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Where’s the money gone? Not to D.C United – Financial accounts paint a bleak picture

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There is some confusion and questioning over where the money has gone from Swansea City Football Club since Levien and Kaplan have taken ownership.

Taken out of the club and moved off to D.C United? Helping to pay Wayne Rooney’s ridiculous wages? Those claims are wide of the mark. Why? Simply because the money has been overspent and we’re now paying the price. There’s been rumours that the club is in £30m of debt and when you sum everything up – it’s probably not wide of the mark when we’re looking to get the wage bill down to a manageable level for a Championship club. Our turnover is going to massively decrease and parachute payments probably won’t cover our operating costs – and they decrease further over the next two years.

As outsiders looking in and seeing a negative net spend on players, you would automatically think that we have millions in the bank but again, unfortunately, that’s not true and the reality paints a far bleaker picture.

In a nutshell, the main point here is not to shift attention to these claims involving D.C United but to focus on what’s really gone badly wrong, financially, over the last few years.

The big problem at the club has been sustainability. We simply don’t make enough money ourselves and have heavily relied on Premier League TV money and profits from player sales to make a profit.

More and more money has been spent on transfer fees and wages and it’s just got out of control. Our early philosophy and wage structure seemed to go out of the window – possibly in growing desperation to ensure our Premier League status?

We were once reluctant to pay ‘big money’ to bring in Wilfried Bony to the club when Michael Laudrup was manager. A few years later, following a season out of action at Stoke, we’re happy to pay out £12m to see his return. When Monk was manager, we brought in Gomis and Andre Ayew on free signings but as a result of that, we could afford to pay out higher wages.

A wage and transfer fee structure was once in place, the wage structure went first, followed by the transfer fee structure as we paid out the likes of £18m for Andre Ayew’s return and £15.5m on Borja Baston.

We did make a lot of that back though with the big sale of Gylfi Sigurdsson for £45m but you’ve still got to look at the bigger picture here and look at the turnover numbers compared with the overall operating costs of the business. Again, it doesn’t paint a pretty picture.

The graph below also shows Player registration costs up until the 2017 financial year. To understand what these costs mean, the tweet below explains how this works for a single player:

Again, huge increasing amounts that were just not manageable. The season before we were promoted to the Championship, our wage bill was less than £9m. That increased to £17m the following season as a result of bonuses paid for promotion to the Premier League.

The last available public accounts now show that figure to have ballooned up to £98.7m. Like the article at importantly states:

“The problem with such an approach is that the club pays out so much of its income in wages that there is little left to pay the other running costs.”

The graph below highlights another on-going worry – how the operating costs exceeded turnover.

To summarise, the money isn’t going out to D.C United. We haven’t got money and we’re fighting to help us get back to a healthy financial position. That’s down to poor financial management, mistakes and the need for investment to cope in the Premier League.

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