Following the release of Birmingham City’s annual reports for the fiscal year ending June 2023, chief executive Garry Cook stated that Knighthead remains conscious of the risks of spending money on player transfers.
Blues, who had a pre-tax loss of £25.4 million the year before Knighthead’s arrival, had a busy summer in terms of deals that affect the current fiscal year; while Tyler Roberts and Krystian Bielik were signed in 2022-23, a slew of other additions arrived during this period.
Fees and/or wages were agreed upon with Ethan Laird, Koji Miyoshi, Dion Sanderson, Siriki Dembele, Lee Buchanan, and Keshi Anderson in the summer, with Paik Seung-ho and Alex Pritchard arriving in the winter window. A number of other players in the current squad have signed on loan deals.
Blues did raise finances during that period; Tahith Chong moved to Luton for a large amount, while the club also sold Josh Andrews to Gillingham, Nico Gordon to North Texas, and Kevin Long, most recently, to Toronto FC. Maxime Colin, Harlee Dean, Troy Deeney, George Friend, and Jordan Graham all left the club last summer, resulting in a wage reduction.
The club, which hopes to reap the benefits of Knighthead’s arrival and investment when this year’s accounts are published next spring, was still operating at a loss as of the previous fiscal year, and CEO Cook, who was appointed by Knighthead last summer, understands that everyone involved with Blues must be cautious in their spending, especially with the stringent PSR rules in place.
Cook stated in the club’s accounts, which were published this week on Companies House, that “the acquisition of players and their related payroll costs are deemed the core activity risk, and, while assisting the manager in improving the playing squad, the board is mindful of the pitfalls that are inherent in this area of business.”
“The aim is therefore to manage these costs whilst being as competitive as possible within the club’s financial constraints.”
Knighthead has promised to investing up to £58 million in Blues between their arrival in July 2023 and February 2025: “The directors have received formal confirmation from Knighthead Capital that financial support would be extended for at least the next 12 months.
“As part of the company’s longer-term expectations, the directors generated detailed cash flow forecasts up to February 2025. According to the predictions, BCFC will require around £58 million in further finance from Knighthead Capital between July 2023 and February 2025.
“The directors of the company and Knighthead Capital have indicated that they expect that the group will have sufficient working capital to be able to advance funds for BCFC to meet its financial obligations as and when they fall due for the next 12 months.”
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