Hull City’s Finances Show The Downside Of “Ambition”

By on Oct 30, 2009 in English League Football, Finance, Latest | 15 comments

Football fans have become better educated in the mysteries of football finances over recent years out of necessity as much as anything else, but just occasionally old naiveties come to the fore. It might just be that they can’t believe that things could be as bad off the pitch as on it at the moment, but Hull City fans are less concerned than they should be about the lack of financial information coming out of their club in recent times, and now that the information has come out and has proved as grim as one may have feared, they still don’t sem to believe that things can be as bad off the pitch as on it; despite the phrase “significant doubt over their ability to continue as a going concern” appearing not once, but three times in a relatively short annual report and statement of accounts for the Tigers’ promotion year.

Hull’s on-field fall from grace is well-documented. This time last year, they were a breath of fresh air, with even the cynics raising a smile when they won at Arsenal. A year on and Match of the Day thought the half-time whistle was a highlight of their first-half against Portsmouth. Attention has focused on the increasingly egotistical and orange manager Phil Brown and only now that the accounts have finally arrived, late enough to have been originally drafted in Latin, has the spotlight finally turned on the real problem. A quick look at the accounts shows Paul Duffen as chairman and Russell Bartlett as vice-chairman. Bartlett is the owner, something which was not originally disclosed when Adam Pearson sold up and moved to Derby in 2007, and it is with Bartlett, not the departed Duffen, that much of the responsibility lies for the financial morass.

Bartlett was only named Hull’s owner in the latest national newspaper snapshot of Premier League clubs, in The News of the World earlier this month. Just over a year ago, The Independent listed Duffen as owner, and even when Pearson announced in 2007 that he was selling up he said it was to “Paul Duffen and his investment associates”. Only in July, when the Premier League introduced new regulations enforcing public disclosure of all shareholdings larger than 10%, did it become apparent that Bartlett, not Duffen, was the main man, but a flow chart of Hull’s ownership and loans structure would be something Jackson Pollock would have rejected as “a bit messy.”

There are a number of inter-linked Hull City companies. The accounts which have propelled Hull back into the news are for “The Hull City Association Football Club (Tigers) Limited.” Bartlett bought Hull in 2007 via “Tiger Holdings”, which remains the club’s ‘parent company’ and whose accounts were also filed late and contained the magic words “material uncertainty”. Bartlett is the ultimate beneficial owner via an offshore company, naturally, the Jersey-based Isis Nominees and somewhere in the mix is “Superstadium Management”, which runs the council-owned KC stadium and “Superstadium Holdings”, which is owned by “Superstadium Management”.

Money has been loaned regularly between these companies, sparking vigorously denied rumours that Bartlett was either using football club money for other companies in his portfolio or chasing debts in the manner of a latter-day Robert Maxwell. No evidence whatsoever has been produced to back these rumours up, and the “Hull City AFC” accounts suggest nothing of the sort. They do, howevr, suggest is that Tiger owed the football club £3.2m, Superstadium Holdings £2m and was owed nearly £2m by R3 Investment Group, another Bartlett company, and that the club owes Superstadium Management £1.2m, who, in turn, owe Bartlett £1m and R3 £6-700k, which, in turn, invested £4m in Tiger. Sorry if I’ve missed anybody out.

None of these loans have repayment dates or attract any interest…unlike the £22m loaned to the football club by investment bank Investec. None of this attracted mainstream media interest until now. Private Eye published the details while others featured Brown’s inappropriate facial hair and sub X-Factor singing voice, as Hull avoided relegation. So maybe Duffen got tired of toeing the party line on the increasingly tardy accounts, especially as the ‘line’ was often preposterous. “If it was a tyre repair firm that had put its accounts in a bit late, no-one would care”, he noted, but the analogy was hardly exact. People “care” about Hull City AFC, in huge numbers compared to even the world’s most popular tyre repair firm (unless there’s a fetish involved here that I don’t, and would rather not, know about), and his interpretation of “a bit late” was “a bit” elastic. While reports suggested the accounts were due on May 31, they were actually due by then at the very legal latest (“it is not a crime”, he told the Yorkshire Post last month, incorrectly). Arsenal, for example, produced accounts two weeks earlier than Hull but for this year, not last.

Duffen protested that the delays were due to “auditing standards having changed…and we are in negotiations with our auditors over a way round it, as are a number of football clubs”. Naturally, the global economic crisis (nee ‘credit crunch’) got its share of the blame: “Auditors have become much mores stringent about signing off accounts since the global economic crisis hit,” he told the Guardian last month. You suspect that the postal strike would have copped it for any delays beyond this week. But leaving aside why Hull would want to negotiate “a way round” universally accepted auditing standards, this still begged the question why this “number of football clubs” all managed to deal with this months earlier – even financial basket cases such as West Ham and Portsmouth.

