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Charlton's board have had to dig deep into their pockets after the South-East London club was hit hard by relegation from the Premiership. Turnover to June 2007 recorded a fall from £41.9m to £35.9m due principally to the reduction in the Premiership merit award scheme, lower matchday revenues and a reduction in cup revenues when compared with the previous year. 19th place in the Premiership resulted in a 75 per cent merit award reduction, demonstrating that the financial effects of a poor season and relegation are felt in that season as well as those that follow. Overall receipts from Premiership broadcast contracts and other central arrangements fell by 14 per cent. Season ticket sales fell by eight per cent, but this was offset by improved match-by-match sales so that combined revenues fell five per cent. However, utilisation of stadium capacity remained at 96 per cent. Matchday commercial operations were broadly flat, but lack of success in domestic cup competitions meant that revenues fell by more than £1.5m. Disappointing performance in the pitch was reflected in a six per cent fall in retail sales. Player wages rose by seven-and-a-half per cent on a like-for-like basis.
With an operating loss of £9.1m compared with £8m the previous year, the club found itself under financial pressure. As is so often the case, non-playing staff were the first to take the hit and 42 left many of whom, chief executive Peter Varneu admitted, 'had been familiar faces at The Valley for many years.' Pressure was placed on working capital so the directors had to provide loan facilities, of which £9m has been drawn down. In his report chairman Richard Murray points to the potential of the club's catchment area with large-scale housing development planned for the Thames Gateway. Given that it is surprising that, despite the club appointing Seymour Pierce to advise them on new investment or a takeover, no candidate appears to have come forward.
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