Day: March 7, 2013

QPR’s Accounts & The Costs Of Relegation

It was always likely that there would be strong interest in the annual accounts of Queens Park Rangers, which were made public yesterday. After all, this was the Premier League club which defied the division’s recent moves towards austerity by spending lavishly during the January transfer window whilst rooted to the bottom of the table, a position they have yet to shake off. It was suggested at the time that there was an element of gamble to the club’s decision to spend so much money, both in terms of transfer fees and commitments in terms of wages over the coming years, and yesterday’s financial results have, if anything, expressed the extent of the gamble that the club has taken in increasing its liabilities at a time when the possibility of its income dropping dramatically is a very real one. The headlines do not make for particularly comfortable reading. The club’s wage bill increased by £29m during the 2011/12 season, and the club now has a wages to turnover ratio which stands at 91%. The wage bill increase is, perhaps unsurprising. After all, promotion to the Premier League in May 2011 was always going to come at a cost to the club. The wages to turnover ratio figure, however, is more difficult to put a positive spin on. Wage control is a key indicator of a successful and sustainable business,...

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100 Owners: Number 74 – The Three Amigos (Derby County)

It is now almost eleven years since ITV Digital collapsed into administration, dragging the clubs of the Football League into a mass financial crisis which took years for its clubs to recover from. When it collapsed in May 2002, the television company owed the Football League £185m from a television deal with two years left to run on it and its loss had a serious effect throughout its member clubs. This wasn’t just about a loss of revenue, either. The suddenly frail condition of so many Football League clubs offered a cheap route into the game for those with less than noble aims, and at one club, Derby County, this quest for new ownership would end in criminality, imprisonment and disgrace for those involved, in particular the three directors who became known as The Three Amigos. Derby County had been relegated from the Premier League at the end of the 2001/02 season after six years back in the top division of English football. This was not a good time for a club to be losing its place in the top division, and Derby’s troubles continued throughout the following season, with the club finishing just three places above a second successive relegation position. By October 2003, the club was in administrative receivership, from which it was purchased for £3 by a consortium which included Jeremy Keith, a serial company director...

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