Earlier this week, AFC Bournemouth released their annual accounts for the year ending June 30, 2021.
As was the case with last year’s submissions, the financial accounts were affected by the COVID-19 pandemic, games behind closed doors and the club’s relegation from the Premier League.
In total, Bournemouth played 53 games without a full crowd, hurting revenue and billing costs. The directors considered the financial position of AFC Bournemouth Limited to be “satisfactory”, with the club posting a pre-tax profit of £17m, a significant improvement on the £60.1m loss from 2020 .
However, broadcast revenue was supplemented by the fact that the 2019/20 season was cut short and games played after 1 July 2020 while Bournemouth were still in the Premier League and thus earned top-tier broadcast revenue, taken into account for the 2020/21 fiscal year. Overall, broadcast revenues equal 88 per cent of Bournemouth’s total revenue.
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Other findings included the club’s turnover falling by £23.7m, having recorded an annual turnover of £71.7m in 2021 accounts. In 2020 that figure was £95.4m. sterling pounds. The club attributes the defeat to the impact of COVID-19 and relegation from the Premier League. However, the additional losses were offset by a successful £2.5m business insurance claim related to the COVID pandemic.
Relegation clauses in player contracts, as well as the dumping of higher-paid players, meant overall personnel costs fell to £57.4m, a £50m reduction on the £107.9m figure. million from 2020. This provided Bournemouth with a bit more cover, particularly as the second year of parachute payout, less than the first payout, was set to begin.
AFC Bournemouth, in their accounts, said: “The club strives to offer competitive remuneration packages to attract and retain the caliber of playing and team management personnel required to enable the Club to compete in the league, with the aim of achieving and maintain the Premier League. While this goal was ultimately not achieved, the board of directors has committed to this level of remuneration through long-term contracts already in place at the start of the season.”
The 2020/21 accounts also included Bournemouth’s highest-paid manager Neill Blake, who was paid £1.884 million, a 44.3 per cent increase on his 2020 salary of £1.306 million.
The accounts also confirmed that Maxim Demin, the owner of Bournemouth, provided interest-free shareholder loans worth £24.5m from 30 June 2021. Demin’s financial support to ensure Bournemouth remains competitive is well documented. and may seek a return to the Premier League. . It is understood that Demin’s support remains as strong as it was when he issued a public statement he made in July 2020.
dorsetlive spoke to football finance expert Kieran Maguire, author of the book ‘The price of football’ for his opinion on the 2020/21 Bournemouth accounts.
The club’s turnover was down by £23.7m, having recorded an annual turnover of £95.4m in the 2020 accounts. The club attributes the loss to the impact of COVID-19 and a decline in PremierLeague. Is this an easy shortfall to make up in 2022?
Maguire: No, expect revenue to drop further in 2021/22. While the crowds have returned, Bournemouth stadium capacity is low. Broadcast revenue was higher than expected in 2020/21 because some Premier League games were still being played in July 2020 before relegation. These were included in broadcast revenue.
How much of owner Maxim Demin’s money is needed for the day-to-day running of the club? (The club recorded a pre-tax profit of £17m.)
Maxim Demin loaned the club a further £28m during the 2020/21 season, with the club having borrowed £24.5m from him since the end of that campaign. In addition, they obtained £10m from the banks in the form of payday loans in respect of player transfer sales.
Additional losses were offset by the successful £2.5 million commercial insurance claim in relation to the COVID pandemic. What could this be?
Many clubs had taken out business interruption insurance that was paid out as a result of COVID. The standard policy payout for these claims was £2.5 million. Profits made from player sales were a record £56m, so it easily made up for daily losses.
For example, the club’s commercial revenue was halved (£17.9m in 2020 to £8.7m in 2021) mainly because the front of the shirt and other sponsorship deals were worth significantly less in the EFL.
Judging from your latest set of accounts, do you forecast Bournemouth becoming a financially sustainable business while in the Championship, or do you need Premier League riches to sustain your spending output? Bournemouth posted an operating profit of £23.6 million:
Excluding parachute payments, Bournemouth Championship revenue is likely to be in the region of £18-20m. Salaries in 2020/21 were still £57.1m, so further significant cost cuts are needed for the club to be sustainable in the EFL.
The wage bill was halved in 2020/21, but the average salary is still £27,500 a week. This equals 75% of your total income.
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