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Fulham FC’s 2019 Finances Predicted

Fulham 2019 Financial Predictions

Fulham enjoyed a spectacular Wembley Play-off victory in 2018 to achieve promotion back to the Premier League for the first time since 2014 ahead of the 2018/19 season.

The season began with much hope after an ambitious summer transfer spend that saw Fulham become the first promoted side to spend over £100m in the season after promotion.

Although they didn’t lack ambition, it was not reflected in performances on the pitch with Fulham condemned to relegation following a 19th placed Premier League finish.

Despite relegation, one season in the Premier League will see their 2019 finances rocket with a huge rise in revenue expected.

Let’s get into the numbers.

Revenue Prediction

Matchday Revenue

Fulham earned matchday revenue of £7m in 2018 in the Championship. Promotion to the Premier League will bring higher ticket prices and attendances rose from 19,896 to 24,371 (22%) as fans clamoured to see their team in the top flight for the first time in five years.

When Fulham were last in the Premier League, matchday revenue was £12m, and that was five years ago. We expect matchday revenue to reach similar levels and increase by around £5m.

Commercial Revenue

Fulham’s commercial revenue was £8m in the Championship, relatively high at that level due to their historic performances and London status.

Fulham had the same kit manufacturer (Adidas) as in 2018 however they signed a new lucrative deal with DafaBet (replacing Grosvenor Casinos) which will see a significant boost in commercial revenue.

Promotion is likely to see performance related clauses activated in existing partnerships while there is likely to have been a host of new commercial partnerships owing to their (short-lived) Premier League status.

Based on this, we expect commercial revenue to rise to around £13m. Commercial revenue was £12m in their most recent Premier League campaign (2013/14).

Broadcasting Revenue

Premier League Payments

Fulham earned broadcasting revenue of £23m in 2018, largely from the English Football League (EFL) for their Championship performance (3rd). This is where Fulham will see a huge uplift in revenue, with Fulham earning Premier League distributions of £102m after finishing 19th and being featured on TV 13 times during their relegation battle.

Domestic cup performances were very similar to as in 2018 and therefore no material financial impact is expected.

Based on this, Fulham will likely see an increase in broadcasting revenue of £80m to £103m, a 348% increase in broadcasting revenue, showing once again the huge riches available on promotion.

Total Revenue

Total revenue was £38m for Fulham in 2018. Based on the above predictions, Fulham will see a huge £90m in revenue to around £128m. This increase may be even larger if commercial revenue rises by more than we expect.

Relegation will see revenue begin to fall right back down after their short-lived Premier League stay. A drop of 30-40% is likely in 2020.

Costs Prediction

Amortisation

Fulham had amortisation of £19m in 2018 which was already relatively high for a Championship club. After a huge transfer spend of just over £100m ahead of their first Premier League campaign in five years saw eight new signings enter Craven Cottage.

Based on the reported transfer fees and contract lengths, amortisation is likely to rise by between £20-£25m to around £40m, more than double the 2018 numbers.

Wages

Fulham spent £54m on wages in 2018. This does include promotion wage bonuses that will not be present in 2019.

Based on reported wages of their new signings and new contracts for their promotion heroes, wages are likely to rise by between £15-20m to around £70m, on the basis that promotion wage bonuses had already been recorded in 2018.

Other Operating Costs

Other operating costs were £26m in 2018. Promotion to the Premier League is likely to see such costs rise a few million pounds to £30m.

Total Costs

Fulham recorded total operating costs of £99m in 2018. Based on the above, total costs are likely to rise by around £40m to £140m as the club spent big in a bid to retain their Premier League status.

The rise in costs (£40m) is less than halve the expected rise in revenue (£90m), therefore a huge improvement in profitability is expected.

The rise in costs however could be greater if reported wages are wide of the mark. Wages will drop significantly following relegation due to outgoing players and relegation wage drop clauses, a necessity if Fulham are to comply with EFL Financial Fair Play (FFP) regulations.

Transfers Analysis

Fulham had a busy summer ahead of the 2018/19 season spending over £100m on eight players who were meant to secure Premier League survival .

In came Seri (£27m), Anguissa (£22m), Mitrovic (£22m), Mawson (£15m), Bryan (£6m), Fabri (£5m), Le Marchand (£4m) and Babel (£2m) for a combined £103m.

The only departure was Button for £4m.

This led to a huge £99m transfer net spend, the largest ever by a promoted side. Unfortunately for Fulham, the signings (other than Mitrovic and Babel), failed to perform as expected as the new signings struggled to settle in England with five of the signings experiencing English football for the first time.

Fulham recorded a profit on player sales of £14m in 2018, this is likely to fall by around £10m after the only sale in 2019 being Button for £4m, who is likely to see a profit of around £3m recorded on his sale.

Fulham also owed £19m in transfer fees in 2019, this was however largely offset by being owed £12m, with the £7m net not affecting transfer plans significantly.

Profit/Loss Prediction

Fulham recorded a significant loss in 2018 of £46m after paying promotion related bonuses under low revenue conditions.

Based on the above predictions, Fulham are likely to still be in a slight loss making positon of between £5-10m despite a £90m rise in revenue.

A profit could be recorded if commercial revenue rises by more than expected or wages/amortisation rise by less than expected which is possible. However, for Fulham, their financial position is likely to be one around the break-even point due to heavy spending in 2018/19.

It looked to have paid off following promotion, but poor signings and an immediate return to the Championship mean that the club are likely to be under FFP players immediately on their Championship return.

The sale of youth prospect Sessegnon in 2019 will go a long way to easing this financial pressure but it will be interesting to see how Fulham balance the goal of returning to the Premier League with the financial scrutiny they may be under by the EFL.

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Everton FC’s 2019 Finances Predicted

Everton once again finished 8th in the Premier League in 2018/19, missing out on the Europa League and a lucrative pay check.

It was a similar season to 17/18 with no significant cup runs, with the only real difference being the lack of European football.

This was despite a near £100m transfer spend that was meant to close the gap on the top six, however inconsistencies throughout the season let the team down at vital moments.

This significant transfer spend and the lack of player sales this year mean that Everton are likely to see mounting losses that may cause financial issues going forward.

Let’s have a look at the numbers.

Revenue Prediction

Matchday Revenue

Everton earned matchday revenue of £16m in 2018 after 25 home games in the campaign. The lack of European games saw Everton have three less home games and average attendance remained stable, decreasing slightly 38,797 to 38,780.

Due to the fall in home games, we expect Everton’s matchday revenue to fall slightly to £15m. In comparison, Everton had matchday revenue of £14m in 2017 when they last didn’t have European football.

Commercial Revenue

Everton had commercial revenue of £43m in 2018. It is worth noting that this includes Europa League revenue, which is included in ‘Other commercial activities”, along with corporate hospitality and events income.

Usually we would record this within broadcasting revenue, however due to not knowing the exact amounts we will predict its effect on ‘commercial revenue’.

UEFA have reported that Everton earned £14m from their Europa League campaign, despite exiting at the group stage. This will leave a sizeable hole in their revenue without this income, immediately reducing their commercial revenue by £14m.

Everton have the same shirt sponsor (Sports Pesa) and kit manufacturer (Umbro) as in 2018. Being the two major lucrative deals the club have, commercial revenue is unlikely to change too much.

Based on the lack of Europa League football and only a slight increase likely in sponsorship income, commercial revenue is likely to fall by around £12m to £31m.

