In many ways Charlton Athletic are typical of many Championship football clubs whose financial problems for at least five years could be solved by just one year in the Premier League. In the meantime, the club continues to make substantial losses of over £7m a year. It is difficult to see how this can be sustained, given that owner Roland Duchatelet thinks that clubs should move to a break even position.
In many ways Charlton Athletic are typical of many Championship football clubs whose financial problems for at least five years could be solved by just one year in the Premier League. In the meantime, the club continues to make substantial losses of over £7m a year. It is difficult to see how this can be sustained, given that owner Roland Duchatelet thinks that clubs should move to a break even position.
Last week 400 Charlton fans attended a protest meeting in Woolwich to express concern about the apparent strategy of the Belgian owner, and in particular his reliance on players drawn from a network of clubs he owns across Europe, of which the best known is Standard Liege. Fans were concerned that he had underestimated the standard of the Championship which is arguably the best second tier league in Europe.
Turnover increased from £11.9m to £12.7m. This was down to an increase in Premier League ‘solidarity’ payments and matchday revenue £0.7m higher than the previous season, explained entirely by a FA Cup run to the Sixth Round. Indeed without the additional Cup revenues, matchday revenue would understandably have been down (given lower average attendances).
Commercial income was moderately higher at £1.5m as the result of ‘new sponsorship and preferred supplier contracts’.
The club made an operating loss (before transfers) of £7.2m (2013 : £7.4m) – profit from the disposal of players (which is not the same as ‘transfer fees received’) was again £1.7m, the same as the prior year.
Staff costs were down slightly at £11.5m (2013 : £12.0m), of which £10.4m was wages/salaries – moreover this includes £0.3m of ‘severance costs’ relating to former employees, the club having settled a number of cases before (or at the doors of) an employment tribunal. Once severance costs are added back, this implies staff costs equal to 88 per cent of turnover. This is dangerously above the 50 per cent level recommended by Deloitte.
A rough and ready calculation would suggest that 75 per cent of staff costs are accounted for by the first-team squad (say 25 players) and a further say five key coaching staff – on this basis it implies these 30 key playing staff earn an average of £5k per week, which seems about right for a Championship club with no legacy Premier League ‘overhang’.
The editor of the Voice of the Valley fanzine, Rick Everitt, commented: ‘The size of [the club’s] debts continues to grow apace and the extreme unlikelihood that this can be addressed by anything other than an eventual return to the Premier League. Some £28m was owed to Duchâtelet’s Staprix NV by June 2014, against £15m to the former owners’ British Virgin Island company a year earlier. This financial hole is going to get deeper and deeper, especially if the additional revenue paid to all Championship clubs as a result of the new Premier League TV deal and amended Financial Fair Play rules simply inflates player wages.’