Dundee United have confirmed another financial year of multi-million pound losses.
But owner Mark Ogren has predicted that the only way is now up for the Tannadice club and in 12 months’ time he will be announcing the first profit since taking over.
United’s accounts for the year up to the end of June, 2021 have now been published ahead of the AGM at the end of this month.
Turnover is around the same mark as the previous year (£3.79m in 2021 compared to £3.91m in 2020).
The wages to turnover ratio has risen from 120% to 132% but the operating loss of the club has fallen from £3.19m to £2.27m, with the overall losses also heading in the right direction (£3.01m to £2.52m).
Those figures do not factor-in the transfer fees banked for the likes of Lawrence Shankland and Kerr Smith.
In his strategic report, Ogren expressed a belief that United’s economic picture is changing significantly for the better.
Looking to the future
He said: “The board is confident looking forward without the detrimental impact of Covid-19 that the club will be in a much stronger financial position and will no longer be reporting significant operating losses.
“With the easing of many of the restrictions related to football stadiums in August 2021, the internal financial projections for the year to 30 June 2022 are predicting a return to a more normal trading period, and with the benefit of the season ticket credit donations we expect to report an operating profit for the year.”
Football finance expert Kieran Maguire says Ogren’s prediction is “feasible” but not without challenge.
Price of Football author Maguire added: “They’ve not made a profit since 2015, and that was purely on the basis of player sales.
“If Dundee United wants to compete in this division then it’s an expensive one to be in.”
University of Liverpool academic Maguire reckons cost control – as well as working with commercial partners to generate more money on non-match days – is vital for the Tangerines to deliver on Ogren’s projection.
“But cost control is really difficult in football,” he said.
“Football is a dull industry because you have costs 365 days of the year but have income 25 days a year.”
On the pitch, owner Ogren has given manager Tam Courts the “primary objective” of making United a top six Premiership club.
And he says keeping them in the upper echelons of the Premiership is vital to the Tannadice side’s financial performance.
There are currently only four points between fourth and ninth places in the league, with United sitting sixth.
Ogren said: “When the role became available [to replace Micky Mellon] he was the outstanding candidate who was interviewed by the board.
“Tam’s remit is to continue with the club’s key vision of developing home grown players for the first team as well as cultivating a long-term game model across all teams and age groups within the club, with the primary objective of attaining a regular top six Premiership league position.”
Relegation risks
The US-based businessman says the biggest risk to United is relegation to the Championship, where they spent four seasons from 2016/2017 to 2019/20.
He added: “Due to the principal activity of the company, the revenues of the business are inherently linked to the on-field performance and success of the football team.
“The performance of the team in previous years led to the company making significant financial losses, which have required substantial investment to maintain the company as a going concern.
“The principal risk to the business is therefore the possibility of the team being relegated to the Championship again.
“The owners and board are committed to providing the required funding and infrastructure in the club to maintain it as a competitive team and going concern in the Premiership, and also to provide the platform to enhance the team’s prospects of a top-six finish and qualification for Uefa competitions.”
Additional reporting by Alasdair Clark
