When I sat there watching the turmoil and trouble unfold at a fellow founding member of the football league, I began to ask myself: Could this happen to Preston North End? A matter of weeks ago, Bolton Wanderers found themselves staring into a deep abyss. The proud Lancashire side were just moments away from liquidation, despite spending most of the 21st century in the top flight of English football.
Bolton were a club who had tasted the riches at the top, they had enjoyed the service of great players and even competed in Europe against the likes of Bayern Munich and Red Star Belgrade. But within the space of a decade, the demise was complete. Bolton had fallen into the third tier of English football and found themselves placed under administration. While the situation at Preston is markedly different, the future ownership of the club is a very real concern. Embed from Getty Images
And with today seeing the appointment of Preston’s first official Chairman since 2012, does this show Trevor Hemmings’ desire to shift the control of the club to his heirs? Craig Hemmings, Trevor’s son, was given this role and while Peter Ridsdale remains an ‘advisor’, Craig has been appointed in a move that might mean nothing for our immediate future, but it does indeed show that at least one of Trevor’s offspring has an ambition to become increasingly involved in a club he will partly own in the near future.
Even though Trevor Hemmings remains the current owner of Preston North End after acquiring a controlling interest in the club during the summer of 2010, I cannot help but wonder how long his ownership will last and who inevitably will take control of our club. While it seems likely that his children will become the primary stakeholders in Preston North End, it is unknown whether they will fund the club to the same degree as is currently the case or whether the club will instead become part of a consortium owned by another cash-rich tycoon.
Assuming Trevor’s children become the primary stakeholders of the club, it could be expected that the turnover of the club will be used to fund the purchase of new players and respective wages without running up excessive debt as has been the case for almost a decade under the ownership of Trevor Hemmings. The turnover of the club is approximately £7.3m and will likely rise over the next few years depending on how future events pan out.
Trevor Hemmings previously saved the club from a HMRC winding-up order in 2010 which could have forced the club into compulsory liquidation. Hopefully, Trevor`s children will be able to deal with similar problems which could crop up in the club’s future. The biggest concern is whether one or more of Trevor’s children will sell their respective stakes in Preston North End. While it is possible that potential new stakeholders will be able to fund the club effectively, there is always the chance that funding targets may not be fulfilled. It is equally possible that Trevor’s children will not put the necessary funds into the club to keep it in good financial shape since the turnover to wage ratio is currently 100%. The club also experienced a pre-tax loss of £4.4m during the 2015/2016 season which quite clearly exemplifies the financial commitments needed to prevent the club from going into additional debt. It was also reported during the 2015/16 season that the club had received £28.1m in loans.
If Preston North End is sold by Trevor`s children, it is hard to predict exactly who will own the club. Football clubs are typically owned by a single individual or a group of stakeholders who may own a consortium or a conglomerate. For instance, Milton Keynes is owned by Pete Winkelman who also owns a property development consortium. While many football clubs are owned by wealthy individuals or corporations, most run up excessive debt which can prove extremely damaging to the prospects of the club if not eventually dealt with. Embed from Getty Images
Southend United were presented with a winding-up order in January due to unpaid taxes and it doesn’t look like it has been settled as of today. How are we supposed to know if the new owner of Preston North End will curtail any financial problems in the future or will proliferate the relatively small debt the club has currently?
Last season, Birmingham City were deducted nine points after incurring losses of £48.8m between the years of 2015 to 2018. And it was reported last year that most clubs in the Championship spent 99% of their revenue on club wages in a desperate bid to get to the Premier League. Given the financial pressures that clubs face nowadays, it is almost certainly not going to get any better when more and more historic Premier League sides drop down to the Championship and desperately splash bucket loads of cash in an attempt to win the financial wacky races of the second tier. It seems more than likely that Preston North End could become a victim of financial difficulties in the future that are beyond resolvable if the new owner proves to be unreliable.
Only time will tell what the outcome of the club’s ownership will be. While we won`t have to worry about what will happen now, we will have to worry about what direction the club will head in the future.