Derby County wage bill needs to be controlled

Derby County’s 2016/17 financial results covered the second season since Mel Morris purchased the club. The authoritative Swiss Ramble has been giving his thoughts on them. He notes that, 'A review of Derby County finances is complicated by the structure, where a holding company, Sevco 5112 Ltd, owns The Derby County Football Club Ltd plus 3 new companies: Club DCFC Ltd (catering & hospitality), Stadia DCFC Ltd (commercial & sponsorship) and Derby County FC Academy Ltd.'

The club's loss reduced by almost £7m from £14.7m to £7.9m, mainly due to £16m increase in profit on player sales to £16.2m, though revenue also rose £6.5m (29%) to £29.0m. The last time the Rams made money was 2008 (in the Premier League). Since then, they have had nine years of losses, amounting to £80m.

The main reason for the Rams' revenue growth was the Premier League solidarity payment, up from £2.3m to £4.3m, which meant broadcasting income rose £2.3m (41%) from £5.6m to £7.9m. Commercial also rose £3.8m (44%) to £12.4m, while match receipts were up £0.4m (4%) to £8.7m.

The club's £8m loss was the 10th highest in the Championship. As the club stated, 'In order to compete in the world’s most competitive league, significant investment is required.' Almost all clubs lost money with only 5 clubs profitable in 16/17 (Nottingham Forest and Barnsley due to loan write-offs).

Attendances have steeply declined from over 32,000 in the Premier League to 27,175 in 2017/18. Worth noting that the club restated down the attendance figure for 2016/17 from previously reported 29,085 to 27,885, so previous seasons’ figures should be treated with caution. Nevertheless Derby's 27,885 attendance was still the fourth highest in the Championship. Season ticket prices have been frozen for 2018/19 for the third year in a row.

Commercial income was up an impressive 44% (£3.8m) from £8.6m to £12.4m, comprising sponsorship £5.0m, commercial & hospitality £4.1m, merchandising £0.3m, programme sales £0.2m and other receipts £2.9m. Commercial income is the fifth best in the Championship, just £400k below Aston Villa, though £4m less than Leeds.

The wage bill rose £1.4m (4%) to £34.6m, though the wages to turnover ratio decreased from 147% to 119%. The wage bill has virtually tripled since £12.1m in 2013. The wages to turnover ratio is the sixth highest (worst) in the Championship, as over half the clubs in that division have ratios above 100%.

Even if we take the lower football club £35m wage bill, this was still the fifth highest in Championship (though way behind Newcastle United £80m and Aston Villa £61m). Morris admitted, 'The reality is that we still have a very high wage bill. It’s something we need to get under control.'

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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