Preston rely on owner funding

In the eight seasons since Preston were promoted to the Championship they have finished between 7th and 14th, so they have become the very definition of a mid-table club. This has to be considered a decent achievement, as they have to compete with far fewer resources than most of their rivals. Their fans might find it frustrating, though.

Preston’s pre-tax loss in 2022/23 reduced by £5.8m from £20.2m to £14.4m, which the club described as “a significant financial stride in the right direction.” Revenue rose £1.8m (12%) from £13.8m to a club record £15.6m, while profit from player sales was up from £0.3m to £0.8m. In addition, the club cut costs by £3.6m (10%) to £30.7m.

There were substantial improvements in all three revenue streams, but the star of the show was match day, which rose £0.9m (28%) from £3.0m to £3.9m. In addition, broadcasting increased £0.6m (8%) from £8.1m to £8.7m, while commercial was up £0.2m (9%) from £2.8m to £3.0m.

Only five Championship clubs have to date published accounts for 2022/23, but Preston’s pre-tax loss is, true to form, around mid-table. Although a £14.4m loss is not great, it is much smaller than other clubs in this incredibly competitive division, e.g. Norwich City lost around twice as much last season.

The last time Preston managed to generate a profit was in 2018, so they have now lost money five years in a row, adding up to £77m. This is the price that has to be paid for a club with Preston’s limited resources trying to be competitive in the Championship.

Unlike many clubs, Preston have rarely made big money from player sales, generating profits of less than £2m in the last three seasons combined.

Preston’s average attendance shot up 30% from 12,501 to 16,269, including 11,981 season ticket sales, which was the club’s highest for over 60 years. The growth was due to a number of factors, including the return of fans to the Kop and big reductions in season ticket prices for the majority of fans.

Preston’s wage bill fell £3.0m (21%) from £24.6m to £21.6m after nine consecutive annual increases. Nevertheless, wages have nearly tripled since promotion to the Championship from the £7.8m paid in League One in 2015.

Preston only spent £0.9m on player purchases in 2022/23, which was one of the lowest in the Championship. In stark contrast, Norwich City and Middlesbrough had £15.0m and £12.2m gross spend respectively. Low transfer spend is nothing new for Preston, whose outlay over the last decade adds up to less than £24m.

Preston’s gross financial debt increased by £10.4m from £77.6m to £88.0m, almost entirely owed to the Hemmings family via their company Grovemoor Ltd. The owner loan rose by £10.6m last season. Preston’s debt is not really a problem, so long as the Hemings family remain committed to the club. The loan is interest-free (with no fixed repayment date), as is the case with most owner loans in the Championship.

The shareholder put in circa £11m last season, which means that the Hemmings family financial support has averaged £12m in each of the last three years. Since they took over the club, it is estimated that they have provided £95m of funding up to 2023.

Preston are a perfect example of how difficult life is for clubs in the Championship if they don’t receive parachute payments. Even with their prudent approach to wages and the transfer market, they still post large losses every year.

Like other clubs in their situation, they are reliant on their owners to fund the shortfall. If they could generate more money from player trading, that would make a difference, but there has been little evidence of improvement as yet in this area.

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The Political Economy of Football V2

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