#BrentfordFC 2018/19 financial results covered a season when they came 11th in the Championship, their 5th consecutive top half finish, a great achievement for a club with such low income, especially as head coach Dean Smith left for #AVFC in October, replaced by Thomas Frank.
#BrentfordFC swung from £4m loss before tax to £24m, very largely due to £14m sale of land to stadium developers & profit on player sales rising by £13m to £27m. Revenue grew £2.6m (21%) to £15.2m, while expenses were £3.5m higher. Profit after tax was £20m due to £4m tax charge. 
All three #BrentfordFC revenue streams grew with broadcasting contributing the largest increase, up £1.6m (23%) to £8.8m, followed by commercial, up £0.7m (30%) to £3.0m, and ticketing income, up £0.3m (10%) to £3.4m. Other operating income (player loans) up £2.3m to £2.7m.
#BrentfordFC cost growth in line with revenue growth. Wage bill increased by £0.9m (5%) to £18.9m, player amortisation rose by £1.0m (18%) to £6.6m and other expenses were up £2.1m (29%) to £9.3m. Net interest receivable was up £0.3m, due to unwinding of discount on transfers.
#BrentfordFC £24m pre-tax profit was actually the best financial result in the Championship, with only 7 clubs making money. In fact, 10 clubs lost more than £20m with those promoted “leading the way”: #WWFC £57m, #FFC £45m and Cardiff £39m (including hefty promotion bonuses).
However, #BrentfordFC profit was inflated by £14m from transfer of land to the developer building club’s new stadium at Lionel Road (sales proceeds £50m less £36m book value). Other clubs had similar impacts from stadium sales, e.g. #DCFC £40m, #SWFC £38m and #AVFC £36m.
Excluding property sales, #BrentfordFC profit down to £11m, but that is still worth second place in the Championship, just behind Bristol City. Only 3 other clubs were profitable. As chairman Cliff Crown said, this is “arguably the most competitive league in world football.”
#BrentfordFC also benefited from the “remarkable achievement” of making £27m from player sales, including Mepham, Woods, Yennaris and Egan. Almost twice as high as club’s £15m revenue and fourth highest in the Championship, behind Bristol City £38m, #Boro £33m and Swansea £30m.
Following promotion from League One, #BrentfordFC losses initially increased in the Championship (£18m in 2015 and £13m in 2016) in order to compete at the higher level, but the club has since adapted well, leading to smaller losses in 2017 and 2018 and a large profit in 2019.
Improvement is due to player trading, which is “especially important” at #BrentfordFC, who have made £69m profit here in the last 4 seasons, due to their ability to “buy low and sell high”. Indeed, excluding player sales and land transfer, the Bees would have lost £17m.
This year will see further gains with around £36m of sales, including Maupay £20m, Konsa £12m and Sawyers £3m. According to Transfermarkt, #BrentfordFC have sold players costing £15m for £118m in the last 5 years (including 2019/20), thereby adding £103m of value.
Rasmus Ankersen, #Brentford FC co-director of football, said, “The key is being able to identify undervalued talent in the market, develop them, and then sell them on for profit, gradually building more value into the squad and gradually increasing the level of the squad.”
There’s no doubt that #BrentfordFC have become the “smooth operators” of the transfer market, though there must be a concern that prices will be depressed by COVID-19, which would have a big impact on the club, as this activity is “fundamental to the business model”.
#BrentfordFC EBITDA (Earnings Before Interest, Depreciation and Amortisation), which strips out player sales and non-cash items to give underlying profitability, has been consistently negative, though did improve from £(12)m to £(10)m in 2019.
In fairness, only four Championship clubs have managed to achieve positive EBITDA in 2018/19, so #BrentfordFC £(10)m is actually 10th best in the division. For some context, nine clubs lost more than £20m on this metric, including #AVFC £54m, #SUFC £31m and Reading £31m.
