The Club’s owner issues a message to Town fans
- An update from Huddersfield Town Chairman Phil Hodgkinson
- Town’s owner reviews the January transfer window
- Hodgkinson also gives info on Club finances and plans
Now that the January 2021 transfer window is closed, I want to give everyone an update on what’s happening at the Club.
A lot has happened here since the most recent big update with Steven Chicken in the Examiner back in October, so I’ll be as thorough as possible.
I want to begin by thanking every single Town fan for their support at a time where you still cannot attend games in person. As I will detail, your support has been more vital to the Club than ever before, and I am so grateful – as is everyone working behind-the-scenes.
We receive feedback from supporters all the time, and we monitor feedback through every medium. We’re acutely aware of how hard it is to stay engaged with your team right now. Taking that feedback into account, I will commit to issuing one of these updates at the start of every calendar month, so that you’re as up to date as you can be on what’s going on at your club. It will not always be from me, but it will come from a member of the Board or a senior manager.
Finances
The pandemic has made things very tough for football clubs, just like every other business.
Again, I must start by thanking Season Card holders for their support ahead of the season, and throughout the campaign. Your support in buying nearly 11,000 Season Cards has been extraordinary and has been massive in terms of the Club’s cashflow. The pandemic has been around for much longer than we all expected, and your understanding of that fact is incredible.
Despite that amazing support, the Pandemic continues to have a significant financial impact on the Club. There’s a big range of effects, from the obvious ones of lost match day income, lost hospitality income and lost retail income, to other less evident connotations like the reduction in our parachute payments from the Premier League and a drop in the money received as a member of the Championship.
Our estimates, based on what has happened so far, indicate that we will be down around £5 million from lost revenue and new costs from day-to-day operations.
The effect on the transfer market adds another, very significant dimension to that loss. As has been the case over many years, Huddersfield Town is a Club that looks to trade players. Unfortunately, the pandemic has understandably seen demand in the market – and transfer fees – fall through the floor. There are exceptions to this at the elite level, but it was very demonstratable in January when you look across our division, where barely any money was spent.
That is significant to our model, where we do look to trade players and bring new ones in. The market was just not there. We still did business – and I will cover that in more detail later – but the fees we aimed to receive for certain players was impossible in the current climate.
When you add the effect on transfer fees to the figure we’ve lost on day-to-day operations, we would estimate we are down in the region of £10-12 million over the last 12 months.
Our constant aim is to improve the squad in every window; that will continue to be the case. However, we also must be aware of our finances. I’ve spoken before about our desire and need to make our club as sustainable as possible and that remains the aim.
As I write this, our wage bill sits above £19 million for the year. Moving forward, that figure is unsustainable. For comparison, we got promoted in 2017 on a wage bill that was nearer £12 million.
This summer is a big moment in terms of the playing squad, as we have many players out of contract. We are already taking stock of what we need to do to give Carlos an improved squad, and to ensure we get full value for what we pay out in wages.
Whilst doing this, we are also reducing the Club’s level of debt. It’s not uncommon for football clubs – or other businesses – to run with debt, with the key being that it is serviceable by the business. Often Premier League clubs run a high level of debt because it is serviceable through the big incomes you receive, if necessary, but we must reduce our debt level – and we’re in the process of doing so.
I understand and recognise that paying off debt isn’t exciting as a football fan, and that many would rather see millions being spent on transfer fees rather than reducing a figure in the accounts. However, it is vitally important to the sustainability of this Club. I believe we can strike the correct balance between doing this and being more competitive on the pitch, and that’s exactly what we’re striving to do.
Additionally, I’ve seen two comments I have made in the past being highlighted, and I’d like to address them. The first is that I thought it would take three transfer windows for us to reshape the squad. I said this in good faith, but with the onset of the pandemic I was proven wrong. As I’ve said, this pandemic has had a distinct negative effect on the way clubs have spent, us included. It’s far from ideal, but we’re having to play the situation as it unfolds.
The second regards my ability to fund the Club with my own money. I am no different to almost every other club owner in that the cash I can put into Huddersfield Town comes from my businesses, and the PURE Group, like most businesses, have felt the effect of the pandemic.
I am not worried over the medium to long-term, as the businesses in the PURE Group are robust and are already bouncing back. Whilst they remain profitable, COVID-19 has had a big short-term impact on cashflow, as it has for almost every business. I must also preserve free cash in my businesses as I must do in the football club, until such time as we have a clear path out of this pandemic, now is not the time to take unnecessary and uncalculated risks.
