Middlesbrough’s 2019/20 financial results covered a season when they finished 17th in the Championship. Neil Warnock replaced Jonathan Woodgate as manager in June. Some thoughts in the following thread #Boro
#Boro swung from £2m profit before tax to club record £36m loss, as finances hit by COVID and expiry of parachute payments. Revenue dropped £36m (65%) from £56m to £19m and profit on player sales fell £30m to £3m, partly offset by £27m (31%) cut in expenses. Loss after tax £31m. Image
All three #Boro revenue streams fell, especially broadcasting, which was down £32m (78%) from £41m to £9m, due to no parachute payment. Also decreases in commercial, down £2.7m (31%) from £8.6m to £5.9m, and gate receipts, down £1.6m (26%) from £6.1m to £4.5m. Image
#Boro partially compensated for the revenue decline by cutting costs. Wage bill fell £9m (23%) from £40m to £31m, while player amortisation and impairment were down a third (£9m) to £18m. Other expenses were £8m (56%) lower.
#Boro other operating income rose £1.7m to £1.9m, including £1.2m from the Premier League relating to the Elite Player Performance Plan (EPPP) as a contribution towards the Category 1 Academy and £0.6m for the government furlough scheme for the pandemic.
#Boro loss of £36m is the worst reported to date in the 2019/20 Championship, though this result may well look better when other clubs publish their COVID-impacted accounts. In fact, even before the pandemic, many clubs had losses above £20m. Image
It is also worth noting that some clubs’ figures were boosted by once-off accounting profits from the sale of stadiums, training grounds and land, especially #DCFC £40m, #SWFC £38m and #AVFC £36m, so their underlying figures were even worse than reported. Image
Excluding property sales, just 3 Championship clubs were profitable with only Hull City managing to make money so far in 2019/20. The sad reality is that almost all clubs in this division lose money, as they strive to remain competitive in pursuit of promotion to the top flight. Image
One reason for #Boro’s worse financial result is they only made £3m profit from player sales, whereas the prior year’s figures were boosted by £33m, including Traoré to #WWFC, Gibson to Burnley and Bamford to #LUFC. This was a lot less than Bristol City £26m and Hull City £23m. Image
Although #Boro have generated a profit twice in the last four years, including £7m in the Premier League in 2017, they have generally posted fairly large losses. In fact, their cumulative losses over the last decade add up to £145m, averaging nearly £15m a season. Image
One way that #Boro have tried to become more sustainable is player trading. They have increased profit on player sales to an annual average of £16m over the past 4 years. This season included the sales of Braithwaite to Leganes, Randolph to #WHUFC and Flint to Cardiff. Image
#Boro operating losses (i.e. excluding player sales and interest payable) widened from £30m to £38m, having been only £4m in the Premier League in 2017. In fairness, almost all Championship clubs report substantial operating losses (nearly half of them more than £30m). ImageImage
#Boro revenue has fallen by £102m (84%) from £121m to £19m since relegation from the Premier League 3 years ago, very largely due to £93m decrease in broadcasting after parachute payments ended after 2 years, though also reductions in commercial £5m and gate receipts £4m. Image
Following the decrease, #Boro £19m revenue is firmly in the bottom half of the Championship, significantly below clubs benefiting from parachute payments, e.g. in 2018/19 these included WBA £71m, Stoke City £71m and Swansea City £68m. Image
Championship revenue is hugely influenced by Premier League parachute payments, making it difficult for clubs like #Boro to compete. Seven clubs benefited from these in 2019/20, led by Cardiff City, #FFC £42m and #HTAFC (£42m), followed by Stoke City, Swansea City and WBA (£34m). Image
If parachute payments were excluded, #Boro £19m would still be a fair way below the leading clubs. The gap to the highest placed club Leeds United (in 2018/19) would be reduced, but it would still be a chunky £30m. Image
#Boro broadcasting income fell £32m (78%) from £41m to £9m after parachute payments stopped, down from £102m in 2017. Most Championship clubs earn between £8m and £10m in TV money, but there is a big gap to clubs with parachute payments (over £50m for WBA, Swansea and Stoke). ImageImage
#Boro match day income fell £1.6m (26%) to £4.5m, as they staged 4 fewer cup games and played 4 home games behind closed doors due to the pandemic. Has decreased 3 years in a row, so is now one of the lowest in the Championship, just ahead of Millwall. ImageImage
#Boro average attendance dropped from 23,217 to 19,993 for games played with fans, down 35% from 30,449 in the top flight in 2017. This was 11th highest in the Championship, over 15,000 below #LUFC 35,322. Small ticket price increase, only second in 16 years at the Riverside. ImageImage
#Boro commercial revenue fell £2.7m (31%) from £8.6m to £5.9m, comprising sponsorship & commercial, down £1.7m to £4.5m, and merchandising, down £1.0m to £1.4m. Middlesbrough’s lowest since 2014 and less than half Bristol City’s £14m in 2019/20 Championship. ImageImage
In 2018/19 #Boro changed both their main sponsors. A “record-breaking three-year partnership” saw online casino 32Red become the new shirt sponsor, though long-standing Ramsdens switched to back-of-shirt, while kit supplier Adidas was replaced by a five-year deal with Hummel.
