It has been well-documented that Sheffield United have financial troubles, as such, Prince Abdullah put the club up for sale earlier this year. The Blades securing promotion back to the Premier League last season was a vital and timely cash boost for the club.
The EFL placed United under a transfer embargo in January, because of unpaid instalments on transfer fees. But thanks to an FA Cup run bringing in additional funds, the embargo would then be lifted in April.
Prince Abdullah has attempted to sell the club twice in the past 12-months, Henry Mauriss and Dozy Mmobousi; both times, the investors failed the Owners and Directors’ Test.
Looking at the key numbers of the 21/22 accounts:
[Credit to @SwissRamble on Twitter]
Sheffield United’s revenue for 21/22 went from £115m to £67m, a drop of 42%, which is to be expected after relegation from the Premier League. While the expenses shrunk from £77m to £62m, a welcomed decrease of 15%.
The expenses included a wage bill of £42m and player amortisation of £25m. The Blades would ultimately end the financial year operating at a loss of £13m.
What is player amortisation?
The financially savvy Blade, Darren Smith clarified the term when speaking to Hal on Sheff United Way.
“I’m going to keep it as little technical as I can. When we signed Aaron Ramsdale for £18.5m [the club] doesn’t recognise the full transfer fee in the accounts on day one. [The club] spreads that fee over his contract and that is what is referred to as amortisation.
“We had a year’s worth of play out of [Ramsdale], so this would’ve actually reduced his value in our accounts by one-year of his four-year contract. Therefore we actually make a profit of where his value stood after one season, and not on day one. That’s why [the club] have a profit of £11m [on Ramsdale’s sale].”
Is Sheffield United operating sustainably?
The transfer embargo came as a huge bombshell when it was announced by the EFL, and it scuppered any chance of arrivals in the January transfer window. Interestingly, Darren Smith claims that there were no sign that an embargo would manifest in the clubs accounts.
“The football industry basically says a sensible ratio of spending your revenue on wages is around the 65% mark. So, for every pound you earn you pay 65p in wages. That’s a sustainable figure. Our ratio was 63% which is very sustainable. And bear in mind we would’ve lost £27m without the sale of Ramsdale.
“We owed suppliers about £3m and the taxman about £5m. For a £66m turnover business, those are the sort of the normal numbers you would see in that size of a business. There was no hint that we were slow to pay our suppliers. At that time it certainly wasn’t an outlier compared to other football clubs.
“In actual fact, those debts were actually lower than when we came down because we actually deferred some of our tax liability due to covid.”
The benefits of United World
Many Sheffield United supporters have voiced their concerns about the United World operation in the past. But Darren Smith explains the benefits of being part of the United World.
“In that particular year we paid £1,525,000 to United World, which is described as consultancy fees. A lot of fans will say ‘why do we pay this it’s just a waste of money’. The United World is the entity that has all the recruitment assets and resources. United World are the ones that have the data analysis on all the clubs they have, they have these worldwide scouting networks.
“There are data analysts that work for United who tend to deal with opposition analysis, but all the recruitment is within United World. In theory, if Sheffield United bought this for themselves the fees and the employment costs would be higher rather than lower.
“Because of our money problems, United World actually lent the club £6m within the year. In this particular year, we were the benefactor of around £4.5m.”
