Bristol City chairman Steve Lansdown has admitted that the club’s current balance sheet is ‘a mess’ after the club reported losses of £11.8m in the year ended 31 May 2010, almost double the record shortfall of £6.6m recorded a year earlier.
Bristol City chairman Steve Lansdown has admitted that the club’s current balance sheet is ‘a mess’ after the club reported losses of £11.8m in the year ended 31 May 2010, almost double the record shortfall of £6.6m recorded a year earlier.
It is a concern if a Championship club like Bristol City, the highest placed club in a major city, reports spiralling losses. Admittedly, there were special factors such as the cost of developing the training ground at Failand and the new stadium project at Ashton Vale which run up costs of just under £2m.
However, the biggest factor in the loss is the familiar story of an inability to keep players’ wage under control. Staff costs were up by over a third from £10.2m to £13.8m. A lot of this was down to bringing in expensive players on loan, although there was also the need to reach a settlement with former manager Gary Johnson who resigned in March. City also lost £2.1m on player trading.
Revenue from gate receipts fell and turnover was down from £11.6m to £11.2m. The team did not play well in the middle part of the season which hit gate revenue, while season ticket sales were also down on the previous year (this could be a recession effect although Bristol has been hit less hard than some places).
Another factor has been the failure to progress the stadium project which has encountered local opposition. The financial model was based on drawing on facilities in place for the stadium funding. The project is now about a year behind its original timetable. One is sometimes left wondering whether a move to a new stadium is a good idea for other than the very top clubs.
The auditors have qualified the accounts by stating that there is a ‘material uncertainty which may cast significant doubt on the group’s ability to continue as a going concern.’ In everyday language, this means that the club could go bust. However, the majority of the debt is owed to Lansdown and he has made it clear that he will continue to bankroll the club, although costs need to be cut to give it a more sustainable business model.