It’s been a wild season to be a Blues fan. After a decade of dross it’s been amazing to once again support a team that demands a winning mentality and while it is only the third tier the prospect of setting an all-time wins and points mark is definitely one that appeals.
However, it’s not just on the pitch that Blues have record results. The recent accounts filed by the club showcase just how far the club are coming on financially.
In the past I’d normally have done what I could to make sure I got a piece out immediately about finances and the implications that it has for the club.
These days, things have changed.
With a change of ownership, there is no longer a worry about the direction of travel the club is undertaking financially. I’m not concerned about the club owing money to shady corporations in the British Virgin Islands or similar and I’m confident that the club is now being run by truly competent staff.
There is also a plethora of people online these days who can report on the accounts with competence thanks to their skills and qualifications, which has ensured that the headline figures were reported almost instantly.
I can’t compete with people like Kieran Maguire on that sort of thing and in honesty I don’t want to; it makes me happy that there are people of his ilk who are making sense of this sort of thing for the common fan.
Instead, I’ve spent a few days trying to talk to contacts around the club to see what I can do to answer what I think are the more important questions in this piece.
As always I must stress I’m not an accountant nor do I have any training in that field and that I recommend taking a look at the figures for yourself to come to your own conclusions.
Profit and Sustainability Rules
Although Blues are currently in League One and are not currently subject to PSR rules, the fact that we’re now just two points from promotion means that it should come back into our consideration.
With Blues making a £13.827M loss from operations in the 2023-24 season, I can understand that it’s inevitable there will be questions from some fans concerned if the club can continue to invest in players in the summer.
Although I do know that the loss made on paper in these accounts is not necessarily the same as the PSR result the club will file with the EFL, the truth is I don’t know exactly how much they differ and thus it’s difficult to make a guess as to how close to the line we will be.
One thing I am sure of is that the obfuscation as to exactly where Blues are in relation to PSR is deliberate from the club.
As someone who believes that football finances should be more transparent this is saddening, but I have to accept from a pragmatic standpoint that it only works if every club is forced to commit to the same levels of transparency.
The reality is that the club’s willingness to keep secret how close to the PSR thresholds is nothing to do with us fans.
As we saw last summer, clubs know we have money to spend and thus are willing to jack up transfer fees up higher in the belief we’ll pay more.
Because of this, it’s important to Blues that other clubs aren’t aware of just how close to the line they are sailing.
And this means we have to take it on trust that Tom Wagner and Knighthead know what they’re doing and they will continue to keep the club compliant while investing as much in the squad as possible.
Revenue
Anyone who has followed the words of Tom Wagner in the last couple of years will know that the Knighthead chief is all about the revenue generated by the club; the more it can generate, the more it can spend.
I’m a fan of this approach myself having seen the damage that continual cost cutting can cause. From my standpoint, consistently looking to improve revenue is taking positive steps to improve things and positive is good.
The Knighthead difference is massively present in the 2023-24 accounts with revenue going up from just shy of £19M to £28.720M – an increase of 45%.
This massive increase in revenue in addition to transfer profits (the Jude Bellingham sell-on money) ensures that losses were cut in half in the 2023-24 season.
What is more important is that while revenues are going up, it’s the ticketing and commercial revenues which are improving. From a sustainability standpoint it’s imperative that Blues aren’t overly reliant on one sector of revenue and this has massively improved.
| Sector | 2024 £ | 2024 % | 2023 £ | 2023 % |
| Match Receipts | 6115977 | 21.29% | 3728240 | 19.64% |
| Broadcasting | 9654420 | 33.62% | 9065225 | 47.75% |
| Commercial | 12949878 | 45.09% | 6192218 | 32.62% |
| Total | 28720275 | 18985683 |
As to be expected, reopening the stands made a massive difference as it ensure that money received from match receipts would massively increase.
However, it’s commercial which has really turned out to be the winner as Blues made more than double the money from commercial sources compared to the previous season.
And even though Blues are in a lower division this year, I’m led to believe that this commercial income has continued to grow and will again jump next year on promotion.
My one fear with commercial income is that Blues must do their due diligence on potential partners.
For example, in recent times the deal with God55 as Asian betting partners was almost immediately pulled after a news story emerged alleging that God55 were not registered with any gambling authority.
I spent a couple of years working in the iGaming sector and my experience has left me feeling that this is something Blues need to be very careful with, especially outside of the UK regulatory structure.
I’m hopeful that the deal with God55 was an outlier and is a mistake that won’t be repeated.
Transfer Fees
One of the biggest themes of this season has been the number of salty opposition fans moaning on social media about how Birmingham City have “bought the league” this year. The figure that Blues are alleged to have spent has steadily climbed as the season has gone on almost to the point of parody.
Now, of course with the splash Blues made on Jay Stansfield there were going to be allegations that Blues have spent astronomical amounts of money, and this coupled with hyperbolic reporting in the press is only going to fuel the flames of envy.
Back in September last year I made myself a little spreadsheet to try to guess how much Blues had spent and how that would work with amortisation – and even though I was conservative in my original estimates I was surprised with how much pushback I got from contacts who insisted the figures in the press were not to believed.
One of the good things about these accounts is that they include a net spend figure for transfers after 30 June 2024, which is given as £21,070,000.
A quick look back through the transfer window confirms that the signings of Ryan Allsop and Bailey Peacock-Farrell were both made by that date and thus won’t be included; however, the remaining 15 permanent signings and five loan signings (including January) have only cost the club in total slightly more than some think we paid for Jay Stansfield.
Of course, the number given above is the net spend, which means it will include the money we have received from the sales of players like Jordan James, Juninho Bacuna and Koji Miyoshi.
From an amortisation point of view this gives me the impression that Blues probably have broken even on transfers this season; especially as any money made on Jordan James and Koji Miyoshi will have been pure profit due to their book value being zero as ex-academy player and Bosman free transfer respectively.
This in turn should give fans even more confidence that we’ll be okay from a PSR point of view, which should then mean Blues have definitely got some wiggle room this summer to make some decent signings.
In short, like most things Blues this season we can take lots of positives from these accounts.
Of course, there is no time for anyone to rest on their laurels as Blues do need to keep continuing to push revenues as high as possible, while the recruitment team will need to show once again that they can bring in players who will improve the squad without breaking the bank.
That being said, I hope readers of this blog will understand why I have faith and trust in the current staff to continue to deliver.