Sheffield United ran up a loss of £13.6m in the year to June 2011, a period which saw them relegated from the Championship to League 1, further blunting their earning potential. It has been a miserable period for the one time Premiership club which has admitted that mistakes have been made.
Sheffield United ran up a loss of £13.6m in the year to June 2011, a period which saw them relegated from the Championship to League 1, further blunting their earning potential. It has been a miserable period for the one time Premiership club which has admitted that mistakes have been made.
Net debt stands at a worrying £32m which is approximately twice annual turnover. Kevin McCabe and his family have provided sufficient working capital to ensure that the club can see out the season. Bank debt has been reduced by the disposal of an interest in the Copthorne Hotel, which contributed to a reduction in debt from an even higher figure of £57m, although there is an option to buy back later if the financial position improves.
Turnover fell by £4.3m to £16.2m as relegation loomed. Operating costs which include player wages were cut by £4.1m to £18.2m and doubtless have been cut further since then.
In many ways a relegation from the Championship to League 1 can be more painful than one from the Premiership to the Championship as the example of a number of top flight clubs shows. Manchester City, Southamption and Leeds United all eventually escaped and Charlton Athletic hope to do so. All these clubs have seen changes of ownership. For an excellent in depth analysis of the case of Charlton which has wider applicability go here.
Attendances fell last season as performances on the pitch deteriorated contributing £0.7m to the loss in revenues. However, an average attendance of 20,362 is still a substantial one in those circumstances and shows the strength of the club in terms of its fan base.
Indeed, the two Sheffield clubs currently having the highest average attendances in League 1: Wednesday with 18,655 and United fractionally behind at 18,446, a fall of under 10 per cent after relegation. Top team Charlton are in third place with 16,417 and media heroes Huddersfield are fourth withn 13,008.
There has been some analysis in the wake of these figures comparing Sheffield United with Manchester United, but a more general question is why both steel city clubs are punching below their weight in League 1, an issue to which we shall return in a later article.