Swansea City: Chairman Trevor Birch warns of further cuts after loss
- Published
Former professional footballer Trevor Birch led the sale of Chelsea to Roman Abramovich
Chairman Trevor Birch has warned Swansea City could face more cutbacks after recording a pre-tax loss of £7m for their first year after relegation from the Premier League.
The Swans have had to cut costs severely since dropping down to the Championship in May 2018.
The club made a loss of £3m in 2018 and, despite a profit of £13m in 2017, there was also a £14m loss in 2016.
Birch says the club could be forced to make cuts to facilities.
The Swans will continue to have a category one academy in 2020-21 - but Birch also warned they may be unable to retain that status for the academy unless they earn promotion back to the Premier League.
Swansea cut their player wages and staff costs almost in half for the financial year ending 31 July 2019.
The club employed an average of 359 members of staff, including players, coaches and part-time matchday staff, during the year at a cost of £48.9m.
This compared with 409 staff members at a cost of £92.5m the previous year, a reduction in staff costs of £43.6m.
Birch was appointed by Swansea's majority shareholders, Steve Kaplan and Jason Levien, last summer to have operational control of the club.
Swansea's American owners have faced criticism from fans since taking charge of the club in 2016.
Birch admitted the club's problems had been worsened by failures in the transfer market.
Striker Borja Baston cost £15m but joined Aston Villa for free on transfer deadline day last week and Tom Carroll, a £4.5m signing from Tottenham, was released.
"The fact that some of our expensive recruits in the last couple of seasons in the Premier League didn't work out has obviously exacerbated our problems," Birch said.
He added there were "some financially testing times ahead of us if we don't get promoted this season".
Indeed, Swansea's financial losses would be even greater but for player sales, though striker Oli McBurnie's £20m move to Sheffield United will be contained in next year's accounts.
"If we had not sold players in the last few seasons, we would have reported significantly higher losses," Birch wrote in a letter to supporters.
He also warned Swansea's financial situation is only set to get worse unless they are promoted.
The Swans are currently eighth in the Championship table, four points off a play-off place.
"Next season (2020-21) we will see another drop in our revenue when our final year of parachute payments fall by a further £20m," Birch added.
"To put our revenue decline in context, for the year ending July 31, 2018, we had a total turnover of £126.8m.
"Next season (2020-21) that will drop to just shy of £30m, and when the parachute payments cease for season 2021-22 then turnover drops to approximately £17m if we are not promoted. That's a drop of nearly £110m.
"So, it is not surprising that many clubs struggle following relegation from the Premier League and that many slide straight through the Championship and into League One.
"It's against the tough financial backdrop highlighted above that we have harsh and difficult decisions to make for the future."
Birch says Swansea will give consideration to continuing to run two "Premier League standard" training facilities in Fairwood and Landore, which is linked to the club retaining their top academy status, estimated by Birch to cost £3m per annum to run.
However, the Swans will continue to have a category one academy in 2020-21.
"The decision we make on our academy category status, currently category one, more or less depends on how we decide to move forward in relation to the training grounds," Birch added.
"For example, it would be difficult physically and logistically, if not impossible, to maintain category one status if we consolidated all our operations to just one training venue.
"However, I am pleased to announce that with the full support of the owners we have made the decision to continue to operate the two training sites to maintain our academy category one status for season 2020-21.
"This will then give us a breathing space to explore further options prior to the start of the 2021-22 season."