But whatever the intricacies of Hull’s ownership, the bottom line remains the bottom line and the bottom line is not good. Hull need “to generate a surplus of £23m over the next 12 months through player trading, commercial income and/or through additional finance raising”, and that comes in the wake of a “pre-tax profit” of only “£2m after player trading” for their first season among Premier League riches, according to “draft, unaudited statements for the year ended 31 July 2009”.Player trading wouldn’t raise tuppence if recent displays are a guide. Maybe Jozy Altidore will prove a big enough hit for someone in Europe to overpay wildly for him. He is a talent, of that there is no “material uncertainty”. Maybe Jimmy Bullard will quickly fulfil his undoubted potential, sneak into Fabio Capello’s World Cup squad, where he’d surely be now if it wasn’t for his injuries, and be faced with a choice of Hull City or Real Madrid come next July. Or maybe none of these things will happen.

Other financial initiatives seem equally shaky. Commercial income? Unless there’s a rush on Phil Brown fake-tan products, there won’t be millions coming from this direction, and “additional finance raising?” Bank loans and re-financing, similar to Liverpool’s in the summer, only with the decimal point one place to the left. Of the £22m owed to Investec, £12.6m is due by next July. Whether Investec will take the liberal attitude towards Hull that banks have done towards Liverpool remains to be seen. Of course, the banks only re-financed Liverpool after insisting that their co-owners cough up some of their own cash. With so many loans between his companies with no repayment date set, nor repayment imminent, it is far from clear whether Bartlett would, or could, do likewise.

Yet some Hull fans still don’t get it. Some interpreted “material uncertainties” as the accountants “covering their back” Others thought the Premier League riches which post-dated these accounts – all £2m worth – would solve their problems (”and those accounts don’t have to be filed until May 2010 at the earliest” said one fan, missing the point to an Olympic standards), and an “accountant” from Hull suggested in the Hull Daily Mail that parachute payments would save the day, and that “If this was such a big issue, the BBC and the national media would be all over it”, which rather overlooked the fact that, with two features articles on the subject in “The Guardian” in recent weeks, the national media – or at least one corner of it – has been “all over it”.

It’s hard to know where to start if rose-tinted spectacles continue to sell so well on Humberside. Bartlett bought his majority shareholding on the back of a property boom which is already taught as history in some schools, and he has clearly borrowed excessively, but has been unable to provide a happy ending in football or in ‘real life’. The mooted return of former chairman Adam Pearson, from an ostensibly unsuccessful time at Derby, is being trumpeted as a return to the good old days by those who lived through the good old days when Hull rose through the Football League ranks. This, however, overlooks the fact that Pearson sold up in 2007 because “I had taken the club as far as I could and really needed the support of a financially stronger board”. He still does, and Russell Bartlett doesn’t appear to fit that bill anymore. It’s seems likely to be a long 12 months for Hull City off the pitch as well as on it.

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  1. You are kidding!!! Hull City’s plight is nothing in comparison to the debt of West Ham, Portsmouth, Newcastle, ManU, Chelsea, Liverpool, Everton, Spurs and the rest. The only difference is that they have their own stadia. I am sure Stoke City do not have loads of cash and will have remortgaged their stadium against signings. The only clubs that now have decent levels of cash are those that have just had a “sugar daddy” buy them such as Birmingham and Sunderland.

    Hull City do not have “mega rich” owners. They have peope who ave put some cash in and gone on from their.

    Also these figures are from over a year ago- do not include the Premier League incoming money or parachute payments if we do get relegated. So stop trying to whip up undue concern and rubbish towards our club..

    Phil in Hull

    October 30, 2009

  2. You are obviously trying to down a smaller club.

    You talk of debts needing to be repaid by certain dates- but how do you know that we do not have the cash available to do this. How do you know that there are not monies available through further investments.

    These accounts are for the season we were in the CCC. We have since brought in significant monies through the Premier League TV deal- occording to many it is over £30M. We have a wage bill of between £20M and £25M – giving a surplus of over £5M from that alone. Also our commercial revenue (from boxes and advertising revenues) is in excess of £10M per year. Add to that the monies from thet sale of Michael Turner and Sam Rickets (approximately 14M between them) this creates monies of around £30M – once we have paid the £12M in loans back this would allow further player trading of around £18M.

    If you want to know where my figures for advertising etc come from- I am an advertiser at the KC – 1 board= 6-10k/season (dependant upon where you advertise) approximately 120 boards at the KC (so between £700k and £1.2M). There are also 30 boxes at £1000 per game (30k per game £570k per season in boxes). Sponsorships raise approx £2M per season for match sponsorships etc. Not including the shirt sponsorship (believed to be £2M per season)- totalling £6M. On top of that the Tiger Leisure store generates approx £1M per year. With further income from Cup monies and extra cash generated from the sales pre-match and at half time being around £2m per season. The figures do stack up- unlike your own…

    The £2m profit may already include the repayment of the debt factored in- until we see the first season of accounts in the Premier League we do not know where we stand.

