The Political Economy of Football V2

Back in the 1920s Huddersfield were a leading club in English football.   Prime minister Harold Wilson (1964-70, 1974-76) was a declared supporter. Huddersfield Town have had a pretty good start to the season, winning four of their first five games in League One.  The expectation is that they should be among the clubs challenging for promotion, especially as they are one of the bigger spenders in the division, splashing out £1.2m on striker Alfie May from Birmingham City, while bringing in quite a few players on free transfers (but on decent wages). 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 Char...

There has been a lot of change at Huddersfield Town in the last few years, though it’s fair to say that the trend has not been their friend, as the club was relegated from the Championship to League One last season, the first time that the club has been in England’s third tier since 2011/12. This represented a steep decline for the Terriers after spending two seasons in the Premier League (2017/18 and 2018/19) just five years before. Indeed, it was only two years since Town enjoyed a fantastic season under Carlos Corberan, when they finished 3rd in the Championship, thus securing a place in the play-offs, before losing to Nottingham Forest in the final. As owner Kevin Nagle put it when describing the 2023/24 season (with a fair degree of understatement), “On the pitch, we did not perform very well.” Nagle is Huddersfield Town’s current owner, having acquired the club in March 2023. He is an American businessman, who is also owner of Sacramento Republic, a USL Championship team. ...

How did a team which spent two seasons in the Premier League, from 2017 to 2019, find themselves in English football’s third tier after a miserable campaign that saw them finish second from bottom? In July 2023, American businessman Kevin Nagle completed his takeover of Huddersfield, buying all of British retailer Dean Hoyle’s shares and ending the Card Factory tycoon’s 14-year spell as owner. That period had seen the Yorkshire club go through plenty of change. The team had risen back into the top flight for the first time in 45 years and, in 2017-18, retained their status under David Wagner with notable wins against Manchester United, Newcastle United and Crystal Palace along the way. Life proved far harder the following year and they finished bottom to return from whence they had come. On May 13, Michael Duff became Huddersfield’s sixth permanent manager since July 2022. The former Swansea City boss is charged with leading their journey back into the Cha...

Huddersfield Town have submitted their 22/23 accounts, repots Kieran Maguire.  Revenue up £18.1m or 42%.   Wages £21.5m up 6%. Underlying loss £16.2m (hardly any Championship clubs make a profit).. Player purchases £3.1m. Player sales £9m.  Revenue down in 22/23 as payments finished. This caused losses to increase 5x as costs maintained. Player sale profits and covid claim reduced losses to £5m Huddersfield have cash in bank. Whilst total liabilities are over £62m majority is due to parent company. Losses over the years are £32m Running club on day to day basis Town spent over £11m cash in 22/23. Player sale receipts and net borrowings of £9m in the year funded this deficit. Wages up in year. Average first team weekly wage £10k, below Championship average of £12-13k. Town bought players in year for £3m which meant squad cost at end of season was just over £4m Town have no external borrowings. Loans from parent interest free and total £50m. In depth analysis ...

According to Deloitte Sports Business Group, reaching the top flight via the Championship play-off final in 2022-23 will earn the winner an increase in revenue of at least £170million across the next three seasons. This figure could rise to more than £290m if the club avoids relegation after their first season in the Premier League. Deloitte, the accounting firm, estimates one season in the Premier League will bring additional revenues of at least £90m. Add on two years of guaranteed parachute payments (the extra financial support that the Premier League gives to relegated clubs), worth close to £80m, and the play-off final will likely yield approximately £170m across three years to its winners, even if their stay in the top flight only lasts 12 months. Brentford, who secured a 13th place finish during their debut Premier League season, secured merit payments of close to £15m in 2021-22. Avoiding relegation in their first season also secured a third year of parachute paymen...

