Season review
Blackpool endured a third successive season in League One in 2019/20 which proved to be its penultimate campaign in the third tier, finishing 13th (PPG basis) before promotion back to the Championship was finally gained in 2021.
The start of the season saw a new face as the owner of Blackpool, local entrepreneur Simon Sadler, who took over from the Oyston Family after an eventful 32-year tenure.
After renewed optimism of new ownership, COVID-19 threw a spanner in the works as the club suffered its fifth consecutive year of losses, remaining relatively small however at £2.2m.
This article explores Blackpool and its 2020 finances and the impact of COVID-19.
Revenue
Blackpool saw its revenue rise from £4.6m to £5.5m (19%) despite COVID-19 as the club saw an upturn in its finances as new owners created a buzz around the town.
Matchday
Matchday revenue rose from £2.1m to £2.5m (19%) as Blackpool benefitted from a significant increase in season ticket revenue from £0.2m to £1.0m following a change in ticketing model.
This was achieved despite five home games being cancelled following the curtailment of the season and bodes well for the 2021/22 season.
There will be close to nil matchday revenue however in the 2020/21 season.
Broadcast
Blackpool’s broadcast revenue fell 5% to £1.6m following worsened performance in the domestic cups and league.
Improved performance in 2020/21 should see an increase in 2021 broadcast revenue before a significant hike in 2022 following promotion. Blackpool’s broadcast revenue was £13m in its last Championship season, an eight-fold increase.
Commercial
A new era saw commercial revenue rise from £0.9m to £1.4m (67%) as a new commercial sponsorship with Visit Blackpool and greater revenue from corporate hospitality.
Blackpool had a great financial year in 2020 as they capitalised on a new ownership to provide fresh optimism in Blackpool and deliver revenue gains. This will however be difficult with matchday revenue close to nil in 2020/21 which will result in revenue declining but increasing significantly in 2022 following promotion and the return of fans to the stadium.
Operating costs
Overview
Blackpool had a new owner who instantly showed ambition to invest in the playing squad result in operating costs rising from £8.0m to £10m (25%) as they spent the majority of these costs on wages.
Wages
Wages rose £4.7m to £6.6m (41%) as the club looked to invest in players recruited from the free transfer market.
This did however result in the club’s wages to revenue ratio rising to 121% (2019: 101%) which is relatively unsustainable in the long-run.
It has however paid off with promotion secured in 2020/21 which will see this ratio decline due to significantly higher revenue (unless wages are increased significantly too).
Other costs
Other costs rose from £2.9m to £3.4m while there were no exceptional costs compared to £0.5m incurred last year relating to the sale of the club.
Blackpool’s cost base rose substantially in 2020 as it looked to gain promotion, a gamble many clubs take. Having not initially paid off, there was success in 2021 which meant the gamble has so far paid off as long as costs are managed sensibly while in the Championship, balancing this with the need to be competitive.
Transfers
This will be a relatively short section due to Blackpool relying primarily on free transfers and loans to mount a promotion challenge in League One.
Amortisation
Player amortisation charges rose from £0.1m to £0.3m in 2020 suggesting an outlay on a signing or two. Transfermrket.com doesn’t record any transfer fee sales for Blackpool to allow me to comment on this.
Profit on player sales
Blackpool recorded a healthy profit on player sales of £1.4m in respect of transfer clauses activating on Osayi-Samuel and Brad Potts.
Blackpool had no major sales in 2021 and therefore will be hoping for further clauses being triggered or find themselves with a one-million-pound hole in its finances.
Profitability
Blackpool is a loss-making club at all levels and have been for the last five years since relegation from the Championship.
A return to the Championship does bode well for the club’s finances when the club was last profitable.
Operating profit / loss before player trading
Operating losses before player trading increased from £2.8m to £3.4m as cost (specifically wages) growth outstripped revenue growth.
This situation will be exasperated by the fact revenue will in fact fall in 2021 leading to potentially significant losses past the £5m mark.
Operating profit / loss after player trading
After player trading losses fell to £2.4m (2019: £2.6m) as the crystallisation of clauses of Osayi-Samuel and Potts were welcome bonuses.
Profit / loss before tax
Losses after tax fell to £2.2m due to finance income due to an amount due to the Oyston Family being waived.
Blackpool has cumulative losses before tax of £10m which are modest enough to manageable for a wealthy owner. Striving for even greater sustainability may be the sensible way to go however the urge to try for Premier League promotion at a pace may be too hard to resist.
Assets / Liabilities
Overview
Blackpool was backed by its new owner as he injected £3.6m into the club in his first full year in charge.
Cash flow
Blackpool operate with minimal cash, remaining stable at £0.2m as the club utilise the majority of its funds to stay afloat.
Blackpool do not produce cash flow statements to enable a more detailed analysis of cash flow.
Debt
While the club does not produce cash flow statements, we understand that £3.6m has been invested by Sadler in covering losses and investing in the club, showing his ambition from the get-go.
This was supplemented by an EFL loan of £0.2m.
Net debt
Blackpool’s net debt was hence £3.6m as they embark on a new era of ownership.
Final Remarks
Simon Sadler is a local boy from Blackpool and will be hoping to take his club back to the top flight for the first time since 2011. They are a long way from there and will need to manage ambition, finances and expectations to avoid struggles later down the road.
Blackpool look in good shape to be a financially sustainable Championship club (as they were during the back end of its last spell in the league) and a strong start to the 2021/22 season is evidence of that.
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