QPR moved out of the relegation places at the weekend, but there was real sadness at the passing of their legendary player Stan Bowles. Sincere condolences to everyone who knew him, he was a true bright light in football.
QPR’s pre-tax loss reduced from £24.7m to £20.3m, as revenue
rose £1.2m (5%) from £22.1m to £23.3m and profit from player sales increased
from £0.2m to £1.0m.
The main reason for the revenue growth was commercial, which
increased £1.4m (19%) from £7.3m to £8.7m, while gate receipts were slightly
up, rising £0.1m (2%) to £5.7m. However, broadcasting fell £0.3m (4%) to £8.8m.
QPR’s £20.3m loss is still one of the worst of the nine
clubs that have published 2022/23 accounts to date, only surpassed by Norwich
City £27.2m and Bristol City £22.2m. That said, very few clubs manage to make
money in this very challenging division with only Watford in the black so far
last season.
Although QPR increased their profit from player sales from
£0.2m to £1.0m, this was still one of the lowest in the Championship, miles
below the likes of Watford £59m and Middlesbrough £22m.
Losing money
QPR’s last two seasons have not been great from a financial
perspective, as they have lost £45m in this period, i.e. nearly £2m a month.
Like many others in the Championship, they had clearly gambled on reaching the
play-offs in 2021/22, leading to a return of large losses. Up until then, they had been making good
progress, losing “only” £4m in 2020/21, which was their best result since 2006.
That said, Rangers are no strangers to losing money. Since
Tony Fernandes arrived in August 2011, total losses have been £274m – or £334m
if we exclude a £60m loan write-off in 2014.
A big factor in QPR’s worsening financials is the tiny
amount they have made from player sales, amounting to only £1.2m in the last
two years. In fact, they have only generated more than £10m profit from this
activity twice in the last decade, despite a stated desire to develop players
from the academy.
QPR’s revenue has dropped by a third since parachute
payments ended in 2019, falling by £11.3m from £34.6m to £23.3m, due to a
£13.1m decrease in TV money. This was partly offset by small increases in
commercial and gate receipts.
Relegation from the Premier League in 2015 is the root cause
of QPR’s steep revenue decline, leading to a 73% (£63m) fall from £86m. Equally
importantly, the club has missed out on the growth in media rights in this
time.
QPR’s £23m revenue puts them mid-table in the Championship,
but is significantly lower than those in receipt of parachute payments, e.g.
Norwich City £76m and Watford £66m had around three times as much. It’s also worth noting that Rangers are a
fair way below some other clubs without parachutes, e.g. Bristol City £37m and
Stoke City £31m last season.
QPR’s average attendance increased for the second year in a
row to 14,977, which is the club’s highest since 2015/16. However, crowds have
fallen by 2,800 (16%) since relegation, as they peaked at 17,809 in the top
flight.
QPR have been looking for a new ground for some time, as the
club “is not financially sustainable in the long-term” without a move, but it
has been a fruitless search to date. As a result, there has been talk of
redeveloping the main stand.
Wages
QPR’s wage bill was cut £2.2m (8%) from £27.6m to £25.4m,
following a number of departures. Even if players left on free transfers or
loans, thus generating little profit, this still helped the finances by
reducing the payroll. After all the ups
and downs, QPR’s £25.4m wage bill is around mid-table in the Championship,
suggesting that they badly under-performed last season.
Debt and owner funding
QPR’s gross financial debt rose £14m from £75m to £89m,
mainly £79m provided by the owners (a £70m loan plus a £9m convertible bond
issued to Ruben Gnanalingham’s wife). QPR’s
£89m gross debt might be relatively high given that their revenue is only £23m,
but it is not that large compared to many other clubs in the Championship, e.g.
Blackburn Rovers owed £163m and Middlesbrough £159m. That said, QPR’s debt would have been
considerably higher if their owners had not converted £256m loans into equity,
including £13m last season, and written-off another £60m in the last 10 years.
In the last 10 years QPR’s owners have put in an incredible
£219m, basically providing all the available funds for the club. Although they are not putting in as much as
the early years of the takeover, they have still had to write cheques for a
hefty £68m in the last three years, which works out to very nearly £2m a month. Whatever criticism is aimed at QPR’s owners
(and they have clearly made several mistakes over the years), nobody can accuse
them of not putting their hands into their pockets.
The harsh reality is that the Championship is a division
that has an endless appetite for owner funding, so QPR are far from alone with
this business model. In fact, no fewer than seven clubs received more than
£100m in the five years up to 2022.
Tony Fernandes stepped down as a director and shareholder
last July, leading to increased stakes for the remaining owners. Ruben
Gnanalingam remains the majority shareholder with just under 60%, while
American businessman Richard Reilly’s stake is up to 21%. The Mittal family has
19% and is represented on the board by Amit Bhatia. There have been media reports in the last
few months that QPR has drafted in a team of US bankers to help pitch the club
to new investors, though nothing concrete as yet.
It’s yet another sorry tale of a Championship club
struggling to compete with “parachute payment” clubs on far larger budgets.
Basically, such clubs are “damned if they do, damned if they don’t”. The Championship is effectively a Premier League 2 and a lot of spending and some luck is needed to get to the top flight.
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