to a relatively low facility fee. As a comparative, the nine clubs above them were shown live between 21 and 31 times.  Perhaps the broadcasters think that North and West London is more fashionable than the south!

Nevertheless, TV money is incredibly important to Palace, contributing 76% 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 impact on player sales profits.

Of course, if Palace do manage to win the FA Cup, they would then qualify for the Europa League, which could be a big money spinner.  For example, the Swiss Ramble  estimates that Manchester United and Tottenham have earned around £25m apiece this season in TV money alone, though both clubs have got as far as the semi-finals (to date), so this is quite high for this competition.

Attendance and the stadium

Palace’s average attendance increased by 5% from 23,493 to 24,561, so crowds have grown by over 7,000 (42%) in the Premier League. That said, it was around 1,000 lower than the 25,455 achieved in 2018/19.   Even after last season’s growth, Palace’s attendance of 24,561 was still towards the lower end of the Premier League, though stadium utilisation was an admirable 97.5%, based on Selhurst Park’s capacity of 25,194.

There has been slow progress on the stadium project, also delayed by COVID, but Parish said that investor funding should bring “the Main Stand project closer to fruition, with construction set to begin ahead of the 2025/26 season”.

The development was originally expected to cost between £75m and £100m, though this has increased to an estimated £200m 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 rose £3m (2%) from £131m to £134m, which was (just) a new high for the club, overtaking the previous £133m peak four 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. As a result, wages have hardly moved at all in the last five years.

Palace’s £134m wage bill was the 16th highest in the Premier League, only above Brentford and the three relegated clubs (whose wages were deflated by the lack of a survival bonus).  As might be expected, they were miles below Big Six, only around a third of Manchester City £413m, Liverpool £386m and Manchester United £365m. More meaningfully, they were also behind the likes of Fulham £155m, Brighton £146m, Wolves £142m and Bournemouth £136m.

Steve Parish’s remuneration at £2,5m was the third highest in the Premier League, albeit much less than Daniel Levy at Tottenham £3.7m and Paul Barber at Brighton £3.2m.

It is fair to say that Palace have lagged behind most clubs in terms of the transfer market.  In the last five years, their £275m gross spend was one of the lowest in the Premier League, only above Burnley, Brentford, Sheffield United and Luton Town, all of whom who spent some of this period in the Championship, where outlays are smaller.

The simple reality is that Palace cannot afford to spend as much as some other clubs, though Parish looks at this somewhat equably, “It’s an advantage sometimes not having as much money, and less expectation of instant success. It means we have to go looking in all sorts of different places. There’s less temptation to say, ‘Let’s spend £50 million and take the short cut.’”

Debt and funding

Palace’s gross debt grew by £27m from £131m to £158m. The amount owed to group undertakings was the main reason for this increase, rising from £38m to £77m. External debt reduced from £93m to £81m, including £32m bank loans, £48m advances from a funding agreement with MGG Investment Group (secured on Premier League TV money) and £1m finance leases.  Since these accounts, the funding agreement has been renewed and extended.

Palace’s owners put £39m cash into the club in 2023/24, on top of £30m in each of the previous two seasons, adding up to £99m. Money is injected via additional share capital into the parent company, Palace Holdco UK Limited, who then provide the football club with loans.

In this way, shareholders have provided “significant investment” of £156m to the parent company in the last three years, including £87.5m in 2021/22, £30m in 2022/23 and £38.7m last season (capital call £37.5m plus £1.2m share issue).

This is a decent wedge, but some Premier League owners have put in even more cash, including five who have provided more than a quarter of a billion Pounds, namely Chelsea £927m, Newcastle United £303m, Fulham £302m, Everton £300m and Aston Villa £272m.

Crystal Palace are run by four general partners: John Textor’s investment means that he is the largest shareholder with 45%, while Josh Harris and David Blitzer each own 18%, and Steve Parish is down to 10%.

This has led to a somewhat awkward partnership, as Parish effectively is the decision-maker, running the club on a day-to-day basis, despite his relatively small stake. Parish has looked to invest in the foundations of the club, such as the Academy and Main Stand, while Textor has been keen to spend money on the squad.

In addition, Parish’s sole focus has been on Palace, while Textor holds significant majority stakes in Olympique Lyonnais in France, Botafogo in Brazil and RWD Molenbeek in Belgium. Blitzer’s portfolio includes investments in Augsburg, ADO Den Haag, SK Beveren, Estoril Praia, AD Alcorcon and Brøndby.

Therefore, it is not an enormous surprise that Textor has engaged investment bankers Raine to find an investor to purchase his 45% stake in Palace, after failing to secure a majority shareholding.

It will be interesting to see how much appeal Textor’s stake holds, as most potential suitors in a football club would like to acquire majority control.  That said, there have been reports of interest from two groups: one is backed by individuals from Saudi Arabia and the USA; the other, Sportsbank, brought together by Keith Harris is looking at investing in Eagle, as opposed to Palace directly.

Some fans will probably feel frustrated at the club’s inability to push on to the next level, but Palace’s achievement in surviving in the Premier League for so long should not be under-stated, especially given their relatively small financial resources.   In fact, outside of the Big Six, only West Ham and Everton have been in England’s top flight longer than Palace - and both clubs have spent a lot more than the Eagles.

it is clear that Palace have demonstrated their ability to punch above their weight on numerous occasions, so FA Cup victory is far from impossible, especially if they can play as well as they did in the semi-final.

Looking further ahead, the club does face a number of challenges:

• Will they be able to keep hold of thrilling young talents like Eberechi Eze, Adam Wharton and Marc Guéhi in the face of offers from bigger clubs?
• Similarly, can they retain the services of the excellent head coach, Oliver Glasner?
• Can they fund the stadium development without endangering the performances of the team?

However, these are nice problems to have, compared to many other clubs.