23 February 2014


£14,756,989 in a year, £1,229,749 a month, £567,576 per match at the Amex, £283,788 a week, £40,430 a day, £1,685 an hour, £28 a minute. However you put it, the Albion lost a huge amount of money in the year to 30 June 2013, how and perhaps importantly, why, did this occur?

Ultimately profit is the money generated by a business less the costs in running that business for a period of time, so we’ll look at those things in isolation to begin with.


Football clubs make money from us (the fans), sponsors, and TV.

In terms of fan income, the Albion did extremely well. Having the highest gates in the division, along with prices that weren’t extortionate but not cheap either, meant that our match day income (tickets, catering and merchandise), at £11.8 million, was far ahead of a lot of the competition such as Bolton Wanderers, freshly relegated from the Premier League (£4.8 million), and the league champions Cardiff  City (£6.2 million).

The increased capacity of the Amex soccerdome was the main reason why ticket receipts increased by 10.6%, although home cup matches against Newcastle and Arsenal, plus the play off semi-final against ‘that lot’ contributed too. We also ate a lot of pies, catering income, despite the issues with the clowns at Azure at the start of the season, increased by 42% to nearly £1.8 million.

The main downside was that merchandising income fell, as the club was in the second year of the Brighton and Hove Jobs.com shirt deal, and most of us had rushed out to buy the shirts the previous season. The good news is that the Amex shirt deal is likely to be far more lucrative, and the club have been making big noises about a record shirt manufacturing deal for next season onwards, all of which will boost revenue.

Commercial income is still suffering a hangover from the days of tea and biscuits in a Withdean portakabin. Most of the commercial and sponsorship deals signed then have now expired, and the facilities and environment at the Amex are far more attractive to sponsors. Commercial income rose by nearly 7% in the year to £4.2 million, which is good compared to both Cardiff (£3.4 million) and Bolton (£2.4 million) despite the issues I have highlighted.


Mention football expenses to fans, and they immediately start talking about the level of player wages. The Albion’s wage bill has shot up from £7 million in our last season at Withdean to £14 million in the first season at the Amex to £21 million last year. For fans, many of whom can’t recall their last pay rise, this seems extreme. The problem facing the Albion is that in order to be competitive on the pitch, they have to pay wages that match our competitors. Both Cardiff and Bolton paid out a huge amount more than we did in the year, and based on the figures I have seen so far from all the other clubs in the division, it looks as if our wage bill (some of which are still to be published), I estimate we are probably about 8th-10th in the wage table of the Championship.

Part of the reason for the increase in the wage bill is that the club employed more people than the previous season. There was an increase in management and administrative staff from 122 to 178 employees. In addition an average of 572 part time staff were employed on match days (up from 495). This reflects that the Albion are a professional outfit and have people dedicated to ticketing, marketing and so on, but it did look as if things went too far. There have been redundancies since last June, and this is likely to contribute to a drop in employee numbers when this years (2013/14) accounts are announced. To give the numbers some context, in our final year at the Goldstone, the club had only 12 management and administrative staff. Those who recall those dark days under Bill Archer will know that Ron Pavey and co were running around from role to role by the hour.

It won’t have gone unnoticed that Paul Barber trousered a not inconsiderable £480,000 in his first year as club chief executive. This compares favourably to predecessor Ken Brown on £143,000. Whilst eyebrows will be raised by many, (especially as the job was advertised for a much lower sum), ultimately you get what you pay for. Those who have had dealings with Barber know that he is committed to the job 24/7 (just check out some emails from him sent at all hours), and he is carrying out Tony Bloom’s orders from afar to the letter. If Barber can negotiate himself such a good salary, then no doubt he is equally adept at negotiating good deals for the club with sponsors and commercial partners. There is anecdotal evidence that when the club first moved to the Amex that cost control went out the window, and there was profligacy that angered TB, bringing about the changes in the composition of the board. We’re living in an age where high quality football administrators are on big money (Manchester United, Spurs, Arsenal and Sunderland each paid theirs more than £2 million last season), and it is no longer a career just for someone who has worked themselves up from being the post boy.
Trying to work out player wages is nigh on impossible, but I’ve given it a go with the following spreadsheet

I have taken as much detail from the accounts as possible, and worked out a rough total for match day costs based on seven hour shift at £10 an hour, the directors pay comes direct from the accounts themselves, as do employee numbers. I’ve also assumed an average cost of £27,000 (including pension and NI costs) for admin and youth team employees, and stuck in a million for the management team.

