Boom and bust culture has to end – Clibbens

HUDDERSFIELD TOWN chief executive Nigel Clibbens insists the impact of new financial regulations is already being felt across the Football League after the Yorkshire club posted a reduced loss of £4m for last season.

Jordan Rhodes

In an attempt to cut spending, the League has brought in Financial Fair Play legislation that will see any Championship clubs who lose more than £8m in 2013-14 hit with a transfer embargo or fined.

In future years, losses must be capped at £6m (2014-15) and £3m (2015-16).

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Penalties relating to this season’s accounts, which must be filed by December 1, 2014, will be imposed the following January.

For clubs in the second tier such as Huddersfield, it has largely meant a round of belt-tightening with the Terriers’ wage bill for 2013-14 likely to be 15-20 per cent down on last season when an outlay of £11.8m on players and football staff led to an overall loss of £4.02m.

Speaking to the Yorkshire Post, Clibbens said: “As a club, we have been long-term supporters of FFP. The culture of boom and bust has to go. Clubs need stability, not peaks and troughs.

“The bottom line is there isn’t an endless stream of wealthy individuals who can put huge sums of money in. And even if there is, what happens when they pull out?

“The ramifications can be felt for years to come.

“Huddersfield Town were in administration a decade ago, but decisions made at the time were still being felt this season.

“The new rules have made an impact. Clubs – or most clubs, anyway – are operating in a different way.

“Long-term contracts are getting rarer and squad sizes are getting smaller. Clubs are also willing to let players go at the end of their contracts. We have done it here with players who were not willing to accept our offer of a new deal at reduced terms.”

Huddersfield’s accounts for the year to May 31, 2013, vividly illustrate the value of the club’s 2012 play-off success.

Turnover was up 59 per cent to £11.23m, mainly thanks to an increase of £3m in central payments to Championship clubs compared to those in League One.

That increase, however, was offset by the wage bill rise that saw all the club’s income swallowed up in paying the players and staff.

The overall loss of £4.02m was, though, an improvement on 2011-12 when Town suffered a £5.7m deficit.

Playing a big part in the reduced shortfall was Jordan Rhodes’s sale to Blackburn Rovers for £8m in a structured deal that will see payments spread across five years.

In 2012-13, for instance, Town received £2.5m. An identical sum was then paid by Blackburn last August, with the three remaining payments of £1m due in August of the next three years.

A further payment may also come Huddersfield’s way with a 20 per cent sell-on clause (over and above an £8m fee) being included in the transfer that took the Scottish international to Ewood Park.

Clearly, the deal was a lucrative one for Town, who paid Ipswich £450,000 for Rhodes plus another £550,000 or so as part of a sell-on clause inserted in the original 2009 transfer.

But the fact Town insisted on a structured deal guaranteeing a certain income over five years rather than a one-off reduced fee from Blackburn also reveals the good husbandry that is under-pinning the club’s thinking.

Clibbens said: “The club is extraordinarily fortunate to have someone like Dean (Hoyle, chairman), as it allows long-term decisions to be made that are for the good of Huddersfield Town.

“We have a budget every year that does have a bit of flexibility built in. But that budget will invariably generate a certain level of losses – which Dean is comfortable with.

“Of course, we would love to break even. But, say for example, we had wiped out the £4m loss of 2012-13 by cutting our wage bill last season by the same amount, the upshot is we would have more than likely been relegated.

“After promotion, we budgeted for a bigger wage bill because we needed players like (Jermaine) Beckford, (Neill) Danns and (James) Vaughan to stop up. You have to have principles, but also be pragmatic.

“Part of our model is to recruit players, develop them at the same time as winning games and then maybe sell them on. That process is really important to us because we simply don’t get the attendances that a lot of others in the Championship get.

“The same goes for turnover, particularly compared to those who receive parachute payments from the Premier League.

“Where we have been strong, though, is in choosing when to sell players. We have got good value for money in several transfers. Jordan was one of those, as was Jack Hunt, who we sold to Crystal Palace (for £1.5m last September).

“We can plan for the future in the knowledge that money from those deals will be coming in.”