Drop from top flight plunges Burnley back in the red

BURNLEY Football Club witnessed a steep fall in revenues in its first season back in the Championship.

Newly-filed accounts for the club showed that sales dropped by 40% to £27.4m, from £45.4m during its season in the top flight. The decline meant that the club posted a pre-tax loss of £4m, compared with a profit of £14.4m in 2010.

Writing in the notes to the accounts, club chairman Barry Kilby said that it was “disappointing” that the club had not been able to land a play-off place which may have secured a route back to football’s top flight.

“How realistic that was considering the playing squad we had is, as ever open to debate but there was a sense of frustration that permeated though the season,” he said.

He said that despite the loss of revenues caused by its drop from the top flight, the club “can take sume satisfaction from the continued progress of our commercial revenues, which have increased by 15% overall since we had a ‘normal season’ in the Championship in 2007/08.”

However, he added that staff costs have doubled since that season and at £12m were only 13% lower than when it was in the top flight. It also spent £4.7m on new players and changes in the management team, with former manager Brian Laws being replaced during the year by Eddie Howe.

“It almost goes without saying that this level of expenditure is not sustainable in the Championship,” he said.

“We will address these costs in 2011/12, whilst maintaining as stron a squad as possible to enable us to compete for promotion again.”

He added that despite last year’s significant profit, the firm’s operating loss over a five-year period had been over £12m despite player sales bringing in more than £10m.

The results mean that the club’s net liabilities widened from £1.6m to almost £5.7m. Its net debt increased to £10m (2010: £7.8m, which cost £907,000 to finance.

“Our aim continues to be to eliminate those borrowings in the medium term,” said Kilby.

Mr Kilby added the club has “considerable work to do” to make sure costs are brought in line with revenues as Financial Fair Play rules are introduced to the Football League and its prachute payments friom the Premiership fall away.