There have been precious few pieces of good news for Burnley over the last 12 months, as they once again failed to survive more than one season in the Premier League.
Having come up from the Championship in some style under Scott Parker, accumulating an impressive 100 points, largely thanks to the best defence in the division, they found life a lot more difficult in the Premier League, finishing in 19th place.
After relegation was confirmed, Parker departed by mutual consent, leaving his assistant Mike Jackson in charge on an interim basis.
The club described the season as “difficult”, adding, “we have fallen short of the quality and consistency required to compete at Premier League level”, which was fair comment, given that Burnley only won four games, conceding more goals than any other team.
Compensation Award
Therefore, the recent award of £35m by an independent Premier League Commission as compensation for losses suffered by Burnley following their relegation to the Championship in 2021/22 was very welcome.
Burnley had brought a case against Everton after the Toffees breached Profitability and Sustainability Rules (PSR) for the 2021/22 season, arguing that their relegation was a result of Everton’s non-compliance, which had given their rivals a sporting advantage.
The claim was for £51.7m, but the damages were calculated by the Commission as £26m plus £9m interest, which is the largest financial sanction ever imposed on an English club.
Burnley chairman Alan Pace said, “When we were relegated in 2022, we disappointingly accepted the outcome on the pitch. What we could not accept and what no club should be asked to accept was competing in a competition later shown to have been compromised.”
The owner added, “The Independent Commission has now confirmed, in clear terms, that a rule was broken and a competitive advantage was improperly gained.”
Everton understandably disagreed, describing the verdict as “fundamentally flawed in both law and fact”.
They added, “This ruling sets a dangerous and unworkable precedent for English football, given it is constructed on a principle that a club can be in breach of financial rules at any point in a financial year.”
Everton have appealed the decision, so there is no guarantee that Burnley will receive all of the £35m award (or indeed any of it), but, if confirmed, the cash injection would have a very positive impact on the club’s finances.
This blog will not delve into the “whys and wherefores” of the legal process, but will instead focus on Burnley’s financial situation – and why the award is so important to the Clarets.
Ownership
Life has certainly been a rollercoaster for Burnley fans since Pace took over the club in December 2020, when his company ALK Capital purchased an 84% majority shareholding.
This represented a change in approach for Burnley, as the new owners put in very little of their own money, instead making the acquisition via a leveraged buy-out, placing debt on the club for the first time in many years and using the club’s own cash reserves.
In this period, Burnley have become a classic “yo-yo” club, with the last five seasons featuring three relegations and two promotions, which is not exactly the “exciting journey” promised by Pace on his arrival.
This is in stark contrast to the stability the club previously enjoyed, which featured six consecutive seasons in the Premier League, including a notable 7th place finish under Sean Dyche in 2017/18.
Pace also said, “I believe there is a way to be financially responsible that is sustainable.”
We will review the latest available accounts from the 2024/25 season to see how close the club is to that prediction.
The figures are obviously a full year out of date, but they are still of relevance, as they cover the last time that Burnley were in the Championship, so provide a good indication of the challenges they will face after the recent relegation.
Profit/(Loss) 2024/25
Following relegation to the Championship, Burnley’s pre-tax loss only slightly increased from £28.4m to £29.2m, despite revenue almost halving from £133.6m to £71.7m, mainly because of a steep increase in profit on player sales from £15.1m to £59.0m.
They reduced costs by £14.5m (9%) from £166.4m to £151.9m, but the operating loss still nearly tripled from £26.5m to a hefty £74.6m.
Net interest payable decreased by £3.5m (20%) from £17.0m to £13.5m, but this was still a very sizeable sum for a football club.
The loss after tax was smaller at £28.5m, thanks to a £0.6m tax credit, compared to the previous year’s £4.0m.
The main driver of Burnley’s £62m revenue reduction was broadcasting, which was 50% lower in the Championship, falling from £111m to £55m. Commercial income was also significantly lower, down £6.7m (47%) from £14.1m to £7.4m, but match day actually slightly increased from £8.9m to £9.1m.
Other operating income also fell £0.7m (11%) from £6.3m to £5.6m.
Burnley partly compensated for the lower revenue with a reduction in staff costs, as the wage bill fell £11.1m (12%) from £93.4m to £82.3m, while player amortisation dropped £5.9m (14%) from £42.6m to £36.7m. The reduction in wages would have been much higher without the payment of a chunky promotion bonus.
In contrast, other expenses increased £2.7m (10%) from £27.7m to £30.4m.
Burnley’s £29m loss before tax was the third worst financial performance in the Championship in 2024/25, only better than Leeds United £49m and Cardiff City £35m.
