Finances in Football: BCFC Transfer Spend

Birmingham City were exceptionally busy in the transfer window, with 14 players coming into the club while the same number left on loan and permanent deals. With all that action going on, how much money did the club spend and is it likely there is much more available?

Finances and BCFC

Of course without access to precise financial documents like accounts and payroll it’s absolutely impossible to answer this sort of question precisely.

However, that doesn’t preclude us from trying to work out a rough ballpark figure of where the club is at.

Transfer spend or net spend?

This is where it gets complex, because the correct answer is neither.

The Guardian published this piece last year where they exploded a lot of transfer myths – particular among them being that net spend isn’t as important as fans think.

What they explained is that while a transfer fee might be a large sum paid up front, in accountancy terms it is recorded as the fee divided by the number of years in a contract. For example, if Blues sign Jota for £6.5million on a four year deal, then that goes in the books as £1.625million per year for four years.

With this in mind, I’ve attempted to prepare some figures to give an idea of what Blues will need to add to the books this year in transfer fees and wages.

The key word in this is “attempted”. 

Firstly, remember I’m not an accountant – I’m just somebody with access to Microsoft Excel.

I’ve tried to source figures as widely as possible – contract lengths are from news articles when players have signed and remaining contracts are calculated in the same way.

I’ve also tried to use reported fees along with wages guesstimated from speaking to my own contacts (and from people online such as Beesotted).

These figures don’t take into account add-ons, agency fees, VAT and NI, bonuses etc and are provided as an indication – nothing more.

Treat these figures with the scepticism they deserve.

Ballpark Figures BCFC Spending Summer 2017

As to be expected, the number of players Blues brought in meant a huge amount of investment into the club. Jota’s club record fee and reported £40k per week wages alone will add more than £3.7million per annum to the outgoings on the balance sheet.

Likewise, loans are becoming very expensive. Assuming a £1million loan fee for both Jenkinson and Bramall along with taking almost the entirety on Jenkinson’s reported £40k+ per week wages puts another £2.5m on the balance sheet.

The Mirror reported a £1.2million loan fee and £18k per week wages for Sam Gallagher that means more than another £2million spent on the Southampton forward.

BCFC Transfer Fees Received Summer 2017
The good news is that Blues will also save a bunch of money in the window.

The sale of Kerim Frei to Istanbul Basaksehir alone removes almost £4.5million or so from the Blues books in the future. While the initial fee received was low (€1million), taking 3 years of his contract off at a guesstimated £23k per week relieves a lot of pressure.

Likewise, selling Ryan Shotton to Middlesbrough helps a lot too – even at a conservative estimate of £1.5million received initially before add ons.

Because I’m not an accountant, I’m not sure how amortisation works even after reading pieces online. However, taking the “OUT” total away from the “IN” total leaves a figure just a shade under £12.5million – which isn’t far away from my guess of £11million I made in June.

What does these “ballpark” figures mean?

The biggest thing it means to me is that despite my repeatedly avowed worries about Harry Redknapp’s record on transfers, Blues have kept things under a fairly tight rein – which is good news.

I think it also means that there might still be some wiggle room in the winter window should we require a little extra oomph to get us across the line – which is also good news.

When will we know the figures for sure?

It won’t be for a while. We’re still waiting last years accounts – which for BSH should be released before the end of this month, while for BCFC and their UK parent BC plc they should be available from Companies House around December.

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