IT’S not been a great week for the Football League’s first champions and original invincibles, Preston North End (PNE) who announced a big pre-tax loss for 2021-22 and then lost 4-0 at home to Norwich City in the Championship.
Preston are hovering in mid-table but it would seem unlikely they will challenge for a play-off place this season. There is a chance of glory in the FA Cup, though; Preston are at home to Tottenham Hotspur on January 28 in the fourth round and given the current erratic form of the London side, the tie could be a big banana skin for the Spurs. Victory would also ease some of the pressure on the club’s finances.
PNE made a pre-tax loss of £ 20 million in 2021-22, higher than the £ 17.5 million lost in 2020-21. By Championship standards, that’s not dramatic, but for a club of Preston’s size, it is very significant and amounts to a weekly loss of £ 400,000. Fortunately, the club has generous owners in the Hemmings family. PNE owe them around £ 77 million in soft loans and without their support, there is no way the club could entertain Championship football. Over the past 10 years, PNE have made a loss in eight, but the 2021-22 deficit is the highest.
The big question is, can Preston sustain the level they are at and should they even be trying to given the amount of wages they are paying out just to stay in the division? They are currently in their eighth consecutive Championship campaign after winning promotion from League One in 2015.
In 2021-22, the wage bill at Deepdale was £ 24.6 million, which represents 177% of income, a dangerously high level. If that figure appears somewhat frightening, then consider that in 2020-21, the wage-to-income ratio was 216%.
PNE’s revenues for 2021-22 were £ 13.8 million, 16% higher than the previous season’s total of £ 11.9 million. This was boosted by a return to near normal conditions for matchdays at Deepdale in 2021-22, with earnings rising more than fivefold to £ 3 million. Media income was down by around 10% to £ 8.1 million, while commercial revenues amounted to £2.8 million.
How can a club like Preston change their current situation? In 2022-23, they are averaging 16,000 at Deepdale, their best average since 1964, so it is difficult to see that climbing much higher. The club’s commercial income was up by 12%, a welcome trajectory after a few years of decline, so there is continued scope for improvement, but essentially, the elephant in the room will always be the wage bill.
PNE could do better in player trading judging by the last two years in which they have made around £ 1 million. It is not so long ago that they sold Callum Robinson to Sheffield United for £ 7 million and Jordan Hugill to West Ham for £ 10 million. Many clubs have tried to implement a strong player trading culture in order to generate income because it is arguably the way ahead for small-to-medium sized clubs. Of the current squad, midfielder Ben Whiteman could yet earn PNE a decent fee and already Premier League Fulham are apparently showing an interest in the 26 year-old.
Preston’s dilemma is they are plying their trade in a division where everyone lives beyond their means as they chase the dream of a place in the top flight. In order to remain competitive, the pressure to follow the crowd is intense. But for most clubs, the prospect of the lucrative world of the Premier is beyond them. The game with Tottenham will give the Deepdale regulars a glimpse of the promised land.