Sheffield United accounts: Blades must attempt to soften the financial blow relegation from the Premier League will bring
After operating at a profit for the only the second time in a decade, Sheffield United’s focus will now turn towards limiting the financial impact their imminent return to the Championship will have upon the club’s accounts.
Despite losses accrued as a direct result of the Covid-19 pandemic, United’s latest set of financial figures show they finished the year covering their first season back in the Premier League £17.5m in the black.
That sum, despite significant rises in transfer spending and staff costs, underlines the importance of top-flight football to United’s balance sheet - something they will have to address after falling 14 points adrift of safety with only nine matches remaining ahead of tomorrow’s visit to Leeds.
With an all-time record income of £143.1m - a near seven fold increase on what they earned en route to promotion from the second tier in 2019 - United were able to absorb the £11.2m they lost as a result of the global health crisis, combined with the £467,171 it cost to extend the campaign following the first national lockdown.
Staff wages increased by more than £37m following their climb out of the second tier, with United also committing themselves to spending £66m on player acquisitions during the relevant period.
Although owner HRH Prince Abdullah bin Musa’ad bin Abdulaziz Al Saud and former manager Chris Wilder have both confirmed that members of the first team squad will suffer a cut in salary if they are demoted, the numbers which have been registered with Companies House emphasise the scale of the challenge United are likely to face next term as they look to construct a promotion winning team on a much reduced budget, although the blow will be softened by enhanced PL parachute payments earned as a result of their ninth placed finish last term.
Following a period of considerable upheaval behind the scenes at Bramall Lane, with Prince Abdullah seizing sole control following a High Court battle with former co-owner Kevin McCabe, United extended their accounting period until July to cover the remainder of the 2019/20 campaign.
With his takeover dependent upon buying the ground and other associated properties from one of McCabe’s companies, United took out a £38m mortgage to facilitate the purchases. The repayments, to a bank in the Middle East, appear to be around £1.2m per annum. United also finished 2019/20 owing around £16m in social security and taxes, after the government created a payment holiday to help businesses negotiate safe passage through the pandemic. This could go some way towards explaining why United have borrowed an unspecified amount from Macquire, an Australian lender, secured against future broadcasting income.
With a wage bill likely to have been the lowest in the competition across the timeframe concerned, United say their long term aim is to become “self-sustainable” at the highest level of the domestic game.
However, with the value of their sponsorships and matchday revenues likely to be reduced if they are demoted, an immediate return to the PL coupled with sensible planning in the boardroom appear to be required.