Millwall suffer covid hit, but remain realistic

MILLWALL continued to be unprofitable in 2020-21, recording their biggest ever loss as the affects of the pandemic came to the fore. The Lions lost £ 13.8 million before tax, an increase on 2019-20’s £ 10.9 million deficit. However, because Millwall are generally a well-run club, the losses could have been worse in the circumstances.

Over the past decade, Millwall have accumulated pre-tax losses of £ 78 million, but the past two seasons have accounted for almost £ 25 million, largely due to covid-19. The club continues to make little from transfers and in 2020-21 the profit on player sales was just £ 0.7 million, arguably the lowest in the Championship. In the period between 2011-12 and 2020-21, Millwall spent £ 7.8 million and received £ 9.9 million, according to Transfermarkt. 

The club has tried to bring through young players into the first team, current first team players Danny McNamara and Billy Mitchell have come through the ranks at Millwall. They operate with a relatively small squad compared to most of their rivals and the overall market value of their players is estimated at £ 31.6 million. The squad has cost, in actual terms, less than £ 4 million.

While the club’s income went down by 24.4% to £ 12.5 million – the lowest since they returned to the Championship – the wage bill rose by just under £ 2 million to £ 20.8 million, a jump of 10%. This suggests Millwall’s wage bill is still too high for the amount of income they can generate. Thankfully, the club’s shortfall is covered by American owner John Berylson. Even though the loss for 2020-21 was bad by Millwall’s standards, Berylson commented that a number of clubs are likely to lose £ 20-30 million during the pandemic.

Even allowing for the difficulties of the past two seasons, Millwall’s wage-to-income ratio over the decade has been 110%, but in 2020-21, because of the near total absence of matchday revenues, the ratio soared to 167%. Income over 10 years has increased by 9% compared to a doubling of wages. Millwall were assisted by the league’s support loan, borrowing £ 8.3 million over a three-year period. These loans are in the name of the EFL, but secured against future solidarity payments from the Premier League.  

It’s easy to see where Millwall were hit hardest, their matchday income was just £ 1.4 million versus the £ 4.4 generated in 2019-20. Broadcasting monies were also down by £ 1 million to £ 8.4 million, while commercial revenues totalled £ 2.7 million, on par with the previous year, which was no mean feat in a challenging environment. Fortunately, the club is currently enjoying its best-ever sponsorship deal with Swedish company Huski Chocolate.

Millwall remain one of the most passionate clubs in English football and in normal times, they can call on close to 14,000 people at their home games. At present, retaining their Championship status has to be the priority and their performance this season suggests they should be secure for the 2022-23 season. But in the current climate, Millwall will need to maintain their realistic approach to financial management in order to get through the immediate challenges created by the pandemic.

Solskjaer is the fall guy, but are United still in a post-Ferguson hangover?

SURELY, after eight seasons, Manchester United should have recovered from losing their iconic and most successful manager? There was always going to be a period of instability after Sir Alex Ferguson hung his stopwatch up, but United are still looking for some sort of formula, some kind of leadership that can make them genuine contenders once more. But where is it coming from? – they have tried several different routes to success since 2013: innovative appointment of unsung manager (Moyes); track record managers (Van Gaal and Mourinho) and “one of our own” (Solskjaer). The next step will surely be to employ a manager who represents football’s future, not the past.

United have won three major trophies in eight years, a haul that Ferguson might have achieved in a solitary campaign. Furthermore, the club have lost their joie de vivre, and they’ve been left behind by City, Chelsea and Liverpool. Even with the financial platform they have and their enormous support, Manchester United have rarely looked more jaded and uninteresting than they do at the moment. 

Losing 5-0 is a disaster, getting dismantled 5-0 by Liverpool is like bathing in a tub of iron filings, but losing 5-0 at home to their old rivals is just plain humiliating. How the scousers must have loved their journey back through Manchester. How galling it must have been for United’s faithful. How era-defining it may turn out to be. Football will be watching for signs of tinted smoke billowing from the hallowed rooftops of Old Trafford this week. 

