Summary:
Revenue £204m (up 17%)
Wages £128m (up 11%)
Underlying loss pre player sales £16m (down 53%)
Player sale profits £121m (excludes Caicedo and Sanchez)
Highest post tax profit in Premier League history
Player purchases £62m
Player sales £144m
Tony Bloom loan £373m
Sixth place position in Premier League with the 13th highest wage bill and 20th most expensive squad.
Revenue
Like all clubs, the Albion generate income from three main areas, matchday, broadcast and commercial.
Matchday
Matchday income increases by 20%. A combination of a modest price rise for tickets, average attendances up five hundred at the Amex and a cup run that took the club to Wembley all contributed.
Like all income streams, the Premier League is very much a very wealthy v moderately wealthy in terms of the sums generated and matchday is no exception. The Albion do well in terms of competing with most of the ‘Other 14’ having a relatively small stadium by Premier League standards. Has to be remembered though that the matchday revenues are before the transport subsidy is removed.
Four home matches in Europe in 23/24 will help maintain matchday income. Whether the Albion have much scope to find more gaps in the Amex in which they can squeeze in a few seats is to be determined. Increasing the size of the stadium is by all accounts a non-starter as the design makes that too expensive an option.
Not all clubs have published accounts, so the figures are from 2022 unless specifically mentioned in the tables. Fulham’s accounts are from that season when the club was in the Championship.
Broadcast
The Albion benefitted significantly from the sixth place finish (each individual place in the PL is worth about £3.4 million) compared to ninth under Graham Potter in 2021/22. Broadcast income was up by £30 million overall, the Covid related rebates from matches being postponed during the pandemic no longer applying.
The split of money is that half of the PL broadcast revenue is split evenly between all twenty clubs, a quarter based on popularity with broadcasters (which the Albion are not particularly, with just 16 matches chosen for live picks, despite the sexy football being played) and a quarter linked to final league position, with each position higher in the table worth £3.1 million.
The Europa League progress in 2023/24 will be worth £18-20 million from UEFA, but if the club finish 12th or lower in the Premier League then this may result in overall broadcast income being lower than the last season.
Participation in the Champions League is worth up to £120 million for the winner, the revised ‘Swiss’ version that kicks in for 2024/25 due to pressure from the larger teams via the European Clubs Association to guarantee them more fixtures (player welfare of no interest to the billionaires, hedge funds and private equity that now dominate ownership, it is all about generating more money).
Commercial
The Albion’s long-term strategy of partnering with Amex has proven, as do so many of Tony Bloom’s ideas, to be a wise one. With Premier League clubs voting to prohibit front of shirt (but not sleeve) sponsorship from the gambling industry, having a commercial relationship with a more family friendly partner than from the world of white-collar Escobar’s gives the club an advantage.
It is difficult to draw too many conclusions from the commercial revenue totals, partly due to how the club changing how some income items are allocated between matchday and commercial.
The Albion have done as well as can be expected in terms of commercial income, but the club’s lack of a global fanbase (although Mitoma-mania has helped) and not playing in the Champions League means that there will always be a large gap between the Sneaky Six and the remaining clubs.
Total Revenue
Putting all three income streams together, the Albion generated over £200 million in 2022/23. To give this some historical context, it was £1.6m in the club’s first season in the top flight in 1979/80, £1.1m in the Hereford season of 1996/97 and just over £20m in the first season at the Amex. Amazing growth, and once again shows Tony Bloom’s long term vision combined with Paul Barber’s ability to deliver that on a day to day basis.
In the Premier League it is easy to identify which clubs are those behind the European Franchise League gamble and Project Big Powergrab, which would have concentrated power, control and most importantly money in the hands of a very small group.
The club are still reliant on being in the Premier League and the benefits of the TV deal, which contributes just over three-quarters of total income.
Costs
The main costs for clubs are player related, wages and transfer fee amortisation. In addition, there are day to day overheads such as heat and light, travel (especially for away games), administrative costs etc.
Wages
Wages increased by just over 10% to a record £128 million, driven by bonuses for achieving a sixth place finish and qualifying for Europe. This compares to just £785,000 when the Albion had their first season in the top flight.
By Premier League standards, the Albion still vastly overperform in terms of their wage bill. There is an extremely high correlation between wages and final league position, but the club finished 13th in the league wage table (and could be lower when Fulham and a small club from London get round to publishing their results for 22/23 too).
Wages for 22/23 were therefore a creditable £62 for every £100 of revenue, the lowest since the Club’s first season in the Premier League. It is also well within UEFA’s suggested limit of a 70% wage to income limit, which may be echoed by the Premier League if it changes cost control rules in 24/25.
The increase in payroll cost means that average wages have more than tripled since the Club was promoted in 2017, but whilst the Albion were big hitters in the Championship, they are a smaller fish in a bigger pond in the Premier League.
At the executive end of payroll, Albion’s highest paid director earned over £2.3 million in 22/23. Whilst the person is not named, there is a high chance that the recipient could be the recipient of the 2018 GQ Magazine’s Mustard Knitwear Wearing Man of the Year award. Chelsea’s highest paid director figure relates to 2022 when someone at board level thought it was a clever idea to let Toad Boehly’s merry men buy the club and was rewarded for the amazing foresight that such a decision has brought to the levels of success at Stamford Bridge. The news that Paul Barber has committed to stay at the club until 2030 by signing a new contract suggests that he believes that the Albion have not reached the summit of their ambitions as he is highly regarded throughout the industry and has many admirers elsewhere.
