Yesterday the club finally got round to releasing the annual accounts for last year, and they show that we made an operating loss, despite achieving record income.

The accounts cover the year to 30th June 2022and they were due to be published by March 31st, but they didn’t come out until today until they had been signed off by the auditors and the Premier League. This will have incurred a fine of £300, which is insignificant in terms of the amount of money sloshing around football these days, but late filing can be an indicator that there are issues to be ironed out.

But when the actual figures appeared it didn’t seem that there is that much to worry about. The bottom line shows an operating loss of £34m, a figure that would have been better if we hadn’t had to make a pay-off of £3.5m to the departing Marcello Bielsa and his assistants, and a settlement of £15.5 after losing the case concerning Jean-Kevin Augustin.

Turnover increased to a record of £189m, despite a drop of £17m in broadcasting revenue during the year. That came about because of the lower league position, as 25% of the Premier League broadcasting revenue to clubs is distributed as ‘merit payments’, so our share dropped as we just avoided relegation in 17th place compared to 9th in the previous campaign.

This was offset by matchday income rising from £2m to £24m as the crowds came back after the pandemic, and also a sharp increase in merchandising sponsorship and advertising revenue. But despite the impressive achievements of the club’s commercial department, there was an overall loss as costs were also up during the 2021/2 season.

The wage bill was up from £108m to £121m despite Bielsa’s refusal to increase the size of the squad mid-season, with Dan James and Junior Firpo being signed in the summer before the season had kicked off. The club paid £86m in transfer fees for the above two players plus Jack Harrison, whose loan was converted into a permanent deal, with only £1m in player sales to offset this outlay.

Over nine months have passed since the end of the period covered by these figures, so what will have happened since? The transfer income doesn’t include the sales of Raphinha and Kalvin Phillips, as they happened later in the summer, though a fair chunk of those fees have since been re-invested into the squad to purchase Adams, Aaronson, Kristiansen, Gnonto and Rutter.

Football financial expert Kieran Maguire has commented that the club’s finances look "solid enough" and that we don’t look like breaching the Financial Fair Play regulations. He has also revealed that we could pay up to £45m in bonuses and future installments if we avoid relegation once more. That such clauses have been written into players' contracts is a reflection of how much of a financial hit the club would take if we did drop out of the Premier League.

So it’s no surprise that in the strategic report that accompanied the accounts the club said the primary risk to the finances is the threat of relegation from the Premier League, with the huge hit in TV income that would result. But they also claimed that an independent regulator could "materially impact both the club's finances and elements of the way it currently operates".

The plan for a regulator was recommended by a fan-led review last year and confirmed by the UK government in February, but the idea has already had a lukewarm reception from the Premier League. One of it’s objectives was to prevent a breakaway European League, though it would also lead to greater scrutiny of club finances and a more even distribution of income between all levels of the game.

It's not been reported exactly what the club’s objection to a regulator actually is, but if the idea is to prevent the sort of financial meltdown we suffered 20 years ago then it has to be a good thing. And if the dreaded regulation did come about, we would be thankful for any increase in the amount of TV money being handed down by the Premier League.

So there we have it. We’re doing OK off the pitch, but much depends on avoiding the dreaded R word come the end of the season, and that of course was thrown back into doubt by yesterday’s’result against Palace . So over to you, Javi.

Photo: Action Images

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