It seems like a lifetime ago that West Brom were considered a new team in the Premier League. Last season, their third consecutive in the EPL, saw them register their highest ever points total (49) and finish 8th in the league. Under Roberto Di Matteo, Roy Hodgson and current Manager Steve Clarke, they appear to have progressed from being the 'yo-yo' club of English football and developed a sustainable model that is allowing the team to compete (or survive) at the highest level in English football.
Don't get me wrong, the Baggies are a team with a rich history. A founder member of the Football League in 1888, they have won the FA Cup on five occasions and many of you will remember the glittering 70s team led by Ron Atkinson. Since 2002, they have spent 7 seasons in the EPL but have been relegated 3 times. Their current run in the Premier League is their best for many years and is largely down to the prudent actions of their board.
For the 2012 financial year the club recorded a pre-tax profit of £1.5m. Although a modest figure, a team of the Baggies' size and resources registering a profit whilst surviving in the EPL is very impressive. In fact, according to the Deloitte 2012 Annual Review of Football Finance, only half of the twenty EPL clubs were in the black.
Mark Jenkins, the club's Chief Executive and former Finance Director, has plenty to be pleased about. “We know where to make our resources go the furthest," said Jenkins. "We're a club with rather limited resources, and we have to think cleverer than some of our competitors who have got more unlimited resources.”
In fact, in the last 3 years the club have banked £11.3m profit whilst reducing their net debt from £2m to just shy of £500,000.
For any club in English football, striking a balance between player investment and financial stability is extremely tough. Over the years, West Brom have had to carefully manage their expenditures due to their fluctuating revenues and have made a particular point of highlighting this in their Financial Statements.
“The board is aware of the risks which affect the company. It has analysed its previous seasons in the Barclays Premier League and has tried to implement lessons learned from this and as a consequence it believes that the squad will be stronger and more experienced. This is part of the long term policy of the club which is to improve the playing squad and infrastructure year on year”
The board and chairman have not been averse to making tough, often unpopular,decisions. In February 2011, after a run of defeats and poor performances, Roberto Di Matteo was dismissed as Manager “to give the club the best chance of remaining in the Premier League”. The decision paid off immediately and under the guidance of future England Manager Roy Hodgson, the team finished 11th that year.
Going forward the club and management will need to carefully track their expenditures. Last year, for the first time, the club's total wage budget exceed £50m - representing 74% of their total revenues. The club will clearly benefit from the record TV rights that the EPL are generating - this year they will generate atleast £73m from TV rights.