Last week, a poster who goes by the handle of 'Waltersobchak' on HTFC fans forum DATM, started a great thread about finances and how Huddersfield Town's finances are structured. There were many interesting comments, so I approached 'Walter', and asked him if he would like to embellish further and write an article. The below is the result.
A point Dean Hoyle was keen to make following the appointment of Chris Powell was that he wanted Huddersfield Town to start punching above their weight. What would this realistically mean and how far have we been from achieving it in the two seasons we've had back in the Championship? Have teams with a similar budget been able to do anything more than survive?
As the set of accounts for the 2013/14 season showed, we made a gross loss of £7,091,073, on total turnover of £10,758,339 and had a wage bill of £13,300,611. It’s not the sort of figures that saw Dean earn his millions from the Card Factory, that's for sure. Once again, it was purely down to him picking up the tab that the club is even able to function. The total he's put in (invested certainly isn't the right word) now stands at over £30m in five years.
In our first season back in the Championship, the club’s gross loss was £8,856,229, on total turnover of 11,227,801 and had a wage bill of £13,351,940. The wage bill has remained stable, despite the drop in turnover and the resulting bigger loss. Financial Fair Play rules mean we're losing as much as we're allowed and Dean is putting in as much as he is allowed. It remains to be seen how strictly these rules will be implemented, or how much of a difference they will make - the early signs are not very encouraging.
However, if we work on the assumption that they will be followed, even if someone even richer comes along, they've got no scope to put more money in. It is also unlikely that crowds and other revenue are going to increase by a level that would bring significant amounts of extra money in.
So, does success in the Championship depend solely on how much money you've got to spend? Is the league table an exact list of how big each club's wage bill is? In fact, how does our wage bill compare other teams? Below is the table for Town's first season back in the Championship, listed in the traditional format, followed by the season before that (it would have been more interesting to put last season's figures in, but at the time of putting this together only 10 of 24 teams had filed their accounts). The next column shows how big their wage bill was, and how that ranked in comparison to the rest of the league, then how many places that was up or down on their league position, the next column shows how much each point cost them in wage terms:
Team / Points / Wage Bill / Wage Position / Up-Down / Wage Per Point
Cardiff / 87 pts / £20,824,000 / 8th / 7 / £239,356
Hull / 79 pts / £19,005,000 / 11 / 9th / £240,570
Watford / 77 pts / £12,825,000 / 16th / 13 / £166,558
Brighton / 7 5pts / £21,063,000 / 6th / 2 / £280,840
Palace / 72 pts / £11,718,000 / 21st / 16 / £162,750
Leicester / 68 pts / £26,114,000 / 4th / -2 / £384,029
Bolton / 68 pts / £36,518,000 / 2nd / -5 / £537,029
Forest / 67 pts / £21,010,000 / 7th / -1 / £313,582
Charlton / 65 pts / £11,977,000 / 19th / 10 / £184,262
Derby / 61 pts / £12,059,000 / 17th / 7 / £197,689
Burnley / 61 pts / £15,369,000 / 12th / 1 / £251,951
B'ham / 61 pts / £22,913,000 / 5th / -7 / £375,623
Leeds / 61 pts / £20,004,000 / 10th / -3 / £327,934
Ipswich / 60 pts / £15,001,000 / 14th / 0 / £250,017
Blackpool / 59 pts / £11,560,000 / 22nd / 7 / £195,932
M'boro / 59 pts / £20,745,000 / 9th / -7 / £351,610
Blackburn / 58 pts / £36,617,000 / 1st / -16 / £631,328
Sheff Wed / 58 pts / £11,887,000 / 20th / 2 / £204,948
Huddersfield / 58 pts £13,351,000 / 15th / -4 / £230,190
Millwall / 56 pts / £12,053,000 / 18th / -2 / £215,232
Barnsley / 55 pts / £7,697,000 / 23rd / 2 / £139,945
P'boro / 54 pts / £6,209,000 / 24th / 2 / £114,981
Wolves / 51 pts / £31,116,000 / 3rd / -20 / £610,118
Bristol C / 41 pts / £15,215,000 / 13th / -11 / 371,098
Average £18,819,565 / £303,373
Team / Points / Wage Bill / Wage Position / Up-Down / Wage Per Point
Reading / 89 pts / £26,551,113 / 3rd / 2 / £298,327
Southampton / 88 pts / £26,114,422 / 4th / 2 / £296,755
West Ham / 86 pts / £41,645,000 / 1st / -2 / £484,244
Birmingham / 76 pts / £25,120,000 / 5th / 0 / £330,526
Blackpool / 75 pts / £13,580,253 / 15th / 10 / £181,070
Cardiff / 75 pts / £20,824,000 / 7th / 1 / £277,653
M'Boro / 70 pts / £21,541,000 / 6th / -1 / £307,729
