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Burnley’s 2018/19 financial results covered a season when they finished 15th in the Premier League, securing a fourth consecutive season in the top flight, and competed in Europe for the first time in over 50 years. Some thoughts follow #BurnleyFC
#BurnleyFC profit before tax dropped from a club record £45m to £5m, mainly because profit on player sales fell £24m from £31m to £7m, though revenue was also slightly lower at £138m and expenses increased £15m. Profit after tax was down from £37m to £4m.
#BurnleyFC £1m (1%) revenue fall was very largely driven by broadcasting’s £7m (5%) decrease from £122m to £115m, due to lower prize money for finishing 15th (against 7th prior year). In contrast, commercial rose £4.6m (39%) to £16.5m and match day was up £0.7m (13%) to £6.3m.
#BurnleyFC wage bill rose by £5m (6%) from £82m to £87m, while there was a significant increase in player amortisation, up £10m (35%) from £28m to £38m. Other expenses and depreciation were flat at £15m and £2m respectively.
Despite the decrease, #BurnleyFC pre-tax profit of £5m is still highly creditable, given that half of the clubs in the Premier League lost money, including two with deficits above £100m, namely #EFC and #CFC.
#BurnleyFC profit is all the more impressive, as they only had £7m gains on player sales, mainly Sam Vokes to Stoke City. Prior year profitability boosted considerably by £31m from sales of Andre Gray & Michael Keane. #CFC earned £60m from player trading, followed by #LCFC £58m.
#BurnleyFC have made profits for 3 years in a row, aggregating £77m over that period. In fact, they have been profitable in each of their seasons in the Premier League, including 2010 and 2015. Losses reported in the Championship in 2014 and 2016 were driven by promotion bonuses.
#BurnleyFC have rarely made big money from player sales, though annual average has increased to £13m in last 4 years against £3m in previous 6 years. Only made profits above £10m twice in last decade. This year will include Tom Heaton to #AVFC and Nakhi Wells to Bristol City.
#BurnleyFC EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), considered a proxy for cash operating profit, as it strips out player sales and exceptional items, decreased from £44m to £37m, down from the £50m peak two years ago.
Despite the decrease, #BurnleyFC EBITDA of £37m was actually mid-table in the Premier League, around the same level as #HTAFC £36m and Watford £35m, and not far behind Chelsea £43m. Miles better than the likes of Everton £(15)m, Leicester City £(6)m and Southampton £(4)m.
Even though #BurnleyFC revenue fell slightly to £138m in 2019, it was still £17m more than £121m reported two years ago in their first Premier League season back after promotion. All revenue streams have increased in this period: TV £10.0m, commercial £6.1m and match day £0.5m.
#BurnleyFC £138m revenue is 16th highest in the top flight, only ahead of the 3 relegated clubs and #AFCB. The gap to the Big Six is enormous, as they are £257m below #AFC £395m. As manager Sean Dyche said, “We’re not wealthy in Premier League terms. We’re the minnows of the PL.”
That said, #BurnleyFC £138m revenue is only £16m below the £154m needed for a place in the Deloitte Money League, which ranks clubs worldwide by revenue. If the Clarets had made it to the Europa League group stage, they would have been very close to being in the top 30.
#BurnleyFC TV money from the Premier League fell £12m from £120m to £107m, due to lower merit payment from finishing 15th instead of prior season’s 7th, offset by higher facility fee (1 more game shown live) and overseas TV rights. In last decade received half a billion from PL.
Also #BurnleyFC failed to benefit from their Europa League experience, as they did not manage to qualify for the group stage, so only earned €0.8m. They would have also received some money from BT Sport, though only 2 of their 6 qualifying games were broadcast live.
A massive 83% of #BurnleyFC revenue came from TV (£115m out of £138m), though this is “only” the 5th highest reliance on broadcasting in the Premier League. Furthermore, it should be noted that no fewer than 13 of the 20 clubs in the top flight are above 70%.
#BurnleyFC match day revenue increased by £0.7m (13%) to £6.3m, thanks to the 3 additional Europa League games, though offset by a slight reduction in attendances. Despite the growth, this remains the third lowest income in the Premier League, only ahead of #AFCB and #HTAFC.
#BurnleyFC average attendance fell slightly from 20,688 to 20,534, but this still represents an increase of almost 4,000 compared to the last season in the Championship.
#BurnleyFC attendance of 20,534 is third lowest in the Premier League, only ahead of Watford and Bournemouth. Ticket prices have been frozen for seven consecutive years since the Championship season of 2013/14.
#BurnleyFC commercial revenue surged £4.6m (39%) from £11.9m to £16.5m, comprising other commercial £12.1m, catering £2.6m and retail £1.8m. Growth due to new sponsorships and European qualification. Now up to 15th in the Premier League in terms of commercial income.
