An excellent review of the finances someone posted on Facebook. So nothing to do with me. https://www.facebook.com/share/p/1Sn1UrJZbE/? Our 2023/24 season financial accounts are now publicly available on Companies House, so I’ve put together a quick write up for anyone interested in our financial position. https://find-and-update.company-information.service.gov.uk/company/04032392/filing-history TL;DR: Our 2023/24 accounts paint a very concerning financial picture. The club is currently being run in a completely unsustainable manner, and is dependent on generating big transfer sales to stay within the PSR rules (ie not get a points deduction). Whilst revenue grew by 17.4% in 2023/24 to £21.2m, operating expenses ballooned by 23% to £47.7m. Our wage costs are 139% of our revenue, which is far above the recommended level of 70-80%. The club posted a £18.8m pre-tax loss, significantly higher than the £5.2m loss in 2022/23. Over three years, we remain under the £24m PSR loss limit, but only due to a £20m debt write-off from the Allams in 2021/22 as part of the takeover deal. Without this debt write-off, our three-year losses would breach the PSR cap and we would likely face a points deduction next season. Looking forward, the club must generate an accounting profit this season or it will violate the PSR rules and potentially face a points deduction. That is, unless Acun injects additional equity into the club instead of funding the club through loans from Acun Medya (his current financing strategy). Revenue: Positive news on the revenue side. Revenue increased 17.4% to £21.2m (2023/24) from £18.1m (2022/23). This was composed of: - Match Day: £5.7m (+11.1%) - Broadcasting: £9.4m (+4.6%) - Commercial: £4.4m (+68.1%) - Retail: £1.6m (+28.2%) Looking ahead, matchday revenue is likely to plateau this season due to our current stagnating attendance figures. However, the new Sky broadcasting deal is likely to significantly boost broadcasting revenue in 2024/25. This, alongside maintaining strong performance in commercial and retail, will be key to increasing revenue this season. Operating Expenses: Our day-to-day expenses are where the problems start to arise. Last season, our operating expenses increased 23% from £38.7m (2022/23) to £47.7m (2023/24). Wage costs alone rose 25%, from £23.7m to £29.6m, pushing our wages-to-revenue ratio to 139%. This far exceeds the sustainable wage to revenue ratio of 70-80% recommended for Championship clubs. This meant we made an operating loss of £26.5m last season. One way to think about that number is that the club is losing over £500k every week. And whilst it’s completely normal for Championship clubs to have operating losses, our losses are far higher than other clubs. The average operating loss in the Championship is £13.2m, making our losses 2x higher than the average. Player Transfers: The club made a £8.4m from player sales in 2023/24, down from £15.2m in 2022/23 (which was largely driven by the sale of Keane Lewis-Potter). Sales of Sayyadmanesh and Tetteh likely accounted for some of the 2023/24 income, however there must have been some additional income from historic transfer clauses to hit this figure (I don’t think anyone thinks those two are worth anywhere near that much…!). Transfer expenditure last season was £8.5m, a very slight increase from £8.4m in 2022/23. However, this doesn’t take into account the massive increase in wages driven by signing a significant number of players on loan from Premier League clubs. This is one of the reasons our operating expenses grew so significantly in 2023/24. Profit/Loss: Our loss before tax was £18.8m, up 258% from a £5.2m loss in 2022/23. Over the last three seasons, our net loss before tax is £10.1m, firmly within the £24m PSR limit. However, this position was only made possible by a £20m debt write-off from the Allams in 2021/22 as part of our takeover deal, which meant we posted a significant accounting profit in 2021/22. Without this write-off, the club’s three-year loss would be £30.1m, breaching the PSR cap. To stay within PSR rules the club must turn an accounting profit in 2024/25, unless Acun chooses to equity finance additional losses, which would enable us to lose up to £15m this season. Acun’s financing strategy to date has been to fund the club exclusively through loans from his company, Acun Medya, so this is probably unlikely. As such, the £30m+ from Philogene and Greaves’ sales will likely be used to offset operating losses this season rather than fund significant reinvestment in the squad. My guess would be that we have very little wiggle room in January for more permanent signings unless we can shift some players out the door for decent fees. Financing: Losses over the last two seasons have been funded solely by loans from Acun Medya, with no additional equity injected since his takeover of the club. This structure benefits Acun personally as he has a right to recoup the loans in the future, however this financing strategy increases the financial risk to the club due to the large debt overhang it creates. It’s exactly the same financing strategy the Allam’s used which caused consternation amongst the fan base… Our debt now totals £65.8m, with £43.8m owed to Acun Medya and ~£22m still owed to the Allams and other minor parties. As part of the takeover, the Allams agreed not to charge any interest on their remaining debt, and it is likely that the repayment terms are flexible. Based on estimates from the accounts, it looks like Acun is charging the club a 5.8% interest rate on the loans he’s using to fund the club. This is unusually high for a “soft loan” from a football club owner, which are usually charged with minimal interest. To give Acun the benefit of the doubt here, this suggests that Acun Medya is itself borrowing funds from financial institutions to finance the loans it is extending to the club. Therefore, rather than trying to profit directly, Acun is likely just passing on the interest costs Acun Medya is facing to borrow the funds that they are then loaning to the club. Other Tid Bits: - Two members of the Acun Medya senior leadership joined the Hull City board in December 2024. The board is now exclusively populated by Acun Medya associated individuals after Tan Kesler’s mysterious exit. - Tan Kesler was paid £309,879 in remuneration in 2023/24 before his departure. Other directors remain unpaid. - It looks like the club paid a £111k penalty to HMRC for using a historic tax avoidance scheme (Growth Securities Ownership Plan). Other businesses have been hit with similar penalties, but there isn’t any information on exactly how this scheme was used by the club and for what purpose. —— Hopefully this is useful to understand what’s going on at the club behind the scenes. Bear in mind that this is just my own analysis from looking at the club’s public accounts over the last couple of seasons, so please assume that there could be errors or omissions in my analysis. The key takeaway from all this is that Acun appears to be placing all his chips on achieving rapid promotion to the Premier League. While this ambition is understandable and in line with what he’s said publicly, it does leave the club in an increasingly precarious financial position if promotion isn’t secured. The risks are even more pronounced if relegation were to happen this season, as the club would find itself in a far worse financial state than it was under the Allams during the 2019/20 relegation. For all their flaws, the Allams maintained much tighter financial controls, ensuring the club was more sustainable during their tenure (despite repeatedly shooting themselves in the foot in a myriad of other ways). By contrast, our current approach is essentially debt-fuelled expansion over long-term stability, which could leave the club vulnerable without success on the pitch. And given how this season’s gone so far, it looks like success on the pitch is far from guaranteed…
Lets not call him a crook just yet. "Based on estimates from the accounts, it looks like Acun is charging the club a 5.8% interest rate on the loans" "Therefore, rather than trying to profit directly, Acun is likely just passing on the interest costs Acun Medya is facing to borrow the funds that they are then loaning to the club"
I'm not calling anyone a crook though I might be suggesting he waffles a load of sh!te about his intentions..
There’s a massive range to be fair, it’s a fraction of what Leeds pay their c-suite but will be a hell of a lot more than Plymouth pay.
Good report. So in a nutshell we are in 5hitstreet? Adding if these figures has been published with the Allams still owning the club there would be a mob marching on their homes with pitchforks and rope. And how does Acun still owe the Allams £22m? Hasn't he paid for the club yet?
