Birmingham City: St Andrew's sale helps reduce Blues losses for 2018-19 season

Written by on January 7, 2020

General view of St Andrew's
            </figure><p class="sp-story-body__introduction">Birmingham City sold St Andrew's to a company controlled by owner Paul Suen Cho Hung for &pound;22.8m to bring pre-tax losses down to &pound;8.4m last season.</p>

Financial details came a day after news that Blues could face another points deduction for breaching spending rules.

Losses of £48.8m over three years saw them deducted nine points last term.

The deal to sell “land and property” to Birmingham City Stadium Limited will see the ground leased back to the club for £1.25m per year for 25 years.

Birmingham City Stadium Limited, which was only registered on 20 May 2019 according to Companies House, is a “wholly owned subsidiary” of Birmingham Sports Holding Limited – the Cayman Island-registered, Hong Kong stock exchange-listed parent company of the football club.

The financial results also show that Birmingham owe the parent company £97m, up from £73.1m a year earlier, and “forecasts show” an additional £54.2m is needed before December 2020.

A profit of £17.2m on the sale, referenced only as “the disposal of freehold land and buildings”, comes after the asset was independently valued at £22.8m.

That sale brought the pre-tax loss down to £8.2m, with Blues having recorded an operating loss of £29.2m for the 12 months up to June 2019.

Their pre-tax loss the previous year was £37.4m.

What does it mean for Blues?

Birmingham have followed the recent trend of clubs selling their home ground to try to avoid a spending breach, while not breaking English Football League rules.

However, similar arrangements by Derby County, Aston Villa and others are being scrutinised, while Sheffield Wednesday have been charged for misconduct over their sale of Hillsborough.

For Blues, it does improve their financial results on paper.

That, however, may not be enough to avoid a second points deduction after the club revealed on Monday that it faces a charge of breaching a business plan imposed by the EFL last season.

Figures show that £7.4m was spent on transfers, while player sales – which includes the reported £4m that Aston Villa paid for Jota – brought in £8.2m.

In the month following the accounting period, last season’s top goalscorer Che Adams was sold to Southampton for a reported £15m and Croatia midfielder Ivan Sunjic was brought in for an estimated £6.3m – one of eight summer transfer window signings.

Club director Xuandong Ren confirmed that the latest breach notification was received on 14 May 2019 and said they were “in negotiations with the EFL on the possible disciplinary actions that might be imposed”.

“Save for the breaches of the EFL regulations, as far as the board and management are aware, during the year under review, the club complied in all material respects with the relevant laws and regulations that have a significant impact on the business and operation of the club, and there was no material breach of noncompliance with the applicable laws and regulations by the club,” he wrote in the accounts.

In the 2018-19 season, Blues’ turnover was £23.3m, up from £19.1m the previous campaign, with ticket sales, broadcasting income and other commercial revenue all increasing.

And, while the club’s wages were brought down from £38.6m to £32.8m, they was still spending £140 on salaries for every £100 earned.

Updates from the Cannock Chase Radio News Desk via BBC Birmingham and Black Country

From: https://www.bbc.co.uk/sport/football/51022017


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