Bournemouth beat the odds

It’s strange to think that as recently as 2008/09 Bournemouth finished a lowly 21st in League Two after they were deducted 17 points for leaving administration without a Company Voluntary Agreement.

However, these days the trend is very much their friend, as the club has steadily improved since then. In fact, they have spent no fewer than eight of the last ten years in England’s top flight, including the most recent three seasons after they were promoted from the Championship in 2021/22.

Much of the recent improvement can be attributed to owner Bill Foley, who bought Maxim Demin’s 100% stake in Bournemouth via his Black Knight group in December 2022 to end the Russian’s 11 years tenure.

Foley has plenty of experience in running a sports club, as he also owns the Vegas Golden Knights, a successful NHL franchise. Various figures have been given for the purchase price, but the most commonly reported is £120-125m.

The American billionaire certainly has big plans, “I want Bournemouth to play in Europe – that’s our goal. It’s not going to be easy, but I’m confident we can get there. Brighton are a great inspiration; they do a terrific job. I certainly think we can be in Europe within five years.”

Bournemouth swung from a £44m pre-tax profit to a £66m loss in 2023/24, a significant deterioration of £110m in the bottom line, mainly because the previous year benefited from an exceptional £71m gain after the write-off of shareholder loans.

Revenue rose £20m (14%) from £141m to a club record £161m, while other operating income more than quadrupled from £2m to £9m, though profit from player sales dropped from £2m to just £251k.

However, this was more than offset by steep growth in operating expenses, which shot up £62m (37%) from £164m to £226m. in addition, net interest payable increased by a third from £7.6m to £10.3m.

The main driver of Bournemouth’s revenue growth was broadcasting, which rose £13m (10%) from £123m to £136m. There was also a significant increase in commercial, which was up £6m (48%) from £13m to £19m, while match day improved by £1.1m (21%) from £5.4m to £6.5m.  All three revenue streams set new highs for the club.  TV money is incredibly important to Bournemouth, contributing 84% of their total revenue last season. Only one other club in the Premier League was more reliant on broadcasting income last season, namely Luton Town.

Bournemouth’s £66m pre-tax loss was the third worst in the Premier League last season, only better than Manchester United £131m and Aston Villa £86m.  Bournemouth have now posted losses in five of the last seven years – and this would have been six years without the £71m loan write-off in 2022/23.  If that were excluded, their aggregate loss in this period would be a hefty £235m.

Of course, Bournemouth’s financials would have been a lot better if they had sold some of their exciting players, but they preferred to retain their talent, as this gave them a better chance of doing well in the Premier League.

Player sales

As a result, profit from player sales was only £0.3m, i.e. even lower than the previous season’s £1.9m. Unsurprisingly, this was the smallest gain in the Premier League, far below the likes of Chelsea £152m, Manchester City £139m, Brighton £110m and Nottingham Forest £101m.

However, this season’s figures will be much better, thanks to the sale of Dominic Solanke to Tottenham. The club said that sales proceeds were £57m with an accounting profit of £35m.

In addition, centre-half Dean Huijsen will move to Real Madrid at the end of the season, after the Spanish giants activated his £50m release clause. This represents a tidy profit, as Bournemouth bought him from Juventus for £12.5m just a year before.

This is almost certainly a sign of things to come, as the club has adopted a policy of investing in young talent with a view of selling at a profit, similar to Brighton’s business model.

Foley understands the realities for a club in Bournemouth’s position, “You can’t fall in love with players. You’ve got to sell them, and you’ve got to make some money.”

Bournemouth’s crowds are incredibly small for the top flight, where no fewer than seven clubs enjoy attendances over 50,000, led by Manchester United with nearly 74,000.  Bournemouth’s low match day income is due to the limited capacity of Dean Court (aka the Vitality), which is the smallest stadium in the Premier League at just 11,307.

The club is planning a new or expanded stadium with an initial capacity of 20,000, possibly rising to 23,000 at a later stage. The club said that they would increase hospitality and premium seating, but would also look to “take care of some of the 15,000 people” on the waiting list.   It has been estimated that the cost of the redevelopment may come to £120m, including the new training ground.

Bournemouth’s wage bill significantly increased by £36m (36%) from £100m to £136m, which was a big new high for the club, overtaking the previous £111m peak in 2018/19.  This means that wages have more than doubled since promotion, rising from £61m. The growth would have been even higher without hefty promotion bonus payments being paid in the most recent Championship season.

However, even after this growth, Bournemouth’s £136m wage bill was firmly in the bottom half or the Premier League, only above the three relegated clubs (no survival bonus), Brentford and Crystal Palace.

Bournemouth spent £141m on player purchases in 2023/24, a new record, which the club described as part of “a strategy of targeted expenditure of playing squad assets”.  Bournemouth have had gross spend of £271m in the last two seasons, which is very high by the club’s standards. As they only had £5m sales, their net spend was a hefty £266m.

Bournemouth have continued to spend this season with an outlay of around £60m, as they broke the club transfer record to sign Evanilson from Porto for a fee of up to £40m.

Bournemouth’s gross financial debt reduced by £13m from £136m to £123m, comprising a £90m loan from the owners, Black Knight Football Club Ltd, plus £33m external loans, mainly to fund the training ground development.  Bournemouth’s relatively high debt has not really been an issue, as the vast majority is owed to the owner, who has provided the loans interest-free.

In the last decade most of Bournemouth’s £310m available cash has come from the owner’s pockets, split between Foley and Demin.  The majority was spent on player recruitment with £240m (net), while another £45m was invested in infrastructure with £20m used to cover operating losses.  In the last decade most of Bournemouth’s £310m available cash has come from the owner’s pockets, split between Foley and Demin.  Foley has provided Bournemouth with £177m of funding since his arrival, including £99m in 2023/24 and £53m since then.

So the club has greatly benefited from support from the new owner, though Foley suggested that he should not be considered as some kind of blank cheque, “We are not a sovereign wealth fund and we don’t have that kind of backing, so we have to do it differently.”

Multi-club model

Foley is also determined to pursue a multi-club ownership model, “It’s really to control our destiny; to develop players in other locations and buy clubs that have great academies that are developing their own players.”  The group currently has minority stakes in Ligue 1 club Lorient and Scottish Premiership club Hibernian, while it was granted a licence to set up new A-League expansion club Auckland FC in New Zealand. It is also looking to finalise the acquisition of a stake in Portuguese club, Moreirense.   In addition, it has announced strategic partnerships with Japanese club Kyoto Sanga and Orlando City in the United States.

Bournemouth should be applauded for their tremendous improvement since Bill Foley bought the club. Not only have the Cherries achieved their objective of securing Premier League status, but they very nearly qualified for Europe last season.   This is particularly impressive, given the club’s relatively low budget, which is linked to the smallest stadium in the top flight.

It won’t be easy for Bournemouth to continue to beat the odds, but it will be fun watching them try, especially if they manage to keep hold of Iraola.