Hatters see gross profits drop by over half
Luton Town have revealed their turnover was unsurprisingly ‘significantly reduced' following relegation from the Premier League to the Championship after submitting their club accounts for the 2024-25 season today.
The Hatters had posted income figures of £132,321,856 the previous year, as they reached the top flight by beating Coventry City in the play-off final at Wembley, only to see that amount drop to £66,823,168 due to not receiving the broadcast revenue from being back in the second tier once more.
Although Town made an impressive £17,217,562 on player sales, as opposed to just £1,216,434 the previous year, they also spent £27,645,472 on bolstering their squad, which meant that without the cash received from the Premier League, their gross profit was £14,263,511, well over half less than the £41,688,824 they recorded the previous year, while their actual balance was £1,344,464 down from £1,639,954.
Luton Town have announced their club accounts - pic: Leila Coker/Getty Imagesplaceholder image
Luton Town have announced their club accounts - pic: Leila Coker/Getty Images
Writing on their strategic report, the club said: “The 2024-25 season marked Luton Town's return to the EFL Championship following relegation from the Premier League. Despite high hopes for an immediate bounce back, the campaign ended in disappointment as the club finished 22nd and was relegated to League One.
“Despite planning for the possibility, relegation proved an unsettling experience for the squad and wider club. There was significant transfer activity during the summer of 2024, with several key players from the 2023-24 season departing for significant fees including Ross Barkley, Ryan Giles and Chiedozie Ogbene.
“In their place came experienced Championship performers Shandon Baptiste, Liam Walsh and Mark McGuinness, as well as the promising young talents of Reuell Walters from Arsenal and Lamine Fanne from AIK Stockholm. The window also saw the arrival of midfielder Tom Krauß from Mainz.
“Relegation from the Premier League resulted in significantly reduced turnover in 2024-25 principally from broadcast revenue. Despite a strong showing in the Premier League, the club had planned for this risk, with relegation clauses included in all player contracts helping to mitigate the reduction in income.
"Financially, the key difference from 2022-23, when the club last competed in the second tier, was that Premier League parachute payment had been secured for the 2024-25 and 2025-26 seasons. These are distributed to relegated clubs to allow a phased transition to an EFL Championship cost base. Given the clubs long term strategy and continued commitment to operating a sustainable business model, a significant proportion of this revenue was earmarked for capital investment activity.
"While the club's support functions grew following promotion to the Premier League, the scale of the overall operation remained comparable with other Championship clubs of a similar size, so fundamental re-organisation was not required following relegation. Administration expense, therefore, remained consistent with the prior year.
"The club recorded a gross profit of 14.4m which was fully offset by administration costs, but the summer transfer activity resulted in an operating profit of 17.1m. As in the prior year, all profits were reinvested in player acquisitions or development activity and associated capital allowance were group relieved to fully offset any tax liability.”
Town did see the amount spent on wages go down from £49,668,063 to £34,539,396, with the report continuing: “Despite the club's revenue approximately halving, the club's wages to turnover ratio only increased by 16% due to the squad restructuring and relegation clauses being triggered. The net book value of the squad increased from the prior year, with the major summer departures relating to players acquired for minimal acquisition costs and the consequence player trading income being used to fund new acquisitions.
"The club remains in good financial health with strong liquidity and net assets in excess of £45m at year end. Movements in cash and key working capital are primarily driven by the timing of player trading transactions, with trading subsequent to the year end further strengthening the club's asset position.”
Meanwhile, Luton are still fully focused on putting as much money as they can to a new stadium at Power Court and also helping to developing the club’s younger players too, with the report adding: “The club's long-term strategy remains to build a football club that can stand on its own two feet by operating a sustainable business model, whilst remaining competitive at the highest levels of the game. This requires the construction of Power Court Stadium, with a combination of both debt and equity funding.
"This project will be undertaken by another group undertaking, with a significant proportion of the parachute payments earmarked for this purpose to support the group undertaking. The board have also invested in the Academy as it continues to pursue EPPP 2 category status and plans to significantly improve the facilities over the next year. As well as the potential benefit to the club of developing young talent for the senior squad, this also provides aspiration and encouragement to young people in the local area.”
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