Kieran Maguire of the PriceofFootball describes it as a 'jaw dropping week of financial information publication from the Championship' with clubs reporting heavy losses as they chase the Premiership dream. Once again we see how clubs receiving parachute payments from the Premier League are at a clear financial advantage compared to those who do not. Clubs in the Championship lost on average £365,000 a week last season from day to day operations as they chased the gold at the end of the EPL TV rainbow.
Reading are the latest club to report their 2017/18 results with losses of ‘just’ £746,000 in 2017/18. An unusual grant receipt of £10m and flogging off some assets then helped reduce these losses to just £21m compared with a profit of £4.7m the previous year.
Turnover decreased by £18.8m from £36.7m to £17.9m. Average attendances declined from 17,505 to 15,181. Media revenue was the biggest factor in this decrease, accounting for 71 per cent, down from £20.9m in 2017 to £7.5m in 2018. Match day revenues were down by £5.5m. Commercial revenues were up by £0.8m to £5.6m. Rugby match commission was £592k.
There was a profit of £1.4m on the disposal of player registrations.
Reading’s income fell by £19 million but wages increased by over £7 million resulting in £197 of wages being paid for every £100 of income (76 per cent the preceding year). This is not far short of the staggering £202 achieved at Birmingham City through the 'Redknapp effect' ('king of the wages jungle').
The highest paid director earned £639,000 for masterminding this achievement (up from £374k the previous year).Reading’s owners funded the losses with £16m of shares and £3m of loans in 2017/18.
Reading bought players for £19 million and had sales of £2 million in 2017/18.
Avoiding relegation is crucial if the club is to achieve some measure of financial stability.
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