Fulham are back, now for the struggle

FULHAM Football Club is one of those popular institutions that people find hard to dislike. They have a picturesque stadium, sitting on the banks of the River Thames, their neighbourhood is full of well-heeled professionals sitting on millions of pounds worth of real estate, and the club itself has rarely posed a threat to anyone. An afternoon at Fulham is a pleasant experience.

But for the past five years, Fulham have led a “Grand Old Duke of York” existence, in other words, they have lived in a strange half world that has a foot in both the Premier League and the Championship. They’ve just secured their third promotion in that period, achieved with no small amount of panache.

Fulham have become the classic yo-yo club, but you get the feeling they are going back to the Premier in a better condition than they were in 2018-19 and 2020-21. There has been none of the waste that accompanied their stint in 2018 when the club’s owner, Shahid Khan, allowed his son to play Fantasy Football with the first team squad. They spent a lot of money in 2018 on average players and were the third biggest spenders in English football behind Chelsea and Liverpool, but they nosedived back to the Championship, employing three managers of the way. At the end of 2020-21, they were relegated again after immediately winning promotion in 2020, but the popular Scott Parker decided to leave Fulham for Bournemouth.

The appointment of Marco Silva didn’t fill everyone with confidence – indeed, Silva had experienced relegation at Hull and was sacked at both Watford and Everton after poor results. It worked out well this time as Fulham played with carefree abandon and scored goals for fun – 98 in 42 games so far. Furthermore, the mercurial and occasionally brilliant Aleksandar Mitrović, who has yet to light-up the Premier League, scored 40 goals up to and including the club’s promotion night.

Mitro is a character but he’s now 27 and no longer a man with potential, what Fulham are seeing is what they’ll get. But he needs to prove he can score goals in the Premier League and their survival in 2022-23 depends, to some degree, on how the Serb adjusts to life back in the top flight. This may be his last chance of proving the sceptics wrong.

Fulham have other talents that will interest Premier audiences – Harry Wilson, the winger signed from Liverpool, for example, and Neeskens Kabano. Fabio Carvalho would also be one to watch, but he looks bound for Wilson’s old club.

Fulham’s promotion can be attributed to a very generous owner in Shahid Khan. He has converted his loans to the club into equity, now totalling over £ 400 million, and has propped-up the club’s relatively high wage bill. In 2020-21, for instance, the club’s wages were £ 114 million, representing 98% of revenues. This was Fulham’s last relegation campaign and overall income reached a record £ 116 million, almost entirely due to the £ 105 million of TV money that came with Premier League membership. While matchday was wiped out by the pandemic, commercial income increased by 26% to £ 11 million. 

Fulham made a pre-tax loss of £ 94 million in 2020-21, high even by Premier standards, but losses are not new to the club, they last made a profit in 2011. Their deficits would be lower if they made more money on player sales, but over the past half decade, they have generated profits on player trading of less than £ 60 million. Since 2017, Fulham have spent over £ 200 million on new recruits, making them a top 20 player in the transfer market.

After almost an entire season without crowds at Craven Cottage, attendances have averaged 17,600 in 2021-22. Over the past two years, the club has been building a new Riverside stand, which will increase Fulham’s capacity to just under 30,000 and significantly improve gates at one of London’s oldest and much-loved venues.

Marco Silva said Fulham are going back to where they belong. The jury has to be out on that verdict, but there’s no doubt most football followers will welcome their return. Survival beyond the first season will not only change the perception of Fulham, it will also have a profound impact on the club’s finances.

Forest’s wages hit 200% of income

WE’VE KNOWN for years that clubs in the EFL Championship have dangerously high wage-to-income ratios, but Nottingham Forest’s wage bill now consumes over 200% of their total revenues, the worst in the league. In their 2020-21 financials, Forest revealed that their wages totalled £ 37.2 million while their income amounted to £ 18.4 million. Such a figure, obviously influenced by the impact of the pandemic, should send alarm bells ringing among Forest’s loyal fans.

Forest’s ownership has already written off some £ 73 million in loans, otherwise the club’s net debt would be higher than the current level of £ 36.2 million, a figure that compares favourably to most of the Championship, notably fellow midlanders Stoke City and Birmingham City. They have also converted £ 52 million of debt to equity to ease the situation, including £ 12 million in the last financial year. 

Forest’s pre-tax loss for 2020-21 was £ 15.5 million, slightly less than the £ 15.9 million lost in 2019-20. They have only made a profit once since 2005 and have lost over £ 100 million in the past decade, including in excess of £ 60 million since Evangelos Marinakis took over. The operating loss for the season was more than £ 34 million. 

Forest’s overall revenues dropped by 27% on 2019-20. This was their lowest income since 2015-16 after four seasons when they generated £ 23 million per season. The current level equates to mid-table levels of earnings, but is way behind clubs like Norwich (£ 57 million) and Cardiff (£ 55 million). Over the past two seasons, covid-19 has cost the club some £ 16 million in lost revenues. 

The club has to cancel its shirt sponsorship with Football Index, who went into administration. Furthermore, the redevelopment of the 10,000-seater Peter Taylor stand has been put on hold, but Forest expect planning approval to be granted soon.

Matchday income totalled just £ 1.3 million in 2020-21 owing to empty stadiums for the vast majority of home fixtures. This was an 83% decline on 2019-20. Forest are not alone in virtually wiping out this revenue stream. This was partly compensated by a 12% rise in media income to £ 11 million. Commercial earnings went down by £ 2 million to £ 6.2 million.

Player trading have long been important to Forest and in 2020-21, profit from sales was £ 14.3 million, 27% more than the previous season. This was the second highest in the past 10 years, but way lower than clubs like Norwich City (£ 60 million) and Brentford (£ 44 million). The biggest sale was Matty Cash’s move to Aston Villa, which raised £ 14 million.

Forest spent modestly in a season that saw them finish a disappointing 17th. The signings of Harry Arter (Bournemouth) and Loïc Mbe Soh (Paris Saint-Germain) were all bought for undisclosed fees but Scott McKenna of Aberdeen cost around £ 3.5 million. Transfer income was approximately £ 15 million. Unfortunately, Arter fell out with the club and was sent on loan after just a few months and is currently at Notts County.

The club clearly has a very committed owner, but the wage-to-income ratio is still precarious and can only be unsustainable. Forest, in normal times, have a healthy support base – they have an impressively high percentage of season ticket holders and their average gate in 2021-22 is close to 27,000. This bodes well for the club’s 2021-22 accounts. Forest have made headlines this season in the FA Cup, beating Leicester City and Arsenal, and are not far off contending for promotion. Can they push on and return to the Premier League and transform their financial position?