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Bournemouth Financial Results 2023/24

Season 2023/24 was Bournemouth's second consecutive season in the Premier League and their seventh in the top-flight in the last nine...

Season 2023/24 was Bournemouth's second consecutive season in the Premier League and their seventh in the top-flight in the last nine seasons. Bournemouth's season saw them have periods of poor form, followed by some impressive runs. They only secured their first win in match 10 and yet, despite some setbacks, were pushing for a top-10 finish by the end of the campaign. A few late losses saw them finish in 12th place, which, while not their best-ever finish (which was 9th in 2016/17), did represent their highest points total. For a smaller club in the Premier League, this was still a significant achievement. In the domestic cups, they reached the fifth round of the FA Cup and exited the Carabao Cup in round 4. Financially, Bournemouth remains one of the smaller clubs in the league, but they have big ambitions. Their matchday and commercial revenues are among the lowest in the league, constrained by their small stadium with a capacity of just over 11,000. However, they ranked fifth in net transfer spending, ahead of clubs like Tottenham and Newcastle. These ambitions have been largely supported by Bill Foley who is lead partner in club owners Black Knight Football Group, who have invested over £200 million since acquiring the club in December 2022. However, as with many smaller clubs, they must navigate the challenges of staying within the league's profit and sustainability rules (PSR). This likely contributed to the sale of Dominic Solanke at the start of the current season. Matchday Finance's unique platform puts the power of analysis in your hands. Whether you're a fan, journalist, industry expert, or investor, all the key numbers are right at your fingertips. Overview of Bournemouth's Financial Results. Bournemouth’s 12th-place finish, resulted in higher central payments from the premier league, leading to a record turnover of £161 million, an increase of £20 million from the previous season. However, with several new signings, the club's operating costs also rose sharply, up 28%. With no income from player sales, Bournemouth reported a significant loss of £66 million, a big change from the £44 million profit in the 2023/24 season. The previous year profit however was mainly driven by a £71 million gain from a loan write-off at the time of Foley's acquisition. Financial Highlights for the 2023/24 Season: Record turnover of £161 million, up £20 million from the previous season. Broadcast revenue increased £14 million due to a higher league finish. The club's small stadium capacity remains a constraint, keeping matchday and commercial revenue among the lowest in the league. Staff costs rose 40%, now ranking as the 12th highest in the league, and totaling 123% of turnover. The club reported a record loss before tax of £66 million, one of the highest losses reported so far this season. £141 million was invested in the squad, including the signings of Adams, Sinisterra, Scott, and Kerkez. Net player trading at 140 million is likely the fifth highest in the league. An additional £23 million was invested in the Canford Magna training facility. Owners Black Knight provided further funds of £98 million. Bournemouth is no doubt carefully managing its finances to stay within the Premier League's Profitability and Sustainability Regulations (PSR). After reporting this significant loss, the club will likely be close to the PSR limits (as the £71 million gain from the previous year is likely to be excluded for PSR calculation). While the Premier League has confirmed that no club breached PSR requirements for the 2023/24 season, Bournemouth's financial position will remain tight. The sale of Dominic Solanke at the start of this season, which is expected to generate around £35 million in profit, should provide them with some financial breathing space this year. Next Read For a full breakdown of the Premier League’s 2023/24 financial results, check out our recent blog: Premier League Financial Results Season 2023/24 Bournemouth's Turnover By Premier League standards, Bournemouth is considered a smaller club. The Vitality Stadium has the lowest capacity in the league, holding just 11,329 spectators. Their commercial revenue is also among the smallest in the league. Consequently, a large portion of their income comes from central broadcast distributions, which accounted for 84% of their revenue in the 2023/24 season. This makes their financial performance highly dependent on their league position. As illustrated below, Bournemouth ranks 17th in overall revenue, with only the relegated teams generating less. However, they have managed to increase their revenue, with broadcast income growing in line with their league position, while matchday and commercial revenue have also seen good gains. Matchday Revenue Matchday revenue is influenced by factors such as the number of home games, average attendance, ticket prices, and the club's ability to generate income from hospitality events and corporate boxes. The only exception to this is domestic cup matches, where revenue is shared between the clubs and the FA. The 2023/24 season saw two additional games thanks to an improved performance in both domestic cups. As mentioned, the stadium's capacity remains a limiting factor, so with the ground always full, average attendances stayed the same. However, their average revenue per fan increased by around 20%, partly due to the first ticket price hike in eight years. As a result, matchday revenue grew by 21%, which is impressive, though it remains one of the lowest in the league, likely only ahead of Luton. For comparison, it’s about half of Brentford’s and a fifth of Brighton’s. Broadcast Broadcast revenue primarily comes from central distributions from the Premier League, UEFA (if the club participates in European competitions), and revenue generated through