A very good result but a concern for cash: Kieran Maguire’s verdict on Sheffield United’s accounts
Leading football finance expert Kieran Maguire has praised Sheffield United for being the only Premier League club to post a profit. The Blades have released their accounts for the period covering their second season in the top flight and Maguire says it was “quite a feat” to record a surplus.
United recorded a profit for the second consecutive season when they finished with £9.5m in the bank. Considering they finished bottom of the league and Covid affected matchday revenue and other revenue streams, he says those numbers are impressive under the circumstances.
“They’re as good as you’d expect,” he told Yorkshire Live.
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“They are the only club in the Premier League to report a profit from day-to-day trading which is quite an achievement considering there was Covid to consider and they finished bottom of the league , which significantly reduces their money, because the amount of TV cash you receive is tied to your final position.
“The reason for that profit is that they kept their wage bill low and it looks like they had some pretty big bonuses built in to avoid relegation, so those weren’t triggered. The investment in players didn’t work.They spent an extra £46m on players in the season and it didn’t deliver what they were aiming for, which to be realistic is 17th in your early years.
“The previous season was a magnificent achievement. Since the end of the season, they have sold players and taken out advanced loans on the installments due, which suggests that cash flow is still an issue. They have recovered the stadium, which which is positive, so these are good results.”
For the second year in a row, United will also finish bottom of the table when it comes to player wages. He estimates United’s average weekly salary at £29,500, which is significantly below the division average of £53,000.
This explains how difficult it has been for the club to attract players of this level and compete, and Maguire claims the club’s wage bill is tied to their position in the league. He added: “The paradox of football is that Sheffield United made the only profit in the Premier League and were relegated.
“A few years ago Rotherham United made the only profit in the Championship and were relegated. The clubs that make the biggest losses win the trophies.
“I estimate that United’s weekly wages in the second season average £29,500, compared to just under £35,000 a week in the season they finished ninth. The average wage at Premier League level is currently £53,000 a week, so by far they had the lowest wages.
“United’s wage bill was £57m, that was for 11 months, but even if you increase that pro rata it’s around £63m. Second lowest I’ve seen so far. “Now Brighton are at £109million. That’s a ridiculous difference.
“The wage bill shows you how hard it was to compete. If we look we know Manchester City are a fantastic team, but for every £100 in wages United spent, City were paying £570. That’s just a crazy league.
“The fact that you have clubs like Brighton and Southampton paying £50m more than United in wages shows you how difficult it is to compete. If you draw a wage table and then link that to the final league position is very, very close.
“You have Manchester City first, Chelsea second, Manchester United third and Liverpool fourth. Well, those are your four Champions League teams.”
A £30million loan was also on the accounts and since then more have been taken out, secured against Aaron Ramsdale’s transfer fee and Premier League parachute payments. Although this suggests that the club’s cash flow is a concern, fans shouldn’t be too worried as the club has some salable assets.
“I don’t think the loans are too much of a concern for the fans,” he explained. “Obviously there were issues regarding the stadium and it has a lot to do with managing cash flow and making sure the club is able to keep going. He has assets salable, Ramsdale is gone, so to an extent that will cover a significant amount of the loan.
“They have an extra £30m in loans but have the stadium as a secured asset and that had to be sorted out at some point. The cost of the squad went up from £75m to £113m, those are the very salable assets, some of which can be sold.”