Fulham had one of the largest losses in the Championship

The authoritative Swiss Ramble has taken an in depth look at the recently published accounts of the Fulham Football Club.

Fulham paid the price for success in terms of promotion, as the loss more than doubled from £21.3m to £45.2m, mainly due to 'substantial' one-off promotion related payments. Revenue rose £3.4m (10%) from £34.9m to £38.3m, but this was offset by a £3.4m fall in profit on player sales to £14.0m.

Almost all Championship clubs lose money, but Fulham's £45m is one of the largest in 2017/18. However, it is worth noting that the three biggest losses came from the clubs promoted to the Premier League, including Wolves £57m and Cardiff City £37m, impacted by hefty promotion bonuses.

Losses are nothing new for the Cottagers, as the last time they made a profit was in 2011. In fact, they have only made money twice in the last 21 years. Losses have accelerated since Shahid Khan bought the club in July 2013, amounting to £139m in the last 5 years (averaging £28m a year).

There were small increases in all revenue streams, the largest coming in commercial, which rose by £2.4m (33%) to £9.6m. Broadcasting increased £0.6m (3%) to £21.7m, due to a higher parachute payment, while gate receipts were up £0.3m (5%) to £7.0m. That said, Fulham's £45m loss is the fifth highest ever reported in the Championship, though still a fair way below QPR’s £70m loss in 2013/14.

Figures were boosted by £14m profit on player sales, including Aluko to Reading, Malone to Huddersfield and Sanchez to Celta de Vigo. That’s pretty good, but significantly lower than the large profits made by clubs relegated from the Premier League. Fulham have only averaged £9m a year profit from player sales in the last decade, but made £31m in the last two years alone, so this activity is becoming more important.

Since relegation in 2014, the club's revenue fell by £53m (58%) from £91m to £38m. Most of this decrease is broadcasting £45m, but gate receipts £5m and commercial £3m are also down. Revenue would have fallen further in 2018/19 without promotion, as parachute payments ended in 2017/18.

Championship revenue is greatly influenced by Premier League parachute payments. In 2017/18 Fulham received £17m, giving them a total of £79m over the last four years, but this was a lot less than Boro and Hull City £42m.

Fulham will get at least £95m in the Premier League even if relegated. Adding £76m of parachutes (only two years if club relegated straightaway) means promotion was worth around £170m.

The 9,910 average attendance was only the 14th highest in the Championship last season, a long way behind top two (Villa 32,097 and Leeds 31,525). Work will start on expanding Riverside Stand at Craven Cottage at end of this season, increasing capacity from 25,700 to 29,600, at cost of £80-100m.

The wage bill surged 47% (£17m) from £37m to £54m, though this includes 'substantial' promotion bonuses. Wages had been pretty steady at £37m for the previous three years, having almost halved following relegation. The £54m wage bill was the second highest in the Championship, just ahead of champions Wolves £51m, though still a long way below Villa £73m. Their 2017/18 wage bill is the sixth highest ever reported in the Championship. The wages to turnover ratio increased from 106% to 142% (again hit by the impact of promotion bonuses), though to be fair over half the clubs in the Championship have a ratio over 100%.

The club spent £31m on players in 17/18, which was the 2nd highest in Championship, ahead of Wolves £25m, but less than half of Boro’s £66m.

Gross debt was cut from £66m to less than £1m, despite Shahid Khan loaning an additional £40m, as he converted £105m from debt into equity. An incredible £375m of debt has now been 'written-off' in this way, including £212m by former owner Mohamed Al Fayed and £163m by Khan.

As a result of these transactions, Fulham's debt of £1m is now the third smallest in the Championship and is in stark contrast to some others with six clubs above £70m, including Middlesbrough £101m, Ipswich Town £95m and Wolverhampton Wanderers £75m.

In the last decade, virtually all of the club’s £196m available cash has come from the owners’ pockets with £79m used for player purchases (net), £50m to cover losses, £42m on infrastructure and £20m on loan/interest payments.

It is difficult to say whether Fulham complied with FFP, as it depends how much can be excluded for promotion bonuses. If we assume £15m and £7m a year for academy, community and infrastructure, they were slightly above the maximum £39m loss over the 3-year monitoring period.

The Swiss Ramble concludes, 'Finances will have been transformed by their promotion to the Premier League, though they clearly took a major financial gamble to get there (albeit fully funded by the owner). A likely relegation is not good news, but this would be cushioned by chunky parachute payments.''