Hull / 68 pts / £19,005,220 / 8th / 0 / £279,489
Leicester / 66 pts / £27,718,000 / 2nd / -7 / £419,970
Brighton / 66 pts / £14,682,093 / 14th / 4 / £222,456
Watford / 64 pts / £10,350,000 / 18th / 6 / £161,719
Derby / 64 13,047,000 / 16th / 4 / £203,859
Burnley / 62 pts / £16,988,000 / 12th / -1 / £274,000
Leeds / 61 pts / £17,828,000 / 10th / -4 / £292,262
Ipswich / 61 pts / £17,954,000 / 9th / -6 / £294,328
Millwall / 57 pts / £10,250,000 / 19th / 3 / £179,825
Palace / 56 pts / £11,718,133 / 17th / 0 / £209,252
Peterborough / 50 pts / £5,701,812 / 21st / 2 / £285,091
Forest / 50 pts / £17,562,000 / 11th / -8 / £351,240
Bristol City / 49 pts / £16,502,837 / 13th / -7 / £336,793
Barnsley / 48 pts / £6,956,188 / 20 / -1 / £144,921
Portsmouth / 40 pts / n/a
Coventry / 40 pts / n/a
Doncaster / 36 pts / n/a
The results are interesting, if for no other reason than to see how our wage bill compares to everyone else’s. The 11/12 season for the most part follows the pattern of the biggest spenders occupying the top positions and being promoted. Despite this Blackpool, with a budget very similar to ours, made the play offs. The relegated teams were either in administration or not turning over enough (£6.5m) to file full accounts.
The 12/13 season shows a number of teams punching well above their weight. Watford are a slightly curious case, as they benefited from loan signings due to their owners owning multiple clubs. Hull were somewhat surprising, gaining automatic promotion on a wage bill of less than £20m. The most interesting club were Crystal Palace who made the play offs and won promotion, with a wage bill of £2m less than us. Honorouble mention to Chris Powell's Charlton who achieved a top ten finish in their first season back at this level, despite having the fourth smallest wage bill. The same thing happened last season with Burnley being promoted on a wage bill of around £15m. At a guess, Brentford are currently challenging for the play offs this season on a similar, if not lower, wage bill.
There definitely appears to be a minimum amount that needs to be spent in order to stay in the league long term, any club spending less than £8m on wages has been unable to finish much above the drop and is never too many seasons away from being relegated. It is worth noting, this is the sort of wage bill we could afford without Dean Hoyle's support.
Having a quick look back over previous seasons there has been a club promoted going back to 2007 with a wage bill at a similar, or lower level, than us (this does become harder to compare the further back you go, due to budgets increasing, but is still interesting to view):
10-11 Swansea £8,318,348,
09-10 Blackpool £12,622,189,
08-09 Burnley £13,427,000,
07-08 Hull City £13,963,792.
The growing parachute payments that relegated Premier League clubs receive in recent years has unexpectedly not had an impact on them gaining promotion. Wolves impressively managed to get themselves relegated with a wage bill of more than £30m - Barnsley stayed up despite have a wage bill less than a third the size – and Wigan are giving it a good shot this time around. In the same season Bolton and Blackburn failed to even make the play offs. This season, whilst Norwich are in the hunt for the play offs, both Cardiff and Fulham are currently below us.
So, with a wage bill at the level we currently have history shows there is no reason we can't realistically expect to challenge at the top end of the table. Having less to spend does mean that we can't afford to carry passengers - recent signings that have good experience at this level and have simply not delivered, such as Paterson, Stead, Peltier and Majewski, can't be repeated. We also can't have injuries to key players that clubs with bigger squads and larger budgets can wear. However, despite these added difficulties there is no reason that with good management and a bit of luck, we can't emulate the likes of Burnley and Crystal Palace with the wage bill we have had for the last two seasons. The fact we are about to complete our third season at this level, should stand us in good stead, there are encouraging signs of the impact that Chris Powell has started to have on results without really having the chance to shape the squad - he made a similar start to his time at Charlton and then won the league with over 100 points the next season!
All of this is, of course, reliant on Dean Hoyle carrying on his current levels of investment and crowds not dropping further, without this financial support history tells us we've little chance of avoiding relegation.