Hull City benefits from a more benevolent owner

Some highlights from the Swiss Ramble's authoritative analysis of Hull City's finances.  An exhaustive analysis can be found on his Substack page.

Hull have lost money in all three of the seasons since Ilıcalı bought the club, adding up to £34.3m. In fact, they have now posted losses in four of the last five years.   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 six years out of seven.

A key element of the club’s business model is to make money from player trading, so the £57m generated in the last three seasons has been very important. This marked a “return to form”, as their profit only amounted to £5m in the preceding 2-year period.

Hull’s revenue has grown by an impressive £10.4m (68%) in the last three years, rising from £15.4m to £25.8m. This is easily the club’s highest revenue outside the Premier League in a season without parachute payments. It was also nearly four times as much as the £6.9m they earned in League One.

However, even after last season’s steep growth, Hull’s £25.8m revenue remains firmly in the bottom half of the Championship, miles below the clubs benefiting from parachute payments.

Hull’s match day income rose £1.5m (25%) from £5.7m to £7.2m, the highest for seven years, though this was still less than half of the £16m that they generated in the Premier League.

Hull’s average attendance has sharply increased under the new ownership, though it dipped from 21,980 to 20,389 last season, as the team performed much worse.  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 unhappiness with the previous owners, which led to many fans deciding to boycott games.

City’s wage bill shot up £7.1m (24%) from £29.6m to £36.7m, presumably including some compensation for the changes in manager, which was a new club high for the Championship.

This means that wages have almost tripled under the new owners, reflecting the significant investment in the squad, though this was obviously a lot less than the £61m they paid in the Premier League.

There is no doubt that Ilıcalı has been prepared to put his money where his mouth is, given that he has provided £52m of loans in the last three 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 2015. Indeed, they were repaid £37m in the four years between 2018 and 2022.

In the two seasons up to 2023/24, Hull’s £38m was in the top ten of the Championship in terms of owner funding, but this was still a fair bit lower than some other clubs, e.g. Leeds United £163m, Leicester City £94m, Southampton £85m, Birmingham City £83m and Norwich City £80m.

Hull’s 2024/25 financial results basically reflect the harsh realities for non-parachute clubs in the Championship, as they made an enormous operating loss, driven by a horrific wages to turnover ratio, which they partially offset by selling a couple of their more talented players. The resulting shortfall then had to be covered by the club’s owner.

Hull’s dilemma

Tigers’ fans were understandably delighted to see the back of the Allam family, after many years of parsimony, especially as Ilıcalı was clearly more ambitious, demonstrating a willingness to provide the club with the required financial support.

However, new owners eventually realise that such investment does not guarantee success, so the funding often reduces over the years, especially as PSR can also bite aspirational clubs.

Hull therefore find themselves in a difficult position. Do they continue to “go for it” in a bid to return to the Premier League, risking more financial issues? Or should they cut their cloth according to their mean, thus reducing their chances of promotion?

The owner is giving mixed messages: on the one hand, he has talked about the need to reduce the wage bill and sell players; on the other hand, he still clearly dreams of Hull going up, “If we are promoted, watch me. I’m sure that the fans already know how crazy I am, but they will see the real crazy guy if we are promoted.”

In the meantime, the club’s supporters would be forgiven for feeling slightly apprehensive. Given the trials and tribulations they experienced under the Allam family, they would have hoped to avoid any whiff of financial problems, so news of late payments and cash flow issues must have alarmed them.

The issue with a business model that is reliant on an owner’s benevolence is that it works just fine – until it doesn’t. Hopefully, this is not the case with Hull City, but their situation is one that is all too common in football, especially the incredibly competitive Championship.