Chairman looks after Millwall

The authoritative Swiss Ramble reviews the latest accounts of Millwall.

Millwall’s financial results for the 2020/21 season, when their pre-tax loss widened from £10.9m to £13.8m, as revenue fell £3.9m (24%) from £16.4m to £12.5m, due to COVID.   The loss wass covered by £8m share capital from owners and £8m EFL loan.  Profit was “significantly impacted” by COVID with total revenue loss to date estimated as £7m, including £6m in 2020/21, partly offset by iFollow streaming income and £1.4m staff furlough income

The pre-tax loss widened from £10.9m to £13.8m, largely due to revenue falling £3.9m (24%) from £16.4m to £12.5m, though operating expenses were up £0.7m (3%). actually one of the best results in the Championship, where most clubs operate at a significant loss.

 Partly offset by profit on player sales increasing £0.6m to £0.7m and other income rising £1.2m to £2.1m.   This was the lowest reported in the Championship, far below the likes of Norwich £60m, WBA £29m and Bristol City £26m.

Millwall have rarely made big money from player sales, only generating a profit above £0.5m once in the last 10 years: £5.4m in 2019, thanks to George Saville’s move to Boro.  Similar story this season with Jason McCarthy’s return to Wycombe the only noteworthy sale.

The £13.8m loss is not great, but it is still only mid-table in the Championship. As owner John Berylson said, “You have teams that are going to lose £20-30m this season – some were losing that before the pandemic.”

The Lions have not posted a profit in the last 10 years, losing £78m in this period. In fairness, their losses had been reducing (from £12m in 2015 to only £1m in 2019), but the onset of the pandemic (and a rising wage bill) has resulted in sizeable losses since then.

The £4.0m revenue decrease was largely driven by match day falling £3.0m (67%) from £4.4m to £1.4m, as COVID meant games being played behind closed doors, while broadcasting also decreased £1.0m (11%) from £9.4m to £8.4m. Broadcasting income fell by £1.0m (11%) from £9.4m to £8.4m, due to COVID impact, having peaked at £10.0m in 2018 due to FA Cup money. Most Championship clubs earn £7-9m from TV, but there is a massive gap to clubs with parachute payments.

Commercial income held steady at £2.7m.  This was a decent achievement, but this is still one of the lowest in the Championship, miles below the likes of Bristol City and Stoke City (around £14m).  £12.5m revenue is one of the smallest in the Championship, significantly below clubs in receipt of parachute payments

The impact of COVID means that the £12.5m revenue is their lowest since they were last in League One four years ago. It has dropped by a third since their pre-pandemic £18.4m peak in 2019, which was also boosted by the run to FA Cup quarter-finals.

Despite the revenue fall, the wage bill rose £1.9m (10%) from £18.9m to £20.8m, reflecting investment into the playing squad and football management team. Wages have more than doubled since promotion to the Championship from £9.4m paid in League One in 2017. Even after the growth the £21m wage bill is still very much on the low side in the Championship.

The wages to turnover ratio increased from 115% to 167%, which is not great, though is clearly impacted by COVID. Also, most clubs in the ultra-competitive Championship have ratios above 100%, i.e. much worse than UEFA’s recommended 70% upper limit.

The £1.5m expenditure on player purchases in 2020/21 was one of the lowest in the Championship, paling into insignificance compared to recruitment at clubs relegated from the top flight, e.g. Fulahm £53m and WBA £34m (both in 2019/20).  The small transfer spend is nothing new for Millwall. Even if gross spend has increased in the last five years, the annual average is still less than £2m. The objective seems to be to balance the books, leading to a low number of senior players compared to other clubs.

The club will be happy that grounds returned to full capacity at the start of 2021/22 season. Their 13,734 average attendance in 2019/20 (for games played with fans) was one of the lowest in the Championship, but was club’s highest since they were in the top flight in 1988/89. 

Gross debt increased from £10m to £18m, due to a new £8m EFL loan, repayable over next 3 seasons, which was used to repay money owed to HMRC. Loan notes from the owners remain £10m, though repayment has been extended again to July 2023.  The £18m gross debt is very small compared to many other clubs in the Championship, e.g. Stoke City £187m and Blackburn Rovers £156m, though would be much higher without the owners effectively writing-off £30m by waiving interest and converting loans into equity.

Chairman John Berylson’s company CHV charges 12% a year on the loan notes, but interest payments have been frequently suspended.  One fan commented, ‘Makes we wonder where we would be without JB.’