Preston North End chairman pens lengthy club update on transfers, sustainability, FFP, last season, next season and even the roof

Hemmings’ wide ranging update on the club website covered all areas of North End, from catering and commercial to the leaking roof of the Alan Kelly Town End and transfer strategy.

Preston finished their Championship season in 12th, a point worse off compared to their total last season but were closer to the play-offs this time around, six points off compared to 11.

Sections of the update are listed below, with the full update available here.

2022/23 Season

“While we are disappointed with the final run of results during the season, and that consequently we didn’t make the Play-Offs, as the dust settles, I would like to think most fans will agree that there have been a number of positives this season.

“To have still been in with a chance of making the Play-Offs right up until the final two games of the season has to be viewed as progress. Not quite where we wish to be, but progress nonetheless. The Championship is one of the most competitive leagues in the world, where we are up against a number of teams with tens of millions to invest from Premier League parachute payments.

I also feel it is worth pointing out that the manager, the coaching staff and the players achieved a top half finish despite suffering a number of key setbacks through player injury. Last season’s leading goalscorer Emil Riis missed the majority of the season, and Troy Parrott and Ali McCann were both out for a long period. Alan Browne, Ched Evans, Ben Whiteman, Greg Cunningham, Robbie Brady and Andrew Hughes were also missing for the final run of games. How might we have fared in the run-in with a fully fit squad available to us? But that’s the nature of this game. All the ‘what ifs’.

"But how did the club perform off the field as well as on it? I want to share with you some preliminary highlights for the 2022/23 season (please note, the figures referred to have yet to be audited):

1. Turnover for the season up to a record [operating] revenue of £14.8m.
2. Increased revenue largely through commercial and stadium income (driven by improved season card sales).
3. Annual pre-tax operating losses (pre depreciation and amortisation) reduced from £16m to £11.5m.
4. Season card sales highest for over 60 years at c12,000.
5. Average attendance at home games increased from 12,501 to 16,269. This is the highest average attendance at Deepdale for over 50 years.
6. We changed our retail/club shop partner to fast-growing Castore brand.
7. We changed our commercial/catering partner to industry leader Sodexo.
8. Invested a six-figure sum in opening up a new fan bar – The Gentry Bar.
9. Financial support from the owners for 2022/23 season anticipated to be c£11m.

"These figures are hugely encouraging and are testament to the amazing fans and fanbase which PNE has.”

Works to the stadium

“Additionally, we acknowledged fans wanted us to have a dedicated fan zone bar and wanted us to repair the Town End roof. It took longer than we would have wanted – but in April we opened The Gentry Bar.

"This has already received great feedback and it will continue to improve and evolve. Finally, a significant sum has been set aside to begin work on the Town End roof over the summer months so that it is ready for the coming season.

"This investment is in addition to the annual hundreds of thousands of pounds that we invest each season into the repairs and maintenance of the stadium.

“We know that we do not get every decision right (both on and off the field) but I hope that we have demonstrated that we are listening to fans and trying to improve. Equally, I hope that fans do understand and appreciate that there are projects and developments we would all like to be fast tracked but we have a budget, a budget that is first and foremost focused on the first team squad.

"As custodians, the long-term financial sustainability and success of the club is paramount to us.”

Transfers

"We said at the beginning of this season that there was a great deal of work needed in order to get player numbers, squad quality and costs under control. I am pleased to say that we have largely achieved all this, getting the operating costs of the club to much more sustainable levels.

"Across the summer and the January transfer windows we brought in six new players and three new players respectively, all to help bolster the first team playing squad. Whilst we achieved this through a combination of signed players and loan players, each of these players costs significant money to contract. To counterbalance this we had a large number of players we either moved on or terminated contracts with.

“What does all this mean for the season ahead? Working closely with Ryan Lowe, the coaching staff and the club’s recruitment advisors, we have been reviewing and highlighting potential targets for the summer transfer window as we look to strengthen and enhance our playing squad.

“We do not underestimate that there is a great deal to be done to strengthen the squad for the 2023/24 season. Nor do we underestimate the amount of work required to contract those players we wish to retain and replace those we do not. The end goal is to have a substantially improved squad. Time will tell if we succeed.

“Player budgets for the season have been discussed in detail with the manager (and his coaching team). As I have outlined on numerous occasions, we do not have the luxury of the riches of the parachute payments. Also, like every club in the Championship, we are constrained by Financial Fair Play rules (FFP), which means we must keep our (three year accumulated) losses to under £39m.

