West Bromwich Albion have announced a net debt of £6.6 million – after making an initial operating profit of £7.7 million.
The Baggies have released their annual accounts, which also show an increase in turnover from £27.2m to £47m for the year ending June 30, 2009, mainly down to the money brought in through Premier League media rights.
The club made a profit of £7.8m with a further profit of £7.7m on the sale of players during the period, with a net debt of £6.6m, which was down from the £7m figure for the previous 12 months.
The depreciation of players’ values, due to the running down of contracts, means the club have made a pre-tax loss of £13.3m, although this is a theoretical figure, with the wage bill rising from £21.6m to £30.7m after the club’s promotion to the Premier League during that period.
The club’s future liability on first-team players’ wages, effectively the minimum to be paid during the course of their contracts, increased by £10.2m to £33.4m.
Finance director Mark Jenkins believes Albion’s model is appropriate during these troubled times.
“We’re running as we always do – compared to other football clubs we’re relatively strong but we are nearly £7m in debt,” he said. “The Premier League is a very cash-hungry league to be in. The £21m figure is a Championship parachute wage bill.
“When we do our three-year plans and we’ve got parachute payments we do consider that. You only have to look at the financial difficulty many clubs are in at the moment and players’ wages are the main issue.
“Already you’ve got one or two clubs struggling to pay their wages. We are well planned. We know when a player contract is dropping out and we can flex our costs appropriately.
“We have to cut our cloth accordingly, like other clubs do. Some clubs push it more than others and they’re the ones whose players don’t get paid come the last Thursday of the month,” Jenkins said.
“Clearly we are in a period of recession but player wages don’t seem to have decreased to a large extent.”