https://www.lep.co.uk/sport/football/preston-north-end/preston-north-end-are-scary-example-of-championship-finances-kept-afloat-by-investment-of-love-says-football-finance-expert-3994086?fbclid=IwAR0utKfVoyf8KbH0qB0Y1uVN56U60LQKQf4CPAsLD1ApTa6V9CYgeC_5os4

Hope this woks Preston North End have just posted a 16 million yes 16 million pound loss

The figure of £177 spent on wages per every £100 of income is eye watering, and similar to the kind of ratios Scunny were hitting a few years ago.

As touched on in the Lincoln thread last week, the difference is that, Preston’s losses are being covered in the form of shares by the family of Trevor Hemmings, who owned Preston for many years and did with a net worth of something like £1.5bn when he died a couple of years ago. It was Swann’s interest bearing loans, and his idiocy, that were Scunny’s problem.

Like Lincoln, Preston’s losses pose them no real risk. Brighton, probably pound for pound the best run club in the country (if not the world) are in debt to their owner something to the tune of £500m (yep, that’s half a billion). But, keep in mind that this money has taken them from the foot of League One (once saved by one Russell Slade) to pushing for the Champion’s League, he’s almost certainly increased the value of the club by an even greater figure when you consider Chelsea were recently sold for £4.25bn.

Posting huge losses is fine if you do it smartly and can afford to underwrite short-term failure. What it does remind you though, is that Town will NEVER sustainably exist as a second tier club ever again.

Quoted from Poojah

The figure of £177 spent on wages per every £100 of income is eye watering, and similar to the kind of ratios Scunny were hitting a few years ago.

As touched on in the Lincoln thread last week, the difference is that, Preston’s losses are being covered in the form of shares by the family of Trevor Hemmings, who owned Preston for many years and did with a net worth of something like £1.5bn when he died a couple of years ago. It was Swann’s interest bearing loans, and his idiocy, that were Scunny’s problem.

Like Lincoln, Preston’s losses pose them no real risk. Brighton, probably pound for pound the best run club in the country (if not the world) are in debt to their owner something to the tune of £500m (yep, that’s half a billion). But, keep in mind that this money has taken them from the foot of League One (once saved by one Russell Slade) to pushing for the Champion’s League, he’s almost certainly increased the value of the club by an even greater figure when you consider Chelsea were recently sold for £4.25bn.

Posting huge losses is fine if you do it smartly and can afford to underwrite short-term failure. What it does remind you though, is that Town will NEVER sustainably exist as a second tier club ever again.

Thankfully I have memories of Town in the second tier. As you point out it may never happen again, but I can live in hope. League 1 will probably be our financial limit.

Wow! That’s absolutely crazy

The question is who’s going to cover these types of loss when the Hemmings family decides they don’t support Preston like the old man did?

Quoted from louth_in_the_south

The question is who’s going to cover these types of loss when the Hemmings family decides they don’t support Preston like the old man did?

Exactly.

It's like the Rushden and Diamonds saga. A very wealthy owner, who I believe owned Dr Martens too, took two non league teams, (Rushden Town and Irlingborough Diamonds), combined them, built an impressive stadium and got them into L1.

Then one day he decided not to keep pumping millions into the club. He gave it away, but as no one was was willing to throw serious money at it, they eventually sank without trace.

In most businesses at some point sustainability has to come into the equation otherwise disaster looms. But in football it seems there are no end of people willing to sponsor loss making clubs, for a while at least.            

Quoted from DB

Thankfully I have memories of Town in the second tier. As you point out it may never happen again, but I can live in hope. League 1 will probably be our financial limit.

I don’t think getting back there is necessarily beyond us. But certainly to stay there for a meaningful period of time without the backing of someone willing and able to underwrite substantial losses is a near impossibility.

Quoted from louth_in_the_south

The question is who’s going to cover these types of loss when the Hemmings family decides they don’t support Preston like the old man did?

Bolton & Wigan in that neck of the woods are prime examples of what happens.  

