Bounce-back Burnley look ahead to the Premier

BURNLEY’s tremendous campaign in 2022-23 means the club will surely overcome any hardships from suffering relegation a year earlier, although the accounts for the season just ended will reveal an inevitable drop in revenues. 

The club has just published its financial report for 2021-22 and, despite falling through the trapdoor into the Championship, Burnley made a pre-tax profit of £ 36.1 million, bettered only by Manchester City, on turnover of £ 123.4 million. It is likely the club’s income will be less than £ 100 million and probably closer to £ 80 million in 2022-23.

Now that the EFL’s transfer embargo has been lifted, Burnley will go into the Premier with no small amount of optimism; they were worthy and impressive winners of the Championship, losing only three games and running-up a staggering 101 points. Vincent Kompany, their manager, won the hearts of the fans in his first season and has now signed a contract that takes him to 2028. This may seem a bold gesture on the part of the club, but the way Burnley played suggests they could acclimatise quite well in 2023-24 and Kompany is, after all, a sought-after asset. 

Burnley’s last Premier League season underlines the importance of TV and media income to the clubs. Burnley’s £ 123 million (an increase of 7.2%) included £ 105 million from broadcasting, representing 89% of overall revenues. Matchday earnings totalled £ 7 million, a relatively small figure compared to many Premier members but one of the highest recorded by the club, while commercial activity raised £ 11.5 million, better than 2020-21 but some way below pre-pandemic figures.

Burnley were relegated with a wage bill of £ 91.9 million, slightly lower than 2020-21 but still 75% of income, a ratio that was at the higher end of the Premier League. Two seasons earlier, the club’s wages totalled £ 100 million. Burnley’s player wages remained among the lowest in the division in 2021-22.

A number of players were signed in 2021-22, notably Maxwel Cornet (Lyon £12.8 million), Wout Weghorst (Wolfsburg £ 12 million) and Nathan Collins (Stoke City £ 12 million), but with relegation, Collins was sold to Wolves for £ 20 million, Dwight McNeil moved to Everton for £ 20 million and Cornet went to West Ham for £ 17.5 million. Burnley made a profit of £ 54.7 million on player sales, only marginally less than the four previous seasons combined.

Burnley’s net debt increased from £ 14.8 million to £ 53.2 million. They were taken over in 2020 via a leveraged buyout, which loaded £ 65 million of debt onto the club. This method, while undoubtedly convenient for investors, is an unpopular strategy with supporters. Some of the club’s debt had to be repaid after relegation, hence the club offloaded some players to bring down costs.

Kompany was hired in June 2022, two months after the iconic Sean Dyche was sacked. In the summer, Burnley signed no less than nine players from Belgium clubs including Anderlecht, Standard Liege, Cercle Brugge, Antwerp, Union Saint-Gilloise, Charleroi and Westerlo. In total, around 25 players joined Kompany’s revolution. The new-look side drew a few games at the start of the season, but then settled down to show their pedigree, sending a signal to their rivals with a 5-1 win at Wigan. At Turf Moor, Burnley won 16 of their 23 games and lost once in their penultimate home fixture against QPR. 

Kompany’s Burnley, who could be an attractive away team, will face their real challenge next season. Can they adjust to life in the Premier and avoid the relegation battle that often comes after promotion? Does the former Belgium international have what it takes to manage successfully in the top flight? He has been smart enough to resist any would-be employer, perhaps aware that the step-up can be a steep one. Last time around, they had a couple of good years before struggling and even tasted European football. With that experience in mind, will Burnley, with their modest financial profile, be adequately resourced for the return to the Premier?

Burnley break even in their pre-takeover season

BURNLEY, so long paragons of common sense football management, broke even ahead of the club’s takeover by Alan Pace’s ALK Capital.

Burnley’s turnover fell by 3% to £ 133.8 million and revealed that the covid-19 pandemic had cost them around £ 10.5 million. Although last season they made a profit of over £ 4 million, a breakeven scenario was arguably an acceptable result given the backdrop of uncertainty and crisis.

All revenue streams decline, matchday, the obvious casualty, was down 27% to £ 4.6 million, while commercial fell by 5% and broadcasting by less than 2%. Obviously, should the current season continue in its current vein, matchday income could be all but wiped out in 2020-21’s accounts.

Burnley continue to over-perform given the size of the club, but the December 2020 takeover has introduced a very different dynamic to Turf Moor. Pace’s group took an 84% controlling stake in the club, paying US$ 231 million for the privilege. This was, effectively, a leveraged buyout transaction that included substantial borrowing from MSD UK, the family office of computer magnate Michael Dell. 

ALK said, at the time of acquiring the club, it had considered all economic circumstances, both on and off the pitch. They added that the private equity firm is committed to investing in the club and team. 

Pace, 53, is a Wall Street veteran and made his name at Citigroup. He is the former CEO of MLS franchise Real Salt Lake. Although he talks about data and using data and insights to develop and acquire talent, he insists the Burnley project is not about “playing Moneyball”.

Burnley, traditionally, have had low debt levels, but the takeover means the club is much more vulnerable. In such a climate, retaining Premier League football will be crucial in the years ahead. Burnley are currently in their fifth consecutive Premier campaign and should be safe from relegation soon. The club’s last Championship campaign was 2015-16 when revenues totalled £ 40 million, a figure that was almost swallowed up by player wages. There may be more pressure on coach Sean Dyche than he has experienced in the past – US owners are renowned as demanding employers. 

Burnley’s wage bill – £ 100 million in 2019-20 –  is among the lowest in the Premier and represents a wage-to-income ratio of 74.8% (up from 62.8% in 2018-19). Burnley’s total wages are a third of the amount paid out by Manchester City and Liverpool and half of Arsenal’s total bill. Burnley can claim, with some justification, that they get good value for money. A decade ago, Burnley’s wages totalled £ 15.4 million, which was more than their total income.

Similarly, their matchday and commercial income streams are one of the lowest. With cash totalling £ 81 million, they have more in hand than even Manchester United.

Burnley’s transfer policy is modest compared to their peers. Since they returned to the Premier, the club has spent £ 125 million in the market, but recouped £ 65 million. They are a bargain-hunting club but the number of big money deals has been relatively low – the sale of Michael Keane (£ 25 million) and Andre Gray (£18 million) represent their biggest transactions, to Everton and Watford respectively. Of the current squad, goalkeeper Nick Pope, James Tarkowski and Dwight McNeil are arguably the most marketable players. 

It will be interesting to see the new owners’ ambitions for the club and what they will consider as tangible success. Financial discipline will be important, coupled with realistic objectives, especially in 2021-22 when the full impact of the pandemic may hit home. Burnley have tasted Europe before, that might be one way to start. One thing is fairly certain, relegation struggles won’t be tolerated by owners who will expect some return for their investment. 


Photo: Flickr – David Arnone CC-BY-2.0