Broadcasting Revenue

Premier League Payments

Everton once again finished 8th placed in the Premier League. In 2018, Everton earned Premier League distributions of £128m after featuring 19 times on TV.

2019 saw a slight increase in Premier League income to £129m after an increase in distributions by the Premier League, despite a fall in TV games shown to 18.

Everton’s domestic performance had minimal change and therefore will have limited financial impact.

Therefore, we expect Everton’s broadcasting revenue to increase by £1m to £131m.

Total Revenue

Based on the above assumptions, Everton should see total revenue fall by £12m to around £177m, primarily down to having no European football. 

Everton will be relying on commercial growth to not experience a major revenue drop and will need to qualify for the Europa League to see any significant revenue rises going forward.

Costs Prediction 

Amortisation

Everton recorded amortisation of £67m in 2018. Major signings Richarlison, Mina and Digne will see a significant rise in amortisation in 2019.

Based on these additions and the lack of player sales, amortisation should rise to at least £80m depending on the amortisation players left attracted.

Exceptional costs

Everton had exceptional costs of £34m in 2018 after the sacking of Koeman and feasibility/project spending on their potential new stadium.

There may be such costs in 2019 if further stadium planning occurred in 2019 however this is uncertain, while Allardyce was on a short term contract so not much, if any compensation will be due after his termination.

Based on this, our best estimate is that there will be none of these costs next year and therefore costs will fall by £34m.

Wages

Everton recorded wages of £145m in 2018, only a few million pounds less than Tottenham, showing what can be achieved despite a relatively low wage bill compared to the other members of the top six.

On top of the three big signings already mentioned, Everton spent large amounts on the wages of loanees Zouma, Gomes and free signing Bernard.

A few high earners left in Klaasen, Mori, Mirrallas, Rooney and Robles.

Based on these signings and departures, it is likely there will be significant wage growth, with wages increasing to around £160m at least.

Other Operating Costs

Everton recorded other operating costs of £36m in 2018. We expect similar levels of costs here with a slight increase to £38m.

Total Costs

Everton’s total costs were £287m in 2018. Owing to the lack of exceptional costs in 2019, Everton should see a slight fall in total costs to £285m. This is highly dependant on how much wages grow by.

If there is further wages growth above what we have predicted, or if there had been other exceptional costs in 2018/19, there could potentially be a growth in costs.

Based on the reduction in revenue, and the relatively stable costs, profitability has fallen significantly.

Transfers Analysis 

Everton were big spenders in the summer transfer window, strengthening in key areas as they looked to back their new manager, Marco Silva.

In came Richarlison (£35m), Mina (£27m) and Digne (£18m) for a combined £80m.

Departing Goodison Park were Klaasen (£12m), Mori (£8m) and Browning (£4m) for a combined £24m.

The signings did well and were a step in the right direction, improving Everton in their positions. Despite the improvements the signings made, it wasn’t enough to bridge the gap to the top six, who also strengthened.

Everton recorded a profit on player sales of £88m in 2018, owing mainly to the sale of Lukaku to Manchester United. The sales in 2019 were less significant and Everton will record a loss on the sale of Klaasen, having signed him for £24m only a couple of seasons ago. This loss will negate the profits realised on Mori and Browning so Everton are likely to only break even in transfers this year.

Therefore, Everton have a gaping £88m Lukaku sized hole in their finances that we will come to in the next section.

Everton also had to pay £55m in transfer fees from previous windows, however this was more than covered by the £64m clubs owe them for recent player sales (such as Lukaku). Everton do also owe a further £33m which is due in 2020 and beyond however this shouldn’t affect future transfer plans significantly, whereas the rising losses may do…

Profit/Loss Prediction 

Everton made a loss of £13m in 2018 despite the profit on player sales of £88m which were largely due to the Lukaku sale.

Without these sales, and the likely fall in revenue while costs remain stable, is likely to see a huge financial loss in excess of £100m in 2019.

Such a huge loss is likely to call in questions of Financial Fair Play (if they qualify for Europe) and also the Premier League Financial Sustainability rules, which to date are yet to be broken.

It will be interesting to see how this develops over the season with little hope of improving profitability without player sales (at a profit) which do not seen forthcoming currently.

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Crystal Palace FC’s 2019 Finances Predicted

Crystal Palace 2019 Financial Predictions

Crystal Palace extended their longest ever stay in the Premier League, securing their 7th successive season in the top division under Roy Hodgson despite relatively low spending of £10m.

It was a season of much the same for Crystal Palace, finishing 12th (11th in 2018) in the Premier League and once again exiting the League Cup at the fourth round. There was a FA Cup run to the Quarter Final with the club just missed out on a trip to Wembley.

Financially, the fact there was little change on the pitch meant there was little change off it, with large losses once again likely due to a lack of player sales.

Let’s have a look at the numbers.

Revenue Prediction

Matchday Revenue

Crystal Palace had matchday revenue of £11m in 2018 and will see minimal change in 2018 owing to having the same number of home games (21) as in 2018.

Average Premier League attendance rose slightly from 25,063 to 25,455 (2%) which may see a slight increase in matchday revenue, however, is likely to remain around £11m.

Commercial Revenue

Crystal Palace earned £15m in commercial revenue in 2018. A new kit deal with Puma (replacing Macron) and a couple of other new partnerships should see a small rise in commercial revenue to around £17m.

Broadcasting Revenue

Premier League Payments

Broadcasting revenue was £121m for Crystal Palace in 2018, 81% of their total revenue which showcases the importance of Premier League survival to the club.

Premier League distributions remained at £114m for Crystal Palace as the slight increase in prize money available compensated for their one position drop in the league table, having been shown on TV 12 times (the same as in 2018).

Crystal Palace had an improved showing in the FA Cup, making the quarter-finals having only made the third round the previous year. This should boost broadcasting revenue by around £1m to £123m.

Other Revenue

Other revenue was £3m in 2018. As we don’t know exactly what this amount comprises of, our best estimate is it will remain at this level, having also been at £3m in 2017.

Total Revenue

Based on the above, Crystal Palace should see a slight rise in revenue from £150m to £153m. Any growth will be dependent on Crystal Palace’s commercial revenue and any lucrative new deals the club managed to make.

It would be no surprise to see revenue remain the same as in 2018, given the minimal change in performance on the pitch.

Costs Prediction

Amortisation

Crystal Palace recorded amortisation of £46m in 2018 and after a summer of only one signing for a transfer fee in Kouyate (£10m), it is likely that amortisation may fall slightly to £45m based on the lack of reinvestment this year compared to previous seasons.

Wages

Crystal Palace paid wages of £117m in 2018 and are likely to see an increase in this due to the signing of bosmans Meyer and Guaita on lucrative wages.

A few departures on free transfers will offset some of these wages and therefore we expect wages to increase slightly to £120m.

Other Operating Costs

Crystal Palace recorded other operating expenses of £24m in 2018. We expect the trend of slight increases to continue and for other costs to rise to £25m.

Total Costs

Crystal Palace’s costs were £187m in 2018, and with the above predictions we expect to increase slightly but remain at a similar level at £190m.

Any rise in costs is likely to be similar to any rise in revenue and therefore their profitability (or the lack of it) will remain relatively similar.

Transfers Analysis

It was a quiet summer for Crystal Palace with Kouyate joining for £10m. Batshuayi and Ayew joined on loan while Meyer, Guaita and Sako joined as free transfers.

There were no sales in the year with Cabaye the only notable departure after his contract expired.

