Luton’s success on the pitch was achieved on a very low budget. In 2022/23 their pre-tax loss widened from £6.4m to £16.3m, largely due to a hefty promotion bonus, which drove a £14.3m (57%) increase in operating expenses.
On the other hand, revenue rose £0.7m (4%) from £17.7m to
£18.4m, while profit from player sales (and manager compensation) was up £3.6m
from just £1.1m to £4.7m.
The main reason for Luton’s revenue growth was commercial,
which rose £0.9 (40%) from £2.3m to £3.2m. Match day was slightly up by £0.2m
(4%) to £5.1m, but broadcasting dipped a little, falling £0.3m (3%) to £10.1m.
Luton’s profit from player trading “and other related
income” virtually quadrupled from £1.1m to £4.7m, though the increase was mainly
due to compensation received following the departure of Nathan Jones and his
coaching staff to Southampton.
Luton have only posted a profit twice in the last decade,
£0.6m in 2017/18 and £3.4m in 2019/20, but they have managed to restrict their
losses over this period. This is pretty good for a club at this level, though
their losses in the past two seasons have been the club’s highest for some
time.
Luton’s revenue more than doubled after promotion from
League One in 2018/19, rising £10.7m from £7.7m to £18.4m. As recently as
2015/16, their turnover was only £5.0m.
Even after this growth, Luton’s £18.4m revenue was firmly in
the bottom half of the Championship, which highlights how well they did to
secure promotion, punching well above their weight.
This was miles below clubs recently relegated from the
Premier League, who were in receipt of parachute payments, such as Norwich City
£76m, whose revenue was more than four times as much as Luton.
Revenue for clubs promoted in the six seasons up to 2021/22
was on average £134m, which would represent a massive £116m increase for the
Hatters.
Luton’s average attendance in 2022/23 of 9,856 was almost
exactly the same as the previous season.
Luton’s attendance was the smallest in the Championship and the only one
that was less than 10,000. This was obviously miles below the likes of
Sunderland 38,480, Sheffield United 28,746, Norwich City 26,131 and
Middlesbrough 26,012.
The club plans to move to a new stadium in nearby Power
Court, which will significantly enhance revenue. Capacity will initially
increase to 19,500, though this could be expanded to 23,500 in a second phase. The stadium is targeted for completion in
2026, so in the short-term Kenilworth Road had to be brought up to Premier
League standards this summer. This
cost £8-10m, as one stand had to be pretty much rebuilt in less than three
months, while they also needed new floodlights and improved broadcasting
facilities.
Luton’s £28m wage bill was still only mid-table in the
Championship, less than half of the amounts paid by clubs benefiting from
parachute payments, e.g. Bournemouth £61m in 2021/22 and Norwich City £56m last
season. Luton’s £28m wages were among
the lowest of clubs that have been promoted to the Premier League. In the last
eight seasons, only two clubs had smaller wage bills, namely Burnley £27m and
Huddersfield Town £22m – and you need to go back at least six years to find
them.
The £14m gross debt in Luton’s football club is very small
compared to most others in the Championship. Indeed, it was less than 10% of
the borrowings at Bournemouth £184m, Blackburn Rovers £163m and Middlesbrough
£159m.
Based on the cash flow statement in the holding company
accounts, Luton’s owners have provided the club with £39m since 2015, split
between £31m loan notes and £8m capital. This excludes any funding that might
have been made in 2022/23, as we are still waiting for those accounts to be
released.
Luton’s chances of surviving in the top flight have improved
after a rocky start. It will still be an
uphill battle, given that they are still working with smaller resources than
established Premier League clubs, but they have given themselves a fighting
chance.
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