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EXCLUSIVE: Dundee United accounts Q&A with Derek Bond as finance chief addresses losses

Evening telegraph/ Courier news CR0026848 G Jennings pics , Dundee United financial director Derek Bond,
Dundee United finance director Derek Bond

Dundee United’s latest accounts, released ahead of this month’s AGM, revealed an operating loss of £2.27 million.

That follows operating losses of £3.19m in 2020, with the club’s wages-to-turnover ratio increasing from 120% to 132%.

The financial report also confirmed owner and chairman Mark Ogren has made interest-free loans of over £9m since taking over in December 2018.

Dundee United finance director Derek Bond.

Some of those loans were used to service the wage bill during a 15-month period without matchday income from fans.

US-based businessman Ogren predicts the club will report a profit in 2022.

The Tangerines will generate income from the sales of Lawrence Shankland and Kerr Smith for reported fees of £1m and £800,000 respectively, with the package for Aston Villa new boy Smith rising to £2m.

In an exclusive Courier Sport Q&A, Dundee United finance director Derek Bond addressed some of the concerns held by supporters.

Should fans be alarmed by the 132% wages-to-turnover figure in the latest Dundee United accounts?

There are two sides to that equation. There’s the turnover figure and the staff cost.

For a normal year we budget the turnover to be around £7.5m to £8m in the Scottish Premiership.

The turnover ended up at below £4m.

We had no gate receipts which was another £1.2/1.3m. Sponsors wanted credits back because they weren’t getting their benefits.

Matchday revenue, hospitality and retail was down. We’ve lost about £4.2m on revenue.

The wage bill was pretty fixed to compete for top-six football and we never made redundancies.

People took wage cuts and that helped a bit.

Dundee United accounts were hit by an empty Tannadice.

Furlough was used but the football department was fully operational and, unlike other clubs, we kept our academy operational.

Our turnover was decimated because we had no matchday revenue.

You can see quite clearly how we ended up with a wage bill greater than turnover.

If you look at the accounts you will find other operating income. That’s the furlough money and insurance money.

In reality, you should be able to add that to turnover as it is income.

If you stick that £2.3m on to the £3.7m, all of a sudden the wages-to-turnover figure is healthier at around 80%.

What is the basis for the positive projection for 2022?

Our revenue figures are returning to a degree of normality this season.

That £4m revenue we have reported this year will be closer to £8m by the time we have all our matchday revenue.

We will also be able to add in the extra £1m donated to the club via donations from season ticket refunds.

Out of 5,000 season ticket holders, around only 300 chose not to donate their fee back – that is incredible.

Our cost base hasn’t gone up substantially and I’d expect us to show a healthy profit in 2022.

Mark Ogren has given Dundee United £9m in interest-free loans since taking over – what if he decides tomorrow he doesn’t want to be here?

Dundee United owner Mark Ogren.
Dundee United owner Mark Ogren.

Mark Ogren is committed medium to long term. He has said it on the record several times.

We know he’s not going to be here forever but the only way for him to recoup his investment is to make the club successful.

If he walks out the door he is going to lose all his money, but Mark is totally committed to the club.

Around January (2021), I was having to ask Mark for money, month-to-month, to keep the club afloat by paying wages.

There is only so often you can do that before someone says “hang on a minute”.

Thankfully, the Scottish Government loan came in at the end of February and took some pressure off.

That was the same for other clubs. It’s not sustainable to have no income and having to shell out large sums of money on wages.

But it is entirely different now.

How important is fans’ financial input to Dundee United’s future?

Dundee United Supporters Foundation (DUSF) have backed the club.

The donations from season tickets and sales of over 4,000 early-bird season tickets by April was incredible.

But we are still investing.

We are just about to spend several hundreds of thousands of pounds developing Gussie Park to for our academy.

The Dundee United Supporters Foundation are buying into that and helping us.

They have put in £100,000 to the academy. DUSF are a good partner for the club and we are working closely with them.

Should fans have any fears for the future?

As long as we keep heading in the same direction there should not be concerns.

We went through a period where Mark Ogren was putting fairly hefty money every month to pay the wages. We are past that now.

The budget is based on a break-even basis with player trading being the variable.

Player trading isn’t just about a fee when they move.

Kerr Smith is only 17 and is now at Aston Villa. The money we got from him is good but the hope is someone like Kerr can be the next Andy Robertson.

Kerr Smith moved to Aston Villa earlier this month.

If he moves to another big club then we make money on a sell-on clause.

It’s not a one-hit we get on players. It can be a dripping roast because of the terms of the transfer agreement.

Stuart Armstrong is a prime example. We are still getting money him in these accounts.

Celtic had sell-on clauses to Southampton so anything they got we benefited from too.

Is top six football essential to profit in Dundee United’s accounts?

If we are not in the top six it’s not a financial disaster but it would be much better.

Clearly there is a big financial benefit.

There are potentially another two games against the Old Firm and the prospect of Europe.

In days gone past, it probably wasn’t that lucrative being drawn away to some far-flung corner for very little reward.

But now the prize money is a lot higher – even in the European Conference League.

Dundee United boss Tam Courts is set ‘regular top six’ remit by owner Mark Ogren

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