CRYSTAL PALACE go into the 2021-22 season under new management, but as well as hoping Patrick Vieira provides some fresh impetus, they will be eager for a better financial year.
Vieira has a big challenge on his hands – a squad rebuild is in progress and the club’s wage bill is too high. According to CIES Football Observatory, Palace have the highest average age, not just among Premier League squads (29.6), but virtually the whole of Europe. As Vieira took up his new role, 20 players’ contracts were about to expire, underlining the size of the task facing the former Arsenal and France midfielder.
The club has only recently unveiled its 2019-20 financial statements (which were for a 13-month-period) with Palace making a hefty £ 58 million loss, a negative turnaround of some £63 million on the previous season. The 2019 result was somewhat distorted by the sale of Aaron Wan-Bissaka to Manchester United for £ 45 million, but there was no such boost to the finances in 2019-20, the profit from player sales, which hit £ 46.2 million in 2019, fell to just £ 539,000.
Palace’s next big transaction may come if and when Wilfried Zaha leaves the club – current value according to Transfermarkt £ 40 million – or players like Eberechi Eze and Tyrick Mitchell continue their progress and the club decides to cash-in. Zaha remains their prized asset but in the current environment, Palace will probably fail to command the sort of fee they would normally expect. At 28, his market value has arguably been higher.
Palace’s revenues for 2019-20 were down 8.5%, which is about on par with many top flight clubs, but £ 142.3 million was still the third highest total in their history as well as being the first sub-£150 million performance since 2017.
Palace’s matchday and broadcasting revenues were both down, by 8.7% and 9.3% respectively, but commercial income rose by 2.5% to £ 20.9 million. Palace’s matchday income of £ 8.6 million is low for a club of their size and was one of the lowest in the Premier League in 2019-20. Little wonder the club hope to make some improvements to Selhurst Park.
The club’s wage bill rose by 11% to £ 132.6 million, which means the wage-to-income ratio climbed to 93% from a still high 77%. This was obviously influenced by the age of the squad, hence Palace have invested in their academy as they look to recalibrate the strategy around recruitment and team-building. One of their targets is, according to media reports, 21 year-old Ozan Kabak of Schalke, who had a brief loan spell with Liverpool in 2020-21.
While the 2019-20 finances must be something of a concern, the 2020-21 figures may be even more worrying given the full cost of the pandemic. Palace calculate the overall cost of covid-19 to be around £ 11 million and if the crisis had not unfolded, the club’s loss would be around £ 33 million, which would still have caused some furrowed brows at Selhurst Park. However, Palace have a decent level of liquidity with cash reserves of £ 58.4 million, which was boosted by a £ 30 million loan taken out towards the end of 2019-20.
With the new season just a couple of weeks away, Palace’s financial position can be improved by finishing higher in the league in 2021-22. For a few places more, broadcasting income can be increased significantly.