Bristol City enjoyed a good 2018/19 in what was their fourth consecutive year back in the Championship. It was nearly there last after they agonisingly missed out on the playoff places by four points in 8th.
A good Championship campaign was combined with a decent run to the FA Cup Fifth Round, eventually being knocked out by Premier League side Wolves.
Off the pitch, finances also began improving, with a loss of £25.2m in 2018 turned into a £9.8m profit, largely owing to high-profile player sales.
Let’s delve into the numbers.
Revenue Analysis
Bristol City saw their revenue increase from £26.2m to £30m (16%) after improving the commercial side of the club off the pitch to match their improved Championship performances.
Matchday revenue
Matchday revenue surprisingly fell from £6.6m to £6m (9%) despite performances on the pitch.
Average league attendance increased from 21,080 to 21,595 (2%). Bristol City’s run to the Carabao Cup in 2018 saw the club attract huge crowds for blockbuster ties against Manchester United and Manchester City, which clearly boosted matchday revenue, hence the fall this season.
Bristol City have maintained on-pitch performance in the Championship this season. However, they have been knocked out in the first round they entered both domestic cups in, ending a two year spell on successful cup campaigns. Therefore, Bristol City will have less marquee games this year and hence matchday revenue may once again fall towards the £5m mark.
Broadcast revenue
Bristol City saw broadcast revenue rise from £7.8m to £8.1m (4%) as they moved three places higher in the Championship to 8th and reached the FA Cup Fifth Round, this offset the fall in revenue from the lack of Carabao Cup run in 2019.
Bristol City are once again around the playoff places and hence are likely to see similar level of Championship revenue next year. However, exiting at the FA Cup Third Round compared to the Fifth Round in 2018 will likely see a small dip in broadcast revenue.
Commercial revenue
Commercial revenue increased significantly for Bristol City, rising from £10.4m to £14.5m (39%), their highest ever commercial revenue which was driven by further expansion of their non-matchday events as Ashton Gate becomes a leading events venue in the South West of England.
Bristol City positioning themselves as a leading events space on non matchdays has proven a huge success and the commercial team should be commended for this strategy.
Looking ahead, commercial revenue is likely to increase slightly should current trends continue as they push toward the £20m mark which would be a huge win for the club.
Other revenue
Other revenue increased from £1.2m to £1.6m (33%).
What does the future hold?
Bristol City are likely to see a similar level of revenue next year depending on their on pitch performance in the second half of the Championship season and the continuation of their commercial success.
A playoff place isn’t far off and if Bristol City can secure an incredible promotion, revenue should be boosted in the long term when in the Premier League as is the hope of every Bristol City fan.
Costs Analysis
Bristol City saw their revenue gains swallowed by rising costs as the costs of competing in the Championship continue to grow.
Operating costs rose from £51.2m to £56.6m (11%), driven largely by rising wages.
Amortisation
Bristol City saw amortisation charges remained stable, increasing from £7.8m to £7.9m (1%) despite a significant transfer activity, owing to a couple of large profile departures.
Net interest expense
Net interest expenses remained stable at £1.3m, as the club’s loan profile remained relatively similar with the club not taking out any significant loans in the year, relying on cash injections from their owners.
Wages
Total staff costs rose from £27.3m to £30.6m (12%) as the costs of competing in the Championship and signing quality players continues to rise.
Bristol city brought in an influx of new signings to replace significant departures which saw their wages rise by roughly £63k a week, which in the grand scheme of things is not a huge amount given the wage rises of many of their Championship peers.
Director remuneration rose from £109k to £145k (33%) after another decent season.
What does the future hold?
Bristol City once again have had a busy transfer season with an influx of new arrivals and high-profile departures. This is likely to see another wage rise and potentially an increase in amortisation, with total costs likely to rise to close to the £60m barrier.
Transfer Analysis
Bristol City had significant transfer activity in 2018/19, with five incoming signings and five departures for transfer fees with three departures in excess of £6m.
In came Webster (£3.6m), Weimann (£2m), Hunt (£1.5m), Eisa (£1m) and Watkins (£1m) for a combined £9.1m.
Departing Bristol City were Reid (£10.2m), Flint (£7.2m), Bryan (£6m), Magnusson (£2.5m) and Djuric (£0.6m) for a combined £26.6m.
This led to Bristol City having a net transfer income of £17.5m, after a net transfer spend of £9.1m in 2018.
Bristol City coped well with the departures of key players Reid, Flint and Bryan, replacing Flint with Webster proved a master stroke, with the player signing for Brighton in the summer for around £20m, a huge profit in just one season.
The departures of the above three players helped Bristol City record a profit on player sales of £38.2m, without these sales, Bristol city would have recorded a loss of nearly £30m, showing the importance of player sales to their profitability.
The profit on player sales of £30.4m suggests that Bristol also benefitted from the activation of some transfer clauses from previous sales, given that transfer outgoings amounted to £26.6m, the board noted further clauses have been met following the sale of Kodija to Aston Villa in 2016/17.
Further high-profile sales in 2019/20 (Webster, Kelly and Brownhill) should see another profitable year for Bristol City.
Cash
In cash terms, Bristol City spent cash of £10.9m, while they received cash of £17.1m, a net transfer cash in flow of £6.2m, which the day to day operations of running the club.
Debts
In debt terms, Bristol City owe transfer fees of £5.5m, all of which is owed in 2020.
Bristol city in contrast are owed £27.2m in transfer fees. No breakdown of when these amounts are due is provided. Nevertheless, Bristol City are in a comfortable position, being owed net transfer fees of £21.7m, which will help the club run financially soundly over the next couple of seasons, given that they also received significant transfer fees in 2019/20.
Debt Analysis
Bristol City traditionally run on very little cash reserves, having to rely on all the cash they receive to run the club, this is not unusual for a Championship club or many business in general.
This year was no different with cash levels increasing from a lowly £0.3m to £0.8m (plus an overdraft of £1.3m). The net £6.2m received in transfer fees assisted with the running of the club, however the owners still had to inject cash of £10.1m (2018: £18.7m) to cover the underlying lack of profitability outside of transfer activity.
The cash injection also contributed to a £1.4m (2018: £1.1m) on stadia and training facility improvements.
Debt levels did fall slightly however, falling from £72m to £69.9m (3%) as owner cash injection and transfer proceeds allowed the club to pay down their overdraft to £1.3m.
This is the first time debt levels have fallen since 2013 and show a slight improvement in their finances, driven by a number of transfer sales as the club benefit from good scouting.
Going forward, Bristol City are going to have to continue finding new gems to remain competitive and push for promotion, but also to help manage their finances, with the club loss making without transfer sales in 2019. This becomes even more important with plans in place to redevelop their training facility at Failands.
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