#BrentfordFC revenue has grown by 44% (£4.6m) in the last three years, rising from £10.6m in 2016 to £15.2m in 2019. The majority of the growth has come from TV (£3.9m) with small £0.3m increases in both ticketing and commercial.
#BrentfordFC financial challenge is highlighted by the fact that their £15m revenue was fourth lowest in the Championship, only above Rotherham £14m, Preston £14m and Wigan £12m. For perspective, this was only around a fifth of WBA and Stoke City (both £71m).
Championship revenue is hugely influenced by Premier League parachute payments with 8 clubs benefiting in 2018/19, led by Stoke, Swansea and WBA £43m; followed by Hull City, #Boro & #HCAFC £35m; QPR £17m & #AVFC £16m. This makes life really difficult for clubs like #BrentfordFC.
Ankersen complained, “The Premier League is a much more even playing field because of the TV deal. In that sense, the Championship is probably the most unfair league in the world. It would be easier to retain Premier League status than to get promoted to the Premier League.”
If parachute payments were excluded, #BrentfordFC would still have the 21st highest revenue in the Championship, though the top club’s revenue would drop from £71m to £49m (Leeds United). That said, this would still be more than three times as much as the Bees’ £15m.
#BrentfordFC TV income rose £1.6m (23%) to £8.8m, including higher PL solidarity payment £4.6m and £2.5m EFL central distribution. The huge amounts received in the top flight (£152m for 1st place, £97m for 20th) help explain why so many Championship clubs splash the cash.
#BrentfordFC ticketing revenue rose £0.3m (10%) to £3.3m, due to one more home game, boosted by a lucrative EFL Cup tie at Arsenal. However, one of the smallest match day incomes in the Championship, only above Rotherham and Wigan, and less than a quarter of #AVFC and #LUFC £13m.
#BrentfordFC attendance increased 6% from 10,581 to 11,265 in 2018/19, which was 3,550 more than when they last played in League One. Significant rise in 2019/20 for final season at Griffin Park. Ticket prices were frozen for 4 seasons, though £10 increase in 2019/20.
Despite the upward trend, #BrentfordFC crowd of 11,265 was still the fourth smallest in the Championship, only ahead of Wigan, Rotherham and Hull City. The top two clubs in terms of attendances (Aston Villa 36,027 and Leeds United 34,033) were more than three times as much.
#BrentfordFC hope to move to a new 17,250 capacity stadium at Lionel Road this summer, though COVID-19 restrictions mean that work has been delayed (recently resumed). Will boost revenue: premium seats up from 60 to 2,900; naming rights; shared with London Irish rugby club.
#BrentfordFC accounts include revaluation of Griffin Park stadium to the amount at which it will be sold to developer once the club has moved to new stadium, producing a £14m uplift (£17m revaluation less £3m tax). This increased £20m post-tax profit to £34m comprehensive income.
#BrentfordFC commercial income rose £0.7m (30%) to £3.0m, fifth lowest in the Championship, miles behind #LUFC £27m and #AVFC £18m. However, CEO Jon Varney said, “We are confident that by the time we have finished our first season at the new stadium, we will be in the top six.”
#BrentfordFC have new major sponsors from 2019/20: LeoVegas were replaced by stadium developer EcoWorld London; they signed a 4-year kit supplier deal with Umbro, who replaced Adidas; and University of West London became sleeve sponsor.
#BrentfordFC wage bill rose £0.9m (5%) from £18.0m (restated) to £18.9m, as headcount increased from 119 to 137, mainly due to work on new stadium. As a consequence, the wages to turnover ratio fell (improved) from 143% to 124%. Wages only up £1.2m since 2015.
Despite the increase, #BrentfordFC £19m wage bill was the 3rd smallest in the division, only above Millwall and Rotherham. No fewer than 11 clubs have wages more than twice as much as the Bees, including #AVFC £83m and Stoke £56m, so they have punched well above their weight.
