Burnley chairman Alan Pace looking to build on successful foundations at Turf Moor
As Burnley released their accounts for 2020 on Easter Saturday, reporting a break-even net profit, football finance expert Kieran Maguire felt they outlined that the club is “the best run in the Premier League”.
And new chairman Alan Pace is determined to build on those foundations, not tear them down.
Only Chelsea (£36m), Sheffield United (£19m) and Norwich City (£2m) reported better results in the Premier League, as the accounts showed turnover decreased slightly from £138m to £134m, mainly down to an £8.5m broadcaster rebate, while wages were up from £87m to £94m, although the wage bill covered 13 months rather than 12.
Overall losses as a result of the pandemic amounted to around £10.5m, but the accounts showed no debt, with £80m in the bank as at June 30th, 2020.
After the accounts closed, ALK Capital acquired an 84% majority shareholding in the club, and Pace insists their leveraged buyout is “sustainable”, with a mortgage-type loan – believed to be around £60m – taken out on Turf Moor and the club.
Author and broadcaster Maguire, who wrote the book “The Price of Football”, said at the time the figures were released: “As a business, Burnley are the best run club in the Premier League – there’s no doubt about it.
“You can see why ALK were attracted. They weren’t inheriting any debt, or a club that was losing money every week, and that gives them a bit more time to get their feet under the table and identify where they want to direct the club.There is always a risk, because you have to pay interest on the debt, whereas if they bought it using their own money, they’d only take dividends out perhaps if the club was making profits.
“It is higher risk, if the loan figures we’ve seen quoted of say £60m at 8/9% are true, then the club has to go and find that £100,000 a week in interest, which it didn’t have to deal with before.
“That has got to come from somewhere, but even so, if you are paying out interest of £5m and you’ve got a wage bill around £90m, it’s not a huge amount off your wage bill, although you’re probably talking the wages of two first team players.
“Alan Pace isn’t a fool, he knows how the system works in the US, and he will look at income streams – commercial and on matchdays, and development, maybe similar to what Brentford have done.
“But the next set of accounts will not be as impressive, once the club starts to pay interest, and shows a full season without income from matchdays.”
That may be the case, but Pace, in tandem with the desire for evolution, not revolution, on the playing side, is keen for similar in the boardroom, to continue the Burnley success story of the last few years: "We do not want to do something completely different, but at the same time, how do you take that and add to (it)?
"If the foundation is good, when you add to the house it is pretty easy, and I think that is what we are trying to do.
"If you decide to rip down part of the house and start over, you run some risk, and that is why we are trying to make sure we don't run any risk and we continue to add to the foundation pretty easily."
Asked whether he had any financial doubts, Pace added: "Not at all. I get it, but that is not a concern from our perspective.
"We are very comfortable that the funds are going to continue to be available to do the things that we need to do, and we have set out a very thoughtful process to accomplish that."