Massive debts have gone but losses suffered last year

Sheffield Wednesday has released details of its financial accounts for the past year and for the most part they make good reading for Owls fans though there are clearly areas that must be improved upon.

The figures cover the period from June 2010 to May 2011 with the highlight being the clearance of over £40M worth of debt thanks to the change of ownership of the club following the acquisition by UK Football Investments LLC in December 2010, the takeover financed by current Chairman Milan Mandaric.

In terms of the balance sheet, where at the end of the 2010 financial year the club had liabilities totalling in excess of £30M they now have assets of more than £11M.

The bad news stems from the fact that in operating terms the club made a loss of £6.8M, approximately double what was lost the previous year.

This however can be largely attributed to the fact that during the period revenues were reduced significantly due to the club being relegated from the Championship. The loss of Championship status and associated competition revenues, combined with the loss of TV revenues received when competing at that level could amount to somewhere in the region of £3M. In addition to this the club also sacked a manager and his coaching staff who still had significant time to run on their contracts which may have cost a fair amount in compensation.

The current financial year began with some of the clubs high wage earners leaving in the summer and current figures show a healthy improvement in home attendances and with some important home fixtures to come in the second half of the season revenues from the source are likely to show an improvement. A new catering contract has been agreed within the financial year and the improved crowds combined with improvements in merchandising and frontline sponsorship should also increase turnover.

With this in mind there is good reason to be optimistic that the trading performance will improve. The most effective way of ensuring this of course would be through promotion back to the Championship.