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Brit blogging from Switzerland, usually about the business of football.

Apr 5, 2018, 34 tweets

Burnley’s 2016/17 financial results covered a season when they finished 16th in the Premier League, thus securing consecutive seasons in the top flight for the first time since 1974, having been promoted from the Championship in 2015/16. Some thoughts follow #BurnleyFC

Following promotion to the Premier League #BurnleyFC converted a pre-tax £4.8m loss to £27.3m profit, as revenue tripled from £40m to a record £121m, though profit on player sales was down £11m to £1.3m. After tax, the club made a £22.2m profit, compared to a £3.7m loss in 15/16.

#BurnleyFC £81m revenue growth was very largely driven by broadcasting’s £75m increase to £105m, due to the much higher money in the Premier League (plus first year of new deal), while commercial also increased £4.9m (91%) to £10.4m and match day was £0.9m (18%) up at £5.8m.

However, #BurnleyFC wage bill rose £34m (126%) from £27m to £61m, while player amortisation was up £12m (118%) to £22m and other expenses were £5m (77%) higher at £11m. Against that, the previous season included £13m of promotion payments (largely £11m bonuses to players).

#BurnleyFC profit before tax of £27m is obviously a great achievement, though it is only the 11th highest in the Premier League in 2016/17. Thanks to the TV money, all 17 clubs that have published accounts to date have reported profits.

#BurnleyFC profit is all the more impressive, given that they made just £1.3m from player sales, only better than Bournemouth. To highlight how important player trading can be, Chelsea made £69m from this activity, followed by Everton £52m and Southampton £40m.

#BurnleyFC have made good profits each time they have been in the Premier League: £14m in 2009/10, £35m in 2014/15 and £27m in 2016/17. In the Championship they kept their losses low and even delivered a small profit in 2012. In the last 3 years, they have £57m aggregate profits.

#BurnleyFC have traditionally not made much money from player sales, but have done so after relegation, e.g. sales of Ings, Trippier and Shackell in 2015/16 produced £12m profit. Next year’s figures will be boosted by sales of Michael Keane to Everton and Andre Gray to Watford.

#BurnleyFC EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), considered a proxy for cash operating profit, has improved from £8m to £50m in the Premier League. Worth noting that Burnley were one of the few clubs to generate positive EBITDA in the Championship.

#BurnleyFC EBITDA of £50m is actually the 8th highest in the Premier League, even ahead of Chelsea £46m. For some perspective, it’s around a quarter of Manchester United’s amazing £200m, but around twice as much as Everton £27m.

#BurnleyFC £121m revenue is £42m (54%) higher than the last time they were in the Premier League. The vast majority of this growth (£38m) has come from TV, which now accounts for 87% of total revenue, though commercial also grew by £4m (match day was flat).

Despite the growth #BurnleyFC had the second smallest revenue (£121m) in the Premier League, only above Hull City £117m, but behind Watford £124m, Swansea City £128m, Stoke City £136m and Bournemouth £136m. For more context, Manchester United’s £581m is almost five times as much.

#BurnleyFC £121m was not enough to propel them into the Deloitte Money League Top 30, but they were not too far behind Benfica £135m.

#BurnleyFC TV money from the Premier League increased £75m from £26m (parachute payment) to £101m. They were adversely impacted by only being shown live 10 times, the contractual minimum (facility fees). This season will benefit from a better league place (higher merit payment).

An amazing 87% of #BurnleyFC revenue comes from TV, but this is not the biggest dependency, as Bournemouth 91% and Watford 88% are even higher. In fact, 10 of the 17 clubs that have reported to date are above 75%.

#BurnleyFC match day revenue increased by £0.9m (18%) to £5.8m, but this is the 2nd lowest in the Premier League, only above Bournemouth. For some perspective, Manchester United and Arsenal earn more from this revenue stream in two games than Burnley do in an entire season.

#BurnleyFC average attendance increased 23% from 16,709 to 20,558. Unsurprisingly, crowds are higher in the Premier League than the Championship, though worth noting that Burnley’s attendance in the second tier in 2015/16 was much more than the previous time in that division.

