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Defeat by Newcastle United on Saturday brought a difficult week to a frustrating conclusion for Fulham.
Again, they showed their ability to outplay opponents who are superior on paper, but they were unable to capitalise when on top. They were “lacking inspiration” in the final third, according to their head coach Marco Silva.
For Fulham, it has been a season of wild swings in form. This past week’s results, taking one point from the three games, have surely put last season’s final tally of 52 points out of reach for Silva’s 39-point side over the final six fixtures, but he was keen to keep perspective.
“Everyone was saying in the first few months that Fulham did not have a chance again, it would be second-season syndrome, losing the best goalscorer (Aleksandar Mitrovic was sold in August), creating no chances,” he said. “But we were able to build a really strong side. We were able to make the Cottage our fortress again. Because of that, in the last five months, no one is speaking about Fulham to be relegated.”
Fulham have indeed all but secured their Premier League status for 2024-25 already, with a 14-point cushion to the bottom three after 32 matches. It means they will have achieved consecutive seasons in the Premier League for the first time in a decade, and plans are beginning for a third. That, after the recent yo-yo years, is success. It also brings some financial certainty.
On Saturday, before the 1-0 home loss against Newcastle, Fulham’s financial power (also known as their 2022-23 accounts) was published at Companies House.
So, what do the club books tell us about the impact of last season’s 10th-placed finish? And what does it suggest for next season and yes, their compliance with profit and sustainability rules (PSR)? Here are the key details.
Record revenue is good, right?
There were a few records broken in these accounts. Firstly, Fulham received a record amount of revenue last season, amounting to £182.3million ($230.4m). Their previous best was in 2019, at £137.7m. Earlier this year, Deloitte’s Money League ranked Fulham’s revenue as 26th in world football, just behind Italy’s Roma and Spanish club Sevilla, and ahead of France’s Lyon.
Record revenue was anticipated. Most of that money, as the club acknowledges, stemmed from their 10th-place finish. In total, £144.5million came from central awards from the Premier League or broadcast revenue. Commercial and matchday income amounted to 20 per cent of the club’s turnover. Matchday income, which includes ticket prices that have been subject to protest this season, amounted to £15m.
Fulham, though, still spent £208million last year, and therefore recorded a £26.1m loss.
Shahid Khan, the owner, again invested in the club to cover the loss. The accounts show the Pakistan-born American injected a further £62million last season, which was converted into shares. And, for the period after the financial year ending June 2023, they detail an additional £47.5m, taking his total investment into Fulham since buying the club to over £660m.
Why did Fulham make a loss and what did they spend?
Off the pitch, Fulham spent another £32.6million on ‘assets in the process of construction’, mainly the new Riverside Stand. That takes the total cost of that stand past £160m.
Fulham’s Riverside Stand is expected to open fully over the next year (Andrew Kearns – CameraSport via Getty Images)
On the pitch, Fulham committed to spend £85.5million on eight new players. Harry Wilson’s £12m move from Liverpool also entered the books after his initial loan spell.
These figures count as £45.6million on the books for this season, however. Transfer fees are amortised, ie, spread across the length of a contract (for example, a five-year deal would make a £10m transfer cost £2m each season). It is also inclusive of previous signings in recent years that are still on the books.
The big outlay, however, was wages. Fulham spent £139.1million on salaries, a club record, surpassing the wage bill of £113.9m in 2020-21. Compared to other Premier League teams, with two of its 2022-23 clubs still to publish their accounts for that season (Leeds United and Chelsea), seven had lower wage bills.
Premier League annual wage bills
*Accounts for 2022-23 not yet published, so data is from 2021-22
Fulham did reduce their wage-to-turnover ratio, dropping from 126 per cent of income to 76 per cent — a healthier position. Add in the transfer spend, though, and ‘football costs’ amounted to 101 per cent of turnover. Sustainability is not yet achieved, although an initial spend upon returning to the Premier League in summer 2022 was anticipated and is almost a prerequisite for survival.
By way of comparison, Nottingham Forest spent £165million on transfers and £145m on wages after they were promoted at the same time.
So what of PSR?
The Athletic wrote in January that the club passed PSR requirements. As the accounts show, Fulham still need the support of owner Khan and most of their revenue goes out on wages.
On the face of it, you would think Fulham made a clear breach of the rules. Their losses over the past three years amounted to £176.6m. Fulham’s PSR loss limit for the past three seasons was £83m (there are different loss allowances in the Premier League, where it’s £35m per season, and the Championship, £13m, so Fulham’s two seasons in the Premier League and one in the second tier equal £83m).
But that loss figure can be cut down. First, the impact of the Covid-19 pandemic is factored in. That led to the accounting periods for 2019-20 and 2020-21 being merged, so Fulham’s losses averaged out to £71.7m for 2019-21 (which is the figure used instead of the £93.5m loss on the accounts for 2020-21). Fulham also claimed £20.9m in ‘Covid clawbacks’ in 2021 — financial impairments caused by a depressed transfer market and loss of other income streams. The club’s spending on the Riverside Stand, as well as academy spending and on their women’s team, is also deducted.
Knowing the exact figures without guidance is not possible, but these factors indicate why there was no breach.
So what does it tell us for the future?
As mentioned above, a third straight season in the Premier League beckons and that will allow Fulham to make losses of £105million over three seasons. That should permit more breathing space from a PSR perspective.
This current season, 2023-24, is still under £83million PSR loss limits but Fulham’s ‘net spend’ was improved by the club-record sale of Mitrovic for £45m to Al Hilal of Saudi Arabia. The accounts note that Fulham spent £71.7m on signings post-year end. Their wage bill this season will benefit from Mitrovic’s departure, the former highest earner, but will take on not only last summer’s new signings but also significant new contracts, including for Joao Palhinha, Willian and Silva. Overall, Fulham still owe other clubs £65.3m (transfer creditors) and are owed £17.8m (transfer debtors).
Mitrovic was Fulham’s top earner and also their most valuable playing asset (Paul Ellis/AFP via Getty Images)
Turnover may be a similar mark, although achieving 10th again looks tricky. With a nine-point cushion to 14th, however, Fulham look at least guaranteed for a mid-table finish.
Longer term, the full opening of the new Riverside Stand, forecast for hospitality from December this year and then the hotel and members’ club from 2025, will assist next year’s accounts. Delays with the project have been a frustration, and that was evident in the accounts as the club sought damages from construction contractor Buckingham Group, which has since gone into administration.
The club will want to have more profitable player sales post-Mitrovic if they are to become a more sustainable operation longer term. Fulham’s squad is among the oldest in the Premier League. Smart trading will help make Premier League football less expensive.
The club have not made a profit since 2011. That seems unlikely to change in next year’s accounts. But their finances are trending in a better direction, and no doubt on-field performance is key to that.
(Top photo: Alex Davidson/Getty Images)
