QPR moved out of the relegation places at the weekend, but there was real sadness at the passing of their legendary player Stan Bowles. Sincere condolences to everyone who knew him, he was a true bright light in football.
QPR’s pre-tax loss reduced from £24.7m to £20.3m, as revenuerose £1.2m (5%) from £22.1m to £23.3m and profit from player sales increasedfrom £0.2m to £1.0m.
The main reason for the revenue growth was commercial, whichincreased £1.4m (19%) from £7.3m to £8.7m, while gate receipts were slightlyup, rising £0.1m (2%) to £5.7m. However, broadcasting fell £0.3m (4%) to £8.8m.
QPR’s £20.3m loss is still one of the worst of the nineclubs that have published 2022/23 accounts to date, only surpassed by NorwichCity £27.2m and Bristol City £22.2m. That said, very few clubs manage to makemoney in this very challenging division with only Watford in the black so farlast season.
Although QPR increased their profit from player sales from£0.2m to £1.0m, this was still one of the lowest in the Championship, milesbelow the likes of Watford £59m and Middlesbrough £22m.
Losing money
QPR’s last two seasons have not been great from a financialperspective, as they have lost £45m in this period, i.e. nearly £2m a month.Like many others in the Championship, they had clearly gambled on reaching theplay-offs in 2021/22, leading to a return of large losses. Up until then, they had been making goodprogress, losing “only” £4m in 2020/21, which was their best result since 2006.
That said, Rangers are no strangers to losing money. SinceTony Fernandes arrived in August 2011, total losses have been £274m – or £334mif we exclude a £60m loan write-off in 2014.
A big factor in QPR’s worsening financials is the tinyamount they have made from player sales, amounting to only £1.2m in the lasttwo years. In fact, they have only generated more than £10m profit from thisactivity twice in the last decade, despite a stated desire to develop playersfrom the academy.
QPR’s revenue has dropped by a third since parachutepayments ended in 2019, falling by £11.3m from £34.6m to £23.3m, due to a£13.1m decrease in TV money. This was partly offset by small increases incommercial and gate receipts.
Relegation from the Premier League in 2015 is the root causeof QPR’s steep revenue decline, leading to a 73% (£63m) fall from £86m. Equallyimportantly, the club has missed out on the growth in media rights in thistime.
QPR’s £23m revenue puts them mid-table in the Championship,but is significantly lower than those in receipt of parachute payments, e.g.Norwich City £76m and Watford £66m had around three times as much. It’s also worth noting that Rangers are afair way below some other clubs without parachutes, e.g. Bristol City £37m andStoke City £31m last season.
QPR’s average attendance increased for the second year in arow to 14,977, which is the club’s highest since 2015/16. However, crowds havefallen by 2,800 (16%) since relegation, as they peaked at 17,809 in the topflight.
QPR have been looking for a new ground for some time, as theclub “is not financially sustainable in the long-term” without a move, but ithas been a fruitless search to date. As a result, there has been talk ofredeveloping the main stand.
Wages
QPR’s wage bill was cut £2.2m (8%) from £27.6m to £25.4m,following a number of departures. Even if players left on free transfers orloans, thus generating little profit, this still helped the finances byreducing the payroll. After all the upsand downs, QPR’s £25.4m wage bill is around mid-table in the Championship,suggesting that they badly under-performed last season.
Debt and owner funding
QPR’s gross financial debt rose £14m from £75m to £89m,mainly £79m provided by the owners (a £70m loan plus a £9m convertible bondissued to Ruben Gnanalingham’s wife). QPR’s£89m gross debt might be relatively high given that their revenue is only £23m,but it is not that large compared to many other clubs in the Championship, e.g.Blackburn Rovers owed £163m and Middlesbrough £159m. That said, QPR’s debt would have beenconsiderably higher if their owners had not converted £256m loans into equity,including £13m last season, and written-off another £60m in the last 10 years.
In the last 10 years QPR’s owners have put in an incredible£219m, basically providing all the available funds for the club. Although they are not putting in as much asthe early years of the takeover, they have still had to write cheques for ahefty £68m in the last three years, which works out to very nearly £2m a month. Whatever criticism is aimed at QPR’s owners(and they have clearly made several mistakes over the years), nobody can accusethem of not putting their hands into their pockets.
The harsh reality is that the Championship is a divisionthat has an endless appetite for owner funding, so QPR are far from alone withthis business model. In fact, no fewer than seven clubs received more than£100m in the five years up to 2022.
Tony Fernandes stepped down as a director and shareholderlast July, leading to increased stakes for the remaining owners. RubenGnanalingam remains the majority shareholder with just under 60%, whileAmerican businessman Richard Reilly’s stake is up to 21%. The Mittal family has19% and is represented on the board by Amit Bhatia. There have been media reports in the lastfew months that QPR has drafted in a team of US bankers to help pitch the clubto new investors, though nothing concrete as yet.
It’s yet another sorry tale of a Championship clubstruggling to compete with “parachute payment” clubs on far larger budgets.Basically, such clubs are “damned if they do, damned if they don’t”. The Championship is effectively a Premier League 2 and a lot of spending and some luck is needed to get to the top flight.
