West Brom accounts: Albion seek financial help despite record profits
Albion have announced they must seek short-term financial support despite making a record £39 million pre-tax profit last season.
The club’s latest set of accounts reveal record-breaking figures for owner Guochuan Lai’s first year in charge at The Hawthorns.
But that was followed by a disastrous £40m transfer splurge last summer which has left the Baggies out of pocket and facing relegation from the Premier League.
For the first time in more than a decade, the club will now require an overdraft facility at the bank.
Chief executive Mark Jenkins, who rejoined the club last month, explained: “It is not a serious issue but it is something the club has not needed for more than ten years.
“It really just signifies the amount of investment that has gone on in the last year.
“It is nowhere near as big as the overdrafts other clubs have got. But it is a new thing for the club, which we have not had to deal with for a while.”
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'Financially strong'
Jenkins, who rejoined the club last month, insisted the Baggies remain “financially strong” and will not be forced to sell players should they, as expected, drop into the Championship.
But the revelation they must now go cap in hand to the bank, having so recently been in position of financial strength, demonstrates the extent to which things have gone awry.
The accounts, which document the Baggies finances up to June 30 last year, reveal record figures across the board, with turnover rising by nearly £40m to an all-time high of £138m.
A bumper windfall from the Premier League’s new TV deal meanwhile saw Albion record a profit despite operating with an increased wage bill.
The Baggies also smashed their transfer record by signing Nacer Chadli from Tottenham for £18m, yet still made a profit thanks to the £15m sale of Saido Berahino to Stoke.
By the end of the financial year, the club had funds of nearly £40m in the bank.
Transfer splurge
But that has now gone following a summer transfer window which saw Albion spend big fees on the likes of Oliver Burke, Kieran Gibbs and Jay Rodriguez, while they also agreed to fork out for the £110,000-a-week wages of Paris St-Germain loanee Gregorz Krychowiak.
Jenkins previously spent 14 years at The Hawthorns as the right-hand man of former owner Jeremy Peace, when the Baggies had a reputation for being prudently run.
He left in December 2016 but returned as chief executive last month, replacing Martin Goodman following a boardroom cull which also saw chairman John Williams axed.
“This just demonstrates where we were and what has happened this season,” added Jenkins.
“The club fully invested in the playing squad the infrastructure – the club, stadium and training ground. We have record transfer fees, record loan fees and record wage bill.
“The club has invested everything and a bit more. It has gone beyond its own financial limits.” He also revealed the club were “at their limit” when it came to the amount they were spending on player wages.
Relegation bound
Albion currently sit bottom of the Premier League having won only three games all season.
After a poor start, Alan Pardew replaced Tony Pulis as head coach in November but has claimed only one victory in the league since.
With just seven games remaining, the Baggies sit ten points adrift of safety and appear doomed to drop down into the Championship for the first time since 2010.
Jenkins has been tasked with carrying out a root-and-branch review of the club ahead of a close season where big changes are expected, no matter what division the club are playing in next term.
He said: “The important thing is restructuring, whether it’s in this league or the Championship.
“It’s going to be the same restructure. Ultimately it comes down to going back to good financial decisions and good recruitment.
“Making sure the players you bring in are on the right contracts for the right value and are the right players.”
