Ipswich Town’s Premier League dream crashed back to reality after a tough season ending in relegation.
Their Championship form couldn’t consistently shine against Premier League teams, as shown by managing only one win at home.
Now, back in the Championship after a 19th-place finish, the true cost of their Premier League season comes into sharp focus for Kieran McKenna’s side.
While the on-field narrative is one of disappointment, EFL Analysis’ finance expert Adam Williams examines the club’s accounts, revealing the complex financial puzzle Ipswich must solve to plot a swift return to the top flight.
Photo by Harry Murphy/Getty Images
Photo by Harry Murphy/Getty Images
Unpacking the Delap profit and Ipswich’s £61m PSR cushion
To understand the financial task Ipswich face, EFL Analysis’ finance expert, Adam Williams, has taken a look at the lasting impact of their spending:
“With Ipswich, the fact that they were promoted with a real Championship wage bill, as opposed to the other two clubs whose revenue and wages were distorted by parachute payments, will count in their favour,” Williams explained.
“Yes, they spent a lot of money this season but I don’t think the profile of the player they signed will have seen the wage bill go mad. There are one or two others that might fetch decent fees too, but my instinct is that they won’t sell as many as the other two relegated clubs.
“They spent £125m this season so that amortisation will have increased by £25m or so for 2024-25. Let’s say the wage bill went up to £70m. That’s about £15m higher than Luton’s was in their season in the Premier League, so I think that’s a fair benchmark.
“So if we’re looking at a £70m wage bill plus £30m in amortisation and an operating loss of about £25m in 2023-24 minus promotion bonuses, I reckon they’ll be in profit by about £15m when they release their 2024-25 accounts.
Photo by Visionhaus/Getty Images
Photo by Visionhaus/Getty Images
“So a £40m loss in 2023-24 and a £15m profit in 2024-25 equals a net loss of £25m. Take another £5-10m off that for PSR-deductible expenditure.
“The Liam Delap sale will help. His fee was £15m and £3m of that has been amortised already, so if the sale price is £30m then that will be an £18m profit for PSR purposes. So by the time you get there, you’re probably starting 2025-26 at a break-even point in terms of the three-year PSR cycle.
“They’re allowed to lose up to £61m for the cycle, so basically they could sustain a £61m loss in 2025-26 without breaching PSR. With parachute payments, they’ll make a loss but I’d guess maybe in the £10-20m bracket depending on what sales they make.
“So, long story short, PSR isn’t a problem for them. That said, how much they spend will be dictated by how much cash they have access to. We don’t know how much of 2024-25’s spending was done via instalments. If the signings weren’t mostly front-loaded then that’s going to be a pretty big drain on resources.
“I think if they do make many new signings, they will have to be financed by sales. That’s going to be the case for all of the relegated clubs. It’s normal. You have to cut your cloth when you’re losing £60m-plus in revenue overnight.
“But I think the summer will be more about retention and keeping the core of that squad together. In Championship terms, it’s good enough to challenge. They don’t need to bet the farm on going up straight away again.”
Photo by Harry Murphy/Getty Images
Photo by Harry Murphy/Getty Images
Delap’s Chelsea preference triggered by relegation clause
This financial backdrop makes the anticipated sale of Liam Delap a significant factor in Ipswich’s immediate future.
The forward has made it clear his preferred destination is Chelsea, as the Stamford Bridge club pushes to finalise Delap’s £30 million transfer from Ipswich Town.
This move is largely facilitated by a £30 million relegation release clause in Delap’s contract, triggered following Ipswich’s Premier League demotion.
This clause showed a clear exit route at a fixed price, attracting interest despite concerted efforts from Manchester United, Newcastle United, and Everton.
Appearances 40
Goals 12
Assists 2
Points per game 0.63
Minutes per goal 223′
Liam Delap’s Ipswich all time stats, via Transfermarkt.
Chelsea have engaged in discussions with Ipswich regarding the release clause and have also considered a separate loan deal for forward Marc Guiu to Portman Road.
For Delap, the chance to join a club competing in Europe like Chelsea is understandably an attractive prospect, making their interest particularly attractive after Ipswich’s relegation triggered his pre-agreed departure terms.
Ipswich signed Delap from Manchester City last July for an initial £15 million, with a further £5 million due after their promotion.
Despite the club’s struggles and eventual relegation, Ipswich are already eyeing three potential Delap replacements.