This net transfer spend of £10m was considerably down on their net spend of £44m in 2018 and was the lowest net spend by the club since 2013 when they were promoted, showing a tightening of the purse strings by the club.

There were minimal player sales in 2018, however a profit on player sales of £2m was recorded. In 2019 with no player sales means there shouldn’t be any such amount recorded which will negatively impact their bottom line.

Crystal Palace had significant net transfer fee debts of £38m that were due in 2018/19, showing why they had to be more conservative last year owing to previous summer transfers. Crystal Palace also owe a further £9m in transfer fees in 2020 and beyond.

Profit/Loss Predictions

Crystal Palace recorded a loss of £33m in 2018 and when accounting for the above adjustments are likely to see a similar loss in 2019 of £35m, meaning they have total losses of nearly £70m in the last two seasons which obviously isn’t a sustainable position unless their owners are willing to input serious capital, which doesn’t seem to be the case.

This shows why the club had to sell either Aaron Wan-Bissaka or Zaha in the summer as their finances needed a boost and explains why the majority of the sale to Manchester United hasn’t been reinvested. The sale of Wan-Bissaka for £50m will be realised as all profit next year which will swing Crystal Palace back to a profit if they have a similar season to the last two.

A strong start to the season and the sale of Wan-Bissaka suggest that Crystal Palace may once again be profitable in 2020.

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Cardiff City’s 2019 Finances Predicted – Conservative Cardiff

Cardiff 2019 Financial Predictions

Cardiff secured their second season ever in the Premier League after an unexpected promotion-winning campaign in 2018 under Neil Warnock.

The season was always expected to be a difficult one in attempting to avoid relegation, however it proved even more emotional due to the sad passing away of Sala following his signing in the January transfer window.

Despite an emotional campaign, Cardiff put up a good fight in attempting to remain in the Premier League, showing signs of revival until a controversial loss to Chelsea halted their momentum and relegation was shortly after confirmed.

The riches of the Premier League are apparent throughout these predictions with a swing in their financial situation detailed below in what proved to be a financially successful season for Cardiff despite relegation.

Let’s delve into the numbers.

Revenue Prediction

Cardiff would have been predicting a large increase in revenue following promotion and won’t be disappointed with a huge increase likely on last season’s £33m revenue.

Cardiff 2019 Revenue Prediction

Matchday Revenue

Matchday revenue is usually the most stable revenue source for clubs with attendances staying fairly constant year on year. However, this wasn’t the case for Cardiff who saw average attendance rise from 20,146 to 31,229 (55%) as fans clamoured to see their team back in the big time for the first time since 2013.

This, combined with the higher ticket prices from their Premier League status, is likely to see a sizeable increase in their matchday revenue to around £9m from £5m. In comparison, Cardiff had matchday revenue of £8m last time they were in the Premier League in 2013/14.

Commercial Revenue

Commercial revenue has slowly deteriorated since relegation where commercial revenue was £7m (2013/14). Commercial revenue went as low as £3m prior to 2018 where promotion saw commercial revenue increase to £6m.

Despite their main sponsor (Visit Malaysia) and kit manufacturer (Adidas) remaining the same, new deals with a variety of partners including a new sleeve sponsor (JD) and official betting partner (1XBet) will see a sizeable rise in commercial revenue to around £10m.

This however may be reduced by any relegation clauses negotiated with these sponsors.

Broadcasting Revenue

Premier League Payments

Broadcasting revenue has languished at between £20-30m since relegation from the Premier League, with Cardiff recording broadcasting revenue of £22m in 2018 following a 2ndplaced Championship season.

Now, following a season in the Premier League, Cardiff will benefit in a sharp rise in revenue due to receiving £103m from the Premier League for their 18thplaced finish and for featuring on TV 12 times.

This will be the majority of Cardiff’s broadcasting revenue due to insignificant domestic campaigns with exits by the Third Round in both.

At £103m, this represents a £81m, 368% increase in broadcasting revenue.

Total Revenue

Based on the above predictions, matchday revenue and commercial revenue will increase by around £4m each while broadcasting revenue will increase by around £81m give or take.

This will see total revenue increase to approximately £122m, an £90m increase from 2018, showcasing the huge riches on offer for securing promotion to the Premier League.

This affect won’t last long following relegation, although parachute payments will soften the blow. However, despite parachute payments, Cardiff can expect their revenue to fall by around 30-40% following relegation.

Costs Prediction

With promotion, costs are expected to increase significantly in order to compete and try and survive in the Premier League. A conservative Cardiff however seemed to play it financially safe as detailed below.

Amortisation

Cardiff recorded amortisation of £5m in 2018 and after spending £46m in the summer saw a large increase on this total.

(Due to the sensitivity and uncertainty surrounding Sala, any financial analysis has omitted his transfer fee and wages).

Based on the transfer fees recorded and their reported contract lengths, we expect amortisation to rise by around £8m to £13m.

Wages

Cardiff saw a large rise in their wages in 2018, from £29m to £48m (66%), largely due to exceptional costs relating to promotion bonuses to players and staff which won’t be incurred this year.

Based on available information on their signings’ wages, new contracts and also due to the lack of outgoings, we expect underlying wages to rise by around £10m. However, due to the promotion bonuses recorded, actual wages is likely to fall by £13m from 2018, an unusual situation but one that does occasionally happen (Newcastle saw their wages drop following promotion).

Other Costs

Cardiff had over costs of £14m in 2018. Following promotion to the Premier League, these costs are likely to increase significantly due to the extra costs of functioning as a Premier League club due to additional administrative, broadcasting and security costs.

We expect costs to increase to around £20m on the back of these assumptions.

Total Costs

Based on the above predictions, we expect costs to increase slightly to around £70m from £67m, a relatively small 4% increase.

With revenue increasing by such a large extent absent of a significant rise in costs, profitability should improve hugely for a club that has incurred a loss in 6 out of the last 7 seasons.

This also means that there should be less pressure on Cardiff to reduce their costs and wage bill following relegation which may well position them for an immediate return to the Premier League.

Transfers Analysis

Cardiff saw a number of incoming signings from the Championship, a league they and their manage are familiar with and hence had trust in them to potentially make the step up to the Premier League.

In came Murphy (£10m), Reid (£10m), Cunningham (£4m), Smithies (£4m) and Bacuna (£3m) for a total of £46m, more than their transfer outlays in the last 4 seasons combined.

There were no significant outgoings for transfer fees as Warnock looked to keep the majority of his group together.

The signings all did fairly well but proved limited in some areas which saw the club relegated despite their best efforts.

Cardiff had no player sales in 2019 and hence no profit on player sales. In 2018 Cardiff recorded a profit on player sales of £2m.

In terms of transfer fees owed, Cardiff are owed around £0.5m and owe roughly £2m, a £1.5m net creditor position. This isn’t a significant amount and gives Cardiff greater financial freedom in the transfer market, although this is likely to have increased following their signings unless the majority were paid up front, which is possible given the Premier League cash they received.

Cardiff may potentially also face some contingent transfer fee clauses, these were £2m in 2018 and are likely to have increased a fair bit.

Profit/Loss Prediction

Cardiff recorded a huge £36m loss in 2018 following promotion (a large portion does however relate to promotion bonuses of £23m). Following promotion and their newfound Premier League riches, Cardiff are likely to record a profit of £40-50m, an outstanding amount considering no player sales.

This is largely due to a conservative approach following promotion in which the club chose not to overspend to attempt to secure survival, potentially due to the odds seemingly being stacked against them from the beginning.

