NOTTINGHAM Forest may be in the Championship play-off zone this season, but off the pitch, the club is still paying-out too far much money in wages.
Although this year’s performances may have justified the big outlay, Forest’s wage-to-income ratio is a very worrying 143%, not the highest the club has run up over the past decade but still an indication of Championship clubs’ willingness to gamble on gaining promotion to the promised land of the Premier League. The average wage-to-income ratio in the division has regular been in excess of 100%.
Forest’s turnover in 2018-19 increased by 11% to £ 25.3 million, but their wage bill totalled £ 36.3 million as expenses went up by 34% to £ 51.4 million. While turnover has risen by 72% over a 10-year period, wages have grown by 132% during that timeframe and by 31% in 2018-19.
Forest finished ninth in the Championship last season, their highest placing since 2013, with an average attendance of 28,144 – a figure that was higher than six Premier clubs in 2018-19. Season ticket sales reached 20,000. In 2019-20, Forest’s crowds have gone down slightly, but the positive momentum has continued with the team.
The club continues to make operating losses, the 2018-19 season saw them generate a £ 34.4 million deficit, which translated into an overall loss of £ 25.1 million, a jump of 448% on 2017-18’s loss of £ 5.6 million. Only once in the last 10 years have Forest made a profit and that came after £ 40 million of debt was written off. Operating losses have trebled in size since 2009-10.
The club is not worried about breaching Financial Fair Play rules, though, despite the size of their losses. “The owners remain committed to the long-term future of the club and its funding…the level of losses sustained by the cub are within those provided for by the rules, and the club will control losses in future years in order to ensure continue compliance with the rules,” the club said in its announcement.
On a more upbeat note, Forest have made significant progress in growing their revenue streams. Sponsorship and advertising went from £637,000 to £ 1.8 million and media rose by 34% to £ 805,000. With Forest’s attendances up by 14%, ticket sales increased by 34% to £ 7.2 million.
Strangely, Forest’s Chief Financial Officer, Samantha Gordon, left the club on the eve of the recent announcement concerning the financials. Apparently, her departure was “amicable”, although there was a certain irony in the timing.
Forest have plans to improve the City Ground which includes rebuilding the Peter Taylor stand and adding another 10,000 to the stadium’s capacity, along with a shop and museum. These plans have changed from the original project to include a tower block.
Forest were last in the Premier in 1999 and since then, they spent three years in League One. After losing 0-3 at home to Millwall, the club’s chance of automatic promotion this season looks slim, although a play-off place is still very realistic.
There was more negative news when it was revealed the club’s majority shareholder, Evangelos Marinakis has contracted the Coronavirus. Forest’s players and staff have all been tested and the results were negative, but like all Championship clubs, Forest’s season is now in suspension. If football resumes, and there has to be some doubt whether we shall see the conclusion of the 2019-20 campaign, they will be looking to continue their push for promotion. But with the current environment becoming increasingly uncertain, City Ground regulars may have to wait for their return to the top flight.