Hull City AFC have been warned by their accountants Deloitte that their current financial position threatens the club’s ‘ability to continue as a going concern’. The club’s accounts were filed five months later because of a disagreement between the club and the accountants over the wording surrounding City’s financial future and the possible impact of relegation. In the event of relegation they will need to generate a £23m surplus just to meet their existing liabilities.
Hull City AFC have been warned by their accountants Deloitte that their current financial position threatens the club’s ‘ability to continue as a going concern’. The club’s accounts were filed five months later because of a disagreement between the club and the accountants over the wording surrounding City’s financial future and the possible impact of relegation. In the event of relegation they will need to generate a £23m surplus just to meet their existing liabilities. In the accounts for the year ending 2008, the club made a £9,674,850 loss during a period that culminated in winning promotion to the Premiership. That is attributed to ‘significant’ bonuses paid to players, management and other staff for achieving promotion, together with the costs of preparing the squad, training facilities and stadium for the Premier League.
What is of particular concern is Deloitte’s prediction that Hull will need to raise an additional £16m should they retain their Premiership status this season and a further £7m again if the club slip back into the Championship. The report proposes that Hull might seek to recover these sums through a combination of player trading, commercial activities and/or a cash injection. However, Hull have already sold their best player, Michael Turner, who joined Sunderland for around £6m this summer, and there are few other realisable assets within the struggling squad. It is significant that the auditors do not suggest that Essex-based property investor Russell Bartlett, who took over from Adam Pearson in 2007, will invest further in the club to make up the shortfall, as is often the case with football benefactors. Much of this year’s money from the Premiership is likely to have been swallowed up in salaries and transfer fees.
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