The costs of relegation are made clear by the £4m loss reported by Burnley after their first full year back in the Championship. In the year in the Premiership the club made a profit of £14.4m. Revenues fell 40 per cent from £45.4m to £27.4m
The costs of relegation are made clear by the £4m loss reported by Burnley after their first full year back in the Championship. In the year in the Premiership the club made a profit of £14.4m. Revenues fell 40 per cent from £45.4m to £27.4m
It is sometimes said that a year in the top flight will set up a club for the ten years, but these results reveal some of the downside, including an overhang of high wage payments which are not sustainable on crowds of around 13,000. Some clubs can maintain higher attendances after relegation, but the Clarets have always punched above their weight in a limited catchment area.
Staff costs have doubled at the club since 2008 with wages only falling by 13 per cent last season. The total wage bill for 169 staff, of whom 95 were directly pitch related, was little short of £20m at £19.4m. This dwarfs the £380,000 set aside to improve facilities at Turf Moor and the Gawthorpe training ground.
£23.3m of revenue came from gate money, television rights and ‘parachute’ payments from the Premier League. Commercial and shop sales combined fell by around £1m to £2.6m.
Cash flow was boosted by taking a £4.4m loan from club director John Nanaszkiewicz for £4.4m. Interest of this amounted to £292,000 which amounts to some 6.6 per cent, not extortionate given the rate of inflation and what would be charged for commercial loans, but not a free good either. In the medium term the club hopes to eliminate all borrowings on which interest of £907,000 was paid.
Fans are asking ‘where has the money gone?’ They are concerned that as parachute payments run out, the squad will be reduced in size and quality until it is no longer even able to compete at Championship level.