Nine players are out of contract, other key assets are set to be sold and a new manager is due to be appointed ahead of next season after Burnley were relegated from the top flight.
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In an era of balance-altering parachute payments, teams relegated from the Premier League are expected to bounce back a season later. For Burnley, who secured an immediate return after their previous relegation, such optimism seems misplaced.
Sunday’s confirmation of the Clarets’ demotion to second tier after six years in the top flight has been made significantly worse by their perilous position off the pitch.
Key players are certain to leave, there are uncertainties in the dugout and most concerning of all is the need to repay a substantial percentage of a £65m loan which saw ALK Capital take over the club in a highly criticized leveraged buyout in the next few weeks.
It has already raised fears that Burnley may be heading down the same path as Derby County, or at least Sunderland. Rather than finding a process to ensure promotion, there is an undeniable sense of unease surrounding the off-pitch situation.
Nine players are out of contract, including defenders James Tarkowski and Ben Mee as well as veteran Aaron Lennon. It’s unclear who will be offered new offers, but Tarkowski is a near-definite departure as several Premier League sides are expected to assess offers once the transfer window opens next month.
Sean Dyche, who was sacked last month, admitted having so many players out of contract may have been a distraction as the season progressed and the lack of foresight contributed to a deadly cocktail.
Among those who remain, England goalkeeper Nick Pope will have no shortage of suitors while forwards Maxwel Cornet, who has a £17.5million release clause after relegation, club-record signings Wout Weghorst and Dwight McNeil should also command attention.
Losing so many proven performers diminishes Burnley’s promotion hopes and increases the need for a longer rebuild. That won’t begin until a permanent manager is named to succeed goaltender Mike Jackson, and the pool of interested parties may be limited by financial concerns.
The new boss is likely to have his hands tied on recruitment as he needs to cut an annual wage bill of around £80million when that loan has to be repaid to equity group MSD Holdings. Burnley would not comment on the loan although it was clearly described in their most recent accounts for the previous financial year.
Those accounts recorded a loss of just £3million at a time when the majority of Clarets’ rivals were losing significantly more due to Covid-19 concerns, indicating the club continues to be run cautiously. However, they depend more than any part on broadcast money, with around 90% of their income coming from television, according to the balance sheet.
Burnley paid 8% interest on the loan to MSD and while the exact amount due to be repaid imminently is unclear, it will be enough for significant cuts to be needed. The year one parachute payments are worth £42million, so something has got to give.
ALK chief Alan Pace, who borrowed almost £40million from the club’s own accounts when he took over, was described by Dyche as a straight shooter. At the dawn of such a period of uncertainty, transparency and commitment are needed to stop the slide.