Everton's £38.8m Payout Cuts Burnley's Loss, Appeal Looms
Burnley's newly published accounts lean heavily on money from Everton. Without the £38.8m the Toffees paid the Clarets, the 2025-26 loss would have been £47.8m rather than £9m, and the payment is under appeal.
Where the £38.8m comes from
Everton paid the sum because of their profit and sustainability breach in 2021-22. That breach was found to have affected Burnley's chances of avoiding relegation that season. BBC Sport calls it a landmark compensation payout.
The appeal is expected to be heard in January. Burnley's board wrote that the accounts should include no provision for it. The result could "range between £Nil and the full value of the award detailed being repayable", the club said, because the outcome cannot be reasonably determined or measured.
The effect on the loss
Burnley reported a loss of £9m for 2025-26. In the previous three seasons the figure was between £24m and £29m. Excluding the Everton payment, the loss would be a club record, even though revenue reached an all-time high of £144.5m.
Kieran Maguire, professor of football finance at the University of Liverpool, told BBC Sport the timing is notable. The accounts came six months earlier than expected. "If Everton are successful, and Burnley were to file their accounts next April, the £38.8m could not be included the 2025-26 accounts," he said.
Debt after a leveraged buyout
ALK Capital bought Burnley with a £65m loan secured against club assets such as Turf Moor, plus £37m of the club's own bank balance. The holding company Velocity Capital also owed the club £80.1m. The loan was later refinanced and extended to £105m in the 2024-25 accounts, with interest rates as high as 12%.
The new accounts show Velocity Capital has paid £77.7m of that debt to the club, funded by the ownership group. Burnley's debt now stands at £62.9m. Bank loans fell from £105m to £70.1m, and debt factoring dropped from £37m to £16.1m.
Six years ago Burnley were debt free with £41.65m in the bank. They now sit in the Championship relegation zone.
Repayments still to come
Of the bank loans, £24.2m falls due for repayment in January and £21.6m next August. The club is in negotiations to refinance and increase these facilities. If no deal is reached, the owners will need to provide additional finance, the accounts say.
The accounts also warn that several events, including the appeal, could raise serious doubt about Burnley as a going concern. Maguire said the club was still losing more than £1m a week despite Premier League income.
Our view
The appeal decides whether Everton's £38.8m award stands, and Burnley's accounts show how much of the club's finances rest on it. Until then, the accounts leave open what happens to Burnley's finances if the award has to be repaid in full or in part.
Source: BBC Sport