On Monday the Swans confirmed their accounts to July 31st 2020 which showed a pre-tax profit of £2.7m, a big jump from the £7m loss posted in the twelve months previous.
The full impact of relegation from the Premier League was continuing to be shown through in the accounts with turnover down to £50m (from £68m) due to a reduction in parachute payments which will be impacted further when we see the accounts to July 31st this year in around twelve months time.
Matchday income took a hit down from £6.5m to £4.8m as the closing of football stadiums from 7th March at the start of the pandemic showed a huge impact, one that again will be far more reflective when the next accounts are released in 12 months time.
The stark reality though for the fans should be that the financial health of the club is reliant on the selling of key talent. The accounts include the sale of Oli McBurnie to Sheffield United but not the one of Joe Rodon to Spurs. That sale will be in this year’s accounts but tells you that without these sales the club would be on a dangerous looking slippery slope.
We know that this year we have been “helped” by a couple of loans from our owners but this is not pure investment to the club. The sale of Rodon last summer will also help the figure but with matchday income massively impacted this time around the next set of accounts will tell you a much better picture as to the financial health of the club.
What we do know is that promotion to the Premier League will resolve that but, again this should be a face of reality, promotion should not be followed by an endless amount of revenue being thrown at the club. We have to make ourselves a sustainable club and if that means promotion is followed by an immediate relegation with a better financial position then so be it.
We will eventually run out of a McBurnie, James or Rodon to sell and a tightening of the purse strings is as inevitable as it is essential to look after the financial state of the club.
The club has felt the impact of some dreadful decisions in the Premier League throughout the period and there should be a level of commendation to those now in charge that we have retained a strong league position against the backdrop of what could have been a financial disaster.
This is a view that is shared by Chief Executive Julian Winter who said “The club is still adapting to relegation from the Premier League, balancing the tricky conundrum of being competitive on the pitch and financially prudent off it.
“But an overall profit on the back of a loss the previous year shows a great deal of progress on the road to our overall business model of being financially stable. The reduction in parachute payments has, of course, been taken into consideration following a second season competing in the Championship.
“The club’s paramount focus remains being able to be financially stable for the long-term, not just for its supporters but also for its proud community.”
The summer activity at the club will – we know – be determined by the success of our play off campaign. Promotion will almost certainly see us hold onto the likes of Connor Roberts but a failure to do that will likely see us look to cash in on those players. Promotion will mean a sizeable transfer budget (but not a silly one), non promotion is likely to see us utilise the loan market again which shows the challenges we are up against every season.
The gap between Premier League and Championship is getting bigger every year and the return at the first time of asking of Norwich, Watford and possibly Bournemouth increases that as it keeps their parachute payments inside the Premier League spread between the clubs there.
The club are to be applauded for returning this profit but the reality is that doesn’t mean that we are in a strong financial state. Far from it.