The authoritative Swiss Ramble analyses the 2020/21 accounts of Huddersfield Town. Since these accounts, it has been reported that former owner Dean Hoyle has almost completed a takeover of the club by acquiring the 75% controlling stake he sold to Phil Hodgkinson in 2019. As Hoyle had kept 25%, he would have full ownership if the deal is finalised.     Hodgkinson’s main company had been placed into administration in November 2021, so there was concern that this would cause problems for the club. The club swung from a £8.5m pre-tax loss to £2.6m profit, despite revenue falling £8m (16%) from £53m to £45m, exacerbated by decreases in profit on player sales (from £18m to £10m) and player loans (from £5.7m to £0.6m). This was thanks to a huge £33m (38%) cut in expenses. Huddersfield were one of only four clubs to post a pre-tax profit in the 2020/21 Championship, though their £2.6m was outpaced by two clubs relegated from the Premier League the prior season: Norwich ...

The authoritative Swiss Ramble comments on the finances of clubs in the Championship play offs, noting that Sheffield United relates to Premier League (£115m revenue) and Huddersfield Town had a higher parachute payment in 2020/21, The figures emphasise how well Luton Town have done to reach the play-offs (revenue £13m, wages £14m and squad cost £5m).   Huddersfield's £44m revenue will be lower in 2021/22, as parachute payment is smaller in 3rd year after relegation. £25m wages probably down as well. Nottingham Forest only have £18m revenue, but their £37m wage bill was one of the highest in the Championship for clubs without parachute payments.

Kieran Maguire of the PriceofFootball summarises the 2020/21 accounts of Huddersfield Town. Revenue £45m down 23%; wages £25m 19%; operating loss £5m.   Player purchases £2m and player sales £21m Borrowings £44m. Huddersfield bought players for £2m and sold players (who originally cost £71m!) for £21m.   The club borrowed £15m in 2020/21 but paid back loans of £27m to end up with overall borrowings of £44m. Total income was down partly due to second season of parachute payments which are lower by about £7m.   Broadcast income 90% of total for Huddersfield.    This is likely to fall to about £16m in 2021/22.   C ommercial income (including loan fees) down 70% mainly because loans were over £5.6m in 2019/20 and only £0.6m in 2020/2.   Matchday income (which may include iFollow) was down by more than half due to lockdown. Biggest cost for clubs is player based. Wages down and £55 for every £100 of income, a good ratop. Average wage was £11k a week...

The authoritative Swiss Ramble has reviewed the 2019/20 accounts of Huddersfield Town. The club swung from £3m profit to £8m loss, as revenue fell £66m (56%) from £119m to £53m following relegation, partly offset by profit on player sales increasing £15m to £18m and player loans rising £3m to £6m, while operating expenses were cut by £37m, though interest was up £2m. The £66m revenue fall was largely driven by broadcasting’s £59m (57%) decrease from £104m to £45m, due to lower TV money in Championship, though commercial also dropped £6m (59%) from £10m to £4m and match day fell £1m (18%) from £5m to £4m.   The £8m deficit was actually one of the better financial results in the Championship. Many clubs have reported much larger losses in 2019/20, including Stoke City £88m. The revenue decrease was cushioned by the £42m Premier League parachute payment, though the COVID rebate reduced this by £2.6m. Despite broadcasting falling from £104m to £45m, it still accounts for 85% of tot...

Huddersfield income was down £66m in 2019/20 following relegation, reports Kieran Maguire of the PriceofFootball.  Club has gone from a £1m profit to a £22.7m loss, although player sales reduced this by £18m. Interest on loans is over £80,000 a week. Huddersfield have outstanding loans of £57m in 19/20, repaid £11m in the year and have annual repayments of director loans over next few years. Huddersfield wages about mid table for Championship.     Huddersfield have the second lowest wage/income ratio of clubs in the Championship at 57 per cent.   Many clubs have ratios of over 100 per cent.   Only Rotherham has a better ratio than Huddersfield.

