Sheffield Wednesday cut wage bill by £6m, reveal new accounts

Sheffield Wednesday’s long overdue 2018-19 accounts show they reduced their wage bill by £6m but it had little impact on their alarmingly high wages-to-revenue ratio.

Flashback to the Owls' 2018-29 season. Picture: Steve Ellis

The figures are so late, and the financial climate so different since Covid-19, there is a limited amount to be learnt but they warn “a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.”

Thanks in no small part to shifting profits from the controversial sale of Hillsborough from the 2017-18 accounts to 2018-19, the Championship club made a £19.1m pre-tax profit compared to a restated £35.5m loss for 2017-18, but for every £100 received, £160 was spent on wages – a reduction on the previous year, but of only eight per cent.

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The general consensus in football is that a wages-to-turnover ratio of over 70 per cent is dangerous but only once in five years has it dipped below 100 per cent across the Championship – and then only to 99. The average 2019 figure was 109 per cent.

Revenue was down 10 per cent, turnover down £2.4m to £22.8m, and average league attendances down 1,510.

Cash at the bank and in hand, crucial with no fans allowed to watch matches at Hillsborough for the last 12 months, dropped from £2.1m to £1.2m.

The 2017-18 accounting covered 14 months, as opposed to 12 for 2018-19. The accounts were originally due by the end of April 2020, but the pandemic saw a grace period until July 31.

The report stresses the club is still dependent on the continued financial support of owner Dejphon Chansiri – listed as one of only two directors along with Katrien Meire, who resigned in February 2019 – and warns “the principal risk” is relegation. The Owls are seven points adrift of safety with 12 matches left, compared to 11 for the five teams directly above the bottom three.

The Owls made a profit of nearly £1.5m on transfers and wages fell to £32.23m – good financially, but perhaps being reflected on the field.

The figures include a “confidential settlement payment” of £6.5m. Manager Steve Bruce and his coaches left for Newcastle United in 2019.

In November the Owls were found guilty of breaking financial fair play rules for the way they declared the £60m sale to Chansiri and 30-year £77m lease-back of Hillsborough to reduce 2017-18 losses. As a result, the first £7.5m instalment from the sale is now in the latest figures.

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