#BrentfordFC wages to turnover ratio of 124% is far from ideal, but is mid-table in the Championship, despite their low revenue. The harsh realities of competing in this division means that 14 clubs have ratios above 100%, much worse than UEFA’s recommended 70% upper limit.
#BrentfordFC total directors remuneration increased from £98k to £487k, which was 7th highest in the Championship, though a fair way below Reading £1.5m. This included payments to Smartodds, owner Matthew Benham’s company, for director services.
#BrentfordFC player amortisation, the annual charge to write-down transfer fees over the life of a player’s contract, rose £1.0m (18%) to a club record £6.6m. Note: the club did not capitalise and amortise player purchases before promotion to the Championship in 2014.
However, #BrentfordFC player amortisation of £7m was still firmly in the bottom half of the Championship,. For more perspective, it was less than a third of (relatively) big-spending clubs like Stoke City £29m, Swansea City £28m, #Boro £26m, #AVFC £26m and WBA £23m.
#BrentfordFC spent £10m on players, including Ezri Konsa, Julian Jeanvier and Said Benrahma. This was £1m less than prior season, but club has still spent £42m in last 5 years. In 2018/19 massively outspent by Stoke City £67m, #AVFC £31m and #NFFC £23m.
For many years #BrentfordFC spent little on player recruitment, but have averaged £8m in last 4 seasons. However, player sales increased even more to £13m, leading to £5m net sales. Benham argued that this was a necessity, “With FFP we were always going to have to sell players.”
#BrentfordFC gross debt fell £14m from £71m to £57m, all owed to the owner Matthew Benham, including loans to Lionel Road Developments Ltd. The partial repayment was facilitated by the payment for the land sale.
#BrentfordFC £57m debt was the 9th highest in the Championship, though this is a long way below the likes of #BRFC £142m, Stoke City £141m, #Boro £105m, Birmingham City £97m and #ITFC £96m. Most debt in this division is provided by club owners.
The majority of this owner debt is either interest-free or little interest is charged. In this way, #BrentfordFC only paid £30k interest, down from prior year’s £87k. Only 2 clubs in the Championship paid more than a million interest: Hull City £2.4m and Bristol City £1.0m.
#BrentfordFC outstanding payments on transfer fees doubled from £3m to £6m, but so did the amount owed to the Bees by other clubs from £10m to £22m, leaving £16m net receivables. The club will hope this money is not endangered by the effect of COVID-19 on those clubs’ finances.
Even after adding back non-cash items such as player amortisation & depreciation, #BrentfordFC made a £9m cash loss from operating activities and spent £2m on capex. This was funded by £10m (net) player sales plus £16m from sale of land, allowing repayment of £14m owner loans.
As a consequence, #BrentfordFC cash balance rose from £1.1m to £2.2, the 8th highest in the Championship. In fact, 15 clubs in this division had less than £2m cash in the bank, so this was a pretty good performance (though not a great buffer in the current shutdown).
Since 2009 #BrentfordFC major source of funds has been money put in by Benham, boosted by player sales and the land sale. Largely used to cover operating losses (£77m) with £38m spent on infrastructure investment (stadium & training ground) and £8m on acquiring a subsidiary.
Following the £14m loan repayment in 2019, Benham’s commitment to #BrentfordFC has reduced to (a still sizeable) £100m, comprising £62m loans and £38m share capital. With much justification, chairman Cliff Crown has described this as “magnificent financial backing”.
#BrentfordFC have no problems with Financial Fair Play (FFP), as total losses are well within the FFP limit for the 3-year monitoring period, even before deducting allowable expense for academy, community and infrastructure.
In response to the financial challenges posed by COVID-19, #BrentfordFC players have agreed to defer a substantial percentage of their wages until football resumes, while some non-playing staff have been furloughed.
Although #BrentfordFC revenue and wages are among the lowest in the Championship, their shrewd approach to player trading has created an admirable business model that has proved to be equally effective on the pitch (they were 4th before the league was suspended).