Quoted from Poojah

As touched on in the Lincoln thread last week, the difference is that, Preston’s losses are being covered in the form of shares by the family of Trevor Hemmings, who owned Preston for many years and did with a net worth of something like £1.5bn when he died a couple of years ago.

According to Kieran Maguire, they're funding the losses with loans at the moment. The club owes its parent company £77m and has total liabilities of £86m. The owners loaned another £5m to the club last summer. As others have said, as long as someone is there to stand behind these losses, it's 'sustainable'. But if the plug gets pulled they'll sink like a stone. The reality is that most clubs are run at a significant loss as it's the only way for most to be competitive. If Town are to be truly sustainable (without external funding) and be competitive, even at L1 or L2 level, we're going to have to either significantly increase our revenue or find another way to gain an edge.

Need the Ross family to invest. we could easily be chanpionship with their dosh.

Quoted from monkeyboy

Need the Ross family to invest. we could easily be chanpionship with their dosh.

That boat has  sailed

The problem with that notion though is that what it effectively means is ‘we need them to loan the club money’. The concept of investment usually implies a return. Investing in your local football club isn’t likely to bring financial gains, at least not directly, although there are other joys, some would argue, better than money.

Quoted from Poojah

I don’t think getting back there is necessarily beyond us. But certainly to stay there for a meaningful period of time without the backing of someone willing and able to underwrite substantial losses is a near impossibility.

Grimsby Town FC might struggle to stay in the Championship, but that doesn't mean we shouldn't aim to reach that level.  A new 15k stadium would not be an embarrassment in the second tier.

The best way to ensure we don't drop into non-league again is to not be in League Two.  The best way to avoid being in League Two is to be competitive in League One.  The best way to be competitive in League One is to strive for promotion to the Championship.

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Quoted from White_shorts

Grimsby Town FC might struggle to stay in the Championship, but that doesn't mean we shouldn't aim to reach that level.  A new 15k stadium would not be an embarrassment in the second tier.

The best way to ensure we don't drop into non-league again is to not be in League Two.  The best way to avoid being in League Two is to be competitive in League One.  The best way to be competitive in League One is to strive for promotion to the Championship.

Scunthorpe were in the playoffs in league 1 5 years ago. Southend were knocking on the door of the championship, I think the business model of the club isn’t the problem. It’s just the business model of others seems to be chuck a excrement tonne of money at the wall and hope it sticks. Which sometimes works if you look at Fleetwood for example. I’d much rather us follow the Accrington Stanley way of doing things which is what JS&AP have in mind.

Quoted from White_shorts

Grimsby Town FC might struggle to stay in the Championship, but that doesn't mean we shouldn't aim to reach that level.  A new 15k stadium would not be an embarrassment in the second tier.

The best way to ensure we don't drop into non-league again is to not be in League Two.  The best way to avoid being in League Two is to be competitive in League One.  The best way to be competitive in League One is to strive for promotion to the Championship.

Why would we need a 15,000 capacity stadium?

Dont you think we do?

Quoted from chaos33

Dont you think we do?

I think we need a new ground but would struggle to have it looking anywhere near full at 15000 capacity

The worry, if you're Preston, is falling into L1 with debts like that. If the owner wants to withdraw and sell the club, it's far less valuable in L1.

Quoted from HertsGTFC

I think we need a new ground but would struggle to have it looking anywhere near full at 15000 capacity

I think we have the scope to fill it on occasion or at least operate at more than half to two thirds capacity. Doncaster’s stadium holds 15000. Rotherham’s, which is better looking in my view, holds 12000. Something akin to that would be realistic for us I reckon. I see us as a club that could and should expect and strive for being a competitive, sustainable L1 outfit. In my view we should aim to challenge for a crack at the championship in the long term but I really can’t see how we could expect to survive there. It’s mega money and I’m not sure if there are any examples of clubs who aren’t in massive debt. Being solid in L1, playing entertaining football would be success.