This financially safe approach does put them in good stead to be financially secure back in the Championship and sustainably build for a return to the Premier League in the next few years. It also will help with Financial Fair Play compliance which shouldn’t be an issue with their current financial health.

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Chelsea 2019 Finances Predicted – Champions League Losses

Chelsea 2019 Financial Predictions

Chelsea had a turbulent 2019. After missing out on the top 4 in 2018, Conte lost his job and Chelsea were condemned to the Europa League. Sarri-ball entered Stamford Bridge and renewed optimism following a strong start to the season that saw them neck and neck with title rivals Manchester City and Liverpool.

However, things soured, with Sarri-ball deemed ‘boring’ and points began to be dropped, leaving Chelsea in a top 4 battle and calls for Sarri out. Sarri turned it around following an eventful League Cup final loss where Kepa refused to be subbed off, with Chelsea going on to lift the Europa League and finish 3rdin the Premier League, a good season by anyone’s standards.

Despite this, Sarri sought pastures new and landed nicely on the Juventus job, leading to club legend Frank Lampard taking the reins for the new season, under the constraints of a transfer ban.

This article analyses the financial effects of Chelsea’s lack of Champions League football and whether a Europa League win was enough to aid their finances.

Revenue Prediction

Chelsea 2019 Revenue Prediction

Chelsea saw their revenue balloon to record levels in 2018, rising from £368m to £448m after a return to the Champions League. Things were not so rosy in 2019 after dropping out of the competition once again…

Matchday Revenue

Chelsea’s matchday revenue was £74m in 2018, up from £65m in 2017 due to the lack of Champions League games. Chelsea dropped into the Europa League in 2019 and did in fact have 1 more home game. However, the lower pricing of Europa League games compared to the Champions League should see a drop in matchday revenue of around £2m to £72m. This drop could be more significant depending on the ticket price drop of the Europa League, however their appearance in the final should negate this.

Broadcasting Revenue

Premier League Payments

Chelsea’s broadcasting revenue broke the £200m barrier for the first time in 2018 at £204m thanks to their Champions League return.

An improved Premier League performance (moving from 5thto 3rd) boosts Premier League distributions by £4m for Chelsea to £146m, this is despite featuring on TV once less in the season.

The 2018 FA Cup winners fared far worse in last season’s competition, exiting in the 5thround to Manchester United (who they beat in the 2018 final). This saw their total prize money fall from around £3.5m to £0.3m, despite total prize money in 2019 doubling from 2018 levels.

Chelsea reached the League Cup final in 2019, going one step further than in 2018. The prize money on offer is immaterial to Premier League clubs and isn’t considered in our analysis.

Now to Europe. Chelsea reached the Last 16 in the 2018 Champions League, being eliminated by Barcelona. They fared much better in the lesser Europa League, beating London rivals Arsenal in the final to claim their second Europa League trophy.

You may think the prize money on offer for winning the Europa League would rival that of only reaching the Last 16 of the Champions League. WRONG.

UEFA confirmed that Chelsea received a humungous £58m from their 2018 Champions League campaign.

As for the 2019 Europa League campaign based on the guidance provided by UEFA on distributions, Chelsea stand to make the around £30m from the trophy winning exploits. This is a £28m drop in prize money despite winning a trophy, showing why the top six fight tooth and nail for those top four places.

In total, broadcasting is revenue is likely to fall by around £27m to £177m, a drop of 13%.

Commercial Revenue

Chelsea saw a big boost in commercial revenue in 2018, rising from £140m to £170m on the back of their lucrative Nike kit deal.

No such big deal was secured in 2019 meaning the rise will be a lot less. Chelsea did secure a lucrative new sleeve sponsor in Hyundai worth £5m a year while Chelsea would have also secured new partnerships with commercial companies.

Therefore, we suspect a rise of around £12m to £182m to a prudent estimate for the Blues.

Total Revenue

Overall despite a trophy winning season, there was always likely to be a drop in revenue following their inability to qualify for the Champions League.

Combining the above predictions, Chelsea are likely to see a £18m drop in revenue from £448m to £430m, almost entirely due to their drop from the Champions League to the Europa League, despite winning the competition.

A larger rise in commercial revenue than predicted here would close the gap (while a smaller one would widen it). Chelsea did fortunately qualify for the Champions League for the 19/20 season so their revenue should bounce straight back up (provided they reach the knockout stages).

Costs Prediction

Chelsea 2019 Costs Prediction

With record revenue came record costs for Chelsea in 2018, with costs breaking the £500m barrier for the first time at £524m, well in excess of their revenue last year, showing their lack of profitability.

Fortunately, costs are likely to experience a smaller increase than in 2018.

Amortisation

Chelsea had amortisation of £127m in 2018, up from £90m in 2017 due to reinvestment in the playing squad.

In 2019, Chelsea broke the world record transfer fee for a goalkeeper in Kepa (£72m) to replace the outgoing Courtois (£32m). The other big transfers were Jorginho and Pulisic (who joined in January and was loaned back to Dortmund for the remainder of the season).

Based on the transfer fees and contract lengths of the new signings and those sold, we expect amortisation to rise by around £18m to £145m for Chelsea. This is on the basis that both Courtois and Fabregas had already been amortised to close to zero when they were sold.

Wages

Chelsea 2019 Wages Prediction

Chelsea have one of the world’s highest wage bills at £246m, only Manchester United, Manchester City and Liverpool had greater wage bills in the Premier League than Chelsea.

Wages are the most difficult area of finances to predict due to the opaque nature and privacy of these amounts. 

Chelsea signed Kepa, Jorginho, Pulisic (loaned straight back out), Higuain (on loan), Kovacic (on loan) and Green in 2018. They sold Courtois and Fabregas while they also loaned out a whole host of fringe players.

Based on the data available, wages are likely to fall by around £10m to £236m based on the loaning out of a large number of players. The wages may however be higher if they are paying the wages of any of the players loaned out.

Other Costs

Chelsea have seen a steady rise in other expenses, rising from £129m in 2017 to £151m in 2018. We expect this to continue with a £10m rise in 2019 to £161m.

Chelsea are likely to have other costs relating to the sacking of Conte that will likely see costs rise. A rumoured pay-out of £9m is expected based on information from various sources, taking pay-offs by Abramovich to an outstanding £92m during his time at the club.

Total Costs

Based on these additional costs, we expect total costs to increase by around £27m from £524m to £551m, largely due to amortisation rising and the compensation due to Conte.

This means that before taking into account transfers, Chelsea continue to be losing money, approximately £80m, a huge amount that could quickly cause financial issues for Abramovich who will have to continue footing the bill.

Transfers Analysis

Chelsea 2019 Transfers

Chelsea had a busy summer of outgoings with various loan deals while key players had to be replaced. Courtois (£32m) was replaced with Kepa (£72m) and Fabregas (£8m) was replaced with Jorginho (£51m). Pulisic was also brought in for the 19/20 in anticipation of the sale of Hazard, which was duly completed and their now active transfer ban.

This took Chelsea to a net spend of £141m, up significantly on the £54m spend in 2018 as Chelsea looked to back Sarri in the transfer market, while they also had one eye on their transfer ban.

Kepa has proven a good signing despite a few troubles while the quality of Jorginho cannot be denied, fans are still adapting to his playing style and main qualities. Neither Fabregas nor Courtois were particularly missed.

