QPR get their finances under control

The latest club to publish their 2016/17 accounts as the financial year comes to an end are Queens Park Rangers. I am reproducing here some tweets from the authoritative Swiss Ramble.

QPR reduced their loss by £4.6m from £11.0m to £6.4m, their lowest deficit since 2008, as revenue rose £6.1m (15%) to £48.0m and the wage bill was cut by £10.1m (25%) to £30.7m. However, profit on player sales was down £5.4m to £7.3m and interest payable was up £3.3m to £5.7m.

The main reason for the QPR £6.1m revenue growth was the new Premier League TV deal, which resulted in a higher parachute payment, thus increasing broadcasting income by £5.7m to £35.3m. Most clubs in the Championship get just £7m. Commercial income rose £0.7m, a respectable total for this division, but gate receipts were £0.3m lower at £5.2m. Average attendance decreased from 15,994 to 14,616. This was the 17th largest in the Championship and way behind the top two - Newcastle on over 51,000 and Aston Villa on over 32,000.

The level of revenue is the third highest in the Championship in 2016/17, though likely to be overtaken once Newcastle publish their accounts. It is still a fair way below Norwich City £75m and Aston Villa £74m.

The Swiss Ramble notes, 'The £6m loss is around mid-table in the Championship in 2016/17. In general, almost all clubs in this division lose money as they often gamble on promotion.'

QPR are a classic example of a club splashing the cash and not getting the hoped for results on the pitch. The Swiss Ramble comments.'QPR have clearly changed their strategy to operate sustainably, rather than spending big. The club is still making losses, but much smaller than before. That said, total losses since Tony Fernandes took over in August 2011 are £161m (£221m if 2014 £60m loan write-off excluded).'

Although QPR revenue rose £6m (15%) to £48m in 2016/17, this was still £38m lower than the £86m in the last season in the Premier League in 2014/15. Revenue owes a lot to parachute payments (£31m in 16/17), which means that broadcasting accounts for 74% of the total. Parachute payments will be available for two more years at a lower level.

Few Championship clubs earn big money from player trading, so QPR £7m profit on player sales is actually 6th highest in 16/17, even though £5m less than £13m in 15/16. This was mainly due to sales of Matt Phillips to WBA and Leroy Fer to Swansea City.

The wage bill was cut by a hefty 25% (£10.1m) from £40.8m to £30.7m, though the number of players, managers and coaches remained at 111. This reduced the wages to turnover ratio from 98% to a very respectable 64%, a far cry from the 195% of the Redknapp era. It is actually the lowest reported to date in the Championship. Despite the decrease, QPR's £31m wage bill is still one of the highest in the Championship.

Gross debt rose £3m to £50m, as shareholder loan was up £10m to £46m, while bank loan was down £7m to £4m. Shareholder loans carry a high interest rate (£30m at 1% per month, £16m at 2% per month), though £7.5m charged was capitalised. Bank loan was charged at LIBOR + 3.5%. Debt of £50m is by no means the largest in Championship, e.g. Brighton £207m (new stadium and training ground), Cardiff £127m & Ipswich £89m. That said, it would have been much higher without £193m of debt being capitalised (including £181m in 2016) and £60m write-off in 2014. Despite the exorbitant interest rates on QPR shareholder loans, the club only paid £200k in 2016/17, a the owners converted the interest payable (£5.7m in 16/17) into equity.

QPR would like to move away from the constrained conditions of Loftus Road, but finding a new stadium site has been difficult.