The Swiss Ramble reviews West Bromwich Albion’s finances as they face the threat of a points deduction that could seem them relegated. It remains unclear whether there will be a points deduction or if it will be applied this season given the complications that could then arise for the competition as a whole. If they do go down, this would be only the second time in their history that West Brom had been in England’s third tier.
The club has spent many seasons in the Premier League with
their most recent relegation taking place in 2020/21. Since then, they have
finished between 5th and 10th in the Championship, getting close to promotion
in 2023/24, when they reached the play-offs.
This underlines the extent of the decline this season, so the threat of
a points deduction could not have come at a worse time.
Ownership change
It wasn’t meant to be this way after the club was acquired
in February 2024 by Bilkul Football WBA, a company ultimately owned by
Florida-based entrepreneur Shilen Patel and his father Dr Kiran C. Patel.
They originally purchased an 87.8% shareholding in West
Bromwich Albion Group Limited, the parent company of West Bromwich Albion
Football Club, though this increased to 93.9% after the capitalisation of some
of their loans.
Albion had been in decline ever since the club was sold to a
Chinese consortium in August 2016, buying out former owner Jeremy Peace’s
stake. Controlling shareholder Guochuan Lai’s ownership turned out to be fairly
disastrous for the club, culminating in numerous financial issues following
years of no investment, including growing high-interest debt and serious cash
flow concerns.
West Brom have also had to face the specific challenge of
coping without parachute payments in the last couple of seasons.
Following the most recent relegation from the Premier
League, they received £44m in 2021/22, followed by £36m the following season.
They only received two years of parachute payments instead of the full three
years, as they were relegated after just one season in the top flight.
This was a major factor in West Brom’s record deficit in
2023/24, which in turn has led to the club’s PSR issues. In attempting to meet this challenge, they
have had to sell players that could have helped them perform better this
season, in order to reduce the risk of a points deduction. As a consequence, West Brom’s £9m net sales
were among the highest in the Championship this season.
In fairness to West Brom, they have not exactly been sitting
on their hands when it comes to confronting their PSR issues, as the pre-tax
loss halved from £37.6m to £18.8m, including an increase in profit on player
sales from £3.5m to £9.2m.
Revenue rose £2.2m (8%) from £28.2m to £30.4m, while
operating expenses were cut £4.3m (6%) from £67.0m to £62.7m, though net
interest payable was up £0.6m (21%) from £2.9m to £3.5m.
West Brom have now lost money in six of the last eight
seasons, including the hefty £37.6m loss in 2023/24, which is the club’s worst
ever result.
Revenue
West Brom’s revenue is obviously significantly lower than
when they were playing in the Premier League, so it has dropped by£108m from
the £138m peak in 2016/17, almost entirely due to much smaller central TV
distributions. However, it has also
more than halved since the first season after relegation, falling £35m from
£65m to £30m.
Albion’s £6.8m match day income is now in the bottom half of
the Championship, far below Leeds United £31.6m, with the next highest being
Sunderland £13.3m, Sheffield United £13.1m and Coventry City £12.2m. West Brom’s average attendance increased for
the third year in a row, rising from 24,049 to 24,984, In fact, crowds approached the 25,000 that
they regularly achieved in the Premier League.
Albion’s £10.8m commercial revenue is towards the upper end
of the Championship, albeit a fair way below Bristol City £19.6m, Stoke City
£17.8m and Norwich City £16.7m. Leeds United were in a class of their own with
£58m, a record for this division.
Wages
West Brom’s wage bill was cut £5.8m (14%) from £42.9m to
£37.1m, due to what the club described as “changes in the men’s first team
playing squad and senior leadership staff”, i.e. the exit of some high earners
on free transfers and loans. Even after
the improvement, Albion’s 122% wages to turnover ratio was still one of the
worst in the Championship last season, though more than half of the clubs in
this very competitive division operate with unsustainable ratios well above
100%,
West Brom spent £10.5m on player purchases in 2024/25, which
was their highest outlay since relegation. Net spend was just £1.2m, but this
was the first time they had not had net sales since relegation.
The Siss Ramble concludes: ‘The change in ownership brought
some hope to West Brom fans, as it ended Guochuan Lai’s miserable tenure that
had threatened financial calamity. Since
then, the new owners have done some good things, including sorting out the
messy loan position and providing substantial funding. They have also managed
to increase revenue, while significantly reducing the size of the loss.
In addition, they have also clearly worked hard to address
the PSR challenge that they inherited, so it would be particularly galling if
they do end up with a points deduction.
It’s bad enough for a club like West Brom, Premier League
stalwarts for many years, to find itself at the wrong end of the Championship
table, but relegation would be unthinkable – and would have some serious
financial consequences. They could do
without the uncertainty surrounding the outcome of the PSR charges, as indeed
could the other clubs fighting to stay up.’
Comments
Post a Comment