Crystal Palace lose £ 40m but fresh impetus may be on its way

CRYSTAL PALACE finished in a comfortable 12th place in the Premier League in 2021-22, two places up on the 2020-21 season which proved to be manager Roy Hodgson’s last year at Selhurst Park. Hodgson was replaced by former Arsenal and France midfielder Patrick Vieira, and in addition to the credible league placing, Palace also reached the last four of the FA Cup in his first campaign in charge.

The 2020-21 campaign saw Palace make a pre-tax loss of £ 40.2 million, somewhat better than the £ 57.9 million deficit of the previous season. The club estimated the covid-19 pandemic cost them £ 21. 5 million across two seasons. It should be noted that Palace’s 2020-21 figures are based on an 11-month timeframe rather than the usual 12 months.

Palace’s turnover was down from £ 142.3 million to £ 134.4 million, a drop of around 5%. Although broadcasting revenues increased by 4% to £ 117.3 million, matchday income was wiped out (just £ 0.2 million versus £ 8.6 million in 2019-20), and the commercial stream fell by almost 20% to £ 16.9 million. Their commercial earnings are a fraction of their London rivals – West Ham’s are double and Palace’s £ 14 million is just 10% of the amount generated by Arsenal, Chelsea and Tottenham. Matchday income, in a normal season, should produce more than £ 10 million, which is still very modest.

Palace’s total wage bill totalled £ 127 million, down by more than 4% and representing a wage-to-income ratio of 94%. Football finance guru Kieran Maguire calculated that Palace’s average weekly wage in 2020-21 was £ 64,400, which equates to a mid-table placing. Although one of the lowest spenders in the Premier League, Palace did pay £ 16 million for QPR’s Eberechi Eze, a transfer that may look better as time progresses. The club’s profit on player sales totalled £ 9.6 million, a considerable improvement on 2019-20. Meanwhile, the Palace academy has been producing a stream of promising talent and in 2020-21 a number of players started to emerge.

However, Palace continue to lose money on an annual basis and were losing £ 1 million per week in 2020-21. Continued membership of the Premier League is vital to the club, but the financial situation will surely be improved by the arrival of John Textor as investor, director and partner. As Steve Parish, the club’s chairman, said: “We have been looking for the right investor and right investment for some time.” The impact of Textor’s involvement will doubtless reveal itself in 2021-22’s financials. Textor, from Missouri, USA, is a majority shareholder at Brazilian club Botafogo and Belgium’s Molenbeek.

Palace are somewhat hampered by a relatively low level of matchday income and despite Selhurst being a popular venue with home and away fans, the ground does need an overhaul. There is a proposed programme that will raise the capacity of the stadium from 25,486 to 34,259 highlighted by a glass frontage that reflects the club’s history. The plan is to start work on the £ 100 million scheme late in 2022, although there have been a number of hurdles for the club. A revitalised Selhurst Park may be the springboard the club needs to step up to the next level and challenge for a European slot.

What next for Crystal Palace after sizeable loss?

CRYSTAL Palace have provided some insight into their 2019-20 financial results and they appear to be consistent with many of their peers, the pandemic making its mark on the club’s fiscal strength.

Palace lost £ 58 million pre-tax, a shift of some £ 63 million from the previous season when they recorded a £ 5 million profit. The club’s revenues totalled £ 142.3 million, a drop of around 8.5% on 2018-19. Interestingly, Palace’s income for 2019-20 is higher than West Ham United’s, although it has to be remembered that Palace extended their financial year to July 31.

The club calculated that the current crisis will cost them £ 30 million over two seasons, and they borrowed that same amount towards the end of the season to boost their cash flow. The club has zero net debt at the end of July 2020 with a cash position of £ 58.4 million, largely attributable to the borrowing.

Turnover£ 142.3m
Loss pre-tax(£58m)
Wages£ 132.4m
Crystal Palace 2019-20 at a glance

The lower revenues were not matched by a drop in wages, which went up from £ 120 million to £ 132.4 million, taking the wage-to-income ratio to 93%. 

Palace were relatively quiet in the transfer market, generating net income of £ 43 million thanks to the £ 50 million sale of Aaron Wan-Bissaka to Manchester United. Their purchases were fairly modest, including James McCarthy from Everton (£ 3 million) and Jordan Ayew from Swansea (£ 2.5 million).

Although Palace began 2019-20 reasonably well, they had a dire end to the campaign, losing seven consecutive games. Their star man, Wilfried Zaha, is now 28 years of age and clubs are queuing up to buy him, in which case, Palace will need to manage his departure well to maximise their income. Arsenal, Chelsea, Everton and Manchester United are reputed to be interested in the Ivory Coast international. He has two years remaining on his contract and is valued at between £ 30 and 40 million. The future is also uncertain for Palace’s popular manager, Roy Hodgson, whose contract ends this summer. Now 73, Hodgson may be replaced by a younger man.

Palace, who are in their longest-ever top flight run, are safe this season and are likely to finish in the places below mid-table. In the past two years, they have finished lower than the previous campaign and in 2020 they ended up in 14th. Such a trend can land a club in trouble, so in 2021-22 it will be important for Palace to move forward and attain some consistency. If Zaha does leave, that might provide the resources needed to add more quality to their squad.

Palace will always be overshadowed by the bigger London clubs, but South London is a huge catchment area and the potential is there for a successful challenger to emerge. Palace’s challenging is acquiring the necessary scale to become a bigger, more financially powerful club. Selhurst Park is one of the most atmospheric stadiums in London, but can Palace move from being a 25,000 to a 40,000 club? If they want to be contenders, it may be the only way they can step up a level.

Photo: Alamy