With sales much lower than in 2018, there will be a steep drop off in profit on players sales which was £113m in 2018. Courtois and Fabregas were sold for a combined £40m and this should be all profit based on both players being at the club for a long time. Therefore, Chelsea’s profit on player sales is likely to fall by a huge £73m, meaning profitability will take a huge hit.

This may be reduced slightly by the number of loan fees the club received in 20189which is likely to be between £15-20m.

Chelsea are in an okay position regarding transfer fees owed. Chelsea owe clubs a huge £136m in fees in 2018/19 and a further £33m after this, however they are also owed £92m in 2018/19 and £58m after this. 

Therefore, Chelsea are in a net creditor position of £44m this year however after that date they are owed £25m so the differences aren’t huge and shouldn’t affect transfer plans.

Profit/Loss Prediction

Chelsea 2019 Profit Prediction

Chelsea made a profit before tax of £30m in 2018, largely due to profit on player sales of £113m.

With revenue due to fall by £18m, costs to rise by £27m (including Conte compensation), profit on player sales to fall by £72m and loan fees to up around £17m, we expect profits to fall by an eye-watering £100m, meaning a loss of around £70m in 2019.

This isn’t great new for Chelsea and their owner, although it would largely have been expected due to the lack of Champions League football, lack of player sales and the sacking of Conte.

With the return to Champions League football and the sale of Hazard, this is merely a timing issue with Chelsea likely to return to a profit in a huge way next year so fans should not worry too much.

The only issue is without player sales, the underlying profitability is poor and unsustainable, however this is an issue common for the majority of Premier League clubs.

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Burnley 2019 Finances Predicted – Dyche’s Europa Nightmare

Burnley 2019 Financial Predictions

Burnley had a spectacular 2018, finishing 7thand securing a preliminary spot in the Europa League for 2019. This seemed to promise newfound riches in what was their first season in Europe for 51 years.

However, qualifying was harder than expected with a half fit squad barely back from their holidays and with the headache of balancing their early Premier League fixtures, Burnley found themselves out in the Play-off round against Greek club Olympiacos.

This was disappointing not only due to the failure to make the groupstage, but it was a sign of things to come as Burnley struggled to match their previous season performances following a lack of significant investment, nearly seeing the side relegated before they steered clear to a 15thplaced finish.

This article analyses the effects of Burnley’s (short) European adventure and their disappointing domestic campaign on their finances.

Revenue Prediction

Burnley 2019 Revenue Prediction

Burnley saw their revenue rise to record levels of £139m in 2018 following their remarkable 2018 achievements given their budget. Things were not so rosy in 2019…

Matchday Revenue

Burnley saw a nice boost to matchday revenue from £7m to £8m following promotion in 2017, at which level it has remained since.

Average attendance at Premier League games fell slightly from 20,688 to 20,534 (1%). Despite this, Burnley’s adventures into Europe yielded an additional 3 home games and although it ended quickly, Burnley should see matchday revenue rise slightly but remain at the £8m level (when rounded).

Broadcasting Revenue

Burnley saw broadcasting revenue reach record levels of £122m in 2018 following their 7thplaced Premier League finish, which made up a huge 88% of their total revenue in 2018.

The majority of broadcasting revenue is Premier League revenue for Burnley, accounting for £120m of the £122m in 2018. Following a drop of 8 places to 15thin 2019, Premier League revenue dropped £13m in 2019 to £107m. This is despite Burnley seeing an extra televised game (11) in 2019 following their relegation battle.

Burnley didn’t fare much better in the domestic cups. Burnley went one round further in the FA Cup to the 4thRound, netting approximately £136k extra from this. League Cup performances were just as bad as 2018, exiting in the Third Round.

Now, the Europa League was meant to be a nice boost to Burnley’s finances in 2019, with a place in the group stage potentially worth £7-10m based on performances.

However, an exit in the Play-Off round meant none of this was realised and Burnley can only expect to receive around £1m for their troubles, a disappointing figure.

Therefore, Burnley should see a sharp drop of around £12m in broadcasting revenue to £110m in 2019, adversely affecting their bottom line.

Commercial Revenue

Burnley have seen commercial revenue more than double since promotion, rising from £4m in 2016 to £9m in 2018.

This trend is likely to continue on the back of the successes of 2018, with a new, slightly more lucrative deal agreed with Laba360 (£3m a year), who replace Dafabet (£2.5m a year) as their main sponsor.

This, plus many smaller partnerships should see a boost to around £11/12m in commercial revenue, a £3m rise.

Total Revenue

Overall, it wasn’t the season Burnley were hoping for and as such, it will have a negative impact on their revenue, primarily due to the sharp drop in the Premier League table.

Combining the above adjustments, revenue is likely to fall by around £9m to £130m, showing that clubs cannot rest on their laurels as the pace of the Premier League club is brutal. Burnley were never expected to repeat 2018’s heroics and a drop off was expected, however the failure to reach the Europa League group stage saw revenue fall by a greater amount than was expected.

Any improvement on last season’s 15thplaced finish in 2019/20 will see a rise in revenue.

Cost Predictions

Burnley 2019 Costs Prediction

Burnley somehow secured a 7thplaced finish with costs of only £126m in 2018, a ridiculously low figure. By comparison, Everton and Leicester had costs of £287m and £193m respectively, showcasing the huge achievement it was.

Despite revenue being likely to drop in 2019, costs continue to increase as the cost to compete and survive in the Premier League continue to grow…

Amortisation

Burnley had amortisation of £28m in 2018, a relatively low figure. Player investment was greater than in recent years despite being nothing major in comparison to their rivals and will see amortisation rise.

Based on the transfer fees and contract lengths of the new signings and those sold, we expect amortisation to rise by around £8m to £36m for Burnley.

Wages and Other Costs

Other expenses such as stadium maintenance, lease costs etc. amounted to £16m in 2018. These costs rose by £2m from £14m in 2017 and we expect a similar rise this year to £18m.

Burnley 2019 Wages Prediction

Wages are the most difficult area of finances to predict due to the opaque nature and privacy of these amounts. Burnley’s wage bill was £82m in 2018.

Burnley signed Gibson, Vydra and Hart while Vokes and a host of fringe players left (Long, Arfield, Marney). New contracts were provided to McNeil and Hendrick which will see wages rise slightly.

Loans of Wells and Walters are likely to however reduce the wage bill. Based on the data available, wages are likely to remain at £82m and perhaps even fall based on the release of fringe players on decent wages and the players signed not commanding huge wages.

Burnley are also likely to see a significant fall in bonuses which may actually see wages fall to around £80m, however due to the opaqueness of this, our best bet is wages flatline. 

Total Costs

Based on these additional costs, we expect total costs to increase by around £10m from £126m to £136m, largely due to amortisation rising.

This means that before taking into account transfers, unlike 2018, Burnley will be losing money, approximately £6m, should this continue into the future (which we don’t think it will) this could quickly cause financial issues.

However, Burnley are a well-run club that brilliantly live within their means to great success and we expect Sean Dyche and Co to continue thriving in the difficult Premier League arena.

Transfers Analysis

Burnley 2019 Transfers

Burnley spent only £30m to build on their 7thplaced finish in 2018, purchasing Gibson (£15m), Vydra (£11m) and Hart (£4m) while the only monetary departure as Vokes for £7m.

This led to a net transfer spend of £23m, a £36m swing on 2018’s net income of £13m (another showcase of how remarkable their 2018 campaign was).

The signings were uninspiring to say the least. Gibson failed to readapt to the Premier League and struggled to get into the side. Vydra provided relatively little goals and Hart fell out of favour following a series of errors.

