West Bromwich Albion have recorded a loss of £11m for the year ending June 2023, having filed their accounts and financial statements to Companies House, as required, by the end of March. The Baggies are currently into their third season in the Championship, a campaign in which there remains hope that the club can find its way out of the division and back into the Premier League for the first time since 2021.
Failure to make a swifter return to the top flight, though, means that the finances of the club have naturally taken a hit. The turnover in 2022-23 decreased from £65.4m to £56.7m due to the club being in receipt of a smaller portion of parachute payments in year two after relegation. That will drop substantially again for this, the 2023-24, season in which the club are operating without parachute payments for the first time in more than 20 years, and will be apparent in the annual accounts which are published this time next year.
The club made a profit of £5.4m for 2021-22 and coupled with this manageable loss of £11m, the club are for now in-keeping with the Profitability and Sustainability Rules (PSR) which many of their Championship counterparts are feeling the effects of allegedly breaching. While a club is permitted to make losses of £39m in each three-year cycle, it does mean that Albion will have to be careful in the coming 12 months, particularly if they remain in the second tier.
Staff costs increased from £42.4m in 2022 to £45.9m in 2023, taking into account the signings of the likes of Jed Wallace, John Swift and Okay Yokuslu, as well as Brandon Thomas-Asante, Tom Rogic, Nathaniel Chalobah and Erik Pieters, among others. They did, however, complete the notable sale of Dara O’Shea to Burnley for £7m before the end of this financial year which gave them breathing space in the summer.
Following the 30th June date in 2022, they also parted with David Button, Taylor Gardner-Hickman and found a taker in Cardiff City for Karlan Grant, who is receiving a portion of his wages from the Bluebirds. Albion’s incoming business this past summer was minimal – they added only Josh Maja on a permanent basis and that staffing cost sum is expected to drop again next year – especially when you consider the potential turnover of player this coming summer.
Albion paid out £11.4m in player registrations during 2022-23. That includes instalments for recent deals which involved a fee being paid (amortisation) – that includes Grant’s transfer from Huddersfield Town, Daryl Dike from Orlando City and Grady Diangana from West Ham United. Equally, money coming into the club totalled £9.8m – that’s largely down to the sale of Matheus Pereira from the summer previous, and sales of young players to Aston Villa.
It’s important at this point to stress that the Club accounts differ to those of Group; Albion, as a club, make up Group along with Development (which is effectively the training ground) and Heritage (which is dormant subsidiary). Bilkul Football WBA, the company which Shilen Patel and his father Kiran used to buy the controlling stake in Group from Guochuan Lai, owns 87.8% of it. The remaining 12.2% is owned by minority shareholders, many of whom are represented by Shareholders 4 Albion (S4A).
Group’s accounts take into account the loans. That involves monies borrowed from MSD Holdings, who have lent Group around £28m in two separate instalments over the course of the last 15 months to help fund the daily running of the club. The second loan was taken out in order to see Albion through while Patel’s takeover was in the pipeline. He has since relieved Group of the Wisdom Smart loan, which had been previously impaired.
Group’s accounts show that it has made a loss of £7.6m for 2023. That’s around £3.4m less than club have lost, but this takes into account the repayment of the Wisdom Smart loan, an event Albion were able to confirm after the reporting date. They also confirmed that the 2014 loan, which is still being investigated by the King’s Counsel, had been novated from West Bromwich Albion Holdings to Bilkul Football WBA after the takeover in February.
Albion face a crucial summer, irrespective of their league status. With an independent regulator now in situ having been green lighted by the Government, and with more stringent financial rules through PSR and Financial Fair Play (FFP) being mooted, clubs will soon have to – as a rule – spend less than what they bring in. For Albion, and most other clubs around the country, that’ll mean a shake up of their squads and an urgent need to reduce the wage-bill.
This summer, the likes of Kyle Bartley, Cedric Kipre, Matt Phillips, Adam Reach, Martin Kelly, Nathaniel Chalobah, Erik Pieters and Alex Mowatt are all out of contract, while loanees Pipa, Callum Marshall, Mikey Johnston and Andreas Weimann will also leave the club. At the same time, Albion – like every club – will need players of a certain level to compete, and so there are many decisions to be made that await them once this season concludes.
GET MORE NEWS HERE
geraldine ikyelleve