Hull City’s 2023/24 accounts covered a season that at one stage promised so much, but ended in disappointment, as they ultimately missed out on the Championship play-offs by just three points. That said, the Tigers did improve from the previous year’s 15th to a very respectable 7th place.
As manager Liam Rosenior said, “It was a positive season,
but we couldn’t quite get over the line.” His achievement was recognised with a
nomination for Championship manager of the year, though that was not enough to
save the popular Englishman from being dismissed by owner Acun Ilıcalı, who
bought the club in January 2022.
This could be viewed as a sign of ambition from the Turkish
businessman, who has spent big (relatively speaking) in order to improve the
club’s chances of promotion to the Premier League - or alternatively as a
distinct lack of patience.
In fairness, Ilıcalı had initially restored the club’s
relationship with its fans after ending the controversial tenure of the Allam
family, though he did not have much to beat.
While it is true that the club reached the Premier League on
their watch, spending a total of three seasons in the top flight, they also
dropped down to League One, while the spending on the squad had effectively
dried up.
City have steadily risen under Ilıcalı, but this season has
seen a bit of a reality check, as the club is currently sits just above the
relegation zone. Rosenior was replaced by Tim Walter, but the hapless German
lasted less than six months, as he was sacked following a run of four straight
defeats and nine games without a win (plus some unwise criticism of his own
supporters).
This meant that Ilıcalı has now removed no fewer than four
managers since his arrival three years ago, including Grant McCann and former
Georgian international Shota Arveladze in 2022.
Losses increase
Hull City’s pre-tax loss more than tripled from £5.2m to
£18.8m in 2023/24, even though revenue rose £3.1m (17%) from £18.1m to £21.2m,
as profit from player sales fell £6.9m from £15.2m to £8.3m.
To place this into perspective, no fewer than six clubs lost
more than £20m in 2022/23, namely Burnley £36m, Sheffield United £31m,
Birmingham City £25m, Bristol City £22m, Blackburn Rovers £21m and QPR £20m.
City have lost money in three of the last four seasons,
while the £13.9m profit in 2021/22 would also have been a loss without an
exceptional £20m write-down of a loan from the Allams following the sale of the
club. This is in marked contrast to the preceding period, where the Allams
tight-fisted/sustainable approach (delete as appropriate) led to the club
posting profits in six years out of seven.
City said that they had recorded “strong revenue growth”
with all three streams rising. The largest increase was in commercial, which
rose £2.2m (55%) from £3.9m to £6.1m. Match day was up £0.5m (11%) from £5.2m
to £5.7m, while broadcasting was £0.4m (5%) higher at £9.4m.
Unsurprisingly, the largest profit was £36m from the last
time that City were in the Premier League in 2016/17, though more investment
would have given them a better chance of staying up, so arguably this was a
false economy.
Hull City’s revenue has fallen by nearly two-thirds (£34.5m)
since the first season after relegation to the Championship from £55.7m to
£21.2m. The decrease is almost entirely driven by broadcasting £86m, as
parachute payments stopped long ago.
Compared to the last season in the Premier League, City have
lost almost £100m, due to the much better TV deal in the top flight.
The good news is that City’s £21.2m revenue last season was
the club’s highest revenue outside the Premier League in a season without
parachute payments. It was also more than three times as much as the £6.9m they
earned in League One.
However, even after last season’s steep growth, City’s
£21.2m revenue remains in the bottom half of the Championship, miles below the
clubs benefiting from parachute payments, whose revenue is around three times
as much as them. As an example, Norwich City earned £73m in 2023/24.
There has been a strong recovery in City’s average
attendances under the new ownership, including a sharp rise from 17,973 to
21,980 last season, thanks to the club either reducing or freezing season
ticket prices and opening up the West Stand upper.
Crowds had previously slumped from around 24,000 in the
Premier League in 2013/14 to less than 10,000 in the Championship, driven by
the wave of unhappiness with the Allams, which meant that many fans went as far
as boycotting games.
Wages and transfer
spending
City’s wage bill shot up £5.9m (25%) from £23.7m to £29.6m,
presumably including some compensation for Rosenior’s departure. This means that wages have more than doubled
under the new owners, reflecting the significant investment in the squad. On
the other hand, wages are still less than half the £61m they paid in the
Premier League.
Following the substantial increase, City’s wage bill is now
in the top ten of the Championship, albeit significantly lower than the amounts
paid by clubs with parachute payments, e.g. Burnley £54m in 2022/23 and Norwich
City £52m last season.
City spent a hefty £25m this summer, which was more than the
previous six years combined, as a very tangible sign of Ilıcalı’s ambition.
This outlay was only surpassed by two Championship clubs, namely Burnley £43m
and Leeds United £27m.
City’s £14m squad cost has reached the Championship top ten,
though it is significantly lower than clubs that were recently relegated, e.g.
Burnley and Watford had £134m and £103m respectively in 2022/23. In other words, even after the recent
substantial investment, City are still playing catch-up with the main
candidates for promotion.
Hull City’s losses and squad investment have basically been
funded by taking on more debt, which increased by £28m from £38m to £66m last
season. The growth was entirely due to more loans from the owners, which rose
from £16m to £44m, while external loans were unchanged at £22m.
Even after last season’s growth, City’s £66m debt was only
mid-table in the Championship, less than half of the likes of Middlesbrough
£159m, Birmingham City £149m and Blackburn Rovers £142m (all figures from June
2023).
There is no doubt that Ilıcalı has been prepared to put his
money where his mouth is, given that he has provided £38.5m of loans in the
last two years. This is in marked
contrast to the Allams, who initially provided £78m to Hull City in the five
years between 2011 and 2015, but did not put any money into the club after
that. Indeed, they were repaid £37m in the last four years of their tenure.
After many years of austerity under the Allam family, Hull
City do at least now have an ambitious owner, who has demonstrated his
willingness to provide the club with the required financial support.
However, even after a lot of investment by Ilıcalı, it
should be appreciated that City are still a fair way behind many better
resourced clubs in terms of revenue, wages and transfer spend. The new owner’s plan was obviously to invest
in the squad to improve the chances of promotion to the Premier League, but
nothing is easy in the very competitive Championship, so the the club’s
priority right now is to avoid relegation to League One.
Hull are one of the clubs on my ‘like’ list. Why?
I like the city and Beverley. I
like Philip Larkin’s poetry, although he had zero interest in football. Also I starting investing in a company
headquartered in the city when it was founded in the 1980s and it has proved a
very successful investment. Let’s hope
that a bit of Turkish delight comes to the Humber.
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