April 23, 2024

Report: Football finance expert breaks down Sheffield United’s finances for the 22/23 season

It’s spectacular silly business. That’s how football finance expert Kieran Maguire described running a Championship football club. And in the 2022/23 season that’s precisely what Sheffield United was.

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Sheffield United clinched automatic promotion to the Premier League last term, after finishing on 91 points, ten behind champions Burnley, and 11 in front of third place Luton Town.

But while the fans can see the performances from the players on the pitch, supporters are oblivious as to how the club is performing off the pitch, in terms of finances.

Hal from the Sheff United Way recently spoke to football finance expert Kieran Maguire, as he broke down the 22/23 season’s finances for the Blades.

Football finance expert on Sheffield United’s 22/23 accounts

Kieran Maguire’s opening comments on the Sheffield United Way:

“It was a good year to get promoted…running a football club in the Championship is like running a casino operation. The average losses in the Championship is £476,000 per week. That’s the average. You’ve got some clubs losing £1 million per week.

Maguire went into more detail about United’s losses.

“The cost of running a football club, if you want to be successful, are significant. And on the back of promotion, there are more losses because of promotion bonuses and add-ons.

“The losses are legacies of buying players from previous seasons. Even though Sheffield United only spent £4 million on transfers, the cost of legacies players totaled £18 million. That’s a lot of money, that’s twice the amount of money that the club generated from ticket sales.”

Parachute payments

One subject that always seems to be brought up on social media is parachute payments. Some supporters, judging by their comments, don’t know how they work. They will demand United to spend their parachute money on summer signings.

Those payments are in place to try and stabilise the club’s finances after they drop out of the Premier League. The football finance expert revealed how much a club roughly gets in parachute payments.

“As far as parachute payments are concerned you get around about £42/43 million, that drops to around £34 million in year two. And a third year parachute payments is around £16 million.”

The good bits in Sheffield United’s accounts

Sheffield United | Premier Skills English

As Maguire stated to Hal earlier, it was a good year for the Blades to get promoted. He summarised the other positives on the club’s balance sheet.

“Where the club did well was: a good cup run, the sponsorship money was good last year, and they had a few events. They had a couple of matches from the women’s Euros. Def Leopard had a concert.”

Sheffield United will get around £100 million in TV money this season in the Premier League, while in the Championship you get around £8 million.

Interestingly, Maguire added that if Sheffield United had not been promoted, they would actually have a better looking set of accounts.

“We’d actually be talking about a better set of accounts, which is one of the biggest paradoxes in football. The promotion bonuses which are included in these figures are probably in the region of at least 10 million.”

Should there be concern over Sheffield United going into administration had they not been promoted?

“It’s always a concern. The club did borrow substantial amounts in the year. When those payments are due I think would be a critical issue. The reason clubs go into administration is all to do with cash flow, and cash flow is determined by the dates at which payments are due.

“Sheffield United borrowed money from the owner and borrowed money from third parties. Looking at the small print of those particular transactions. I think it would’ve been fairly critical [had the club not gained promotion to the Premier League].

“When a club gets promoted to the Premier League they actually get quite a nice welcoming present. Sheffield United would have received some cash. It comes down to somebody at a very senior level making a decision [on how to spend that cash].”

Kieran Maguire has stated to fans on social media that the Sheffield United 2022/23 accounts are about a six out of ten at best.

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