The Daily Mail reports that Hull have been blessed with debts of £27m and a wage bill of £40m.This ranks them among the highest payers in the Barclays Premier League and leaves them facing financial meltdown if the season ends in relegation.
"In a report compiled by their accountants at Deloitte, Hull have been warned that their uncertain financial position threatens the club’s ‘ability to continue as a going concern’ and have been told they will need to generate a £23m surplus just to meet their existing liabilities should Brown’s team go down."
In 2007, one year before the club earned promotion to the EPL, it had £1m in the bank and a wage bill of £3.5m. In other words, no debt. Now, two years on, the club enjoys (anxiously) life in the EPL. It earns £25m per year in television revenue, or approximately £20m more (£10m after tax) than the club would have made from television outside the top flight. And yet the club has a debt of £27m. How is this possible given the huge uptake in revenue - at least £10m per year - for Hull after the EPL promotion?
"Overspending certainly appears to be at the root of Hull’s problems, not least in the form of signings like Jimmy Bullard from Fulham.
He arrived for a club record fee of £5m on a five-year deal worth £10m in January and has yet to make his home debut after suffering a serious knee injury in his first game.
Other costly signings have included Anthony Gardner (£2.5m), George Boateng (£1m) and Stephen Hunt (£3.5m), who have all enjoyed contracts worth in excess of £1.5m per year."
But the signings of Bullard and others still do not account for the spiraling debt at the club. These four acknowledged "expensive" signings have easily been covered by Hull's increased television revenue, while they earn a combined £8m per year, leaving £32m in wages for other Hull staff members. In other words, Geovanni (pictured) is the highest paid footballer on the planet.
What explains Hull's debt? I don't know.
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