    Phil in Hull

    October 30, 2009

  3. The most sensible article I have seen on the whole Hull City situation recently


    October 30, 2009

  4. @PhilinHull

    “You are kidding!!! Hull City’s plight is nothing in comparison to the debt of West Ham, Portsmouth, Newcastle, ManU, Chelsea, Liverpool, Everton, Spurs and the rest”

    So in essence you are saying that even if Hull City are in financial trouble – and the auditors words “significant doubt over their ability to continue as a going concern” should certainly set alarm bells ringing – as long as there are other clubs out there with bigger problems, journalists and bloggers should concentrate on those clubs and not bother with the Hull City situation?

    I’m afraid your response to this excellent, level-headed article is typical of fans of clubs that are put under the financial microscope on the national stage for the first time. You could class it as belligerent denial, and throw in a does of persecution complex as well. Don’t worry, you’ll get over it! It is actually possible for football fans to examine and discuss finances of other clubs without gloating, or wishing for the worst, which is what you seem to imply is going on here.

    You would be better expending your energies on making enquiries with your club as to the current state of its finances, and why they appear to be so tardy in submitting their accounts.

    Simon Cope

    October 30, 2009

  5. Hull City fans in knee-jerk ignorant defence mode shocker!


    October 30, 2009

  6. You have to love a comment which details all the streams of income into a club and makes a total out of them that totally ignores small matters like paying the tax on that income. It is no wonder the revenue take such a dim view on football clubs.

    Michael Wood

    October 30, 2009

  7. I’ve been spending the last two years wondering when on earth the football financial bubble would burst, as it’s clearly continued to inflate while the broader housing-derivatives-based bubble was bursting.

    Apparently it’s now.

    How many of the current 92 will be going concerns at the start of next season? Fewer than 90, of that I am certain; if the banks really had become significantly less laissez-faire in the last two years (they haven’t), I’d probably be saying ‘fewer than 80′.

    David Howell

    October 30, 2009

  8. “If this was such a big issue, the BBC and the national media would be all over it”

    Well, they would be if Hull were considered a big club. But in


    October 30, 2009

  9. If this was such a big issue, the BBC and the national media would be all over it

    Well, they would be if Hull were considered a big club. But in truth, outside a small elite you can all sorts of financial nonsense occurring and nobody beyond David Conn and Private Eye will say a word.


    October 30, 2009

  10. We know the club currently has no obvious way of paying of the debts as they fall due as the auditors say that in their report. The fact that the accounts are for the championship season is irrelevant, as when auditors report on going concern it is commenting on what is likey to happen in 12 months from the date the accounts are approved ie to October 2010. If the club did have plans in place, of how they would deal with situation of either delegation or survival, and the auditor thought they were reasonable, then the auditor would not have needed to be so damning.


    October 30, 2009

  11. It doesn’t matter how good Altidore is, we can’t sell him because we don’t own him. Is the rest of this article equally factually inaccurate?


    November 1, 2009

  12. Don’t Hull have an option to buy? If I wrongly assumed they had, my apologies. But with a good World Cup behind him he’d be worth a few bob. One for Mr Pearson to look at?

    BTW: My figures are from Hull’s accounts. I don’t have any great inside info. I just read them and took notes.

    To quote, purely at random of course, “Draft, unaudited financial statements for the year ending 31 July 2009 indicate that the Company (Hull City AFC {Tigers} Ltd) recorded a pre-tax profit of £2m after player trading.”

    If Hull fans don’t think the figures stand up (Hello, Phil), best they let Deloitte know where the mistakes are.

    Mark Murphy

    November 2, 2009

  13. re Phil’s response

    Where do you get £14m income for Turner and Rickets. General concensus would be aroungd £9.5m. Of this £1.5-2m suposedly goes to Brentford and even then there will be installments involved. So the actual cash coming in in the current season is pretty small.

    Independant figures over the last few days have put the total wage bill at closer to £40m than £20-25m. In fact Hull have the 10th highest salary bill in the premiership.

    Sorry, but these two holes completely invalidate your argument.

    Indifferent of Hull

    November 2, 2009

  14. In addition to the previous post – Turners transfer has been declared by City at only £4m. This has caused Brentford and Charlton to complain about lost sell-on revenue and the authorities are launching an investigation to find out whether a deal was done to avoid paying these fees or even VAT etc.

    Indifferent of Hull

    November 2, 2009

  15. Interesting to look back at this article now some time has passed. Bartlett had to sell for £1 after months of protesting he had it all under control. During the due diligence it emerged he had taken over £11 million from the club to fund his property business which is now in “recovery” by RBS. I sympathise hugely with Paul Duffen who had to be the public face of a financial maniac and I now understand why he left when he did. Crying shame that Bartlett tried to make him a scapegoat and some of the dimmer hull fans bought it. Apologies and recognition are due to him and Phil Brown for the way they were treated.


    March 15, 2011


  1. Hull City’s Finances Show The Downside Of “Ambition” « Scissors Kick - [...] Hull City’s Finances Show The Downside Of “Ambition” “Football fans have become better educated in the mysteries of football …

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