Football finance expert and University of Liverpool Senior Teacher Kieran Maguire has discussed Oxford United’s ‘scary’ yearly accounts.
The club published their finances last week, recording a loss of £17.5 million compared to the previous season’s £15.9 million.
The club remained within the parameters set by EFL’s Profit and Sustainability Rules whilst the club referenced the cost of competing in the Championship as the main reason for for said losses.
Football finance guru and host of The Price of Football podcast, Maguire, spoke to BBC Radio Oxford’s dedicated U’s podcast The Dub to discuss the club’s accounts.
Initial takeaways
“I’ve often described the EFL Championship as being the clown car of European football when it comes to the finances. The average losses are somewhere between 450 and 500 thousand pounds a week and the only way that you can address that is either by player sales, but there’s a limited number of players that are attracted to the Premier League and the Premier League is where the money’s coming from, or relying on owners.
“Oxford’s results, it’s scary. I’m looking at a loss of 17 million pounds and saying well actually by championship standards that’s not too bad and for a club that’s just been promoted and the previous year Oxford had lost over 15 million pounds in League One, which is very high by League One standard, but you say well at least that’s got them to the championship of things going to improve.
“The money coming in goes up, but the wage bill was up 90 per cent in the championship because you’re fishing in a different pond.”
Matt Bloomfield makes his debut as the new Oxford United head coach (Image: ©Jason Dawson)
Oxford’s standing in Profit and Sustainability Rules
“It is a bit ironic because they encourage neither profitability nor sustainability, but you’re allowed to lose £39m. Some people say well hold on, Oxford must be fairly close to that, but you exclude your infrastructure costs from the calculations.
“It looks delicate because Oxford United’s losses for the last three seasons are around 41 million, but you add back those particular issues and I think they are comfortably within the limit.
Oxford United have published new images of what the club’s proposed stadium at The Triangle could (Image: Oxford United)
“It should however be stressed that it’s a limit and not a target and I think this is where lots of fans sometimes get aggrieved and not necessarily thinking it through.
“You’re still relying upon an individual or a group of individuals to subsidise the football club to the extent of millions of pounds a year…but it doesn’t necessarily mean that if I’ve got a credit card and I aim to get to the limit.”
Impact of potential relegation to League One
“The £11.5m Oxford United generated last season from broadcast revenue, which was around about two thirds of the total, that would drop to around about two million. So, there is a big hit.
“In League One itself, the rule is effectively for every £100 you generate in revenue, you can only spend £60 on wages. Now last season Oxford were 114 per cent, so it’s tricky.
“It will involve quite a reset in terms of what’s being paid to players, and that means that fans will be frustrated because either players will not have contracts renewed or the club will be seeking alternative places for them. And unfortunately, that’s part of football.”
Oxford United owner Erick Thohir (Image: Steve Daniels)
Oxford United’s effectiveness as a brand
“It’s not a negative, I think a lot will depend upon how it is marketed. It’s an attractive city in many regards from an investor’s point of view and I’m here I’m thinking of US investors, how far is it from an airport because they want to come across at weekends.
“It’s not; it’s accessible I think from that point of view clearly the links with the university and so on is got a sort of cerebral element to it which I think could be attractive
“But it’s not going to add millions and millions to the price. It’s going to be a modest help but no more.”
Should Oxford fans be worried?
“I’d still be relatively relaxed. Lenders won’t lend unless it’s in their interest to do so. I’ve got to know Tim Williams – Oxford’s CEO – I’ve got a lot of admiration for him, he’s very professional, he’s not going to put the club at undue risk.
“You look at it from an internal point of view, I’ve got confidence in the senior management team.
“You look at it from an external point of view, lenders will have done their homework because we are talking about specialist and niche organisations and if the two parties are willing to come together then I don’t see a problem.