Millwall reduces losses

The authoritative Swiss Ramble looks at Millwall's financial results for 2018/19. They achieved 'the best result for many years' by reducing their loss from £5.0m to just £0.7m, as revenue increased by £2.8m (18%) to £18.4m and profit on player sales and loans rose by £6.9m, partially offset by £5.6m growth in expenses.

The loss of £0.7m was one of the better financial performances in the Championship. As Finance Director Mark Fairbrother observed, no club in this division is consistently profitable. No fewer than nine clubs posted losses above £20m.

Millwall have lost £61m in the last 10 years, though the losses have been falling – from £12m in 2015 to £1m in 2019. However, this season’s figure will be adversely affected by lower player sales and higher wages, and may not have a financially rewarding cup run like 18/19.

Millwall's revenue increase was largely driven by broadcasting income, up £2.4m (32%) to £10.0m, partly reflecting televised cup games, though commercial also rose £0.4m (16%) to £2.7m. Match day was “static” at £5.6m.

Revenue has grown by £8.4m (84%) in the two years since promotion from League One, rising from £10.0m to £18.4m. This is mainly due to TV money, up £7.3m, with smaller increases in commercial £0.6m and match day £0.5m. Despite the growth, Millwall's £18m revenue is still one of the smallest in the Championship, though they have overtaken Reading and Ipswich Town. However, it was only around a quarter of Aston Villa £69m, Sunderland £64m and Middlesbrough £62m (2017/18 figures).

The bottom line benefited from £5.4m profit on player sales (plus £1.5m player loans), compared to £10k loss the previous season, due to the lucrative transfer of George Saville to Middlesbrough. Still a lot lower than Bristol City’s amazing £38m profit from this activity. Millwall have rarely made big money from player sales. In fact, the £5.4m profit reported in 2018/19 from Saville’s sale to Middlesbrough is as much as the previous 13 years combined, when the highest year was £1.7m in 2011, mainly Steve Morison’s move to Norwich City.

Attendance increased from 13,376 to 13,635. Crowds are obviously higher in the Championship than League One, but it is worth noting that the current average is actually the highest since they enjoyed a brief period in the top flight (old Division One) in the late 80s. Even so, attendance was still one of the lowest in the Championship, only above Wigan, Brentford, Rotherham and Hull City. To give some idea of the strength of competition, 12 clubs had crowds of 20,000 or more. Season ticket prices have been frozen for six years.

The wage bill rose by £3.5m (26%) from £13.4m to £16.9m. The wages to turnover ratio increased from 86% to 92%, which is not great, but is actually among the lowest (best) in the Championship. In fact, more than half the clubs in this ultra-competitive division have ratios over 100% with Birmingham 202% 'leading the way'.

The gross debt was unchanged at £10m of loan notes, where repayment has been extended again to July 2021. This would be around £30m higher without the owners Chestnut Hill Ventures (CHV) effectively writing-off debt by waiving interest and converting loans into equity. £10m gross debt is very small compared to many other clubs in the Championship who have much larger debts, e.g. Boro £101m and Ipswich Town £95m. The debt at these clubs is normally not an issue – so long as the owners continue to provide support.

Millwall's stated objective is 'to take steps to enable the club to become an established Championship side', though they are 'not going to be throwing money at it'. That said, it looks like Berylson will have to continue funding the club’s losses for the foreseeable future.