More worrying news emerges from Birmingham City

Birmingham Sports Holdings Ltd, the parent club of Birmingham City, have issued a profit warning to shareholders as reported by Birmingham Live.

Whilst the ramifications of overspending have already been felt around the club this summer, there seems to be little end in sight with the latest statement to the Hong Kong Stock Exchange.

The official statement read: “The Group is expected to record a substantial increase in loss for the year ended 30 June 2018 as compared to the previous year.”

“The increase in loss was mainly due to the increase in operating costs which largely attributed to the higher spending on players’ registration and staff costs as a result of the change of the club manager and signing in of a number of new players during the season with an aim to strengthen the competitiveness of the football club.”

Birmingham spent the summer under a transfer embargo, with manager Garry Monk unable to strengthen his squad ahead of the new season. That is sharp contrast to the previous summer, when the club spent a record £6m on Jota, as well as making other significant purchases.

The news might sound concerning, but fans at St Andrew’s need not worry too much.

The club’s owners have huge resources on which to draw and are thought to be able to sustain the losses whilst the desire to do so is there.

The Verdict

The issue here isn’t the statement itself, it has surprised few, but it is laying bare the effects of last summer’s decadent approach to recruitment. Now, with a good manager in place, they’re feeling the pinch of someone else’s reckless actions.

Birmingham City are a big club with lots of potential, but they need to move clear of the shadow cast be bad management before they can progress on and off the field.