#BurnleyFC attendance of 20,558 is 2nd lowest in Premier League, only ahead of Bournemouth, around same level as Watford, Swansea and Hull. 16/17 Premier League season ticket prices were kept at same level as Championship, actually lower than previous top flight season in 14/15.

#BurnleyFC commercial revenue was up £4.9m (91%) to £10.4m, comprising catering, up £0.8m to £2.4m; retail, up £0.6m to £1.7m; and other commercial activities, significantly up £3.6m to £6.3m, mainly due to Dafabet replacing Oak Furniture Land as shirt sponsor.

Even after nearly doubling, #BurnleyFC £10m commercial income is one of the lowest in the Premier League, only above Hull City, Bournemouth and Watford. The 2017/18 season will have Playdemic as a new sleeve sponsor.

Following promotion #BurnleyFC wage bill more than doubled from £27m to £61m. Also worth noting that this was a significant increase on the £29m in the previous Premier League season of 2014/15. Wages to turnover ratio was cut from 68% (very respectable for Championship) to 51%

#BurnleyFC £61m wage bill was the lowest in the Premier League (assuming Middlesbrough will be higher), despite reportedly paying large bonuses for staying in the Premier League. They were around the same level as Hull City, but a full £11m below Bournemouth, next lowest at £72m.

As a result, #BurnleyFC have one of the lowest wages to turnover ratios in PL. Their 51% is only above Tottenham, Manchester United and Arsenal (all with significantly higher revenue) and Leicester City (boosted by their Champions League exploits).

#BurnleyFC player amortisation more than doubled from £10m to £22m, four times as much as the very low £5m the last time they were in the Premier League in 2014/15, reflecting much higher investment in players.

Even after this increase, #BurnleyFC player amortisation of £22m is one of the lowest in the Premier League in England, only above Bournemouth £20m and WBA £17m (of clubs reported to date). For some perspective, it is less than a fifth of big-spending #MUFC £124m and #MCFC £122m.

#BurnleyFC made £43m player purchases in 16/17 (including Brady, Hendrick, Defour, Westwood, Gudmundsson and Pope), which is around the same as the previous five seasons combined. However, only higher than WBA £37m, Stoke £36m, Hull £32m & Bournemouth £9m.

On a cash basis, #BurnleyFC have significantly increased gross spend in last 3 seasons (2 in the Premier League) with an annual average of £21m, compared to just £3m in preceding 4 seasons in Championship. Similar story 17/18 with Chris Wood, Jack Cork, Nahki Wells, Jon Walters.

#BurnleyFC are essentially debt-free (except for £0.2m finance leases), having used money from previous season in Premier League to repay directors’ loans and external loans. In fact, the club has £20m net funds, as cash rose from £6m to £20m.

#BurnleyFC are in the best debt situation of all Premier League clubs (Chelsea also have no debt in football club, but £1.1 bln in their holding company). However, they do owe £14m in outstanding transfer fees, while there are also £7m contingent liabilities potentially payable.

The fact that #BurnleyFC pay no interest on loans is a major advantage compared to some of their rivals, e.g. Hull City and Watford both paid more than £4m last season.

#BurnleyFC generated an impressive £53m cash from operations in 16/17, spending £31m on players (net), £6m on infrastructure and £1m on tax, with the remaining £14m simply increasing the cash balance.

Unlike many clubs #BurnleyFC pay their own way. Since 2009 they generated £104m from operations. Of this, £52m went on players (net), while £16m was invested in infrastructure (mainly Barnfield training ground) and £16m interest/loan payments. £20m increased cash balance.

Given #BurnleyFC inspiring progress over the last few years, it is unsurprising that they have attracted the interest of potential investors in America and the Middle East with talk of £150-180m takeover bids, but executives insist they are not looking to sell the club.

Chairman Mike Garlick observed that Premier League status is key to the club’s profitability, but outlined the strategy thus, “We want to be as ambitious as we can, but we have to live within our means, and whatever we do has to be sustainable.”

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