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Burnley would face a “significant” loan repayment if they are relegated from the Premier League

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The stakes in the game BurnleyThe fight against relegation was made much easier after the club’s financial results showed they would face a “significant” loan repayment if they fall in the Championship.

Financial results from last season, which saw ALK Capital undertake a leveraged takeover, show the club suffered a £3m pre-tax loss after revenue fell from £134m to £115m due to the absence of fans during the pandemic. while the club ended the season with £50million in cash.

But the accounts through July 31, 2021 also confirm the debt Burnley now carries after a takeover that saw former Wall Street financier Alan Pace’s ALK Capital buy out former chairman Mike Garlick and John Banaskiewicz in a deal which used much of the club’s own money.

Included in that debt is a £65m loan which, as things stand, is due for repayment in December 2025, but much of it will become due immediately if the club are relegated.

Burnley sits in 16th place First League Table, two points clear of the bottom three after taking 10 points from a possible 12 since Sean Dyche’s surprise sacking last month.

“In the event of the club’s relegation from the Premier League, the repayment earmarked for the capital component of the loan will be brought forward, with a significant part due for repayment shortly after the end of the football season in which the relegation event takes place,” the balance sheet reads.

“This repayment would therefore likely be due within less than one year from the balance sheet date in these circumstances. If the relegation scenario persists, there would also be a further significant reduction in the loan balance in the following season.”

The loan bears interest at eight percent.

In addition to repaying this loan, Burnley would face a significant drop in income should they be relegated due to the loss of television revenue.

The accounts say Burnley’s outstanding debt was £102million last summer, having been nil prior to the takeover.

Pace has consistently maintained since his acquisition that plans are in place should the club fall into the Championship.

The balance sheet states: “The balance can potentially be settled in a number of ways and the Group has sufficient reserves to be able to settle a significant portion of the balance through dividends if required.”

As the accounts cover the period to 31 July they include the signing of Nathan Collins from Stoke last summer for a reported £12m but not the subsequent signing of Maxwel Cornet from Lyon for £13.5m, nor the arrival by Wayne Hennessey, Connor Roberts and Aaron Lennon.

Wout Weghorst’s January signing is unaccounting (Martin Rickett/PA)

(PA wire)

In January, Burnley lost Chris Wood to Newcastle when the Magpies exercised a release clause in his contract but reinvested around half of the reported £25m fee by signing Wolfsburg striker Wout Weghorst.

The accounts said the net spend on those transfers was £1.3million.

Burnley said they were able to reduce their payroll costs from £92m to £86m during the accounting period.

A statement accompanying the financial statements said: “We are pleased with the results of our first 7 months in ownership as we have been able to fully integrate the women’s team into the Burnley FC family and plan long-term improvements to facilities and investment in player development.

“The strength of our team working together to overcome the challenges we have experienced this year gives us hope and confidence for the upcoming season.”

https://www.independent.co.uk/sport/football/burnley-premier-league-mike-garlick-chris-wood-magpies-b2071349.html Burnley would face a “significant” loan repayment if they are relegated from the Premier League

Ashley

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