Nobody wants to be too severe on Ole Gunnar Solskjaer. He’s a fresh-faced character, decent and likeable, but he’s now struggling to stay afloat, and the results speak for themselves. The problem with employing ex-Manchester United and ex-Liverpool players is you rarely get a truly objective view from the pundits, but the jeering and the exodus at half-time and into the second half couldn’t be varnished over. United were abysmal, despite having one of the world’s greatest players in their line-up.

Money isn’t the problem, United have spent over £ 1.2 billion since Ferguson departed and their net spend is the second highest (£ 855 million) in Europe, just £ 63 million lower than Manchester City’s net outlay. Their expenditure is the third highest in the Premier League, behind City (£ 1.34 billion) and Chelsea (£ 1.24 billion). In 2021-22, so far, they have spent £ 126 million, higher than City and just £ 23 million lower than top spenders Arsenal.

Solskjaer took over from José Mourinho, who was never going to fit the bill. To his credit, though, Mourinho won two trophies in 2016-17, albeit lesser priority pieces of silverware, and left Old Trafford with the best post-Ferguson win rate (58.33%). The issue with some managers, Mourinho included, is that in some ways, they are figures that outshine their employees, but in the case of United, that’s really not possible. Mourinho remains a sideshow of his own, no matter where he goes, as evidenced in his recent body language in Rome. But if you are manager of Manchester United, you play second fiddle to the club’s heritage. Busby and Ferguson were giants of the game and figureheads of the club, they were able to look the body United in the eye.

Hence, a manager like Mourinho was expected to play something that resembled “the United style”, even though everyone at Old Trafford should have known that Mourinho’s success was built upon his own methods. It was the same for Louis van Gaal to some extent, but by now the club should realise that hiring a top coach means you are effectively buying what has made them attractive in the first place. The only way to maintain a mythical style is to plan properly for succession, groom your coaches and develop a dynasty where continuity becomes a mantra. That rarely, if ever happens, in football.

At the root of United’s deteriorating status is a quite appalling record in the transfer market since 2013. So many of the club’s signings have either cost too much, failed to live up to expectations or simply been underused. You don’t have to dig too far to see how hit and miss their system is; Jadon Sancho was signed from Borusssia Dortmund for £ 76 million last summer after much speculation over United’s interest in the 21 year-old. He’s only started three Premier League games and Solskjaer has yet to discover the best way to use him. He’s young, but he’s also a key member of the England squad, so he naturally appears slightly out of sorts at United. And then there’s Donny van der Beek, who was signed for £ 35 million from Ajax in 2020. He started just four Premier games in 2020-21 and was clearly upset this season when he didn’t get a run-out in a Champions League game against Villareal. 

The list of players that didn’t work out is quite lengthy and includes: Ángel di María (11 months, 32 games, 4 goals);  Memphis Depay (20 months, 53 games, 7 goals); Romelu Lukaku (23 months, 96 games, 42 goals); and Alexis Sanchez (17 months, 45 games, 5 goals). Of those still at the club, the jury seems to have been out on Paul Pogba (£ 89 million, from Juventus) and Fred (£ 47 million, from Shakhtar Donetsk) ever since they joined United.

There should also be question marks about the signing of Edinson Cavani and Cristiano Ronaldo, not to mention Zlatan Ibrahimović. All three were signed when they were in their 30s, notably Ronaldo, who was 36 when he arrived back in Manchester. Extrordinary characters this trio may be, but should a club of United’s size and stature be pushing the boat out for veterans, almost with an air of desperation?

Ronaldo has scored six goals in nine games, but United’s form has plummeted since he joined the club and their Champions League form has been less than impressive, despite two wins from three. The victories against Villareal and Atalanta, both secured by Ronaldo’s penchant for drama, both looked like ending in defeat. Ronaldo has not scored in his last four league games. United’s win rate in the Premier with Ronaldo is 40%, before he arrived, it was 67%. While he has performed, United’s shortcomings elsewhere have not been addressed. At the moment, he looks like a luxury acquisition in a half-built team.

