Income

Covid-19 and drop in transfer income cited as reasons for Bradford City’s £845,000 financial loss

Utilita Energy Stadium, home of Bradford City AFC.

In the previous financial year, the club made a profit of £1.1 million.

Revenue levels in 2020-21 fell 31% to £5.4m – the figure for 2019-20 was £7.8m – mainly due to the dramatic impact of Covid-19 which prevented fans from attending games last season.

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Club manager and chartered accountant Alan K Biggin FCA compiled a financial summary of the club’s latest figures and said Covid-19 was “having a significant effect on trading, with transfer income remaining modest”. The losses were mitigated, to some extent, by the receipt of furlough funds to the tune of £369,000, he commented.

Transfer revenue, from player sales, sell clauses and appearance fees, totaled £490,000 – down significantly from the previous figure for 2019-20 of £2.6million.

Mr Biggin continued: “Above all, the club must remain financially stable and be able to generate revenue from its own operations and cost centres, so that it does not need to rely on external sources such as shareholders or other lenders.As a consequence of the above realities, gate receipts, match day revenue, season ticket sales and all business activities have been materially affected, although income from iFollow had a mitigating effect worth £529,156.

“Transfer fees remain an important part of our revenue generation model. However, for the year under review, this revenue stream was down significantly from the prior year and largely contributed to the loss that was generated.

“The club are likely to continue with the affordable season ticket policy as it is effective and has been successful. This also comes at a time when so many people in our region have been impacted financially as a result of the pandemic, and so the club considers that it is its responsibility not to increase this economic burden.

“Not for all clubs, necessarily, but certainly in a big city like Bradford with a low-income economy, it’s an important factor in ensuring season tickets continue to be viable for supporters.

“As always, wages, salaries and football expenses remain a major expense for the football club. These costs have been kept at £2.7m for the current season, down from £2.9m before.

“It should be noted that, over these two years, the charges fall within the spending constraints referred to as the ‘Salary Cost Management Protocol (SCMP)’, which links club spending in Sky Bet League Two 55% of their turnover.

“This could very well be a problem for some other clubs in the future, particularly for those who are promoted from the National League where no restrictions currently exist. The definition of ‘turnover’ for the purposes of the Rather, EFL is drafted more broadly than the SCMP rules and allows donations and equity injections from owners to be included in turnover.

“Our club will have no problem staying within the desired parameters and consider all these rules to be part of a policy of good and sound financial management, which is very much needed for the future of Bradford City AFC.