The Athletic looks at the plight of Huddersfield after their time in the top flight.   Here are a few extracts. Huddersfield’s financial health has become the greatest point of discussion among supporters. The cash-rich Premier League days, when annual turnover peaked at £125 million in 2017-18, are a fading memory, with belts tightened transfer window on transfer window. Owner Phi Hodgkinson was aware relegation would require big decisions when taking on a majority shareholding following that 2019 relegation but had hoped he could still see Huddersfield return to the Premier League. They have not come remotely close to that during two difficult seasons back in the Championship, and a worldwide pandemic has placed the club under further strain. “It’s not just parachute money we’ve had to give back and loss of revenue, there’s also the fact the transfer market completely bombed,” said Hodgkinson. “We had players we knew we were selling and we didn’t get what we were ...

The authoritative @SwissRamble continues to produce financial fact sheets for leading clubs which can be accessed via his twitter account.    He states, ' I have now prepared these financial fact sheets for all the clubs that were in the Premier League in 2018/19 (except Crystal Palace  and Newcastle United , who have not yet published accounts for that season) plus those promoted in 2019/20.' His summary on Aston Villa is 'p osted huge £69m net loss. Operating loss even higher at £115m, including £46m promotion payments, but £14m HS2 compensation. Offset by £36m stadium sale and £11m player sales. Revenue fall due to lower parachute payments. Debt-free after write-offs and equity conversion.' Bournemouth ' lost money two years in a row, as revenue has fallen from £136m to £131m, while wage bill has grown from £72m to £111m. Little benefit from low player sales. Debt up to £100m, ninth highest in Premier League. Spent £150m on player purchases in last two years with...

The tireless Swiss Ramble analyses the 2018/19 accounts of Huddersfield Town. He comments, they 'deserve praise for reaching the top flight (and surviving two seasons) on a very low budget compared to others. They concluded, “Whilst relegation was clearly disappointing, the club is generally in a much better position than it was prior to promotion to the Premier League."' Profit before tax fell £26m from £30m to £4m, as revenue decreased £6m (5%) from £125m to £119m, profit on player sales halved from £6m to £3m and expenses rose £17m. After tax, prior season’s £26m profit was down to £3m, as the tax charge dropped from £4.1m to £0.5m. The £6m revenue fall was almost entirely driven by broadcasting’s £6m (5%) decrease from £110m to £104m, due to lower finishing position in the Premier League, while commercial also dropped £0.5m (5%) to £10.0m. However, match day slightly rose by £0.2m (2%) to £5.0m. The £119m revenue is still £103m higher than £16m generated in season ...

Huddersfield Town operating profit down from £23m to less than £2m in 2018/19, reports Kieran Maguire of the PriceofFootball. Turnover fell from £125m to £119m. This was mainly due to lower prize money linked to a lower table position. Huddersfield wage bill up slightly. Would have been much higher had relegation been avoided as big incentive payments included in contracts. Huddersfield player trading 2018/19: Purchases £46m sales £13m. The club owe over £20m on player purchases but also have a £31m new bank loan. Part of reason why Huddersfield have spent so little on players 2019/20 is that Dean Hoyle is due £15m this season followed by £10m in each of following two years. Bank loan of £31m due for repayment 2019/20 too which takes up most of parachute payments. More about payments to Hoyle here: £35m bill Total liabilities to £139 million following increased borrowing and signing players on credit. Lots of cash flowing around from borrowing and repayment loans in 2018/19 i...

