Burnley FC directors pay for player wages

BURNLEY Football Club reduced its loses in 2008, but it is being shored up by director loans and further losses next year are guaranteed, latest accounts show.

The club has made significant progress with reducing its pre-tax loses, which fell to £1.76m in the year to the end of June 2008, from more than £4.37m.

But the club, which finished 13th in the Championship last season, admits that increasing wage pressures will mean the club makes a further “significant” loss in 2009.

It had a turnover of £8.57m – a 28.5% increase on the £6.67 it made last year – with £4.96m of that from match income and television rights.

The highlight of the season for the club was its third round FA Cup tie against Arsenal at home ground Turf Moor. “In many respects, that day was also the highlight of our year commercially. That cup draw was a significant factor in contributing to what was a very successful year off the field,” said the directors’ report.

It added that all operating areas saw increases in income over the previous year, as the club used the tie to sell corporate packages and advertising rights for the match, as well as it boosting retail and catering income.

But costs also increased, mainly because of player wages, which led to an operating loss of £6.7m. Total staff costs for the club were £9.76m, up on last year’s £7.1m. This was mitigated to a degree by the £5m made by selling four players.

The directors said: “Football is an expensive business and we have to ‘pay the going rate’ to try to achieve success. This ‘going rate’ is dictated by clubs with considerably greater resources than ours and this means that we will always have to sell players to balance the books.”

Chairman Barry Kilby added that the club is actively pursuing a policy of investing in younger players and developing its youth system, so that it can benefit from less costly home grown talent in the future.

The club has loans from eight directors, which it increased during the year  to a total of £5.85m “to provide the funds to pay the bills and try to improve the team”.

Chairman Mr Kilby and operations director Brendan Flood were the biggest lenders, being owed £1.48m and £2.68m respectively. Mr Flood is also the managing director of Manchester-based property group Modus, and owner of the ill-fated Passion for Perfume, which went into administration at the beginning of the month with the loss of more than 190 jobs.