The club’s supporters will hope that this recruitment works
out rather better than last season, when their £4.4m outlay was only bettered
by Birmingham City’s record-breaking £30m gross spend. There was a lot of noise
about Wrexham, but they were actually outspent by Town (at least according
to Transfermarkt).
The main signing last season was Joe Taylor from Luton Town,
but they also invested a fair bit in Dion Charles from Bolton Wanderers, Antony
Evans from Bristol Rover, Lasse Sorenson from Lincoln City and Ruben Roosken
from Heracles Almelo.
The fact that two of the top three spenders were promoted
last season (as well as the sixth highest) shows that money really does talk in
League One - though Town discovered that it’s not always a guarantee of
success.
It’s fair to say that Huddersfield Town could do with a
reversal in their fortunes, as the trend has not been their friend for a while.
After spending two seasons in the Premier League (in 2017/18 and 2018/19), it’s
been quite a fall from grace.
Indeed, as recently as 2021/22 Town enjoyed a fantastic
season under Carlos Corberan, when they finished an impressive third in the
Championship. They secured a place in
the play-offs, before losing to Nottingham Forest in the final.
However, the club was then relegated from the Championship
to League One in 2023/24, which was the first time that Town had been in
England’s third tier since 2011/12. Owner Kevin Nagle understandably described
this as “extremely disappointing”.
Changes in manager and
owner
Town have also not been helped by numerous changes in the
manager in the last couple of years. The
latest man to be given an opportunity is Lee Grant, who had been first team
coach at Ipswich Town, which means that the Terriers have had no fewer than
eight managers since July 2022, not including caretakers. this lack of continuity is hardly conducive
to success on the pitch, as different playing styles have been adopted by each
of the coaches.
Owner Nagle is an American businessman, mainly in
pharmaceuticals, who acquired the club in March 2023. He is also owner of a
couple of American sports teams: football club Sacramento Republic and basketball
team Sacramento Kings.
Similar to managers, there has also been a great deal of
change in the club’s ownership in the past few years, which is almost certainly
another reason for Town’s issues. Long
standing custodian Dean Hoyle had sold a 75% stake in Huddersfield Town to Phil
Hodgkinson’s Pure Sports Consultancy Ltd in 2019, but the new owner’s main
business interests were placed into administration in November 2021. Although
this did not directly affect the club, it did lead to the return of the former
owner.
Hoyle stepped back in to oversee the day to day running of
the club and “provide urgent financial support”, even though he was still the
minority shareholder, though he had to once again take a step back in October
2022 on health grounds. The transfer of
Hodkinson’s 75% stake was finally completed in March 2023, so Hoyle once again
held 100% of the shares, though he then immediately sold this 100% shareholding
to Nagle.
Events on the pitch have not been great since Nagle’s
arrival, but in fairness it was reported that the club might have entered
administration without the takeover.
Financial lossees
In 2023/24, when Town finished 23rd in the Championship, the
pre-tax loss more than doubled from (restated) £6.4m to £15.0m, as revenue was
basically flat at £18.2m, while operating expenses rose £2.9m (8%) from £34.1m
to £37.0m.
The increase in the operating loss was exacerbated by profit
from player sales halving from £8.9m to £4.4m, while there was no repeat of the
prior year’s £1.4m exceptional Items (mainly financing gains).
Very few clubs make money in the incredibly competitive
Championship, so Town’s £15.0m loss was pretty normal for this division,
despite the steep increase in the net loss. In fact, no fewer than nine clubs
lost even more money, led by Leeds United £61m, Ipswich Town £39m and WBA £34m.
Town have now posted a loss three years in a row with the
size of the deficit steadily increasing. In fact, they have lost money in four
of the five seasons since relegation from the Premier League. Nagle had said, “We are going to lose a lot
of money, no question. That can’t be continuous and it isn't sustainable, but
right now we are investing in the club and in the infrastructure.” In fairness, Town had one of the best
financial records in the Championship, “only” losing £33m in the five years
before relegation, which was the fifth smallest loss (no clubs managed to
generate a profit).
Town have partially offset their operating losses with £42m
profit from player sales in the last five years, though £28m of this came in
the first two years after relegation from the Premier League.
Town’s revenue very slightly increased in 2023/24 to £18.2m
to break the sequence where this had fallen five years in row, though this has
still dropped by £107m from the £125m peak in the Premier League. This was
largely due to a £100m reduction in TV money, though both other revenue streams
were also down, commercial by £6.1m and match day by £0.7m.
Revenue
As a result of the decline, Town’s £18.2m revenue was one of
the lowest in the Championship in 2023/24, only above Preston North End £16.9m
and Rotherham United £16.6m. Furthermore, it was miles below the parachute
clubs, led by the three most recently relegated from the Premier League, namely
Leeds United £128m, Leicester City £105m and Southampton £85m. However, it’s also worth noting that Town’s
revenue was less than half of some clubs without parachutes, e.g. Bristol City
£42m, Sunderland £38m and Ipswich Town £37m.
Town only own 40% of the 24,500 capacity Accu Stadium
(previously John Smith’s) via their stake in Kirklees Stadium Development Ltd,
which operates the stadium and the surrounding 54-acre site. The rest is owned
by the Huddersfield Giants rugby league club (20%) and the local council (40%).
Under a new agreement, the council is expected to give its
40% share to Town, which would give the football club 80%. However, this deal
is unlikely to be completed until the Huddersfield Giants have planning
permission on a new stadium site – in Huddersfield.
Despite the lack of revenue growth, Town’s wage bill
actually rose £1.5m (7%) from £21.5m to £23.0m, as the club tried to remain
competitive in the Championship. Nevertheless,
wages have been cut by around two-thirds (£41m) from the £64m peak, following
relegation from the Premier League. They will have been even lower in League
One, thanks to relegation clauses and the departure of some high earners.
Despite the increase in 2023/24, Town’s £23.0m wage bill was
the fifth lowest in the Championship, so it’s not a major surprise that they
struggled at the wrong end of the table, given the strong correlation between
wages and league position. The only
clubs to pay less were Preston North End £22.0m, Sheffield Wednesday £21.8m,
Plymouth Argyle £16.9m and Rotherham United £12.9m.
With all of the changes in ownership and different treatment
in the accounts, it’s quite difficult to calculate the owner funding, but based
on information in the cash flow statement and the notes on related parties, it
looks like a net £39m was provided in the last three years, including £16.9m in
2023/24.
The pluses and minuses
After memorably beating the odds by gaining promotion to the
Premier League, Huddersfield Town have found the going tough after relegation
from the top flight, especially once the parachute payments ended. Given that they do not generate a great deal
of money from their normal operations, this should not have come as a massive
surprise.
On the bright side, Town are one of the better resourced
clubs in League One, so they really should be in the promotion mix this season,
especially after being more active in the transfer market with Nagle continuing
to provide significant financial support.
The huge amount of change in the past couple of years at
board level and on the coach’s bench has done them no favours, so the hope
would be for a period of stability, which would surely help Town’s prospects of
a return to the Championship, though League One can be an unforgiving division.
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