This meant that Dyche once again relied predominately on the same players as last year which proved difficult with everyone else improving and some of their dependable players suffering dips in form.

In 2018, Burnley realised a profit on player sales of £30m following the sales of Keane and Gray, which significantly boosted profits. 

With only the sale of Vokes in 2019, this will fall significantly. Vokes was brought in 2012 and no longer attracts amortisation and therefore the full £7m will be recognised as profits; this is still a £23m drop in profits compared to last year.

In terms of transfer fees owed, Burnley were still owed around £28m (predominately from Everton and Watford) of which £7m was due in 2019 and later.

In comparison Burnley owe £23m in transfers in 2018, of which £9m was due 2019 and later. There is not much between these figures and therefore this should have no impact on future transfer plans.

Another season of little sales will see a similar level of profit on sales as is expected in 2019, with the only summer departure being Heaton for £8m. Similarly, to Vokes, this will all be profit.

Profit/Loss Prediction

Burnley 2019 Profit Prediction

Burnley made a profit before tax of £45m in 2018 (£37m after tax) and this will see a significant drop in 2019.

With revenue falling by around £9m and costs likely to rise by around £10m, profits before transfers are taking into account will fall to around £26m. 

Then taking into account the lack of sales in 2019 and hence a much lower profit in player sales, profit are likely to fall by a further £23m to around £3m, a £42m drop. 

These drops in profitability may be a common theme of 2019 for most mid-table Premier League clubs with the costs of competing in the top flight rising considerably. Clubs look like only recording profits currently based on player sales rather than underlying financial stability.

Burnley can however still be positive as they are still very financially stable with many of their rivals likely to record losses on the back of similar seasons.

Burnley are run very sustainably and are in safe hands and look primed to have a more successful season this time out, although the priority is still survival.

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Brighton 2019 Finances Predicted – Seagulls Survive (Just)

Brighton 2019 Financial Predictions

Brighton entered their second successive season in the Premier League wary of the infamous ‘second-season syndrome’ and they were worried for much of the season as the club hung around the drop zone for the majority of the season.

A terrible run of form towards the end of the season led to some tense, nail-biting situations, however a few points were plucked here and there, and Brighton managed to stay up by the skin of their teeth in 17thplace and secure a third Premier League season.

A run to the FA Cup Semi Final was a welcome boost to the club with relegation never far away.

The season wasn’t without its casualties, with Chris Hughton losing his job after performing admirably during his time there but a breath of fresh air was needed for everyone around the club.

This article aims to predict how last season affected Brighton and their finances and what the future holds.

Let’s delve into the numbers.

Revenue Prediction

Brighton 2019 Revenue Prediction

Matchday Revenue

Brighton have fairly high matchday revenue for a club their size at £19m which saw a sizeable boost following promotion.

This season, matchday revenue should remain robust at a similar mark, especially considering the club had 22 home games once again. 

The FA Cup Semi Final at Wembley will boost matchday revenue so a slight increase to £20m seems an adequate prediction given average attendance increased by a whole 19 people to 30,426 in 2019.

Broadcasting Revenue

Premier League Payments

Brighton’s broadcasting revenue was £110m in 2018, of which a huge £108m related to Premier League TV payments after finishing 15thin the Premier League.

Despite increased distributions overall in the Premier League, a drop of two places to 17thmeant that Brighton saw their Premier League revenue drop £2m to £106m. Brighton featured in the same number of live games as they did in 2018 (13).

However, a magical run to the FA Cup Semi-Final and Wembley boosted revenue by around £1.6m in prize money as compared to their Quarter Final appearance in 2018, essentially eliminating the fall in revenue from their lower Premier League position.

The League Cup offers silverware and not much else so an earlier second round exit will not materially affect finances.

Therefore, overall, we expect broadcasting revenue to remain at £110m as their FA Cup run minimises the impact of their fall in Premier League revenue.

Commercial Revenue

Brighton have one of the lowest commercial revenues in the Premier League, lower than some Championship clubs even.

However, their continued presence in the Premier League will continue to boost revenue, which increased from £5m in 2017 to £9m last year.

Survival means that this trend will continue and a rise to around £12m should be easily achievable, with rises in excess of this dependant on survival bonuses and further commercial activity.

The rise is unlikely to be much higher than this due to their ongoing contracts already in place with Nike and America Express which are their most lucrative deals.

Other Revenue

Brighton had other revenue of £2m in 2018 and are best guess here is it will remain at this level with not much else to go to predict this amount.

Total Revenue

A steady year for Brighton means revenue will not change a great deal however we predict that on the basis of matchday and broadcasting revenue remaining at similar levels to last year, commercial revenue growth will help Brighton to increase revenue by around £4m to £143m from £139m in 2018.

Survival is obviously the main goal with around 75% of Brighton’s revenue dependant on Premier League survival. This revenue will make it possible for Brighton to continue investing into the club and players.

Cost Prediction

Brighton 2019 Costs Prediction

Amortisation

Brighton had a big summer, spending just shy of £80m on new players in 2019, having already spent £57m in the previous summer to stay up.

Brighton signed an astonishing 14 players with the standouts being club record signing Jahanbaksh (£17m), Bissouma (£15m), Bernardo (£9m) and Montoya (£6m) as they went on a spending spree.

This spending, something Brighton are not accustomed too, is likely to increase amortisation from £19m to £35m, based on transfer fees and contract lengths.

Wages

Brighton 2019 Wages Prediction

Brighton commendably have one of the lowest wage bills in the Premier League and despite this spending, that is likely to still be the case. Despite a host of new signings, many went out on loan with wages being recouped with the first team additions all being on relatively humble wages compared to their Premier League rivals.

Based on this, an increase from £78m to £95m is possible, however I suspect they will not break the £100m barrier this season, although it won’t be far away with the costs to compete in the Premier League growing at an astonishing pace.

Other Costs

Brighton’s other expenses to run a Premier League were £33m in 2018 following promotion, 2017 was much lower due to being in the Championship so a further jump of around £5m to £38m is likely.

Total Costs

It was an expensive year for Brighton as they successfully battled for their Premier League place and it did come at a cost, with total costs likely to increase from £139m to around £168m based on the above.

These costs are likely to continue rising as they remain in the Premier League with the costs of the Premier League continually rising.

Transfer Analysis

Brighton 2019 Transfers

Last summer was the biggest summer in Brighton’s history as they spent huge sums they have never spent before.

In came Jahanbaksh (£17m), Bissouma (£15m), Bernardo (£9m), MacAllister (£7m), Montoya (£6m), Andone (£5m), Button (£4m), Burn (£3m), Tau (£3m), Mlakar (£3m), Baluta (£3m), Dreyer (£2m), Gwargis (£1m) and Arce (£1m) for a combined £80m.

Out went Baldock (£4m), Goldson (£3m), Norwood (£2m), Murphy (£1m) and Skalak (£1m) for a total £12m.

This meant Brighton had their highest net spend in their history at £68m, eclipsing the £57m net spend in 2018.

Brighton also recorded a measly profit on player sales of £3m in 2018. 2019 is likely to be a little bit higher due to increased sale activity and based on transfer fees paid and received on these departures and their original contract lengths, a profit of around £10m is likely, a £7m increase.

Based on the 2018 accounts, Brighton were owed a measly £2.9m in transfer fees with only £1.5m due in 2019, which will hardly help given their large spending.