the club's media platform. For Bournemouth, broadcast revenue is almost entirely derived from Premier League distributions. The chart below illustrates the distribution by club for the 2023/24 season. A significant portion, 67%, is evenly distributed among all clubs, with the remainder based on league position and the number of televised live games. For more information on how the Premier League central payment distribution system works check out our blog Premier League Broadcast Distribution for Season 2023/24. Bournemouth earned £95.1 million from the equal share, £25.4 million for finishing in 16th place, and £11 million from their 12 live televised games, one of the lowest in the league. Commercial Revenue Commercial revenue, which encompasses sponsorships, retail merchandising, tours, and other activities, totaled £18 million in the 2023/24 season, an increase of nearly 50% from the previous year. However, it remains one of the lowest in the league. The majority of this growth came from sponsorships, with Dafabet, Umbro, and Vitality the club’s primary sponsors. This figure is expected to rise again in the current season, as Bournemouth has secured a new front-of-shirt sponsor, replacing Dafabet with the Asian-based betting company BJ88. However, this agreement is only for two years, as Premier League clubs will be banned from displaying betting company logos and names on the front of shirts starting in the 2026/27 season. As shown below, commercial revenue continues to be a key differentiator between the "Big 6" and the rest of the league. Despite having the lowest commercial revenue among the Big 6, Arsenal still generates 2.5 times more than the next highest, Newcastle. Bournemouth ranks 18th in the league, with its commercial revenue falling behind comparable clubs such as Brentford, Fulham, and Brighton. As shown in the chart there are some impressive growth numbers amongst the club, with Arsenal, Newcastle, Brighton and Brentford also showing strong gains. It is no doubt an area that clubs are very focused on growing, and where the big clubs continue to leverage their huge global appeal. Bournemouth Staff Costs Season 2023/24 saw a significant increase in staff costs. Salaries rose by 36% to £136 million, whilst amortization (the write-down of player acquisition costs) increased by 50% to £61 million, leading to a total rise of £56 million compared to the previous year, or 40%. These increases are a result of significant investment in the squad over the past two seasons. In the 2022/23 season, Bournemouth had the second-lowest staff costs in the league (only Brentford had lower costs). However, after this 40% rise, Bournemouth's staff costs of £198 million, we expect to be the 12th highest in the league, ahead of clubs like Brighton and Brentford (note that ten clubs have so far published accounts for season 2023/24, the rest are based on our estimates). While it might be assumed that Bournemouth has performed exceptionally well relative to their costs, their performance in the 2023/24 season—finishing 12th in the league with the 12th highest staff costs—suggests their results were in line with expectations. However, this season could tell a different story, as they are currently in 10th place, just 5 points off the Champions League spots. The challenge for Bournemouth lies in their low turnover. With total staff costs of £198 million, this represents 123% of their revenue. This means the club faces significant losses unless they sell players, as they have done this season. Additionally, if the Premier League introduces its proposed 'Squad Cost Ratio,' Bournemouth will either need to substantially increase revenue, reduce salaries, or sell players. The current ratio is unsustainable under the proposed rules. They are not alone with this problem-we estimate there are seven clubs with ratio > 100%. Note these clubs rely on profit from player sales to bring down the ratio, Bournemouth being the only exception. Profit on Player Sales Since their return to the Premier League, and up until the departure of Solanke to Tottenham this season, Bournemouth had managed to retain their key players. This has been beneficial for the team, but it has also resulted in minimal profit from player sales. Balancing the retention of talent while staying compliant with the Premier League’s Profit and Sustainability Regulations (PSR) must be delicate task, especially considering that even larger clubs like Newcastle and Aston Villa were forced to sell players at the end of the 2023/24 season. This season, however, things will be different, as the sale of Solanke is expected to generate around £35 million in profit, marking their first major sale since returning to the Premier League. Profit and Loss With low matchday and commercial revenue but high ambitions, achieving profitability will always be a challenge for Bournemouth. Owners Black Knight have made significant investments since acquiring the club, but they must comply with PSR, and as Foley has stated, "there is no blank cheque." As previously mentioned, the 2023/24 season saw record turnover of £161 million, driven by a higher league finish. However, salaries and wages increased by 36%, reflecting the contract terms for new acquisitions. General operating expenses (the day-to-day costs of running the club) also rose by 20%, resulting in an EBITDA (Earnings Before Tax, Depreciation, and Amortization) of £7 million, down from £14 million the previous season. EBITDA is a key indicator, as it reflects operating cash flows. With over £250 million invested in players over the past season, amortization (the write-down of player acquisition costs) has risen significantly. Most contracts are amortized over five years, meaning these acquisitions will account for £50 million per year in amortization. This is a large portion of the £62 million amortization charge for the year, which is a 50% increase from the prior year. With no profit from player sales, the loss for the year amounted to £66 million. This marks a £39 