United will recover, but it is hard to see Solskjaer being part of that process. Yet he must have learned to live with this uncertainty for he has been one or two games from the sack ever since December 2018. That level of scrutiny goes with the job.

Photo: Alamy

Newcastle United’s 2019-20 finances – worth the wait?

ON THE face of it, Newcastle’s financials for 2019-20 could have been far worse, but they did highlight the lack of commercial progress made by the club over the past decade or so. With a decent level of cash in the bank, reduced net debt and a pre-tax loss of £ 26 million, there’s little high drama in the figures, but over the long-term, the club’s inability to push on and compete must be frustrating for all followers of “the Toon”.

Mike Ashley, the owner, is still keen to sell the club, but the lack of a credible buyer means the unpopular billionaire is still in control. Although £ 26 million could have been higher – compared to the huge losses of Manchester City, Everton and Aston Villa – it has to be remembered that in 2018-19, Newcastle United made a profit of £ 41 million, so there’s been a £ 67 million negative swing. Over the past 10 years, the club’s aggregate pre-tax profit was £ 94 million, a figure bettered by only three clubs. They have made a profit in eight of the past 10 years, hence the club’s comment: “The [2019-20] results do not represent a normal year for the company.”

The club’s revenues were down by 13% from £ 176 million to £ 152.6 million, no surprise given the cost of the pandemic. Newcastle estimated covid-19 cost them over £ 14 million.

Matchday income was down 30% to £ 17.4 million, while broadcasting, which accounts for 70% of overall earnings, was 14% lower at £ 106.1 million. Commercial income, which has failed to keep pace with the club’s rivals, was 1% down to £ 25.9 million. An example of their lack-lustre performance in building a formidable commercial presence is the club’s shirt sponsorship in 2019-20, which was only 10% of Manchester United’s deal and one sixth of Manchester City’s. There could be more energy around commercial business in the form of the club’s new partnership with Castore, who will operate the club’s retail operations.

Against this background, Newcastle’s wage bill totalled £ 121.1 million, representing an increase of 25% on 2018-19. This put the wage-to-income ratio up by 25 percentage points to 79.4%, which was considerably higher than the average for the Premier League (69.3%). 

Newcastle’s wages have doubled over a 13-year period, but this pales into insignificance compared to Liverpool (+320%), Tottenham (+314%) and Manchester City (+866%). Furthermore, Newcastle’s net spend in the transfer market was among the lowest in the Premier (£150 million). Their squad for 2019-20 cost around £ 216 million, again at the bottom end of the division.

More positively, Newcastle’s net debt for 2019-20 totalled £ 45 million, which was a big drop on 2018-19’s £ 98 million and 2018’s £ 111 million. In addition, the club’s total cash was up to £ 62.7 million, a substantial increase on 2018-19 (£ 14 million). 

Mike Ashley is still hoping to sell the club to the Saudi Arabian sovereign wealth fund, a deal that caused a lot of controversy when announced. He is waiting for an arbitration hearing with the Premier League, but this won’t take place until early-2022. Given the potential of the club and its strong regional identity, there should be no shortage of takers for Newcastle United.

Despite the obvious lack of verve in Newcastle’s financials, they are still among the top 30 clubs in Europe, indeed, they are just outside the top 20 by revenues. But they are over-reliant on broadcasting income and their commercial revenues are really disappointing for a club that can call on 50,000-plus supporters in normal times. While Newcastle is not in a precarious position, it has been left behind by the top Premier clubs and in their current state, it is difficult to see the long wait for genuine success – it is now over a half a century since their last trophy. New ownership may provide the fresh impetus that is sorely required, but in the meantime, better communication and accessibility could change the dynamic between the owner and the Newcastle public.