#Boro wage bill was cut 23% (£9m) from £40m to £31m, as the club “significantly reduced the size and cost of the playing squad” and made some redundancies  to offset the reduction in income. Wages down  52% (£34m) from £65m peak three years ago in the Premier League. Image
Following the decrease, #Boro £31m wage bill is now in the bottom half of the Championship, making promotion even more difficult. Far below the likes of Aston Villa £83m, Stoke City £56m (both with parachute payments) and Norwich City £51m (promotion bonus) – all 2018/19 figures. Image
#Boro wages to turnover ratio shot up from 72% to 160%, the second highest to date in the Championship in 2019/20, only behind Preston 163%. This is obviously not great, but is pretty much par for the course in the Championship, where 17 of the 24 clubs are above 100% Image
#Boro directors remuneration was just £2k, one of the lowest in the Championship, a lot less than the likes of Reading £1.5m, WBA £953k, Birmingham City £932k and Stoke City £858k. That said, accounts note that one director was remunerated by another group company. Image
#Boro other expenses (i.e. excluding wages, player amortisation and depreciation) decreased by £8m (56%) from £15m to £7m without any real explanation (beyond  less activity in the pandemic), though prior year was on the high side compared to other years in the Championship. Image
#Boro player amortisation, the annual charge to write-off transfer fees over a player’s contract, fell £8m (28%) from £26m to £18m, though up from just £4m in 2015, reflecting the investment in the squad. Still one of the highest in the Championship. ImageImage
#Boro made £6m player purchases, mainly Dijksteel and Stojanovic. This was only around a tenth of the massive £66m spend of two years ago, which former manager Tony Pulis described as “the most disastrous transfer window in the club’s history”. Image
In the three years between 2016 and 2018 #Boro really pushed the boat out, as they averaged gross spend of £52m, compared to £6m in the preceding five years. However, in the two years since then, this has dropped to £9m with £27m sales, leading to £18m net sales. Image
#Boro gross debt rose £11m from £105m to £116m, all of which is owed to Steve Gibson. The debt would have been even higher if £63m had not been converted into share capital, highlighting the owner’s financial support. Image
#Boro £116m gross debt is the third highest in the Championship, only below #BRFC £142m & Stoke City £141m. However, like almost all debt in this division, it has been provided interest-free by the owner, so is very much of the “soft” variety. Image
#Boro have managed to reduce transfer debt from £29m to £8m, down from £56m in 2018. Partly offset by £2m owed to Middlesbrough by other clubs, so net £6m payable. In addition, £7m potential performance-related liabilities, based on appearances, promotion, etc. Image
#Boro do not include a cash flow statement in their accounts, so we do not know exactly how much interest the club actually paid, though the £1.3m shown as interest payable in the profit and loss account would place them among the highest in the Championship. Image
#Boro cash balance fell slightly from £210k to £167k, which is the second smallest in the Championship. In fairness, 16 clubs in this division had less than £2m cash in the bank, so this is not unusual (albeit not a great buffer in the current situation). Image
Despite the hefty 2019/20 loss, #Boro have no FFP issues, as their reported £40m loss over 3-year monitoring period was only £1m above the £39m limit, even before deducting allowable deductions for academy, community & infrastructure and COVID impact. Image

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More from @SwissRamble

20 Oct
Barcelona 2020/21 accounts cover a season when they finished third in La Liga, won the Copa del Rey and reached the last 16 of the Champions League. Their finances were significantly impacted by COVID-19. Some thoughts in the following thread #FCBarcelona
#FCBarcelona pre-tax loss widened from €133m to a shocking €555m (€481m after tax). Revenue dropped €138m (19%) from €729m to €591m and profit on player sales fell €64m to just €4m, partly offset by operating expenses down €66m, though net interest payable rose €22m.
