Hull City - Football Finances
It isn't unfair to say that the club gambled recklessly in 2007-2008 with an unsustainable investment in player transfer fees and wages. The gamble did pay off with the Play-Off success, and the survival in the Premiership. It is surprising though that the board felt up to the gamble given where the club had come from less than ten years earlier. Paul Duffen's comment that he had felt he had to build on Adam Pearson's legacy should have included a deeper understanding of the need to guarantee a long-term future as well as some short-term hope of success.
The results from 2009 season are worrying. The club gamble was successful on the pitch, however off the pitch it just hasn't been paid for, and seemingly hasn't been well managed. In the short term the club survived but long term the position looks full of worries.
The 2008 results contain a few comments regarding the potential problems the club may face. There is a statement regarding loans and the future ....
"... the directors have prepared forecasts ..... with the requirement to make full repayment of bank loans by July 2010. These forecasts have been prepared using a relegation scenario...... These forecasts demonstrate that in order to operate within the company's finance facilities Hull City will need to generate a surplus of £23m during the next 12 months through player trading, match day and commercial income, and/or through additional financing. In the event that the club retains Premier League status for 2010/11 season the additional funding required for the 12 month period will be in the region of £16m."
Now that relegation has happened those words look ominous. The £16m additional funding required for 2010-11 season just isn't there to be had in the Championship. The Championship will likely have a reduction of ~£20m meaning a total of £36m has to be found from somewhere. The only way to get hands on that sort of money is by selling players. The board optimistically seem to think the first team squad in total is worth £35m, so even selling them all wouldn't cover the money required.
Something that should always be looked at is the amount of money the directors themselves take out of the club. In 2007 the board as a whole took out just under £140,000, not an unreasonable amount. In 2009 the board took out over £2m, with the chairman seeing himself worthy of £994,203. This is roughly the money put into the club by 2000 of the fans buying their season tickets.
This site hopefully presents to you the financial results in words that we can all understand. All the numbers quoted about the club have come from the club's own accounts. If a mistake has been made in this, and you spot it, then PLEASE let us know, the aim is to be as honest as can be. If you have more accurate information then please get in touch.
Also if you have any suggestions on what else should or could be looked at please get in touch. The intention of the site is not to try and influence your opinion on the way the club has been run, just to give you the facts, and let you draw your own conclusions.
