Preston North End are 'scary' example of Championship finances kept afloat by investment of love says football finance expert

PNE posted losses of over £16m for the year 2022, an increase of £1.4m on the previous year. North End claimed the increase was due to a number of factors, including the club having the residual payments to an ex-manager, compensation paid to Plymouth Argyle FC for Ryan Lowe and residual payments to a number of players at the end of their contracts.

Staffing costs at PNE were £24.5m, an increase from £23.3m a year prior. The wage bill rose from £20.4m to £21.4m and PNE employed 127 staff compared to 115 in 2021. Preston paid £177 on wages for every £100 of income they earned, although that number was at £216 last year.

With losses seemingly inevitable at PNE, it could be cause for criticism, but not from Football finance expert Kieran Maguire.

“It's a scary example of the Championship being probably the craziest division in European football,” he said.

"In terms of its day to day running, Preston North End probably lost close to £400,000 a week - and I consider them to be, from a financial point of view, a reasonably sane club.

"They don't tend to live hugely beyond their means. They don't spend, by Championship standards, ridiculous amounts on wages, their strategy with regards to transfers is modest and yet, they're losing all this money. It's not just in 2022 it's every year you're in the Championship.

"If it was any other industry you would just say 'let it collapse, it's got no future' but because it's football, because there's that supposed gold at the end of the rainbow from the Premier League, it encourages clubs to gamble. And I don't think Preston are particularly one of the gambling clubs.”

North End owe their owners £77m following the end of the financial year, an increase of £15m compared to 2021.

Owned by the Hemmings family, the club holds a special place in their hearts and according to Maguire, it’s a good job.

Despite the costs vastly outweighing PNE’s turnover, Maguire sympathises with the challenges of running a club in the Championship.He said: "The losses are going up, it was £14m in 2019 and then it dropped to £10m, then up to £17m and now it's up to £20m. Preston are bringing in more money but it's a real challenge to control the costs. I certainly haven't got them down on one of my worst run clubs.

"They're very dependent on the owners. I think they now owe the owners £77m interest free. That's an investment of affection and love because even if you get to the Premier League, you're not going to turn that around.

"I'm a Brighton fan, we've been in the Premier League for six years and we've made a loss most of the time. It's a huge fallacy that the Premier League is full of clubs making huge sums of money.”

With costs spiralling and football only getting more and more expensive, and the Premier League still looking a bit of a distant dream for North End, the current trends from the finances are likely to continue.

As they are currently losing close to £400k a week, without promotion, is there a chance for them to claw their way back to breaking even?

“It can't be done. The only club within the past five or six years that has ever just broken even in the Championship is Rotherham and they always get relegated,” Maguire continued.

"In 2019 we had Derby County play Aston Villa and the losses of those two clubs together was just incredible. But that's what you've got to do in order to get into the play-offs or a promotion spot in the vast majority of instances.

"There is the occasional club who just does it and loses £10-15m, but the average losses are huge.

"The costs are out of control. The average wage in that division is probably £750,000 a year, and that's the second tier of English football.”