What will relegation mean to Bournemouth, some fans think if they keep their manager and most of the current players, with bounced straight back.
I am not sure, it depends how deep the owners pockets are.
Found this article about Bornemouth's finances.
AFC Bournemouth 2019 Finances – Costly Survival
Bournemouth enjoyed their fourth consecutive season in the Premier League and did well enough to enter a fifth, securing Premier League survival with a 14th placed Premier League finish.
Bournemouth are beginning a period of consolidation in the Premier League and have invested significant sums, typically on young, British talent in a bid to consolidate and push forward.
This spending has come at a financial cost off the pitch as losses nearly tripled from £11m to £32m as the costs of surviving in the Premier League continue to rise for the south coast club.
Bournemouth saw revenue remain at a similar level to 2018 given performance was much the same, with revenue falling from £135m to £131m (3%).
Matchday revenue
Bournemouth are very restricted in their matchday revenue given their stadium capacity, which at 11,329 is significantly smaller than all other Premier League clubs and many English Football League clubs.
Matchday revenue remained relatively stable at £5m, a situation that will not change without a bigger stadium or more matches (through further progress in the domestic cups or European qualification).
Bournemouth are reported to be looking at potentially building a new stadium, with previous plans to move by 2020 now seemingly way too optimistic.
Bournemouth are one of many mid-table and below Premier League clubs who receive most of their revenue from broadcast revenue and the Premier League in particular.
Broadcast revenue fell from £120m to £116m (3%), accounting for the entire fall in revenue.
This was owing to Bournemouth finishing two places lower than in 2018 (12th) which saw their Premier Payments reduced from £111m to £108m (3%).
Bournemouth’s Premier League revenue accounts for 82% of Bournemouth total revenue and shows the importance of survival to the south coast sides finances and financial security.
Commercial revenue remained stable at £10m, with Bournemouth securing no major new corporate partnerships in the year.
Bournemouth’s M88 shirt sponsorship deal expires at the end of the current season and offers the opportunity for the club to increase commercial revenue in 2020.
Other revenue fell from £0.5m to £0.3m (40%).
Other income
Bournemouth also receive other income from loans and similar dealings. This amount increased from £5m to £8m (60%). This is not included as revenue due to its nature and is a separate amount which is just detailed here for completeness.
What does the future hold?
2020 revenue is likely to remain at similar levels to 2019. However, if Bournemouth are relegated they will see a huge drop in revenue in 2020/21. The financial impact of the Corona Virus is uncertain, however it may impact all revenue streams significantly going forward.
Matchday revenue is likely to be affected the most in next year’s accounts as there will be no games until 30 April at the earliest and hence matchday revenue may drop out of 2020 accounts and be recorded in 2021.
Cost Analysis
AFC Bournemouth 2019 Costs
As mentioned in the introduction, Bournemouth invested heavily in the playing squad and this led to their increased losses.
Operating costs rose from £153m to £169m (10%), and when combined with the falling revenue, saw their losses mount.
Amortisation charges rose from £27m to £36m (33%) on the back of this player investment, signifying the huge increases in investment in recent years. In the season prior to promotion, Bournemouth had an amortisation charge of only £4m.
With spending continuing in 2019/20 (£51m was spent with a net spend of £20m), Bournemouth are likely to see another rise (but not as significant) in amortisation in 2020.
Net interest expense
Bournemouth saw their net interest expense rise from £2m to £5m (150%) after an increase in shareholder debt saw interest costs rise significantly. It is however worth noting that this is a notional costs and has no cash impact as the owners have not taken any of this implied interest as cash.
AFC Bournemouth 2019 Wages
Bournemouth’s wage bill rose from £102m to £111m (9%) as the club continued to invest into the playing squad.
The fact that the majority of their signings are young and British means that their wages are not as high as if they invested in more established players that demand higher wages, helping ease the burden of their wage bill.
The increase in wages is fairly normal for a Premier League club, if not on the low side.
Bournemouth’s wage/revenue ratio was a relatively high 85% (2018: 76%), meaning the club spend 85p per £1 of revenue, before taking into account all other costs, leading to their rising losses.
Directors’ renumeration rose from £1.7m to £2.2m (29%).
What does the future hold?
Bournemouth are likely to see rising wages in 2020 given further spending, although all predictions of what the future holds are uncertain given the impact of the Corona Virus.
Transfers Analysis
AFC Bournemouth 2019 Transfers
Bournemouth spent heavily in the 2018/19 season on transfers, recording their highest ever net transfer spend.
In came Lerma (£25m), Solanke (£19m), Rico (£14m), Mepham (£12m) and Brooks (£10m) for a combined £80m.
Departing Dean Court were Afobe (£10m), Grabban (£6m) and Gradel (£2m) for a combined £18m, meaning Bournemouth had a net transfer spend of £62m, a club record.
The signings were a mix bag with Brooks proving an overwhelming success and Lerma being a moderate success, while Solanke in particular proved a poor addition.
The sales of Afobe, Grabban and Gradel led to a meagre profit on player sales of £3m, which was still an improvement on the £1m recorded in 2018.
Bournemouth’s sales of Mings and Mousset will lead to a much bigger profit on player sales than in previous seasons and help Bournemouth move towards break even.
In cash terms, Bournemouth spent cash of £47m on players in 2019 despite a transfer fee outlay of £80m which will lead to a further cash burden in the future when these instalments are due.
Bournemouth received cash of £11m, meaning the club had a net cash outlay on transfers of £36m, which isn’t a huge amount for a mid-table Premier League side.
In debt terms, Bournemouth are owed transfer fees of only £5m, which is all due to the club in 2020.
In contrast, Bournemouth owe a huge £81m in transfer fees, of which £32m is due in 2020, meaning the club have a considerable cash commitment over the next couple of seasons, making Premier League survival important given they also spent another £51m in the current season.
Debt Analysis
AFC Bournemouth 2019 Debt
Since becoming a Premier League side, Bournemouth’s debt position has continued to grow, with the costs of retaining their Premier League status continually rising.
Their cash position has remained relatively stable in recent seasons, increasing from £8m to £10m (25%) in 2019. This was driven by cash injections of £40m which covered net cash outflows from operations (£2m) and transfer outflows (£36m).
Bournemouth’s loss making position meant the club only spent £400k on infrastructure improvements compared to £4.7m in 2018.
This £40m cash injection led to debt rising from £69m to £100m (45%), with the remaining increase not included as debt and hence won’t be repaid.
This cash injection showcases the ambition of Maxim Demin, who acquired full control of Bournemouth in January 2019, after accruing the outstanding 25% he didn’t already own.
Bournemouth are in a similar position to many mid-table and below Premier League teams, with their financial health currently very much aligned to their Premier League status, with relegation likely to lead to financial pain and the possibility of remaining in the championship for years to come if the club cannot manage their finances.
Bournemouth also need to survive to continue building and developing their young side, and with the club also looking to build a new stadium, survival is vital to their long term prospects.
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