Burnley FC post losses of £28m in financial accounts as impact of Premier League relegation made clear.
The accounts cover the 12 months leading up to July 31, 2023, the period in which Burnley clinched promotion back to the Premier League with a stunning Championship title win.
But as a result of relegation the previous season, turnover plummeted from £123.4m to £64.9m due to the absence of Premier League TV money.
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Despite the Clarets bringing in £11.4m from player trading, the stark fall in turnover led to the club recording a loss of £27.9m for the financial year.
However, due to a profit of £26m being posted the previous year, Burnley will not be at threat of breaching the Premier League’s Profit and Sustainability rules.
However, should Vincent Kompany’s men face relegation back to the Championship, the club are likely to face further losses.
“The principal risk to the group is the possibility of the football club’s relegation from the league in which it competes,” the Clarets said.
BURNLEY, ENGLAND – DECEMBER 16: General view inside the stadium prior to the Premier League match between Burnley FC and Everton FC at Turf Moor on December 16, 2023 in Burnley, England. (Photo by Marc Atkins/Getty Images)
BURNLEY, ENGLAND – DECEMBER 16: General view inside the stadium prior to the Premier League match between Burnley FC and Everton FC at Turf Moor on December 16, 2023 in Burnley, England. (Photo by Marc Atkins/Getty Images)
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“This would result in a reduction in the club’s turnover and would bring forward debt reduction measures on external borrowings.
“Another risk to the group is the consequence of non-compliance with Premier League, FA and EFL rules and regulations, in particular Financial Fair Play regulations. The group takes all necessary steps to ensure compliance with relevant rules and regulations.”
Should Burnley be relegated back to the Championship this season, the club says it will have no option but to sell players to recoup cash, while player salaries would also have to fall.
“In the event of relegation, the group as with all such clubs will incur a significant reduction in turnover as Premier League broadcasting revenue is replaced with parachute payments,” the accounts state.
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“The group will be required to take steps to reduce costs and borrowings to a level more sustainable for a Championship club.
“In this scenario the group would expect significant reduction in wages and salaries, which will be largely achieved by contractual means existing in player and employee contracts and player transfers.
“The group has also forecast a net inflow of cash from player trading, as is common for many clubs relegated from the Premier League.
“In such a case, to support the group’s obligations, the directors will consider and utilise financing options available, including but not limited to, player receivable financing.
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“In the event that the group’s financial performance varies or is less than that modelled, the directors are satisfied that sufficient funds can be generated or otherwise obtained by the group, if this was absolutely necessary.
“The current football transfer market remains strong and the group believes that future potential player trading consistent with forecasts is reasonably achievable.”
Digging deeper into some of the other figures, the club’s wage to turnover ratio increased from 74.53 per cent in 2021/22 to 82.68 per cent.
Despite being relegated to the Championship, match income rose from £7m to £8.7m. Catering sales grew from £1.7m to £2.3m and retail sales from £2m to £2.8m.
Staff costs, which includes wages and salaries, dropped from just under £92m to £53.6m.
The club also owes £70m in bank loans, up from £45m the previous year.
Related topics:Premier LeagueSustainabilityEFL
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