#FCBarcelona president Joan Laporta blamed this on the previous management, who “delivered the worst accounts in Barca history”. This resulted in €161m player impairment and €110m other impairment and provisions (law suits, tax cases) following the Due Diligence report.
Read 49 tweets
19 Oct
While we wait for clubs to publish their accounts for the 2020/21 season, I thought it might be interesting to look at the trends in the Premier League over the last 10 years from 2011 to 2020, especially with COVID impacting last 3 months of 2019/20. Some thoughts follow #PL
#PL loss before tax widened in 2020 from £155m to £992m,  as the initial effect of the pandemic began to bite. It is true that the division was already loss-making in 2019, but it had reported profits in 4 of the preceding 5 years, amounting to £1.3 bln in this period.
The situation in the #PL was much the same after tax, though the 2020 loss was smaller at £953m, due to £39m tax credits. Tax accounting entries can have a major impact on net profits, e.g. 2018 included a £149m tax charge, while 2103 was boosted by £147m tax credit.
Read 38 tweets
8 Oct
So the Newcastle United takeover saga has finally reached a conclusion, as the club has been bought by a consortium (with Saudi Arabia's Public Investment Fund owning 80%), but what do the new investors get for their £305m? #NUFC
This #NUFC 10-year overview up to 2020 shows a profitable club. The only losses came in 2017 (after relegation to the Championship) and 2020 (COVID impacted). Relatively low profit from player sales for a club in the Premier League.
#NUFC revenue growth has been driven by central broadcasting deals. In contrast, match day has declined, while there has been virtually no commercial growth in the last few years. As a result, broadcasting accounts for 70% of total revenue.
Read 6 tweets
7 Oct
Borussia Dortmund 2020/21 accounts cover a season seriously impacted by COVID, when they finished third in the Bundesliga, won the DFB Cup and reached the Champions League quarter-finals. Head coach Lucien Favre was replaced by Marco Rose for 2021/22. Some thoughts follow #BVB
#BVB pre-tax loss widened from €47m to €73m, as revenue dropped €35m (9%) from €379m to €345m and profit on player sales fell €25m from €40m to €15m, partly offset by cutting operating expenses by €31m and net interest payable decreasing €2m.
#BVB €35m revenue fall was due to COVID driven reductions in match operations, down €32m (98%) to €1m, and commercial, down €21m (12%) to €147m. On the other hand, broadcasting rose €17m (10%) to €187m, mainly Champions League money, while other income was up €1m to €10m
Read 48 tweets
27 Sep
#Juventus 2020/21 accounts cover a COVID impacted season when they finished 4th in Serie A, won the Coppa Italia and were eliminated in the Champions League last 16. Head coach Andrea Pirlo was replaced by Massimiliano Allegri after the season ended. Some thoughts follow.
#Juventus pre-tax loss more than doubled from €82m to €208m (€210m after tax), despite revenue rising €43m (11%) from €407m to €450m, mainly because profit on player sales fell €136m from €167m to €31m. Operating expenses also increased by €37m (6%).
Broadcasting income rose €69m (41%) to €235m, mainly revenue deferred from 2019/20 accounts, though commercial and player loans were also higher, up €9m (5%) to €194m & €7m to €12m respectively. Compensated for COVID driven reductions in match day, down €41m (84%) to €8m.
Read 46 tweets
21 Sep
Manchester United’s 2020/21 accounts cover a season when they finished 2nd in the Premier League and reached the final of the Europa League, having been eliminated at group stage of the Champions League. Financials significantly impacted by COVID-19. Some thoughts follow #MUFC
#MUFC pre-tax loss up from £21m to £24m, as revenue dropped £15m (3%) from £509m to £494m and profit on player sales fell £11m to £7m, while expenses rose £16m (3%). Operational decline offset by interest swinging £39m from £26m payable to £13m recoverable thanks to forex gains.
Net loss after tax rose £69m from 23m to £92m, due to April 2023 increase in corporation tax from 19% to 25%, which meant that #MUFC wrote down the value of a US deferred tax asset, as it is no longer expected to give rise to a future economic benefit. This is a non-cash impact.
Read 47 tweets

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