Deducting all those costs from the wage total gives an average player cost of over £9,200 a week (which includes pension and NI), so after deducting for NI/pensions then the weekly wage is about £8,000 a week. I suspect that in reality the wages vary considerably, as the likes of Kuszczak, Bridge, CMS, Buckley, Bridders, Crofts, Ulloa and Vicente were taking home considerably more to reflect that they were signed from Premier League clubs, or for big fees, or had been given new contracts to ward off bids. It might also explain why Ashley Barnes, one of the lowest paid players in the squad, took the offer from Burnley earlier this year.

The other main player expense is transfer fees. These are spread over the player contract period, so Leo Ulloa’s, who we signed for £2 million and signed a 3½ year contract, will only ‘cost’ the Albion £571k in the accounts (this is called an amortisation charge).  The total amortisation cost in the profit and loss account  for all our signings was about £2.7 million last season. The Albion are reluctant to reveal how much they pay for individual players, but ferreting around the accounts  showed the total paid for Leo, Crofts and errr…….Stephen Dobbie (the other signings were on free transfers) to be £4.2 million. We also sold Craig Noone and made a profit of about £1.6 million from player sales.

In addition the club invested in the academy, and have been awarded level 2 status. We have seen how clubs such as Southampton and ‘that lot’ have benefitted from having a good youth team policy, and Tony Bloom is clearly keen to make the most of all the local talent in the local area. However this comes at a cost of about £1.4 million (level 1 would cost at least £2.5 million), although the club does receive a grant from the FA to partially cover these costs. The main issue with the new Elite Player Performance Plan (EPPP), is that it will allow Premier League clubs to sign promising youth team players for peanuts compared to the current tribunal system.


FFP is looming over the Albion and all clubs in the division. This season (2013/14) we have to be below £8 million or face being unable so sign players in the January 2015 window and onwards (cynics might say that that particular punishment seemed to apply to the recent window too). The aim of FFP is to reduce the negotiating power of money grabban (geddit!) players, who are have been in a very strong position in the last few years in the Championship because clubs have been chasing promotion, and are prepared to pay extra to achieve that goal.

If fans are worried that we won’t achieve that target, they can put aside such concerns. The redundancy programme and legal battles with Azure and Gus are not going to be repeated, and I estimate these to have cost the club about £750,000. Youth development costs and some stadium costs are excluded when calculating the numbers for FFP, and these come to around £3 million in total. So as per the table below, our FFP loss last season was about £11 million.

Losses per accounts
Add back: Stadium costs
Youth development costs
One off expenses
FFP Loss

The club therefore need to make up a hole of about £3 million this season, this sounds frightening, but the increased revenue and cost savings initiated by Paul Barber and David Jones should just about make this achievable, and that is before the sales of Bridcutt, Dobbie, Barnes and El Abd are taken into account.

Tony Bloom

There’s one word to describe where the Albion would be without TB, and that word is fucked. To hear some fans (and former managers) claiming that the club lacks ambition is in my mind at best ill informed, and at worst the sign of an enfeebled delusional brain. At the end of June 2013 he had loaned the club £102 million, and had another £60 invested in the form of shares. Since that date he has written off another £11 million of the loan by converting it into shares. Furthermore, this year’s losses are likely to be around £8 million, and the club have a £21 million commitment in respect of the Lancing training facility.

People may query how much money he has spare to stick into the club, but in keeping with being an expert poker player, he keeps his cards close to his chest. Suffice to say is that if my sources are right, he could do the same investment again at least two to three times. However there is no reason why he should be expected to subsidise our enjoyment.