It's not easy to estimate how much Huddersfield Town would lose from the cancellation of the rest of the season, but a rough-and-ready calculation suggests a little over £3m or 19 per cent of their annual revenue: Losses from coronavirus Preston North End are better off than clubs lower down the pyramid and they have been prudently run by their billionaire backer, but they still face a big financial hit: Preston North End finances Cheltenham Town say that they face no immediate financial threat, but the sale of season tickets in May is normally important to fund them through the summer: Robins want to finish the season Plymouth Argyle chairman Simon Hallett has said that the Pilgrims are better placed than most clubs to withstand the effects of the Coronavirus crisis with the club being largely debt free: Heartfelt message to fans

This essay originally appeared in Charlton fanzine Voice of the Valley. The Championship has become in effect a Premier League Division 2. In many ways it is the least level playing field of all the divisions, except that it is not dominated by the same six clubs each year. Three factors contribute to its distinctive financial structure. First, the availability of generous parachute payments paid to around a third of its clubs (eight at present). Secondly, the option available to relegated clubs of selling one or two players at a substantial profit. This can be done without compromising the club’s competitiveness. Thirdly, the willingness of benefactor owners to pour substantial funds into the club they own in the hope of gaining promotion to the Premier League. Given that some clubs in any one year are in a relegation battle, they have a 6-1 chance of success, although no doubt each club thinks it can beat those odds. As a consequence, the clubs in the Championship have been l...

The seventh annual Football Distress Report by insolvency specialist Begbies Traynor reveals that financial distress in football clubs has seen a six‐fold increase from just one to six clubs (8% of total clubs) across the Championship and two Football League divisions now showing signs of serious financial trouble. With the season’s high stakes play‐off games just completed, the six clubs across the three divisions are already showing signs of financial hardship, which could be exacerbated depending on their relative fortunes on the pitch. The increase to just over 8% of clubs in financial distress follows a period of improvement for the past five consecutive years, during which time the drop in distress fell from its peak of 11% to a record low of 1% of all league clubs in 2018. “A sharp rise in the number of struggling clubs is a great concern for the sport in England, and counters the opposite trend in Scotland where prudent management has seen the distress levels fall to nil thi...

After ten years as the owner of Huddersfield, which saw them promoted to the Premier League, Dean Hoyle is to step down as owner. He has suffered ill health recently, but admits that it will be an emotional moment for him when he attends his last match as owner: Huddersfield sold Lifelong Terriers fan Phil Hodgkinson will take over. Hodgkinson, the CEO and founder of the PURE Business Group, will step down from his role as an owner and director at National League North side Southport. In my view Hoyle has been a good owner, even if it did all end with poor results and relegation. Even with parachute payments, the Terriers will face a tough challenge in the Championship next season, but I wish them well.

The authoritative Swiss Ramble has analysed Huddersfield Town's accounts for 2017/18. Despite their relegation, their financial results are positive. The financial blow will be cushioned by £91m of parachute payments (year 1 – £42m, year 2 – £34m, year 3 – £15m). This means that promotion will have been worth around £290m in TV money in total. The Terriers swung from a £20m loss before tax in the Championship to a £30m profit in the Premier League, a £50m improvement, as revenue increased by £109m from £16m to a club record £125m and profit on player sales was up £5m to £6m. After tax, a £17m loss was turned into £26m profit. To illustrate the huge difference in the Premier League, not only is Huddersfield's 2017/18 £125m revenue a massive £109m more than the previous season’s £16m, but is also more than twice as much as the previous five seasons in the Championship combined (£60m). Nevertheless, the £125m revenue was still the lowest in the Premier League (pending results f...

Modest spending by Huddersfield meant the club had the highest operating profit of any club in the Premier League last season. The club reversed a loss of £22 million in the Championship to a profit of £23 million in their first season in the Premier League. Dean Hoyle lent the club £16.8 million following promotion to ensure it was ready for the Premier League but the club’s success and retention of its place in the Premier League allowed it to repay this and a bit more. They still owed him £49m at 30 June 2018. Turnover increased from £15.8m to £125.2m. Overall employee costs increased by 188 per cent to £62.6m. They represented a healthy 50 per cent of turnover. The club continued to invest in infrastructure with capital expenditure of £5.1m. The club has plans for a major redevelopment of its training complex, PPG Canalside. The public provision housed there would be moved to a new facility at Leeds Road. Matchday at £4.8m accounted for just four per cent of total revenue. ...