Blunts true debt revealed

[tartanowl]

Bosses are today expected to tell shareholders at the club's AGM that their priority is to balance the budget.

Results out last month confirmed the club would have sunk to a loss of around £12m without an £18m payment from West Ham following the Carlos Tevez affair.

In the financial year ending June 30, Sheffield United plc made an operating profit of £6.3m, against an operating loss of £11.8m the previous year and new chief executive Trevor Birch has revealed he must 'cut the cloth' according to their current financial position.

Blackwell said: "It is a fete accompli that 'Killa' will be going. He spoke to Trevor Birch but we can't reach an agreement. At the moment, this club is not in a position to offer outrageous terms to anyone. We can't afford to pay the terms we used to.

"With the interest that has been shown, it will be difficult to keep him. There is significant interest from a few Premier League clubs now as well as one or two in the Championship."

Kilgallon, 25, has made over 100 appearances for the Blades since signing from Leeds in a £1.75m deal two years ago and still has three more games to play before the opening of the New Year transfer window.

Birch told the Yorkshire Post yesterday that he had little choice but to reduce costs.

"That's how you have to run it in the current climate, apart from some of the super clubs in the Premier League, most other clubs have to work within their own budgets," he said. "First of all, it's to make sure that we are now in a financially strong position to move forward. Obviously, tied in with that, along with a number of other clubs, we're looking for investment and looking to take advantage of the current world interest in football in England and I will play my role with chairman Kevin McCabe in trying to tap into that market."

The accounts also revealed that a number of directors had provided large loans to the club. McCabe, himself, loaned £1.49m at an interest rate of 10 per cent, while other loans included £10,000 from finance director Simon Capper and £10,000 from former chief executive Jason Rockett.

Birch, the man who saved Chelsea and Leeds United from financial ruin, said this demonstrated their commitment to the club, adding: "It's not unusual for directors to make loans to football clubs at commercial rates."

The club has also revealed that it has successfully renewed most of its loans and bank overdrafts, which totalled £37m at the year end. These include a £13.5m construction loan for the Copthorne Hotel – next to the Bramall Lane ground – which is being turned into an 18 year facility with HBOS.

Discussing the accounts, Birch added: "From leaving the Premier League you get two years of parachute payments and once those stop, if you haven't readjusted your wage structure accordingly, you'll end up making a loss, which is what most of the Championship clubs do.

"What we've done is to invest in the squad, with the hope of returning to the Premier League so we're probably running with a higher level of wages than your normal, average, Championship club. It's a balance between risking that additional wage cost against financial hardship."

For the present season, despite the loss of such parachute payments, the United salary budget is around £12m.

Birch added: "The intention has to be to get back to the Premier League. It helps the city's psyche to have a Premier League team and helps the city's image and standing within the world.

"It's a club with potentially a great future. In five years we would all hope that it was a solid, Premier League outfit, with a fantastic ground.

"Football is not immune to the recession. Domestically, it's obviously hitting attendances. You see more empty seats these days, and sponsorship and corporate hospitality have suffered but the fan base is fantastic. The passion for the club is one of the things I've been impressed with.

"We want it to have a solid base, because it's so easy to get the finances out of kilter as we've seen elsewhere. As directors you have to try and achieve some form of financial parity."