Six years ago, Burnley were considered one of the best-run clubs in the country.

The Clarets were debt free, with £41.65m cash in the bank, and enjoying their fifth successive season of Premier League football.

Now they sit in the Championship relegation zone, with concerns over debt and the way the Clarets were bought by ALK Capital using loans and the club’s own money.

Fans have been very concerned about what the future holds – although on Wednesday there was some rare positive news in the club’s accounts.

BBC Sport takes a closer look at what is going on at Turf Moor.

You may be familiar with the term “leverage buyout” after the Glazer family’s purchase of Manchester United in 2005.

It effectively means that a purchase is carried out using debt secured on the club’s assets, its own bank balance and other loans, rather than the equity of the buyer.

In Burnley’s case, ALK Capital took out a £65m loan secured against the club’s assets, such as Turf Moor, and used £37m from the club’s own bank balance.

On top of that, Velocity Capital, the holding company, owed Burnley £80.1m – money which was also used to buy the club.

The original £65m loan was partially paid off, but then refinanced and extended to reach £105m in the 2024-25 accounts. Interest rates were as high as 12%.

On top of that were factored debts, when a club mortgages off future transfer instalments for a one-off payment from the bank. Burnley owed £37m at an interest rate of 12.75%.

In total, the football club’s borrowings stood at £142.3m, the 10th-highest external debt in English football.

Then came the 2025-26 accounts, published today, which painted a different picture.

Now, back to that leveraged buyout which has been attracting so much criticism from fans.

Last season’s accounts contained a big surprise.

Remember Velocity Capital, the holding company that owed Burnley £80.1m for the purchase of the club?

The accounts revealed £77.7m of that has now been paid to the Clarets.

It cleared a large chunk of the debt used to buy the football club and helped to make the latest accounts look healthier.

This was needed because, over the past six years, debts related to the leveraged buyout and associated interest payments had increased.

The £77.7m payment, funded by investment from the ownership group, does not mean all Burnley’s financial concerns or debts have been resolved.

The club still reported a loss for 2025-26 of £9m, compared with £24m-£29m in the previous three seasons.

That might seem positive.

But this includes the Velocity Capital payment, money for being in the Premier League – and a landmark compensation payout.

The Clarets have been paid £38.8m by Everton because of the Toffees’ profit and sustainability breach in 2021-22, which was found to have impacted Burnley’s chances of avoiding relegation that season.

Crucially, however, the payout is subject to an appeal, which is expected to be heard in January.

In the accounts, the board stated that “no provision should be included” for the appeal, the result of which could “range between £Nil and the full value of the award detailed being repayable”.

This, the club argues, is because “the outcome of the appeal cannot be reasonably determined or measured”.

Without the Everton payment, the loss in the 2025-26 accounts would have been £47.8m rather than £9m – a record loss for the club despite it reporting all-time high revenues of £144.5m for the campaign.

Removing the Everton payment might present a more realistic picture of their finances.

Premier League football has been seen as key to Burnley’s finances – but the accounts show even in the top flight things were a struggle financially.

Kieran Maguire, professor of football finance at the University of Liverpool, said: “The underlying features are that the club was still losing effectively more than £1m a week.

“That was despite the benefits of being in the Premier League, and therefore relying on player sales and the Everton settlement to reduce the figures to something more palatable.”

The three influxes of money helped reduce the debt, and heavy interest repayments.

The club’s debt now stands at £62.9m, more than half what it was in 2024-25.

But remember, Burnley had been debt free before the takeover.

There was further improvement, too.

Bank loans have reduced from £105m to £70.1m.

Burnley had also, in recent seasons, mortgaged off future transfer instalments for a one-off payment from the bank, called ‘debt factoring’.

Previously at £37m, they reduced it to £16.1m.

This all looks good, but is still reliant on the payment from Everton. If the Toffees do win their appeal, the picture looks very different.

Added to that, £24.2m of the bank loans is due for repayment in January, with another £21.6m falling next August.

The club is in “negotiations to refinance and increase these facilities”, but the accounts note that if an agreement is not reached the owners will require “additional finance to repay the amounts due”.

What about next season? It will be a season in the Championship, with much lower revenues and no one-off payment from Everton.

The 2026-27 accounts will include player sales of around £38m and parachute payments of £48m.

On the face of it, the numbers look very encouraging for Burnley.

But the accounts laid out that a number of events, including “the outcome of the ongoing compensation ruling appeal”, could continue to “cast significant doubt” on the club as a going concern.

Maguire added: “A more forensic look suggests that the underlying issues at Burnley still exist.

“Given that they were in receipt of Premier League broadcast revenues and the benefits of being in the top division, that does suggest that the club faces ongoing challenges.⁠​⁠‍⁠”

On the field, Burnley need a revival – and fast.

It is still early in the Championship season – 14 games have been played – but Burnley sit in the relegation zone.

Over the past six years, they have been a yo-yo club between the Premier League and the Championship, trading the riches of the top flight with strong revenues from a promotion campaign each season.

A big turnaround is needed for that to still be the case under the new management of Swiss Fabio Celestini, who is yet to win in his two games in charge.

Burnley have recorded just one victory in the opening 14 Championship games, leaving them four points adrift in the bottom three.

Recently they set a new English league record for the longest run without a home win, which will reach 400 days when arch-rivals Blackburn visit Turf Moor on 22 November.

Relegation looks more likely than promotion at the moment, and Burnley cannot afford to become the third team in successive seasons to do the double drop from the Premier League to League One.

But time will tell whether the improved results in the accounts start to be replicated on the pitch.