Andy, George and myself get together for our weekly chat. As the Covid-19 virus continues we discuss what a world of football with much less income might look like.
*apologies for the less than perfect sound quality on my responses
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As ever stay safe!
Burnley fan here – I enjoy a lot of what you do and the writings on football finance are very informative and well argued – “Staring into the abyss” was another great piece.
I feel a need to correct the misunderstanding as to what our Chairman said (given he was misquoted twice in the pod)
– He said that if there is no sign of football restarting by late August then the club will have used all their cash reserves if outgoings do not reduce
– note we have not furloughed staff, reduced wages or demanded players take pay cuts or deferrals. We have also committed to pay our matchday/casual staff and our community staff. He has subsequently said we will not go under.
Few clubs in the game could last so long from ready cash, with no additional income from any source (TV, Commercial, retail or outstanding transfer payments inwards) since lockdown.
Prior to these announcements the club had said not finishing the season could cost it £50m in lost revenues (which is roughly equal to our cash balance) again in a worst case scenario.
Our outgoings including wages and other costs average £8m – £8.5m a month. Extremely low by Premier League standards, though it does not include transfers.
Our total debt is £19m outstanding on transfer payments, balanced by £14m owed to us for the same. We do not have an overdraft, we do not have any cash loans against future tv revenues, season tickets or outstanding transfer payments inwards. We do not have any loans from owners or directors, and they do not take any payment in salary or dividend from the club (a tradition going back almost 40 years since the departure of Bob Lord). Our ground and training ground are fully owned by the club and all recent improvements (close to £40m) were paid for in full from operational revenues.
As a club we are in a unique position financially, particularly in the Premier League, fortunate to be owned by people born in the town and who are life-long fans who class themselves as custodians with a mission to pass the club on at some stage in a position stronger than when they arrived. Their greatest crime (from the modern view) is that their wealth is in the 10’s of millions and not billions, though I am not sure that would change their approach if they were that wealthy.
Keep up the good work and like us, be thankful that your club is rooted in it’s community and is doing wonderful things to look after those in it’s community who are in desperate need in these unusual times.
We have both been around since the beginning of the professional game and I look forward to meeting again on the other side of this.
Chester, thanks for listening in, your time is much appreciated, and thank you for the detailed explanation of Burnley’s finances. I wish ours were in a similar position.
Keep safe, and we look forward to future trips to Turf Moor when football and life return to more normal times. Thanks again