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West Bromwich Albion

West Brom releases their annual financial statements and warns of a £11 million loss.

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West Bromwich Albion, which fulfilled their need to file their accounts and financial statements with Companies House by the end of March, has reported a loss of £11 million for the year ending June 2023. As the Baggies begin their third season in the Championship, there is still optimism that the team will be able to escape the division and return to the Premier League for the first time since 2021.

However, the club’s finances have unavoidably suffered as a result of their inability to return to the top division more quickly. Due to the club receiving a lesser share of parachute payments in the second year following relegation, turnover in 2022–2023 dropped from £65.4m to £56.7m. The club is running without parachute payments for the first time in over 20 years, meaning that will reduce significantly again for the 2023–24 season. This will be evident in the annual reports that are released at this time the following year.

In 2021–22, the club turned a profit of £5.4 million. Combined with this slight loss of £11 million, the club is currently in compliance with the Profitability and Sustainability Rules (PSR), which many of their Championship rivals are currently suffering from suspected violations. Even though a club can lose up to £39 million in a three-year cycle, Albion will need to exercise caution in the upcoming year, especially if they want to stay in the second division.

With the addition of players such Jed Wallace, John Swift, Okay Yokuslu, Brandon Thomas-Asante, Tom Rogic, Nathaniel Chalobah, and Erik Pieters, among others, staff expenses rose from £42.4 million in 2022 to £45.9 million in 2023. But before the conclusion of this fiscal year, they successfully sold Dara O’Shea to Burnley for £7 million, which allowed them some breathing room in the summer.

After June 30, 2022, they also parted ways with David Button and Taylor Gardner-Hickman. Karlan Grant, who is now earning a portion of his salary from the Bluebirds, was acquired by Cardiff City. Albion didn’t bring in much business this past summer; they only hired Josh Maja on a permanent basis. Going forward, staffing costs should decrease even further, especially given the possibility of player turnover this summer.

In 2022–2023 Albion paid out £11.4 million in player registration fees. This covers payments for recent transactions including the payment of a fee (amortization), such as Grady Diangana from West Ham United, Grant’s move from Huddersfield Town, and Daryl Dike from Orlando City. In addition, the club brought in a total of £9.8 million, primarily from the summertime sale of Matheus Pereira and the transfer of young players to Aston Villa.

It is crucial to emphasize that the accounts of the Club are different from those of Group; Albion, as a club, combined with Development, which functions as the training ground, and Heritage, a dormant subsidiary, constitute Group. Owning 87.8% of the company is Bilkul Football WBA, which is what Shilen Patel and his father Kiran utilized to purchase the majority of Group from Guochuan Lai. Minority shareholders own the remaining 12.2%, and Shareholders 4 Albion (S4A) represents many of these minority shareholders.

The finances of the group account for the loans. In order to help fund the day-to-day operations of the club, MSD Holdings has loaned Group about £28 million in two distinct installments over the last 15 months. In order to keep Albion operational while Patel’s takeover was being processed, a second loan was obtained. Since then, he has released Group from the previously impaired Wisdom Smart loan.

According to the group’s financial statements, it lost £7.6 million in 2023. That’s almost £3.4 million less than the club has lost, but that does account for the Wisdom Smart loan repayment, which Albion was able to verify after the reporting date. Additionally, they verified that following the takeover in February, the 2014 loan—which is currently under investigation by the King’s Counsel—was novated from West Bromwich Albion Holdings to Bilkul Football WBA.

In any case, Albion will have a busy summer regardless of their league standing. Clubs will soon have to, on average, spend less than they earn because of the government’s approval of the establishment of an independent regulator and the proposed implementation of stricter financial regulations under PSR and Financial Fair Play (FFP). This will require Albion and the majority of other clubs in the nation to reorganize their squads and urgently cut expenses.

The contracts of players including Erik Pieters, Alex Mowatt, Matt Phillips, Adam Reach, Kyle Bartley, Cedric Kipre, Matt Phillips, Martin Kelly, Nathaniel Chalobah, and Pipa expire this summer. Additionally, the club will lose loanees Pipa, Callum Marshall, Mikey Johnston, and Andreas Weimann. However, Albion will need players of a specific caliber to compete, just like any other team, so after this season ends, they will have a lot of decisions to make.

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