Zurich and Burnley are very different places, but the Swiss Ramble is able to run the rule over the Clarets. He has to rely on last year’s accounts, but as Burnley are heading back to the Championship they are relevant.
Burnley’s revenue will have been significantly higher last
season after promotion, mainly due to the far more lucrative TV money in the
Premier League. Whenever Burnley are in
the Premier League, they face a huge revenue challenge, so it’s very much a
case of role reversal compared to the Championship.
The magnitude of the financial disparity was clearly
illustrated in 2023/24, when their £134m revenue was the second lowest in the
Premier League, only ahead of Luton Town.
This was miles below the elite, e.g. the “Big Six” clubs all earned more
than three times as much as Burnley, led by Manchester City £715m.
Looking at the previous time they went up, their revenue
more than doubled from £65m to £134m, mainly due to the much higher TV rights.
Life has certainly been a rollercoaster for Burnley fans
since Alan Pace took over the club in December 2020, when his company ALK
Capital purchased an 84% majority shareholding.
This represented a change in approach for Burnley, as the
new owners put in very little of their own money, instead making the
acquisition via a leveraged buy-out, placing debt on the club for the first
time in many years and using the club’s own cash reserves.
A yo-yo club
In this period, Burnley have become a classic “yo-yo” club,
with the last five seasons featuring three relegations and two promotions,
which is not exactly the “exciting journey” promised by Pace on his arrival.
This is in stark contrast to the stability the club
previously enjoyed, which featured six consecutive seasons in the Premier
League, including a notable 7th place finish under Sean Dyche in 2017/18.
Burnley have lost money three seasons in a row, adding up to
£94m, which is a major change from the club’s traditional sustainable model.
The losses have been consistent at around £30m per annum.
Following relegation to the Championship, Burnley’s pre-tax
loss only slightly increased from £28.4m to £29.2m, despite revenue almost
halving from £133.6m to £71.7m, mainly because of a steep increase in profit on
player sales from £15.1m to £59.0m. Burnley
had the highest profit from player sales in the Championship in 2024/25, ahead
of Sunderland £46m (also benefiting from a July year-end), Hull City £33m,
Middlesbrough £26m, Sheffield United £25m and Leeds United £25m.
The main driver of Burnley’s £62m revenue reduction was
broadcasting, which was 50% lower in the Championship, falling from £111m to
£55m. Commercial income was also significantly lower, down £6.7m (47%) from
£14.1m to £7.4m, but match day actually slightly increased from £8.9m to £9.1m.
Burnley’s £29m loss before tax was the third worst financial
performance in the Championship in 2024/25, only better than Leeds United £49m
and Cardiff City £35m. In fairness, it is absolutely normal for clubs to lose
money in this ultra-competitive division, as shown by no fewer than 17 clubs
posting a loss of more than £10m.
As always, Burnley’s average attendance was lower in the
Championship, falling 6% from 21,153 to 19,876.
Burnley’s 19,876 average attendance was in the bottom half of the
Championship in 2024/25, far below Sunderland 41,158, Leeds United 36,134,
Derby County 29,018 and Sheffield United 28,087.
Wages and debt
Burnley’s wage bill fell £11m (12%) from £93m to £82m, which
was to be expected, based on relegation clauses in player contracts, as well as
recruiting players on Championship salaries.
That said, the reduction was smaller than most would have anticipated,
though 2024/25 would have included a sizeable promotion bonus, which the Swiss
Ramble estimates as £18m, while there was no survival bonus in the previous
season.
However, this was also the case in the previous promotion
season in 2022/23, when wages were only £58m, so these have shot up £24m (43%)
in just two years on a like-for-like basis.
This was partly explained by the number of players, managerial and
training staff rising from 189 to 222 in this period. Burnley’s £82m wage bill was second highest
in the Championship, sandwiched between Leeds United £103m and Sunderland £54m,
the other two promoted clubs.
Burnley’s gross financial debt further increased by £30m
from £112m to £142m, comprising £105m bank loans and £37m factored debts
(secured on outstanding transfer fees).
Having been debt-free for many years under the former owners, in
December 2020 Burnley took out a £65m loan with MSD, Michael Dell’s investment
firm, “following transactions linked to the acquisition of the club”, i.e. so
the acquisition was akin to a leveraged buy-out.
This debt has since been refinanced, but the amount owed has
continued to rise, so now stands at a big new club record. Adding together gross £142m financial debt
and £95m transfer payables, Burnley’s total debt is now up to £237m, i.e. not
far off a quarter of a billion Pounds, which is a big number by almost anyone’s
standards.
Burnley’s auditors have noted a “material uncertainty”
around the club’s ability to continue as a going concern if player sales and
receipts from the group are materially less than forecast. This is not ideal, though it is the third
year in a row that the auditors have included this warning, while many clubs
include such a comment in their accounts without ending up in administration.
Since the arrival of the current ownership, much has changed
at Burnley. This was a club that regularly punched above its weight while
carrying no debt , but it has picked up the unwelcome tag of a “yo-yo” club
that now has a highly leveraged balance sheet.
Given the limited financial resources, the business model
relies on the club bouncing back to the Premier League, but there is no
guarantee that this will continue, even with the substantial competitive
advantage provided by parachute payments.
Burnley’s prospects will partly depend on this summer’s
recruitment, though this has been pretty poor over the last couple of seasons,
while there are still question marks over who will be in charge, as the club is
still searching for a permanent replacement for Scott Parker. Financially, the club has lost significant
sums in the last three seasons, which would have been even higher without
making significant player sales, necessitating a steep increase in debt (and
interest charges).
Fundamentally, Burnley looks like a club that should be re-capitalised, though the owners have shown little desire to make an equity injection to date.
Turf Moor is one of the few grounds where I have watched games in both the home and away ends as I have a friend who is a keen fan. It's an authentic setting, but one wonders what the future is for a club that has a limited and not especially prosperous catchment area.
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