An 'uneven battle' for clubs like Preston

A look at the finances of Football League founders and Championship perennials Preston North End.  Extracts come from the latest report on the club from the authoritative Swiss Ramble.

Preston’s pre-tax loss worsened from £14.3m to £17.7m in 2024/25, despite revenue rising £3.6m (21%) from £16.9m to £20.5m, a new club high.  This was more than offset by a steep increase in operating expenses, up £6.7m (21%) from £31.6m to £38.3m. In addition, they made nothing from player sales, though the previous season was not so hot either, only contributing £0.4m.  The result after tax was better, thanks to a £4.3m tax credit, though this still widened from £9.9m to £13.4m.

There was growth across the board, as all three revenue streams set new club records. The largest increase was in broadcasting, which rose £2.3m (25%) from £9.5m to £11.8m, but match day was up £1.1m (25%) from £4.3m to £5.4m. In addition, commercial was slightly higher, rising £0.2m (7%) From £3.1m to £3.3m.

Preston have only managed to generate a pre-tax profit once in the last decade - and that was just £2.6m in 2017/18. This means that they have now lost money seven years in a row, adding up to £109m, which is an average of around £15m a season.

This can be regarded as the cost of a club with Preston’s limited resources trying to be reasonably competitive in England’s second tier. Indeed, in the accounts the directors “acknowledge that, in common with many clubs in the Championship, the club is likely to incur future losses and net cash outflows.”

The lack of profit from player trading is a real weakness in Preston’s business model, as the club has a history of players leaving for free, a point noted by many supporters.

Preston’s average attendance decreased from 16,714 to 16,504, though this is still around a third more than the 12,501 three years earlier.   However, even after the growth, Preston’s 16,504 attendance was still very much in the bottom half of the Championship in 2024/25, a long way below Leeds United 35,707, Sunderland 29,948, Derby County 29,018 and Sheffield United 27,477.

Preston’s wage bill rose £4.4m (20%) from £22.0m to £26.4m, a new club high, overtaking the previous peak of £24.6m in 2021/22.  This was driven by investment into the squad, the “significant” costs associated with the change in manager and assistant manager at the beginning of the season and the unforeseen increases in National Minimum Wage and National Insurance costs (from April).

Even after this increase, Preston’s £26m wage bill is still very much in the bottom half of the Championship, significantly lower than the amounts paid by clubs benefiting from parachute payments, e.g. Leicester City £107m, Leeds United £84m and Southampton £81m.

They have not exactly been big spenders in the transfer market with a total outlay of just £33m in the last decade.   Manager Paul Heckingbottom, would clearly appreciate a loosening of the purse strings, “We need help if we want to keep competing”, even though he pointed out that they had done well with the existing squad, “If it was all about finance, then we wouldn’t have won our last two games.”

Over the last decade, the main source of the club’s £137m available funds was the owners, who have directly put in £92m of funding via interest-free loans, while another £24m has come from tax losses in group companies. In addition, Preston made £21m from player sales.

The Hemmings family financial support has provided an average of around £12m in the last five years.  Since these accounts closed, they have already loaned an additional £5.5m, which means that they have now provided £125m of funding in total.  It looks like the Hemmings family would be prepared to step aside if the right investor came forward.

In many ways, it is an uneven battle for clubs like Preston, so they have done incredibly well to be in and around the play-off places. The chances of them going all the way to the Premier League remain slim, but stranger things have happened.