Amortisation
The other main player related cost is amortisation, which spreads the cost of transfers over their lifespan. When Brighton signed Joao Pedro from Watford for £30m in summer 2023 on a five year contract, this means there will be a £6m (£30m/5) annual amortisation expense in the accounts unless he signs a contract extension or leaves before the contract expires.
The amortisation charge fell by over a quarter in 22/23, reflecting those players who left (Cucurella, Bissouma, Trossard, Maupay etc.) had higher amortisation costs than those who joined (Estupian, Gilmour, Enciso etc).
By Premier League standards the Albion’s amortisation charge is low. It is no coincidence that the two clubs often hailed as having the smartest recruitment policies in the Premier League (remember Fulham’s figures are from the Championship and Palace’s are in relation to 2022) in Brentford and the Albion have the lowest amortisation charges as the focus is on buying smart rather than buying big.
The club have non playing overheads too which increased by over £10 million as a result of general inflation and investment.
Profits
Profit is revenue less costs. If you ignore player sales and one off transactions, the Club made a loss in 22/23, although this is the norm in the Premier League.
The reason for this is that the running costs of a club are huge, commitments are made in terms of wages and player purchases over maa number of years, whereas player sales are erratic and volatile and as such cannot be guaranteed.
Tony Bloom’s willingness to underwrite these losses and take a risk on a long term basis in terms of player trading success has been central to the Club moving forward.
The only club which made a profit from day to day trading was Brentford, based on a low wage bill. West Ham benefited from their stadium being provided at a discount price, only paying £3m a year in rent for a ground having 60,000 capacity.
The only way that these losses can be converted into profit is through unusual activities such as insurance claims (such as for Covid losses), legal settlements and…player sales!
Operating Profit
The Albion’s sales of players in 22/23 were by far the most successful in the Club’s history and exclude the sales of Caicedo and Sanchez to Brighton’s B Team.
Cucurella, Trossard, Maupay etc. were sold for far more than their accounting book value (original purchase price less any amortisation charged) and as such generated a profit of £121 million. Because Alexis Mac Allister departed before the Club’s financial year end of 30 June his departure is included in the total profit.
The profits in that 12 month period exceeded the total profit from player sales in all the Club’s previous seasons added together (and remember White and BDB went in 2022).
The strategy in terms of recruitment appears to be one initially in the Premier League of consolidation and survival, but this has given the Albion the chance to move onto a higher level and players have become sought after by others as a result.
In addition to player sales, Graham Potter departed in September 2022 to Brighton B, and this meant that the Albion received £23.5 million in compensation. A further £1.5m came from a Covid insurance claim as the Club had wisely taken out a policy prior to the pandemic. Such income streams are unlikely to be repeated to this extent, and certainly not on an annual basis.
The above issues therefore converted the loss into a profit pre tax of £133 million, the second highest in Premier League history (the highest being Spurs in the year they moved from Wembley to the new stadium).
After tax (the Albion are smart not just at player recruitment) the Club made £123 million profit, which is a Premier League record.
It should be noted that circumstances can change and change quickly. Leicester went from having one of the top ten profits a few years ago when they were competing in the Champions League to making a £150 million loss last season (pre player sales), being relegated, and having a transfer embargo and potential points deduction.
Player Transactions
Getting recruitment right for a club is essential, and the Albion have managed to do this with a light budget.
In 22/23 the Club bought players for £62 million (including Joao Pedro just before the end of the financial year) and had total sales of £144 million (including Macca just before end of financial year).
In addition, there are potential add on fees of £40 million that could be earned if certain achievements are met, so Albion fans might be cheering on Liverpool to win the Premier League title as this may trigger an additional sum due from the sale of Macca.
Because the players leaving the club cost more than their replacements, the total squad cost at the end of 2023 was £30m less than the previous year and the lowest since pre-pandemic times.
It also means that the Albion had the squad that cost the least to put together in the Premier League, further indicating the ‘smart not big’ culture that has been created by Tony Bloom and Paul Barber and put into action by the rest of the staff.
No doubt RDZ will be wanting to see the Albion move up this particular table given his recent mutterings at press conferences in terms of being competitive.
Money due on transfers
These days transfers are usually made in instalments other clubs now owe the Albion £136 million in respect of players sold, whereas the Club owes others £49 million for purchases. This will help cash flow going forwards even if there is a poor season on the pitch.
Since June 30th, 2023, the club has sold Caicedo and Sanchez to you know who, as well as bought players for fees such as Bileba, Verbruggen, Barco and Igor. This has been at a negative net spend of £51 million.
Tony Bloom Investment
All fans know that No Tony = No Party as far as the transformation from homeless lower league vagabonds to top half of the Premier League and beyond.
The cash flow generated from the successful season meant that the Club was able to repay TB £36m. His total investment in both loans (interest free, unlike those from certain other owners) and shares is still £363 million.
Summary
2022/23 was a superb season on the pitch, but has probably been surpassed by what the club has achieved in terms of the financial results. The chances of another profitable year in 2023/24 are high, although the benefits of being in Europe are probably overstated, especially if there is a substantially lower finishing position in the Premier League table.
Expectations should be tempered by all concerned though, you cannot punch above your weight forever, but enjoy the ride in terms of what Tony Bloom, Paul Barber, RDZ, the coaches and players have delivered for us this season, long may it continue. UTA.
Join the discussion on Albion’s 2022/23 financial results right here.
Co-host of the successful Price of Football podcast and lecturer in football finance at the University of Liverpool, Kieran is Mr Football Finance.