In 2018/19 #BurnleyFC had LaBa360 as new shirt sponsor (£5m a year) plus AstroPay as sleeve sponsor. From this season, both deals replaced by LoveBet, reportedly worth £7.5m. Also a new 3-year kit deal with Umbro, replacing Puma who have been club supplier since 2010.
#BurnleyFC wage bill rose £5m (6%) from £82m to £87m, though underlying growth was probably higher, as prior year included bonuses for 7th place finish. In the last 2 years, wages have grown £25m (42%), partly due to staff increasing by 60, mainly recruitment and scouting.
#BurnleyFC £87m wage bill was 17th in the Premier League, only ahead of Watford, #HTAFC and Cardiff City. However, this is actually the highest the club has been ranked in the PL in the last 3 years (2016/17 – 20th, 2017/18 – 18th). For context, around a quarter of #MUFC £332m.
#BurnleyFC wages to turnover ratio increased from 59% to 63%, which is still perfectly reasonable (sandwiched between #CFC 64% and #MCFC 59%) and a long way below UEFA’s recommended upper limit of 70%. That said, much higher than 51% in 2017 and (especially) 37% in 2015.
None of #BurnleyFC directors received remuneration for 2018/19 (or previous year). This is in stark contrast to other clubs, notably #THFC and #MUFC, where Daniel Levy and Ed Woodward trousered £7m and £3.2m respectively.
#BurnleyFC player amortisation, the annual charge to write-down transfer fees over the life of a player’s contract, shot up by a third (£10m) from £28m to £38m, which is significantly higher than £5m in 2014/15 Premier League, as the club has ramped up its transfer spend.
Even after this steep increase, #BurnleyFC player amortisation of £38m is still firmly in the bottom half of the Premier League, around the same level as #AFCB. For some perspective, it is less than a quarter of big-spending #CFC £168m.
#BurnleyFC made £33m player purchases, including Ben Gibson (for a £15m club record fee), Matej Vydra and Joe Hart. This was less than previous season’s £44m, but Clarets have spent £119m in last 3 years. Only two Premier League clubs spent less in 2018/19, though one was #THFC.
#BurnleyFC have significantly increased gross spend since promotion to the Premier League with an annual average of £38m, compared to £12m in preceding 2 years and just £5m in 5 years before that. Less spent in 2019/20 on Brownhill, Rodriguez, Peacock-Farrell and Pieters.
#BurnleyFC are completely debt-free, having used Premier League cash to repay directors’ loans and external loans. In fact, the club has £42m net funds, which is testament to their sound financial management.
#BurnleyFC are in the best debt situation in the Premier League with 9 clubs owing more than £100m, led by #THFC £658m and #MUFC £511m. Chairman Mike Garlick: “We continue to see many examples elsewhere of spiraling debt crippling clubs to the extent that payments are not met.”
#BurnleyFC only paid £2k interest (on finance leases), which gives them a competitive advantage against a number of their rivals who have to pay interest on their loans, e.g. Watford £6.2m.
#BurnleyFC do owe £22m in transfer fees, but are owed £14m by other clubs, so the net debt is only £8m. As Garlick explained, “player sales are typically only paid over 3 years.” They also have £7m additional transfer fees that may become payable if certain conditions achieved.
#BurnleyFC generated an impressive £34m cash from operations in 2018/19, spending £13m on players (net), £6m on infrastructure and £8m on tax, with the remaining £7m simply increasing the cash balance.
As a consequence, #BurnleyFC cash rose from £35m to £42m, which is actually the 6th highest in the Premier League. #MUFC £308m are out of sight, followed by #AFC £167m, #MCFC £130m, #THFC £123m and Southampton £47m. This should be a good buffer in the current shutdown.
Unlike many clubs, #BurnleyFC pay their own way. In the last decade they generated £185m from operations, including £140m in last 3 years. Most went on players £86m, while £28m was invested in infrastructure (mainly training ground), £16m interest/loan payments and £16m tax.
It is worth noting that tax payment. In fact, in the last two years only one club (#THFC £34m) has paid more corporation tax to HMRC than #BurnleyFC £14m. Of course, all football clubs pay a lot of tax via PAYE on salaries and VAT on (domestic) transfers.
Garlick worried some fans when he suggested #BurnleyFC might lose £50m from COVID-19 if the season is voided, though he has since clarified that this is “the absolutely worst case scenario. We are not going to go bust, but it is not going to be easy.” No plans to furlough staff.
Apart from the issues caused by the pandemic, #BurnleyFC are in good shape. Arguably, they are the best run club in the Premier League, not only surviving (and being competitive) despite the financial challenges, but also maintaining a sustainable business model with no debt.
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