Skip to main content

Mind the gap

The 2016-17 accounts for Hull City show a big boost in revenue in their year in the Premier League, but also illustrate the gap between the top clubs and those that are relegated. Revenue increased from £42m to £117m, which is 33 per cent up on their last time in the top flight, but it is still among the lowest in the Premier League. Manchester United earned around five times as much, points out football financial commentator Swiss Ramble in a series of tweets.

The wage bill more than doubled from £30m to £61m, but contracts contained a relegation clause imposing cuts of 40 per cent. Clubs have learnt from earlier experiences of relegation when they found themselves locked into contracts that were unaffordable in the Championship, often for under performing players. Players now have to shape up or ship out.

The wage bill was only £6m higher than their last time in the Premier League and one of the lowest in the top flight. Their wages to turnover ratio is just 52 per cent, very near Deloitte's recommended level of 50 per cent. The Swiss Ramble suggests that Stoke City's ratio of 62 per cent might be more appropriate for a club with these revenue levels. Perhaps they should have spent more to stay up rather than generating a record £36m profit.

The club ended up with a cash balance of £21m but net debt at £81m, although brought down by £19m is still relatively high. Interest payments were relatively high at £4.3m The owners, the Allams, have injected £78m since 2011, with £63m net going on players. However, they made a net profit on transfers of £11m last season and made more lucrative sales over the summer raising £40m.

Gate receipts increased by only 10 per cent, but other matchday income was up from £2m to £8m, suggesting increased corporate revenues. Total match day income was up 75 per cent at £16m.

Commercial revenue was up from £3m to £7m, but it was still among the lowest in the Premier League with only Burnley and Watford performing less well.

Hull did collect £97m from the Premier League television deal. They will also receive £41m in parachute payments this season and £31m next season. They receive parachute payments for only two seasons as they were relegated after one season. Clubs no longer have the incentive to follow a strategy of getting promoted, spending relatively little money and collecting the proceeds.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more