‘Expect another drop in revenue in 2022’ – financial expert predicts future Bournemouth accounts
Earlier this week AFC Bournemouth published their annual accounts for the year ending June 30, 2021.
As was the case with last year’s deposits, the financial accounts have been hit by the COVID-19 pandemic, matches behind closed doors and the club’s relegation from the Premier League.
In total, Bournemouth went 53 matches without a full crowd, which hampered revenue and turnover costs. AFC Bournemouth Limited’s financial position has been rated ‘satisfactory’ by the directors, with the club recording a pre-tax profit of £17m, a significant improvement on the £60.1m loss of 2020.
However, the broadcast revenue was supplemented by the fact that the 2019/20 season was truncated and games played after July 1, 2020, when Bournemouth were still in the Premier League and therefore earned premium broadcast revenue , were taken into account for the 2020. /21 financial year. Overall, broadcast revenue accounted for 88% of Bournemouth’s total revenue.
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Other findings included a fall in club turnover of £23.7m, after recording an annual turnover of £71.7m in the 2021 accounts. In 2020, this figure was £95.4million. The club blame the defeat on the impact of COVID-19 and relegation from the Premier League. However, further losses were offset by a successful £2.5million commercial insurance claim related to the COVID pandemic.
Relegation clauses in player contracts as well as offloading players to higher salaries led to overall personnel costs falling to 57.4m, a reduction of £50m from the figure of 107 £.9million from 2020. This provided Bournemouth with a little more cover, especially as the second year of the parachute payment – less than the first payment – was due to begin.
AFC Bournemouth, in its accounts, said: “The club strives to offer competitive remuneration packages to attract and maintain the caliber of playing and team management staff necessary to enable the club to compete in the league, with the aim of reaching and maintaining the Premier League. If this objective was ultimately not achieved, the board of directors has committed to this level of remuneration through long-term contracts already in place at the start of the season.
The 2020/21 accounts also included Bournemouth’s highest paid director, Neill Blake, receiving a fee of £1.884m, a 44.3% increase on his 2020 salary of £1.306m.
The accounts also confirmed that Maxim Demin, the owner of Bournemouth, has provided interest-free shareholder loans of £24.5 million since June 30, 2021. Demin’s financial support has been well documented to ensure that Bournemouth remain competitive and are able to seek a return to the Premier League. . It is understood that Demin’s support continues to be as steadfast as it was when he posted a public statement he made in July 2020.
DorsetLive spoke to football finance expert Kieran Maguire, author of the book “The Price of Football” for his take on Bournemouth’s 2020/21 accounts.
The club’s turnover fell by £23.7m, after recording an annual turnover of £95.4m in the 2020 accounts. The club blame the loss on the impact of the COVID-19 and relegation from the Premier League. Is this an easy deficit to fill in 2022?
Maguire: No, expect revenue to fall further in 2021/22. While crowds have returned, capacity at Bournemouth’s stadium is low. Broadcast revenue was higher than expected in 2020/21 as some Premier League matches were still being played in July 2020 before relegation. These were included in broadcast revenue.
How much of owner Maxim Demin’s money is needed for the day-to-day running of the club? (The club recorded a pre-tax profit of £17m).
Maxim Demin loaned the club a further £28m during the 20/21 season, and the club have borrowed £24.5m from him since the end of that campaign. Additionally, they secured £10m from the banks in payday loans for player transfer sales.
Other losses were offset by the successful £2.5m commercial insurance claim linked to the COVID pandemic – what could that be?
Many clubs had taken out business interruption insurance which was paid out as a result of COVID. The standard policy payout for those claims was £2.5million. Profits from player sales hit a record £56m, so make up for daily losses with ease.
For example, the club’s commercial revenue has been halved (£17.9m in 2020 to £8.7m in 2021) mainly due to the shirt front and other sponsorship deals which were worth much less in the EFL.
Judging by their latest set of accounts, do you expect Bournemouth to become a financially viable business during the Championship, or do they need Premier League riches to sustain their spending? Bournemouth recorded an operating profit of £23.6 million:
Excluding parachute payments, Bournemouth’s Championship revenue is expected to be between £18m and £20m. Salaries in 2020/21 were still £57.1m, so further significant cost-cutting is needed if the club are to become sustainable in the EFL.
The wage bill has halved in 2020/21, but the average wage is still £27,500 a week. This equals 75% of their total income.
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