Owners have pumped money into Forest

Nottingham Forest’s pre-tax loss tripled from £15.5m to £46.2m, despite revenue rising £11.3m (61%) from £18.4m to a club record £29.7m, as operating expenses increased by £25m (46%) from £54m to £79m.  In addition, profit from player sales fell £10.2m from £14.3m to just £4.1m.  Forest’s £46.2m pre-tax loss was one of the largest reported in Championship, only surpassed by the other promoted clubs Fulham £57.0m and Bournemouth £55.5m.

Forest are no strangers to losses, as they have only reported a profit once since 2005 – and that was entirely due to a £40m loan write-off in 2017. Otherwise, the club has consistently lost money, amounting to £141m in the last 10 seasons, including £108m in the five years since Marinakis arrived.

Forest’s staff costs increased with the wage bill up £21.4m (57%) from £37.2m to £58.6m. This was very largely the price of success, as it included £20.9m bonus payments for promotion.

Since the arrival of Marinakis, Forest’s revenue has grown by £8.9m (43%) from £20.8m to £29.7m, with increases in all three revenue streams: broadcasting £4.0m, commercial £3.1m and match day £2.2m.

Of course, Forest’s revenue will be significantly higher this season in the Premier League. This is dependent on final finishing position in the league, though revenue for clubs promoted in the last six seasons was on average £134m, which would represent a £104m increase for Forest.

Forest’s transfer spend since promotion has been considerable, as they have spent an estimated .  This was sixth highest gross spend in the Premier League, according to Transfermarkt, ahead of the likes of Manchester City, Liverpool and Tottenham. It was also more than the two other promoted clubs combined.

Forest’s £21m debt was one of the lowest in the Championship, a long way below the likes of Bournemouth £184m, Blackburn Rovers £163m and Middlesbrough £148m.   However, Forest’s debt would have been much higher without Marinakis converting £93m debt to equity in the last five years, which makes £159m capitalised by various owners since 2013.

In the last 10 years various owners have pumped £168m into Forest, boosted by £31m from (net) player sales. The vast majority of this money has been used to simply cover operating losses with only £11m spent on improving infrastructure.

Clearly, Forest’s primary objective this season is to avoid relegation, hence the massive transfer spending last summer. Of course, this does not guarantee that they will stay up, but it does at least give them a fighting chance.