Last season he effectively subsidised every ticket at the Amex by £21 from his personal wealth. We are very lucky to have him as a chairman, but just as importantly as a fan, as there’s less chance of him throwing his toys out of the pram and threatening to walk away, as the club is in his blood just as it is in ours.

The Future

Being a Championship club is a licence to lose money. In 2011-12 total losses in the division were £158 million, I expect those losses to be close to double that for 2012-13, partially as a result of the huge write offs from the three relegated clubs (Bolton, Wolves and Blackburn have announced losses of £116 million between them), and partially due to other clubs making a huge effort to be promoted before FFP sanctions kick in (Cardiff and Hull lost over £58 million in taking the top two slots in the division).

Whilst some fans will consider the Albion to be at a significant disadvantage to those clubs who have parachute payments from the Premier League, those relegated clubs do have significant player costs to incur (Wolves, for example, and paying Jamie O’Hara £35,000 a week to play for the reserves in League 1), and apart from QPR and their seeming disregard for FFP, the relegated clubs are decent, but not outstanding as a result of parachute support.

Getting to the Premier League is a double edged sword. The increase in TV money is worth an extra £60 million a year, but this is quickly swallowed up in transfer fees and player wage demands. Only 8 out of 20 Premier League clubs made a profit in 2012, so those who think that TB will sell out and make a fortune from the Albion should we go up are once again talking nonsense.

How much is the Albion worth?

For a multi-billion pound industry, there is no agreed way of working out the value of a club. Traditional methods used by banks don’t really apply, as they fail to take into account the emotional investment that goes into a club, and this can often skew the price paid. There’s also the fact that people buy clubs for three reasons:

Local lad made good: This goes for the likes of our Tony, Jack Walker (at Blackburn), Steve Gibson (M’Boro) and the revolving door of ownership that is Palace (Simon Jordan, Steve Parish, Mark Goldberg etc). They are likely to overpay for the club because they love the team.

Vanity purchase: This is usually from someone who is so rich that they are looking for a toy to play with. This could be hugely beneficial for the club (Manchester City, Chelsea) but the lack of understanding of the culture and history of the club can create problems, (Cardiff and Hull), and there are often threats to walk away if the owner doesn’t get their own way.

Pure investment in order to make a buck. This usually only applies to clubs that have international brand value (Manchester United) or are in financial hardship and will take any money from any person (the Albion with Bill Archer, Leeds, Pompey, Hearts).

I’ve found a research paper that uses the following formula which works very well when compared to the prices paid for the club in the market:

Club value = (Revenue + Net Assets) x (Net Profit + Revenue)/Revenue x (Stadium Capacity %) /(Wages/Turnover)

Applying this to the Albion (group accounts) gives (34,800,427 x 0.3468 x 0.8602)/0.9006 and a total value of the club of £11.53 million. Applying these figures to the 2012 accounts gave a value of £7.04 million.

This might appear low, but the Albion’s huge debts to Tony Bloom, huge annual losses and the fact that wages are 90% of turnover mean that as desirable as we find the club, from an investment point of view it’s not very attractive. Perhaps in twelve months the figures will look a lot better if cost control is achieved under FFP.

These valuations show conclusively that our chairman is it in for love, not money.

We are indebted to El P for this article.


Hassocks armchair fan said...

Great analysis, just an observation. The published accounts make reference to the change of football management team, therefore it is fair to assume that the settlements for tanno and oatway (and maybe something for gus) feature in these accounts. No doubt these would be quite considerable settlements (oatway's compromise, we could assume, would reflect the denial of his testimonial match) and will probably feature in the football costs for 2013

I Am Sam said...

That's been included. Without knowing the ins and outs, our man plumped for a cool million quid to pay off the former management team.

Hassocks armchair fan said...

Thanks. My bad :-(

slionky said...

Great Article. Thank you

Anonymous said...

Brilliant article.
Explains a lot to the fan with no idea about the finances involved in Championship Football.

Anonymous said...

Parish et al underpaid for Palace (largely because they were the only willing buyer and the stadium owner was in as much shit as Jordan).