In 2011-2012 Hull City's turnover was £11m (including TV income) with staff costs of £19m and admin expenses of £4m. In 2013-2014 the bottom Premier League club will receive £63m TV money so I would expect the total turnover to be around £80m. If we got relegated at the end of 2013-2014 we would receive parachute payments in consecutive years of £23m, £18m, £9m and £9m. I would estimate that our income would be £30m in 2015-2016. This would mean that we could spend at least £26m per year even on relegation wages as well as transfer payments. In 2013-2014 we could commit more on transfer payments and wages especially when we take into account we could factor in clauses cancelling contracts in the event of relegation. Relegation clauses will always affect potential signings but so will the money we are paying them. I don't expect the Allams to want to take money out of the club or to spend a lot on infrastructure in the first year back in the Premier League. They would get (most likely only some of) their money back if they ever decided to sell the club. Presently they benefit from the tax losses used by their other business. The above gives some indication of what could be spent on wages and transfers without causing any melt down if we are relegated.
Very interesting. We appear to be in an excellent position as long as we have the support of the Allams.
It's the old joke about you owing the bank £10k it's your problem but you owing the bank £10m is the bank's problem. They could get their money back by not signing any players and taking the TV money and parachute payments but if they thought like that they wouldn't have rescued the club in the first place. The best way to get their money back would be to sell the club if it was more established. I think they want to retain the club but stop the losses!
A breath of sanity, Peter, in the crazy world of football finance; like you, I believe the Allam's are in it for a while and on sensible terms. What do you think their options are for bringing in investment - is it really necessary now? A good thread.
Bringing in investment will only create problems. It's a lot better as it is. The Allams seems sensible and Bruce is sensible and knowledgeable. Anybody else and the boat could tip over. Working with the known cashflows would mean the future of the club wouldn't be risked. From the Duffen interview it would seem that they were willing to risk it all to find a mug to buy the club. It doesn't seem to be possible to buy a football club to get a steady income. You have to take a club to "the next level" and hope you can make a capital gain. There seems to be about 6 or 7 "big clubs" in the Premier League and the rest are hoping to keep as far away from the relegation zone as possible.
