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, and what is clear from Queens Park Rangers’ financial results is that the pot of gold at the end of the rainbow that the Premier League is always presumed to be might be more elusive than some believe it will be. In short, the wage inflation that has been seen at Loftus Road is outstripping even the dramatic increase in revenue that comes with promotion into the Premier League. During the 2011/12 season, only two Premier League clubs, Blackburn Rovers and Bolton Wanderers, had a worse wage to turnover ratio, and these two clubs had the lowest and third lowest ticket prices in the entire Premier League.

QPR, on the other hand, had the fifth highest, less expensive than only Arsenal, Chelsea, Liverpool and Tottenham Hotspur. After the outcry when the club’s previous owners hiked season tickets by almost 40% after winning promotion and increased match day prices to as much as £72, new owner Tony Fernandes offered £50 club shop vouchers to season ticket holders and reduced prices, and those prices were frozen for this season as well. Part of the problem for the club is Loftus Road itself. With a capacity of just 18,500 seats, it is a ground which was always going to prove to be something of a stumbling block if the club was ever to want to establish itself in the Premier League. Knocking it down and building a new ground, though, would not be cheap and with the club’s spell in the Premier League continuing to look shaky at best, and the likelihood of the club being to afford to spend as lavishly as it has been over the last couple of years or so and fund the construction of a new, bigger stadium seems slim, to say the least. Ticket prices aren’t a be all and end all of a club’s commercial revenues – and they certainly make up a smaller proportion of revenues than they did thirty years ago – but they certainly help to keep a club afloat, and Queens Park Rangers don’t have a great deal of room to increase these further at present.

The financial loss that the club made over the course of the 2011/12 season was £22.6m, and this loss was achieved in spite of an increase in revenue of £48m as a result of that promotion. And because these figures were to May 2012, there may yet be worse to come for the club. After all, Queens Park Rangers have been spending heavily in the months since then. Park Ji-sung, Robert Green, Andy Johnson, Junior Hoilett, Ryan Nelsen, Samba Diakité, José Bosingwa, Júlio César, Esteban Granero and Stephane Mbia  arrived at the club last summer, and they were joined in the January transfer window by Loïc Rémy, Jermaine Jenas, Yun Suk Young and Chris Samba. Each of those players is likely to be on a handsome salary, with Remy and Samba costing £22.5m – almost the exact amount of money that the club lost during the 2011/12 season – between them in transfer fees alone. And top of all of those players, Queens Park Rangers have Andros Townsend on loan from Tottenham Hotspur and Fabio da Silva on loan from Manchester United. The club has shed players, of course, as well, but on nothing like the scale with which players have come into the club, and players such as Joey Barton, Djibril Cissé and Anton Ferdinand are all out on loan at present, suggesting that the club may still be paying a proportion of their wages as well.

If there has been a reason for this level of spending at this time, then it has to be a desperation to stay in the Premier League at the end of this season. The financial imperative to do this is obvious – a vast increase in television revenues is to come this summer which will mean that even the club that finishes at the bottom of next year’s Premier League table will make at least £60m from still being involved. With such a big increase, Rangers’ level of spending starts, perhaps, to make a little sense, but what if the club is relegated at the end of this season? Premier League parachute payments were recently increased, and are now paid over four years with £16m being paid for the first two post-Premier League seasons and £8m being paid for the two after that. And that sort of money is not going to bridge the gap in the club’s finances, even if relegation release clauses soften the financial blow of such a drop. In such a situation, the club’s future well-being will likely come down to the munificence of its owners. Tony Fernandes and Lakshmi Mittal are both very wealthy men (Mittal, who is said to be worth an estimated £12.7bn, is the richest man in Britain), and the club’s debt – which stood, at the end of last season, at £88.9m – is largely owed to them. They have stated publicly that they are committed to the club in the long-term, but such promises have been made by others at other clubs before which have turned to dust once the reality of life back in the Championship starts to kick in. The owners have the money to keep the club afloat no matter what may come, but no-one can say for certain that any football club will remain in place forever, especially when the glitter of the Premier League starts to fade.

The gamble that is being played out at Loftus Road, then, is one that is subtly more layered than the headline figures may make it seem, but that’s not to say that it doesn’t come without risks. It is a combination of the release of next year’s financial figures and which division the club is playing in at the time that will likely determine the medium-term prognosis for the club, but the risks of such a strategy have been well documented at other clubs, and it is to be hoped that the last two years won’t one day come to be remembered as the two years of madness that killed Queens Park Rangers. The key to this not being the case, however, is staying in the Premier League come the end of this season, and the club remains, in spite of its win at Southampton last weekend, four points shy of the all-important dotted line that will determine next season’s have-nots. More than most in the bottom half of the Premier League, Queens Park Rangers cannot afford to be one of those have-nots when the final whistle blows at Anfield on Sunday the 19th of May.

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