Barnsley 2017/18 financial results

[EastStandRed]

BarnsleyFC 2017/18 financial results covered “an eventful, emotional but ultimately disappointing campaign” which ended in relegation from the Championship to League One after the mid-season departure of head coach Paul Heckingbottom to Leeds United. Some thoughts follow.

In December 2017 the Cryne family sold 80% of BarnsleyFC to a group of international investors, led by Chien Lee of NewCity Capital and Paul Conway of Pacific Media Group. The former custodian, Patrick Cryne, tragically died in January, leaving his son, James, with a 20% stake.

BarnsleyFC went from a £12.8m profit the prior season to a small £0.2m loss in 2017/18, despite revenue rising £1.5m (12%) from £12.5m to £14.0m, as profit on player sales fell significantly by £10.0m to £3.5m and expenses increased by £4.6m to £17.7m.

[EastStandRed]

The BarnsleyFC revenue increase was mainly driven by broadcasting income rising £0.9m (13%) to £8.2m, due to higher central distribution from the EFL, and commercial & sponsorship growing £0.6m (38%) to £2.2m. Match day dipped slightly (1%) to £3.6m.



However, BarnsleyFC saw a fair bit of cost growth, as “significant” activity in the summer 2017 transfer window meant that wages rose £2.0m (23%) to £10.6m and player amortisation more than doubled (up £1.2m) to £2.2m. Other expenses were also up £1.3m (38%) to £4.7m.

[EastStandRed]

Although a loss is not great news, it’s worth noting that BarnsleyFC £0.2m deficit was one of the best financial results in the Championship, only surpassed by 5 clubs who made a profit. Much lower than the huge losses at the promoted clubs: WWFC -£57m, FFC -£45m & Cardiff -£39m

[EastStandRed]

A couple of years ago BarnsleyFC CFO Robert Zuk hit the nail on the head: “the financial results illustrate how challenging it is to run a football club at a break-even level, when others don’t seem to have such constraints because of owner wealth and/or parachute payments.”

BarnsleyFC profit on player sales dropped £10.0m from £13.5m to £3.5m, mainly coming from Marc Roberts’ move to Birmingham City. Few Championship clubs make big money from player trading, except those relegated from the Premier League: NCFC £48m and HCAFC £31m.

[EastStandRed]

BarnsleyFC clearly run a tight ship, as they have usually reported small losses over the past few years. In fact, the £12.8m profit in 2016/17 is the outlier – and was the only season that the club was profitable in the last 5 years.

[EastStandRed]

The reason for #Barnsley profit in 2016/17 was £13.5m from player sales, due to the large sell-on fee for John Stones moving from EFC to MCFC plus the sales of Alfie Mawson to Swansea and Conor Hourihane & James Bree to AVFC. Club said there will be £3.9m net profits in 18/19.

[EastStandRed]

BarnsleyFC losses have occasionally been reduced over the past few years by the former owner, Patrick Cryne, making donations to the club, amounting to £1.2m. These have been reported within revenue: £840k in 2013/14 and £402k in 2015/16.

As a technical aside, BarnsleyFC only published abbreviated accounts for the 2015/16 season, so not all of the usual financial detail is available for that season.

BarnsleyFC EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), which can be considered a proxy for cash operating profit, as it strips out player sales and once-off items, dropped from £0.4m to £(1.3)m, though not as low as £(2.9)m in 2015.

In fairness, only four Championship clubs managed to achieve positive EBITDA in 2017/18, so BarnsleyFC £(1)m was actually the 5th best in the division and much better than the likes of BCFC £(30)m, AVFC £(27)m, WWFC £(27)m and DCFC £(21)m.

[EastStandRed]

BarnsleyFC 17/18 £14m revenue was considerably higher than £4.8m reported in League One in 14/15 (no figure available for 15/16). Following relegation, it will have dropped, but only to around £8m. Co-chairman Paul Conway last month, “Getting promoted gives us another £5-6m.”

Despite £1.5m growth in 2017/18, BarnsleyFC £14m revenue was still 4th lowest in the Championship, only ahead of Preston, Burton and Brentford (all round £13m). For some perspective, only around a fifth of AVFC £69m and Sunderland £64m, though the Mackems were also relegated.

[EastStandRed]

Championship revenue is hugely influenced by Premier League parachute payments with 8 clubs benefiting in 2017/18, led by #Boro, HCAFC & SAFC £42m, followed by AVFC & NCFC £34m, then CardiffCity, FFC & QPR £17m. This makes life really difficult for clubs like BarnsleyFC.

That said, if parachute payments were excluded, BarnsleyFC £14m would still have been the 4th lowest revenue in the Championship, though the gap to the club with the highest revenue (LUFC £41m) would have halved from £55m to “only” £27m.

BarnsleyFC TV income rose £0.9m (13%) to £8.2m, due to higher central distributions (PL solidarity payment £4.5m, EFL payment £2.3m). However, this will have fallen by around £6m in League One in 2018/19.

BarnsleyFC match day income fell slightly (1%) to £3.6m, in line with the lower attendances in the relegation season. This was one of the smallest match day incomes in the Championship, only above Preston £3.4m, Brentford £3.1m and Burton £1.8m. Around a third of AVFC £11.8m.

BarnsleyFC average attendance fell slightly from 13,857 to 13,704, though this was still the second highest in recent times. Further fell to 12,527 in 2018/19, but this was considerably more than the 9,499 crowds the last time they were in League One in 2015/16.

BarnsleyFC attendance of 13,704 was the 4th lowest in the Championship, miles behind the top two: Aston Villa 32,097 and Leeds United 31,521. Season ticket prices were frozen for 2017/18 “early birds”, though there was a small increase for others (for the first time in 5 years).

BarnsleyFC commercial income rose £0.6m (38%) to £2.2m: merchandising £0.7m, sponsorship & advertising £0.5m and other receipts £1.0m (up from £0.5m with no explanation). Lowest in the Championship. As Conway noted, “They were in need of a little help on the commercial side.”

BarnsleyFC shirt sponsor since 2011 is local industrial recycling company, CK Beckett, while Puma have been the kit supplier for the last four years. Both deals ran until the end of the 2018/19 season, but it is not clear whether they will be extended.

[EastStandRed]

BarnsleyFC wage bill was up by nearly a quarter (£2.0m) from £8.6m to £10.6m, due to “increased playing squad salaries following a significant amount of activity in the summer 2017 transfer window”. Headcount increased from 211 to 240, mainly due to footballing activities.

Despite this increase, BarnsleyFC £10.6m wage bill was firmly in the Championship relegation zone, as only Burton Albion £10.0m (also relegated) were below them. The gap to the highest paying clubs was enormous with AVFC leading the way with £73m (around 7 times as much).

BarnsleyFC wages to turnover ratio increased from 69% to 76%, but this is very low for the Championship: only above #SAFC 74%, NCFC 68% and HCAFC 56%. Over half the clubs in this division have ratios above 100%, including BCFC 202%, Reading 197% & WWFC 192%.

BarnsleyFC total directors’ remuneration increased by 41% from £131k to £185k, which is somewhat surprising in a relegation season. This was the 10th highest in the Championship in 2017/18, though a long way below Sunderland’s £2.0m.