In contrast, Brighton owe clubs £19m in transfer fees with £10m due in 2019, a net creditor position of £8.5m, adding to last summer’s outlay.

This is likely to mean their cash levels of £9m in summer 2018 are likely to fall.

Profit/Loss Prediction

Brighton 2019 Profit Prediction

Based on all of the above, despite a small rise in revenue being predicted and an increase in profit on player sales, the rise in the costs of competing in the Premier League significantly outweigh this and a £11m profit in 2018 is likely to turn into a loss of around £15m.

The increased spending and wages are to blame for this; however, such spending was required to show ambition, and more importantly, survive.

2019/20 poses to be an interesting season for the club under a new regime under the impressive Graham Potter who will bring his own ideas and needed his own players, leading to another expensive summer window where the club spent over £60m, showing that costs are only going to continue rising as long as Brighton remain in the Premier League, something they would very much like to do.

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Bournemouth 2019 Finances Predicted – Vital-ity Safety

Bournemouth 2019 Financial Predictions

Bournemouth enjoyed their fourth consecutive season in the Premier League, and it was another successful one as they survived (with a few scares along the way), finishing 14th, a slight fall on the previous season (12th).

A run to the League Cup Quarter Finals gave the fans some hope of silverware, however an unimpressive FA Cup campaign finished in the Third Round, meaning the season ended in pretty unspectacular fashion.

This article aims to predict how last season affected Bournemouth and their finances and what the future holds.

Let’s delve into the numbers.

Revenue Prediction

AFC Bournemouth 2019 Revenue Prediction

Matchday Revenue

Bournemouth’s matchday revenue was the lowest among Premier League clubs in 2018 at £7m due to a stadium capacity of 11,329 which is ridiculously low for a Premier League club and shows how well the the south coast club are doing to survive fairly comfortably.

Average attendance fell slightly to 10,532, however Bournemouth did have 1 more home game this season due to their League Cup exploits so it is likely matchday revenue will remain at £7m.

Bournemouth have begun looking at boosting matchday revenue by building a new stadium, although this is proven difficult with plans on hold after the club were overly optimisticabout plans to move into a new stadium by 2020.

Broadcasting Revenue

Broadcasting revenue was £120m in 2017/18 after a solid mid table season was combined with poor domestic cup campaigns.

As with many mid table clubs, Bournemouth are heavily reliant on Premier League TV money and this makes up the majority of their revenue.

Premier League revenue was £111m in 2018, 82% of their total revenue and 93% of their broadcasting revenue.

In 2019, Bournemouth finished two places lower in the Premier League and were shown on live TV once fewer, costing the club around £3m as Premier League payments fell to £108m despite an increase in overall distributions.

Bournemouth will expect a similar amount of FA Cup prize money as they exited at the Third-Round stage again.

Whilst they did well to reach the League Cup Quarter Finals, the competition prize money is small and will make little difference financially to Bournemouth.

Based on the above, Broadcasting revenue is likely to fall by around £3m to £117m due mainly to the drop in Premier League payments.

Commercial Revenue

Bournemouth’s commercial revenue increased significantly in 2018, rising from £5m to £8m. Bournemouth can expect another jump in commercial revenue as they continue to consolidate as a Premier League club while the Premier League’s commercial appeal continues to grow.

Bournemouth are slightly limited by their shirt and kit sponsors being in the middle of contracts so will have to rely on growth in commercial partners. Based on this, Bournemouth should see an increase in commercial revenue by around 25% to £10m.

Other Revenue

Bournemouth’s other revenue amounted to £0.5m in 2018 and we expect it to remain at a similar level.

Total Revenue

Overall, Bournemouth’s revenue is likely to be at the same level as 2019 at £135m. Performance in the Premier League, FA Cup and League Cup was similar to 2018 and as such was never going to change significantly.

The fall in Premier League payments is likely to be offset by commercial revenue rises with strong growth of around 40% likely to see revenue actually increasing slightly although it is unlikely commercial growth will reach these levels.

Costs Prediction

AFC Bournemouth 2019 Costs Prediction

Amortisation

Amortisation is a large portion of total costs to a Premier League club and Bournemouth incurred amortisation of £27m in 2018. The signings of Lerma, Rico, Solanke, Mepham and Brooks undoubtedly add significantly to this figure, with the departures of Afobe, Grabban and Gradel offsetting some of this rise in amortisation.

Based on the transfer fees and contract lengths of the new signings and those sold, we expect amortisation to rise by around £9m to £36m for Bournemouth.

Wages and Other Costs

AFC Bournemouth 2019 Wages Prediction

Other expenses such as stadium maintenance, lease costs etc. amounted to £24m in 2018. These costs rose by £1m from £23m in 2017 and we expect a similar rise this year to £25m.

Wages are the most difficult area of finances to predict due to the opaque nature and privacy of these amounts. Bournemouth signed Lerma, Rico, Solanke, Mepham, Brooks and Clyne (on loan) as first team players in 2019 while only Afobe, Grabban and Gradel took anything meaningful of the wage bill.

New contracts were handed to Lewis Cook and Francis which will add to these wages

With these arrivals and we expect an additional £6m of wages to be incurred which will take total wages to around £108m from £102m. This could be larger based on survival bonuses players may have in their contracts.

Total Costs

Based on these additional costs, we expect wages to increase by around £17m from £153m to £170m.

This means that before taking into account transfers, Bournemouth will be losing around £35m, an unsustainable financial position that will need to be addressed by either selling players, further funds from their owners or by boosting revenue.

Transfers Analysis

AFC Bournemouth 2019 Transfers

As mentioned, Bournemouth signed Lerma (£25m), Solanke (£19m), Rico (£14m), Mepham (£12m) and Brooks (£10m) for a combined £80m.

Departing the Vitality Stadium were Afobe (£10m), Grabban (£6m) and Gradel (£2m) for £18m.

This led to net transfer spend doubling to £62m, showcasing the ever increasing ambition of the club as they strive to move up the table.

In 2018, Bournemouth made a profit on player sales of £1m due to low sale activities, this year there were more sales and despite none being earth shattering, profit on players sales should be around £6m, an increase of £5m that will boost profits (or reduce losses).

In terms of transfers fees owed, clubs owe Bournemouth £11m as of 2018 with £6m due in 2019 which will come in handy.

However, Bournemouth owe clubs transfer fees of £38m, of which £27m was due this year, which may affect transfer plans going forward unless revenue begins to rise.

Looking ahead, the sale of Mings and Mousset will boost profit on player sales considerably which should help Bournemouth record a profit in 2020.

Profit/Loss Prediction

AFC Bournemouth 2019 Profit Prediction

Bournemouth made a loss of £11m last year and are likely to record an even bigger one this season. With revenue flatlining but costs likely to rise by around £15-17m, even a rise in transfer sales means losses are likely to increase to around £25m. This is partly due as well to the lack of exceptional income after Bournemouth settled an FFP fine for £3m less than expected in 2018 which won’t be the case in 2019.

These increasing losses may be a theme of 2019 for most mid-table Premier League clubs with the costs of competing in the top flight rising considerably. Clubs look like only recording profits currently based on player sales rather than underlying financial stability.

Bournemouth’s reliance on Premier League revenue is more than most due to the relative size of the club, commercially and stadium-wise. The situation is improving commercially due to the playing style of the club and their continued Premier League presence, while a new stadium would boost matchday revenue considerably with attendance restricted by their current size.

