West Brom face a “very significant” revenue drop-off if they are unable to avoid relegation from the Championship, Kieran Maguire has warned.
Speaking exclusively to The Baggies News, Maguire has painted a grim picture if Albion find themselves competing in League One next season after Eric Ramsay was sacked this week.
Bilkul Group celebrate – if that’s the right word – two years since taking over the club this weekend and have worked hard to stabilise club finances in that time, but plans would have been made assuming the club would at least be competing in the second tier.
Kieran Maguire outlines financial impact if West Brom are relegated
Maguire said: “The drop-off would be very significant. Broadcast revenues in the Championship have increased a great deal because of the new TV deal. You can now expect about £12m in the Championship.
“That’s what West Brom will be expecting this season. It will be the biggest single revenue stream for them. Because the EFL TV deal is split 80-12-8 between the Championship, League One and League Two, relegation would cost West Brom about £10m overnight.”
The football finance expert predicts West Brom are a club who would struggle to generate commercial revenue, lacking the fairytale appeal of Wrexham or Birmingham City.
He said: “In terms of commercial income, they would struggle too. They get decent viewing figures on Sky, but unless you’re a Wrexham or a Birmingham – who had a bit of narrative around them last season – that will take a hit as well in League One.
“We had Shilen Patel on the [Price of Football] podcast, but football chews you up and spits you out. West Brom’s total revenue in 2023-24 (last published financial year) was £28m. That potentially could drop to well below £20m.”
Last year, Patel confirmed that he had injected £25m into the club, with the majority of that figure going towards the substantial running costs of a football club and paying ongoing debts.
There is an argument West Brom should be doing better commercially, but until they are competing with clubs at the top of the Championship table. Albion will rely on Patel to underwrite losses, which, up until this point, has been significant.
Relegation would place further reliance on Patel.
“The club was not generating a positive operating cash flow when the debt repayment plan was made, said Maguire.
“So before you get to financing and funding, the owners are underwriting the losses themselves. In that sense, if they are earning less in League One, it increases the need for funding from the owner to service the debt.”
West Brom will release club accounts before the end of March, as confirmed by Ian Skidmore, the club’s Director of Communications and Fan Engagement, in this quarter’s Albion Assembly meeting.