Dundee United in profit amid gloomy season

IT HAS been a bad season so far for Dundee United – bottom of the Scottish Premiership, out of Europe early on, hammered 9-0 by Celtic and 7-0 by Alkmaar. It has certainly been a tough baptism for their coach, Liam Fox. While their home form has improved, their away results continue to be dire; there’s no doubt that Fox will have his work cut out to take the Tangerines away from relegation trouble.

But from a financial perspective, Dundee United saw their revenues rise from £ 3.8 million in 2020-21 to £ 8.3 million in 2021-22, the highest level of income over the past decade. Their pre-tax loss was £ 1 million, an improvement on the previous season which saw them lose £ 2.6 million. Post-tax, Dundee United made a profit of £ 280,000. The financials include a £ 600,000 covid insurance payout as well as a £ 100,000 Scottish government grant.

The club’s wage bill rose to a record £ 5.9 million, representing 71% of income, a vast improvement on 2020-21 when salaries were 132% of earnings. Since 2013, Dundee United’s wages have gone up by 80% and they have doubled since 2017.

Dundee United’s “football” revenues totalled £ 5.3 million (matchday and broadcasting combined) from an average home gate of 6,500 at Tannadice, contributing 64% of income. Commercial activity brought in £ 1.9 million, 23% of the overall total. A final placing of fourth meant they qualified for the Europa Conference League in 2022-23, but the run lasted two games in which they lost 7-1 on aggregate to Dutch side Alkmaar.

In 2021-22, the club enjoyed their best profit on player sales since 2018, about £ 1.3 million from the sales of Lawrence Shankland (£ 1 million to Beerschot) and Kerr Smith to Aston Villa (£ 2 million). They spent £ 435,000 on players, notably the £ 315,000 paid to Ingolstadt for Finnish winger Ilmari Niskanen. Ogren insists that as well as developing their own talent, player trading is an important part of the club’s business model. Over the past 10 years, their net spend is £ 9 million, suggesting the player development strategy is paying off. A total of 17 players from the academy played in the first team

In the summer of 2022, Dundee United were very active in the market and signed Dylan Levitt from Manchester United for a figure thought to be £ 300,000. Levitt is in the Wales squad for the World Cup in Qatar. They also acquired Australian goalkeeper Mark Birighitti from Central Coast Mariners and Rangers’ winger Glenn Middleton.

The pandemic had an impact on the club’s liquidity and although they have a healthy £ 2.7 million of cash, they do have borrowings of over £ 12 million, most of which is due to the club’s owner. Chairman and owner Mark Ogren said that finishing fourth exceeded the expectations they had in 2021-22. He also told fans the club is firmly behind Liam Fox and is confident of reaching the top six by the end of the season. Ogren’s aim is to make Dundee United self sufficient as he has stated that he is not willing to fund the club forever. According to media reports, he has already pumped in approximately £ 13 million.

Dundee United look forward rather than backwards

IT HAS been a long time since Dundee United were referred to as part of the “new firm”, but the club’s management are confident the hurdles of the pandemic may soon be consigned to the past. The Tangerines’ finances took a hit in 2020-21, but the club managed to limit their losses to £ 2.5 million for the campaign. 

Dundee United aim to be a top six Premiership club and qualify for European football. In 2021-22, they are currently in a Conference League position and are still in the Scottish Cup, their objectives look realistic at the moment.

The club’s turnover in 2020-21 was down by around 2.5% to £ 3.8 million, while their deficit was an improvement on 2019-20 when they lost £ 3 million. Like all other Scottish clubs, the lack of matchday income decimated turnover, but Dundee United fared better than some – Hearts saw their revenues drop by 38%, Aberdeen 22% and Celtic 13%.

With revenues dropping, the wage bill became more of a drain on the club’s finances. In 2020-21, the wage bill was up by 7% to £ 4.9 million and this represented 132% of income. In 2019-20, the wage to income ratio was 120%. Ideally, the club would like to see the ratio closer to 80%, still high but much more manageable.

Scottish football benefitted from the government’s relief measures and Dundee United secured £ 2.8 million from the debt facility which has a zero interest rate and is repayable over 21 years. The club estimates it has lost around £ 4.2 million from the pandemic.

In addition, the club’s owner and chairman, Mark Ogren, a US-based businessman, has made interest free loans of over £ 9 million to the club since taking over in 2018. He is committed to the club in the medium to long term and is aware that success on the field is the best way to get a return on his investment. 

Covid has got in the way of his plans and his claim the club is “going places”, and he has received some criticism from a section of the fanbase. However, Dundee United won the Championship in 2020 and returned to the Premiership.

The club expects to return to profit in 2022 partly due to income from transfers involving Lawrence Shankland (who was sold to Beerschot for £ 1 million) and youth product Kerr Smith (£ 800,000 to Aston Villa, rising to £ 2 million), and also a return to normal income streams. 

There is also considerable upside to match attendances. In 2019-20, they averaged 8,500 at Tannadice, but the 2021-22 gates are around 6,500. There is potential at Dundee United, although the gap between the “old firm” and the rest of Scottish football is enormous and growing all the time.

The fans have played a major role in assisting the club during the pandemic, with most of the 3,000 season ticket holders waiving their refunds and the Supporters Foundation donating £ 100,000 towards the development of the academy site at Gussie Park. 

Dundee United could end 2021-22 in a better financial state and bound for European football, that would certainly be a case of going places, to quote the club owner.