As mentioned, the sale of Mings and Mousset will boost profits considerably and help fund further investment. However, the owner may have to pump additional cash into the club to keep them ticking over and growing.

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Arsenal 2019 Finances Predicted – Gunned Down

Arsenal 2019 Financial Predictions

Arsenal experienced their first Wenger-less year in the 2018/19 season, with Unai Emery taking the reigns following a steady decline in performance in recent years.

The early signs were promising, and it would’ve been a successful season had the club not succumbed to a 4-1 loss to London rivals Chelsea in the Europa League final and secured a Champions League place for the coming season.

A slight improvement in the Premier League was welcomed, however defeat at home to Crystal Palace and a draw with Brighton in the last few weeks of the season robbed Arsenal of a Top 4 finish which was very much available with London rivals Chelsea and Tottenham stumbling into the Champions League.

This article aims to predict how last season affected Arsenal and their finances and what the future holds.

Let’s delve into the numbers.

Revenue Prediction

Arsenal FC 2019 Revenue Prediction

Matchday Revenue

Arsenal’s matchday revenue was £99m in 2018, falling slightly from £100m in 2017 after a difficult season. Despite their Europa League run this season, Arsenal had the same number of competitive home games as in 2017/18 and therefore matchday revenue is unlikely to increase substantially. 

However, Arsenal should see a slight increase due to reaching the Europa League final, with the competition (and ticket prices) being considerably more lucrative than the League Cup (in which Arsenal reached the final and had many home games in 2018).

Premier League average attendances rose from 59,323 to 59,899 (1%) and therefore, we expect a slight increase of about 1% in matchday revenue to £100m.

Broadcasting Revenue

Broadcasting revenue was £180m in 2017/18 after a poor season with the only highlight being a League Cup final appearance. 

Premier League Payments

Despite finishing a position higher in the Premier League last season, Premier League prize money remained at £142m as despite distributions increasing, Arsenal featured on live TV three less games last season than in 2018.

Arsenal also fared far worse in the League Cup this year, only reaching the Quarter Finals compared to a final defeat in 2018. However, the prize money available in this competition is tiny and will have an immaterial impact on Arsenal’s finances.

Going a round further in the FA Cup will boost revenue by a few hundred thousand pounds for Arsenal which will more than negate the fall in revenue from the drop in League Cup performance.

Arsenal did manage to go a round further than last season in the Europa League, reaching the final in Baku and despite not achieving the result desired, will likely see a boost in revenue of around £4-6m from prize money of the competition which has become more lucrative in recent seasons.

With much of Arsenal’s other competition revenue remaining the same as in 2018, this should see Arsenal’s broadcasting revenue increase by around £5m to £185m.

Commercial Revenue

Commercial revenue saw a drop from £117m to £107m in 2017/18 in Wenger’s final season. We expect commercial revenue to bounce back in what seems to be a new drive at the Emirates to boost their relevance once more. The general popularity of the Premier League has seen all club’s commercial income rise and this should be no different for Arsenal.

A new Adidas deal will significantly boost revenue in 2020, however before that comes into effect, we expect a rise in revenue to around £115m to be reasonable.

Other Revenue

Arsenal also had a significant amount of other revenue of £17m, compromising of transfer loan income (£2m) and property sales (£15m).

Arsenal only have one more property in their portfolio after the sale of a property next to Holloway Road Station in 2018 and there is no evidence this has been sold or the what the value of this property is. With the loans of the likes of Asano, Nelson, Ospina and Chambers, it is likely Arsenal obtained £3-5m on these loans.

Therefore, we predict that Arsenal’s other revenue will only be £5m, UNLESS they sale their remaining property which could bring in a significant chunk of extra income.

Total Revenue

Overall, Arsenal’s revenue should be around £405m, a slight increase on 2018 (£403m) due mainly to potential rises in commercial revenue and their Europa League campaign. Revenue may increase by a larger extent if that final property held is sold. 

All-in-all, revenue is likely to remain fairly similar to last year due to competition performance improving only slightly with the club remaining trophy-less and Top 4-less.

Cost Predictions

Arsenal FC 2019 Costs Prediction

Amortisation

Amortisation is a large portion of total costs to a Premier League club and Arsenal incurred amortisation of £86m in 2018. The signings of Torreira, Leno, Sokratis and Guendouzi will add a fair bit to these costs while the departure of Perez will reduce this slightly. 

Based on the transfer fees and contract lengths of the new signings, we expect amortisation to rise by around £15m to £100m for Arsenal.

Exceptional Costs

As mentioned, Arsenal sold one of their two remaining properties in 2018 which brought the cost of that property into their expenses last year of £9m. With the sale of the one remaining property unknown, property costs have been excluded in our 2019 prediction.

The departure of Wenger and some of his staff and then the costs of bringing in Emery, Arsenal incurred exceptional costs of £17m at the end of last season. These costs are obviously not expected again and have been excluded.

Wages and Other Costs

Arsenal FC 2019 Wages Prediction

Other expenses such as stadium maintenance, lease costs etc. amounted to £88m in 2018. We expect these have increased to around £95m in 2019 based on recent trends.

Wages are the most difficult area of finances to predict due to the opaque nature and privacy of these amounts. Arsenal brought in Torreira, Leno, Sokratis, Guendouzi and Liechtensteiner as first team players in 2019 while high earners such as Cazorla and Mertesacker departed the Emirates.

Therefore, despite these arrivals we do not expect wages to increase significantly and as such we predict wages are likely to increase from £240m to around £245m.

Total costs

Overall costs are hence due to increase to around £450m subject to the effects of salary bonuses and property sales. Furthermore, contract renewals (which were few) may be more significant than first thought.

Lastly, should there be any exceptional costs (which in nature cannot be predicted) costs may increase to a larger extent.

Transfers Analysis

Arsenal FC 2019 Transfer Prediction

Arsenal brought in Torreira (£26m), Leno (£23m), Sokratis (£14m), Guendouzi (£7m) and Liechtensteiner (Free) as first team players in 2019 for a combined £72m.

Departing were Perez (£4m), Campbell (£1m) and Akpom (£1m) for a combined £6m.

This led Arsenal to a net transfer spend of £66m, much changed from the net transfer income of £3m in 2018.

However, in 2018, Arsenal saw a host of departures (£141m) which led to a massive profit on player sales of £115m due to the sales of the likes of the Ox, Walcott, Giroud, Szczesny etc.

With the lack of player sales in 2019, Arsenal will be lucky to record a profit on sales of £5m, a drop of more than £110m, which will see profitability take a huge hit.

Cash will also take a hit after spending in 2018/19, with the club already owing clubs a net £50m in transfers (Arsenal owe around £100m and are owed about £50m), plus the £72m spent this season, showing why Arsenal are so desperate to agree deals in instalments this season (Hi Zaha and Pepe).

Arsenal need not worry however with cash reserves of £231m in the bank.

Profit/Loss Prediction

Arsenal FC 2019 Profit Prediction

Arsenal made a pre-tax profit of £70m (post tax: £57m) in 2018 largely due to player sales that were not evident in 2019. As mentioned, player sales are likely to fall by around £110m and with revenue and costs predicted to remain at similar levels, a loss of between £30-40m is likely.

A return to the Champions League is hence vital to the club’s long-term finances. However, the new Adidas deal will see a significant bump in revenue which should help the club to return to profitability in 2020, subject to how they perform in the upcoming season and player sales.

I hope you enjoyed this article! Share with a Gunner and look out for when the actual finances are released to see how we fared!

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