Albion’s most recent financial accounts show a loss of £11 million.
The reports, due for the 12-month period ending June 2023, reveal a deficit after profits were claimed two years ago.
The deficit follows a pre-tax profit of £5.4 million recorded through June 30, 2022, and a tiny profit of £100,000 in June 2021. Championship clubs are presently allowed no more than £39 million in losses over three years.
Albion’s turnover also fell by about £10 million, from £65.4 million in 2022 to £56.7 million. This covers the second and final year of parachute payments. Turnover will fall dramatically in the next set of accounts, ending in June 2024, because Albion did not receive any Premier League parachute payments for the 2023/24 Championship season.
The fees paid for player registrations during the time were £11.4 million, down from £12.6 million. These are sums paid throughout the past year, such as to Huddersfield Town for Karlan Grant and West Ham United for Grady Diangana, rather than fresh acquisitions.
Fees collected totaled £9.8 million, down from £17.8 million in 2022, with some of that remaining from Matheus Pereira’s 2021 sale to Al Hilal. Cardiff also purchased Callum Robinson at this time period.
Dara O’Shea’s £7 million transfer to Burnley before the end of June was factored into these figures, giving the club breathing room last year.
Staff costs increased from £42.4 million to £45.9 million. New signings, including free agents Jed Wallace, John Swift, and Okay Yokuslu, as well as fees paid for Brandon Thomas-Asante and Nathaniel Chalobah, contributed to the rise, as did the decision to fire Steve Bruce and replace him with Carlos Corberan in October 2022, among other factors.
The figure decreased last summer when a few senior out-of-contract players left, and it will fall even further this summer. A large number of first-team players will be out of contract at the end of June as Albion seeks to balance the books.
Club records differ from data for West Bromwich Albion Group, Albion’s parent business that is currently owned by Shilen Patel’s Bilkul Football WBA following the American purchase, which was completed at the end of February.
Group posted a loss of £7.6 million, £3.4 million less than the club, and the differences are due to the recently repaid £5 million – plus significant interest – Wisdom Smart loan received by Group from Bilkul Football, as well as the loan extension of a further £8 million to cover overheads received from equity firm MSD Holdings at the end of last November. Albion previously received £20 million from the lender. Previous accounts showed that the Wisdom Smart loan was impaired.
A King’s Counsel investigation is ongoing regarding a historic 2014 transfer from Albion, which was transferred from Guochuan Lai’s former West Bromwich Albion Holdings to Bilkul Football WBA during the takeover.
Patel took over the club’s debts, including running costs, for £60 million from Lai just over a month ago.
Patel’s Bilkul Football WBA, which he owns alongside his father Dr Kiran Patel, purchased an 87.8 percent stake in Group from Lai after the latter’s nearly eight-year tenure, which had caused considerable financial difficulties for the club due to a lack of investment.
While Albion’s losses are minor, the club may have a difficult period in complying with current financial fair play (FFP) standards, if they are maintained in the future.
Existing profit and sustainability regulations (PSR) allow Championship clubs to lose no more than £39 million over three years, or an average of £13 million per season.
EFL data are taken from the Group level (£7.6 million loss), but losses in the following set of accounts, ending June 2024, are projected to be substantially worse.
This may make it difficult for the club to stay on track in the future. Several first-team players are out of contract this summer, and head coach Carlos Corberan, together with incoming chairman Patel, will discuss how to balance the books while maintaining a large and competitive group.
The picture will become clearer for Albion once they know which league they will participate in next season, with promotion to the Premier League still possible via the play-offs. A return to the top flight results in a significant rise in revenue, as well as different rules.
