We have seen many sets of annual financial accounts in the past week, not least from Championship clubs. These show big losses from clubs anxious to be promoted to the Premier League and enjoy its fabulous riches. Unfortunately, while the streets of the Premier League may be paved with gold, the route to them is often one of unsustainable debt.
We have seen many sets of annual financial accounts in the past week, not least from Championship clubs. These show big losses from clubs anxious to be promoted to the Premier League and enjoy its fabulous riches. Unfortunately, while the streets of the Premier League may be paved with gold, the route to them is often one of unsustainable debt.
QPR are the latest club to report and their losses are particularly spectacular. Indeed, they are the largest of any club to report on the 2012-13 season so far. However, press reports referring to the fine of £40m or even £50m plus a transfer embargo they may face if they are not promoted overlooks the possibility of a legal challenge which a number of leading Championship clubs are preparing. QPR are believed to be one of those clubs.
QPR confirmed losses of £65.4 million last season. Rangers’s £41.1m spending spree last season ended in failure as they finished rock bottom of the Premier League. As well as losses almost trebling, their net debt virtually doubled from £91.4m to £177.1m, while turnover dropped from £64m to £60.6m and ticketing revenue was down from £8.4m to £8.3m.
Television provided 70 per cent of the turnover and the parachute payments after relegation will make up only half that shortfall this season. The club hopes to recoup some of the losses when highly-paid players leave when their contracts expire in the summer. Sales of players on loan such as Adel Taarbat at AC Milan should also be possible.
Wages and social security costs soared from £58.5m to £78m as staff numbers increased from 130 to 164, with players, coaches and support staff numbers up from 84 to 107. The wages to turnover ratio is well in excess of 100 per cent when the recommended level is 50 per cent.