million drop compared to the previous year (if we exclude the previous seasons £71 million gain from a loan write-off). So far, nine clubs have released their financial results, and Bournemouth's loss is the second highest, with only Manchester United's £131 million loss being larger. Profit and Sustainability Compliance. As noted, the Premier League confirmed that there were no PSR breaches for the 2023/24 season, meaning Bournemouth complied with the regulations. However, the exact details of how they achieved compliance remain unclear. If we exclude the £71 million gain from the 2023/24 season for PSR calculations, Bournemouth's total losses over the last three years amount to £148 million. Given that they were in the Championship during the 2021/22 season, their total allowable losses for the three-year period are £83 million (with £13 million allowed for the Championship season and £35 million per season in the Premier League). For PSR calculations, certain costs are added back, such as investments in youth development, women’s football, infrastructure, and depreciation. Given that Bournemouth was compliant, these costs must have exceeded £65 million over the three years. While this seems high, it’s possible that their significant investment in the new training facility at Canford Magna played a key role in meeting these requirements. Player Trading Since rejoining the Premier League, Bournemouth has invested over £270 million in their squad, making it the 10th highest spending club during this period. However, unlike many other clubs, Bournemouth has seen negligible player sales, which means their net player trading (player acquisitions less player sales) is remarkably the fourth highest in the league. Major signings, such as Adams, Sinisterra, Scott, Kerkez, Traoré, Zambarnyi, and Ouattara, have contributed to this high net spend. This from a club with a stadium capacity of just over 11,000 and one of the lowest non-broadcast revenues in the league. Over this two-year period, their net player trading has exceeded that of clubs like Newcastle, Tottenham, Aston Villa, and Liverpool, among others. Looking at the club's strong performance this season, they would argue that the money has been well spent. If this helps Bournemouth secure a European spot this season, it probably is! Football Debt The investment Bournemouth has made in players has been funded by owners Black Knight and their lead partner Bill Foley. By the end of the 2023/24 season, they had provided shareholder loans totaling £214 million. Of this, £124 million has been converted into equity, leaving £90 million still outstanding. The club also has £33 million in bank loans, bringing total debts to £123 million, which is the ninth highest in the league. Given the club's significant investment in the squad, it's not surprising that they also have substantial outstanding amounts owed to other clubs. When players are acquired, payment terms are often spread over several years, making it another form of financing. For Bournemouth, this amounts to an additional £106 million in liabilities. Also, since the close of the 2023/24 season, Foley and Black Knight Football have loaned an additional £53 million to the club, bringing their total investment post-acquisition to £267 million. Cash Flow A club's cash flow can vary each year due to factors such as payment terms for transfers, receipts from season tickets, and other fluctuations. The table below illustrates Bournemouth's consolidated cash flow over the past two years. Cash flow from operations, which reflects the cash generated by the club’s core activities before any investments or new funding, is a positive £30 million. Over the two years, the club has paid £153 million for players, with £100 million still outstanding. Additionally, they have invested £30 million in facilities, the majority of which has gone towards their state-of-the-art training facility at Canford Magna. Total cash flow from financing is lower than the amount Black Knight has loaned, as the initial loan of £89 million was used to settle an outstanding debt to the previous owner, at the time of acquisition. Bournemouth's Financial Outlook Under the management of Andoni Iraola, Bournemouth is enjoying a great season. As of this report, they sit in 10th place, just five points shy of a Champions League spot. If their current form continues, Bournemouth stands to receive a financial boost from their Premier League finish, with each additional position worth around £3.7 million. Moreover, if they can secure a spot in one of the European competitions, it will further increase revenue for the 2025/26 season. However, the club's cost base has risen, and further investment in the squad this summer will likely push staff costs even higher. The sale of Dominic Solanke is expected to generate around £35 million in profit, but the club is still likely to make a loss. It will be interesting to see if players are sold before the financial year ends to alleviate pressure from PSR. Boosting their commercial and matchday revenues is undoubtedly a priority. and the club has stated “The directors continue to explore ways to increase turnover, while maintaining tight control over cash flow and developing policies to ensure the club is run in a sustainable and successful manner.” There are well-developed plans for a new stadium, though nothing has been finalized yet. It is likely to involve a redevelopment of the current stadium, with a proposed capacity of between 19,000 and 23,000. This appears rather small, especially considering Foley talked of a waiting list of 15,000 for tickets. Black Knight have already invested an additional £53 million this season, signaling that their ambitions for the club remain strong. If Bournemouth achieves European qualification for the first time in their history, it is likely more investment will follow. To access all the numbers and receive regular updates, sign up to the Matchday Finance platform.

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