“That is a huge number, but we are aware of many clubs in the Championship that are very close to or have already breached this loss figure. We saw, last season, a number of clubs face points deductions due to financial uncertainties. We anticipate more clubs risk sanctions this coming season. We at PNE are not immune to this threat – we too are constrained by large annual losses.

"Our accumulated losses mean there is little headroom beyond what we have budgeted.

“To put things succinctly – for those fans wanting us to spend more on player recruitment than we have budgeted for 2023/24, we cannot. We would potentially break FFP rules and risk a points deduction.

"We believe it is right that identifying all new players is left to the experts. We have a strong scouting network, specialist analytics support and a first-class coaching team. Ryan Lowe, his coaching staff and their advisors analyse the squad, the areas that need strengthening and they identify players who fit our need. It is only then that we (the senior operating team and the board) become involved in trying to secure the players identified.

“It is not always possible to get every player we are asked to recruit. There are a long list of factors and unknowns that can stall or derail any recruitment. It happens at every single club in every league throughout the world. Rest assured though; we have been on with our recruitment process since the closure of the last transfer window. We prefer to get our transfer business done early, but some players we identify might not be available until later in the window (loan players for example).

“The loan market has proven a great opportunity for us. Having access to players in a relatively low-cost way that might ordinarily cost us millions to sign is, in our view, sound business. Our strong relationships with all the top Premier League sides puts us in a great position to benefit from the loan market. Therefore, we will continue to scout the loan market to recruit raw up and coming talent to both help them develop and to enhance our team.”

Sustainability

"Over the past season PNE has worked hard to redress this and to focus on a sustainable financial model. We are on the right track, but we still have work to do. The incredible support we have had from the fans, the increased season card sales and the record-breaking matchday crowds have all played a huge part in improving the club’s finances and we are extremely grateful to each and every fan for their support.

“We know it has been a rollercoaster at Deepdale and the home results haven’t always been as we would have wished – but the team deserves your continued support. We sincerely hope that the season card early bird offer is tempting enough to help us build on the amazing support you gave the lads last season.

“The relative success of Luton, Coventry, Millwall and us this season shows that well-run clubs with a focus on good coaching, hard graft and a network for finding raw talent means you can compete in this league – despite the lack of a financially level playing field. We aim to give Ryan Lowe all the support possible to get the right players in over this summer transfer window. But, as highlighted above, this must always be within the parameters of the budget we have.

“The facts are that the majority of Championship clubs are not sustainable – their costs far outweigh their income. It is therefore incumbent on us to aim to make our club more and more sustainable each season. This can only be achieved, by a club the size of PNE, through a combination of key strategies:

1. Improving the season card contribution. We achieved an improvement last season by driving c12k season ticket sales. This in turn drove matchday attendance and spends.
2. Improving the matchday experience (through better catering and retail). By listening to fans’ concerns and through better fan engagement we have gone a long way to making improvements here.
3. Occasional player sales. This is potentially the area with the most significant impact on annual income. We had some successes pre-Covid in this strategy and it is our intention to re-focus our recruitment and further develop this model.
4. Development of young upcoming football talent through our own Academy to bolster our playing squad. I have explained previously why we remain a Cat 3 (rather than a Cat 2) level Academy. However, the work being done by our Academy team and the successes we are having are testament to the strategic plans we have in place. The c£5m investment required to build the indoor playing facility is just not feasible (without local authority/EFL/grants help) at this time. We are in dialogue with both the local authority and funding/grant bodies.
5. An improvement to the distribution of Premier League monies. For several seasons now we have been strongly supporting the EFL in their negotiations for a fairer distribution model. With Government encouragement we hope that we are nearly there. This will be a “game-changer” throughout the EFL and we urge all parties to get this deal done as soon as practicable for the betterment of the whole football pyramid.”

Aims for next season

"Our aspiration for next season is to achieve top six and ultimately, one hopes, promotion to the Premier League. There are 23 other clubs with the same ambition. There are five clubs with the advantage of parachute payments.

"We are focused on building a squad to improve on last season and to compete at the top end of the Championship.

"Are we punching above our weight? Yes, we are, and long may it continue, and we should be proud of this fact.

"I can promise you we will try our best to improve in what we do. Try to improve our communications with fans and continue to make PNE a better club within the community and a better, sustainable club, for today’s and for future fans.”

Fans’ support

“I’d like to finish off my Club Update with one final special comment on our away fans. They have been truly remarkable and incredible in their dedication to supporting the team come rain or shine, spending their hard-earned money travelling near or far across the country.

"These fans have played a very strong part in our good away form this season. They regularly out-sing home crowds for an entire game, no matter what the score. We at the club are grateful to all of you.”