Huddersfield Town - £8.2m loss

Our near neighbours and rivals Huddersfield Town reported a loss of £8.2m for the year 2019/20. Considering they are similar in size to us their financial position is markedly different.

Turnover for the year was £52.7m, with £44.7m coming from central distribution. Wages stood at £30.3m with player amortisation of £27.9m. As a result the operating loss was £22.7m. Player sales brought in a profit of £18.1m but they also had significant interest costs of £4.3m. Overall loss was £8.2m.

Some marginally interesting numbers, I'll let you decide are:

1. They made a further £25m on player sales post the year end
2. They pay over £1m pa in ground rental payments
3. They received £5.7m for loaning out a player(s) for the season
4. They have debt of £61m, £27m of bank debt which is secured against the 20/21 central distribution and £34m to Dean Hoyle that is now structured to be paid over the next 5 years.

Although they have made a significant profit post year end on player sales the need to pay back the previous owner, service the bank debt and run the club looks a tough ask.

 

Interesting, thanks Archerfield - I appreciate your regular financial updates and insights.

 

Seconded

 

Very interesting re the ground rental payments. The amount paid to the Cryne family seems an absolute snip in comparison.

 

https://www.examinerlive.co.uk/sport/football/news/loans-revenues-player-wages-seven-20740689

https://www.examinerlive.co.uk/spor...rsfield-town-accounts-kieran-maguire-20741179

Eye watering amounts for most clubs. Even more so that a club can lose so much money and owe so much money after two years of recent Premier League riches. That couple of seasons should have set them up for an entire generation of being in the black and not owing a penny to anyone. It hasn't.

 

Oxford United spend a lot on ground rent to their former owner, Kassam, who is owner of the ground. He also gets the profits from match day catering, so I am told.

Under subsequent owners the club has explored to possibility of building a new ground elsewhere around the fringes of the city.

 

Cheers, Archerfield.
This was achieved with parachute payments, too, which have now ceased.

 

The German manager and german league players model was quite savvy.

With the prem money they should have tried to continue that but better IMO

 

Massive loss.

Then sign Jordan Rhodes.

Logic.

 

Didn't I read that the new owner bought the club off Hoyle using the parachute money or did I dream it?

 

Interesting & not that surprising.

I think survival is their best hope TBH.

 

Marvelous news, hopefully they'll be plummeting through the leagues soon

 

No, I think I read that too.

 

Am I right in reading that they

(without handouts) turn over approx 8million quid yet have a wage bill of over 30 million??

 

Yep. It's just ridiculous isn't it? But so many clubs are in the same position. Look how our turnover went through the floor in League 1. Relegation is becoming an existential threat because of the cliff edges now created. And you have to question why owners/clubs covet promotion and the promised land of the PL so much. Fail to stay there, however long you may have been up there, and you risk your future. Chase the dream and fail to get there, and you risk your future. Keep up with the Jones' spending hand over fist for no evident improvement and you risk your future.

Owners get poorer. Players and agents get richer.

Folly on an epic scale.

 

You’ve got that the wrong way round.

They pay £1m a year, but have lower repair costs and increased revenue from the ground due to the Main JS Stand having larger conference facilities and the occasional music gig. We could do something similar with our East Stand and take the executive floor out further above the carpark on columns.

We may pay less for the ground, but have to spend the same again for upkeep, and have less revenue from the East Stand commercial.

I’d say all in all, it balances out that Hudds have a slightly better overall deal than us.

 

Surely those owning the ground would generate revenue from external none football related events, no?

So you're suggesting we spend £850,000 a year in maintenance? If you can outline that in the latest filed accounts, that would be most beneficial.

And of course, the owners could save having to pay rent, by simply taking up the option on the ground from about 3 years ago.

 

We benefit from non-Matchday revenue, don’t we? I believe Huddersfield do too, unless that has changed? The stadium ownership model changed the other year for Hudds. I believe the club are the lead on it. Giants and Kirklees less so. Kirklees Council committed £**m to improve and maintain it didn’t they, around 6 months ago. There was a a big thread on here about.

Oakwell: IIRC, the set before this, showed rent was £350k and maintenance was roughly the same again. Or that might have been from DM’s notes.

Overall, I don’t think there’s a great deal in it.

 

So Huddersfield still pay maintenance as well? Even if not, they pay £1m, we pay £700k (allegedly and using your figures, though that doesn't seem close to the realms of what I recall). We don't utilise our ground at all, our owners still haven't bought it to eliminate rental payments. Maintenance of ageing assets will always exist.

Surely it shows the wisest thing is to own the asset and save rent. Even if you built a new ground, its going to need work on it constantly that increases over time and building a new ground every 25 years is obviously not going to pay itself back for a middling championship club that can't fill its ground.

 

https://www.examinerlive.co.uk/news...irklees-council-agrees-new-ownership-20191178

That’s the recent report I referred to.

Owning our ground, requires a payment to do so - that will be financed, so there’s still money going out. But I understand what you mean.

The trouble is, they’re buying a liability with limited commercial revenue growth, unless money is spent to leverage more out of it. And then whatever we do spend, will affect the playing squad as we need to balance the books as best possible.

You’d have to see the full commercial breakdown of the club to decide if buying it was worth it. Having a fun fair twice a year along with Christmas parties doesn’t maybe warrant it.

It looks like they are trying to renegotiate the terms of the lease. Whereby they’ll pay less rent, which makes the maintenance costs more palatable. Even Cryne used to say the West Stand gobbles money every year.

And then you’ve random bits like the floodlight. They’re 60 years old next year! It won’t be long until they’re condemned for metal fatigue or something sadly. And none of the lights on them are LED, so not cheap to run - hence they are all 3-phase setups.