Preston North End Financial Results

[EastStandRed]

Clubs in the Championship lost £366 million in 2015/16, and that figure could easily be exceeded in 2016/17, as many clubs gambled on big signings and big wages to try to make the £100 million a year broadcasting income of the Premier League.

Preston haven’t taken such a route, but they have still managed to finish 11th in the Championship in the last two seasons, without troubling either the playoff chasers, or those in the relegation scrap.

That has come at a cost, as the club lost £67,000 a week last season, but that is chickenfeed compared to the losses of some other Championship clubs.

Income

Football club income is broadly split into three areas, matchday, broadcasting and commercial.

Less that half the clubs in the Championship have reported their results to date, but the gap between those who receive parachute payments and clubs such as PNE who don’t, is significant.

PNE’s income was a fifth of the sum received by Norwich and Villa (and will be the same in relation to Newcastle when they publish their results), so to finish mid-table was a creditable achievement.

PNE have increased their income over the last few years as a result of promotion to the Championship and benefitted from the new Premier League TV deal too. This ripples through to the Championship in what are called ‘solidarity’ payments. These are worth about £6.5 million a year to Championship clubs.

Matchday income is mainly ticket sales. Preston’s crowds averaged 12,600 in 2016/17, about 400 lower than the previous season. This puts them in the bottom half of attendances in the division. Preston’s matchday income is about a quarter of the total.


The big difference in the division is broadcast income. In the Championship it is a case of the have’s and the have nots, due to parachute payments. Clubs who are not in receipt of these earn about £6.5-7 million in solidarity payments from the Premier League, less than half the sum earned by the lowest paid parachute recipient.

Costs

The main costs for a club, especially in the Championship, are wages. During 2015/16 clubs paid out on average £101 in wages for every £100 of income. There’s been a slight improvement in 2016/17 to date, with the figure dropping to £93 (mainly due to parachute payments boosting income, rather than wages decreasing).

Even when Preston were in League One, they paid out all their income in wages. This leaves relatively little room to sign players and pay the day to day overheads of running the club.

Player amortisation costs are the cost of transfer fees divided by the length of the contracts signed by players. So if PNE sign a player for £1 million on a four year contract, the amortisation cost is £250k a year for four years.

Fortunately, the club’s losses are underwritten by the owner, Trevor Hemmings.

Losses
Profits (or in the case of most non-Premier League football clubs losses) are the difference between income and expenses.

Clubs in the Championship lose money because so many owners are willing to gamble on promotion by investing in players and wages.

PNE don’t seem to have taken such an extreme approach, but to be competitive they have made losses every year.

Trevor Hemmings seems happy for PNE to lose about £70-80,000 a week. This has been the level of losses over the last five years, which have totalled £19.5 million. The club has sold some players at a profit over that period, such as Joe Garner, but in the main the club has been relatively quiet in terms of big money signings in and out.

Player Trading

PNE spent big by their own standards in 2016/17, buying players for just over £2 million, compared to an average of £300,000 in the previous four seasons. By Championship standards PNE’s activities were very modest. They didn’t need to sell players to satisfy Financial Fair Play, and there were not a long line of suitors for their stars. Consequently the club was rarely mentioned on the back pages of the national newspapers.

PNE seem to be happy to be towards the bottom of the table, and hope for a good season, perhaps unearth a gem or two, and some successful loan signings, to then challenge in a similar manner to the likes of Burnley, Blackpool, Wigan, Huddersfield and small London outfit Crystal Palace have done in recent years. If it works, then the club could earn a lot of money.

Summary

PNE have shown it is possible to survive with relative ease in the Championship without spending huge sums of money. At the same time they have achieved that by spending every penny they earn on player wages, and relying on an owner to cover the remaining costs of running the club.

They have significant debts due to the owner of about £30 million, but it’s unlikely that there will be a request to repay these sums.

It’s a model that could turn out to be successful, with PNE presently just three points off a playoff place, and if they do get that far the rest is a lottery, with a big prize for the winning ticket.

[EastStandRed]

So Preston , a club who most regard as a well run club similar in size to Barnsley actually lose £80k a week have debts of £30million and have lost £20million over the last 5 years .

Most companies would fold running up debts like this but Football clubs just keep swallowing up more and more money and the majority goes straight into the players pockets .

[animallittle3]

We are fecked full stop , this is our playground now , fighting for survival in the championship or top 6 in league one .

Nothing suggests anything is going to change that will allow us to grow and compete higher up the league , we do well and bigger clubs buy our players anyways .

Totally strangled , hard for me to accept if the truth be known because in my opinion this is our natural level .

[Romared]

I really cannot see anything changing , if owt it's going to get worse , players wages should be capped according to the League they play in , Sanchez at Man Utd on a reportedly 550/600 k per week , :blue it's total Barm , the game we once knew no longer exists ,

[EastStandRed]

We are fecked full stop , this is our playground now , fighting for survival in the championship or top 6 in league one .

Nothing suggests anything is going to change that will allow us to grow and compete higher up the league , we do well and bigger clubs buy our players anyways .

Totally strangled , hard for me to accept if the truth be known because in my opinion this is our natural level .

Times have changed and we’re regarded as a small club at this level hence the teams like Barnsley bolox . Makes every victory more enjoyable for me , I like being the underdog.

[EastStandRed]

I really cannot see anything changing , if owt it's going to get worse , players wages should be capped according to the League they play in , Sanchez at Man Utd on a reportedly 550/600 k per week , :blue it's total Barm , the game we once knew no longer exists ,

The bubble doesn’t look like bursting does it mate . FFP is a step in the right direction... it’s certainly put a halt to Wednesdays spending spree

[animallittle3]

Best thing that can happen to this game is that the top 6 clubs Man Utd , City , Spurs , Chelsea , Liverpool and Arsenal all feck off to a European League with Sky or Amazon funding it , I certainly won't miss em .

Whatever TV deal is on the table we will have to accept but it will level the playing field .

[Romared]

Agree , gets a bit patronising with some clubs Tho, I didn't realise that Barnsley was a bigger place than both Burnley and Derby until recently , we probably should get someone in to raise our Profile more , and to have a more professional approach media wise ? I do think the new board may be aware of how poor things are handled ? And hopefully address the problem quickly ,

[animallittle3]

The truth is without the top six the PL isn't a product that will attract billion pound funding , Watford v Bournemouth bless em doesn't cut it with advertisers .

If the only show in town and the mega bucks is a European League then clubs like Villa , Wolves , Wednesday etc etc won't attract massive investors and you then get a leveller playing field .

You take the top 6 out of the equation and you change everything for the other 80 odd clubs who are the real backbone of english football .

A European League can't come soon enough for me .

[pass_and_move]

The truth is without the top six the PL isn't a product that will attract billion pound funding , Watford v Bournemouth bless em doesn't cut it with advertisers .

If the only show in town and the mega bucks is a European League then clubs like Villa , Wolves , Wednesday etc etc won't attract massive investors and you then get a leveller playing field .

You take the top 6 out of the equation and you change everything for the other 80 odd clubs who are the real backbone of english football .

A European League can't come soon enough for me .

Tha reight Animal, sooner they feck off the better. I must admit I never thought the game could ever reach the financial proportions it has. I always thought the bubble would burst one day and the game would go into meltdown but they keep on opening up new doors. The interest in the far East has massively contributed to the madness we are witnessing these days. The top 6 have become the Rangers and Celtic of the premiership and barring the Leicester shock it looks like nobody can touch them. Time they joined up with other European super rich clubs and left the rest of us to it.