That has meant that I’ve not been in the position I wanted and expected to be in terms of my cash input. I have still been able to commit funds to the Club to cover short-term cash flow gaps and some of our transfer business, which will be reflected in the accounts next year. Hopefully this will increase to the point I expect it to be as we move forward and come out of the national lockdown.
Football
When we appointed Carlos Corberán as Head Coach and approached the new season, we had two clear stated aims; to bring a style and identity back to our team, and to get back to winning games after nearly three years of not winning enough.
As I write these notes, we’re in our toughest period of results this season. However, I want to be clear in my 100% support for the work that Carlos is doing here. Most fans we heard from saw the style in the first half of the season, and the news of Carlos’ contract extension was very well received.
It’s true that we quickly need to get back to winning ways, and I believe that our staff and players are more than capable of that. The day-to-day work that Carlos and every member of the staff put in is outstanding, and they are an excellent fit for our club.
January transfer window
We were comparatively busy in the January window compared to most clubs, and we all believe we did some good business early in the window.
Ben Hamer and Adama Diakhaby departed the Club for pastures new, which we believe were the right moves for us and the players. I firmly believe that neither player left for the fee they would usually command outside the pandemic, but we had to do our best with the market on offer and I believe we did.
The players coming in represented a mix of those who are here to help us immediately and players for the longer term. Carlos identified a need for another experienced centre back given the injuries to Christopher Schindler, Richard Stearman and Tommy Elphick, along with the shorter-term issue for Rarmani Edmonds-Green, and Richard Keogh arrives having started almost every game in League 1 this season.
Similarly, Jayson Leutwiler adds an experienced head to the goalkeeping department after Ben’s departure.
When the extent of Carel Eiting’s injury became clear, we were able to bring forward a move earmarked for the summer in Duane Holmes’ arrival. He is a player who can help us now and in the future, and we were able to strike a deal that suited every party. He has been bright in his first few games and I know Carlos is excited to work with him.
Rolando Aarons is another player who can contribute now and in the longer-term, and I personally thought he had his best game yet in Town colours at Luton Town on Saturday.
Danny Grant and Sorba Thomas have been brought in for the longer-term. Both are very talented players, and as a Club we will continue to look for investments in younger players who we can develop into First Team stars here – much like Josh Koroma’s path into the side this year.
Fraizer Campbell has done very well for the team, playing so many minutes over an intense period, but with Danny Ward’s unfortunate injury issues, I’m very aware of how many supporters wanted to see a new striker come in too.
We got linked with a lot of strikers on deadline day, and it is true that we investigated every possible option on that day and beforehand.
Ultimately parent clubs were not prepared to let players leave without their own replacement, which proved difficult in the current market and climate. We had a few agreements in principle, but they were all dependent on chains and in the end they didn’t happen. Another one or two players did not want to come to England and a couple preferred permanent deals to loans, which would have affected our summer plans.
We also had an interest in a forward player who we felt would need development, but it became clear that the deal was such that we would need instant success with them. Weighing up players we already have in the position who are already developing towards the First Team in Kieran Phillips and Kian Harratt, we decided it would be correct to look for another senior player who could impact the Championship.
I understand that it’s frustrating when clubs look to be leaving things until the last minute, and it’s certainly not the way we want to operate, but often the availability of players – particularly senior ones – are linked to others, and clubs will not let senior players leave until they have a replacement secured.
We’re constantly assessing the free agents that might be able to help us on this front – and all fronts – so the door is not closed.
Fans and the Club
We’re resetting the Club in a few areas at the moment, and we’re very aware of the need to be the very best we can be across all areas – particularly when fans are able to return.
Our new Commercial Director, Ian Birtley, has now started his work with us and has made an immediate impact, securing us a new back-of-shirt sponsor as announced today. He’ll work closely with our Chief Executive, Mark Devlin, to maximise our commercial revenues; that’s hugely important.
We also have some big plans to improve our digital platforms that are close to completion, which should take our ability to communicate with supporters to a new level. More detail on that should follow over the coming months.
There are plenty of other things we could discuss, but I will leave that for the next update. I want you to know that we are always thinking of ways we can improve what we give to you.
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I hope this update has proven useful and has given good detail to you, our loyal supporters. Thank you for taking the time to read it.
As I said, we’ll continue to issue a regular monthly update on everything that’s happening at the Club so that you can be as aware as possible on what we’re up to.
For now, thank you for your attention. Please stay safe with your families as we battle the pandemic, and we look forward to seeing you at the John Smith’s Stadium again soon.
Phil Hodgkinson
Chairman
Huddersfield Town
