The Swiss Ramble casts his forensic eye over Charlton's 2019/20 accounts. What is clear is the long-term financial limitations the club has faced that many fans seem unable to grasp.
Following promotion to the Championship, Charlton reduced
their loss from £10.1m to just £1.1m, as revenue increased £7.5m (95%) from
£7.9m to £15.4m and profit on player sales rose £1.5m to £4.4m, partly offset
by expenses growing £3.3m (17%).
The £1.1m deficit
was actually one of the best results in the Championship. Only three clubs made
a (small) profit in 2020, while some huge losses were reported: Stoke City
£88m, Leeds £62m and Fulham £48m (latter two included promotion bonuses).
The operating loss (excluding player sales, exceptional
items & interest) improved from £12m to £7m, which was actually one of the
best performances in the Championship. Nearly every club in this division posts
substantial operating losses, i.e. almost half were above £30m.
Charlton are no strangers to a loss, having only reported a
profit once in the last decade – and that was just £1.2m in 2017. Their total
losses amounted to £60m over this period. As owner Thomas Sandgaard wryly
observed, “It is expensive to run a football club.”
The profit posted by the Addicks in 2017 was largely due to
£16m from player sales, including Lookman to Everton. Otherwise, they did not
manage to make more than £5m in any other year in last decade. The 2020/21
season will include £5.6m income, mainly Bonne to QPR and Doughty to Stok
The revenue increase was mainly driven by broadcasting
income rising £6.3m from £1.5m to £7.8m, due to higher TV distributions in the
Championship, while commercial increased £0.8m (36%) to £3.0m and match day
grew £0.4m (9%) to £4.5m. Other income included £634k furlough grant.
Despite COVID impact, the £15.4m revenue was £3.3m (27%)
higher than the last time they were in the Championship in 2016. Promotion from
League One was worth £7.5m. Broadcasting is the most important revenue stream
with 51%, followed by match day 30% and commercial 19%.
The total commercial income rose £0.8m (36%) from £2.2m to
£3.0m, partly due to more streaming on Charlton TV. This was the club’s highest
since 2008, but still firmly in the bottom half of the Championship, far below
likes of Leeds £34m, Bristol City £14m and Stoke City £1
Even after the growth in 2019/20, the £15m revenue was still
one of the lowest in the Championship. Their financial challenge in this
division was highlighted by the fact that this was around a quarter of Fulham
£58m, Leeds £54m, WBA £54m and Huddersfield £53.
if parachute payments were excluded, Charlton would
still have only had the 17th highest revenue in the Championship with the gap
to Leeds United £54m (due to massive commercial income) being a chunky £39m.
the profit on player sales rose £1.5m to £4.4m, including
Dijksteel to Boro plus contingent payments on previous sales (Lookman, Gomez,
Palmer, Pope and Grant). That’s a solid improvement, but still a fair bit lower
than WBA £29m, Bristol City £26m, Fulham £25m & Brentford £25m
The Swiss Ramble estimates that COVID led to £1.6m reduction
in revenue, split between £1.2m lost (match day £0.9m, TV rebate £0.3m) and
£0.5m broadcasting deferred to 2020/21, offset by £0.7m furlough income under
government job retention scheme, leading to a net £1.0m adverse impact.
The average attendance (for games played with fans)
increased 52% from 11,827 to 18,017, the club’s highest since 2013. Mid-table
in the Championship, but Charlton’s potential was highlighted by their highest
home crowd of 25,363 against Blackburn Rover
The wage bill increased £1.8m (17%) from £10.4m to £12.2m,
“primarily reflecting the increased cost of player wages in the Championship”.
That said, this was £1.2m (9%) lower than the last time Charlton were in this
division in 2016.
Despite the increase, the £12m wage bill is one of the
lowest in the Championship, only above Barnsley £11m, so it was perhaps
unsurprising they were relegated.
The wages to turnover ratio improved from 133% to 80%, their
lowest since 2009 (when they had a parachute payment). The vast majority of
clubs in the Championship have (unsustainable) ratios over 100% with Reading
“leading the way” at 211%.
Charlton spent £522k on motor vehicles, i.e. twice as much
as £262k on new players. Agreements terminated after year-end at a cost of
£261k. Sandgaard highlighted previous ownership’s profligacy by giving away one
of the infamous Range Rovers in “Our Club Your Car” campaign.
The club only spent £262k on new players in 2020, partly due
to a transfer embargo imposed by EFL. This was the second lowest in the
Championship, only ahead of QPR £55k, but miles below Fulham £53m and Leeds £46m