This article analyses Millwall finances in respect of the 2020/21 season.
The 2020/21 season was a tame season for the Lions as the club finished mid-table in 11th. This was three places lower than the prior year as they continue to aspire to a EFL Championship play-off place. The club reached the FA Cup fourth round and EFL Cup third round too.
Millwall finances took a hit from the loss of matchday revenue which saw the club record a loss of £14m. This was Millwall’s largest ever loss and The Lions have not recorded a profit since 2002.
Revenue fell from £16.4m to £12.5m as the club saw its matchday revenue plummet. Millwall also recorded other income of £2.1m, an increase from £0.9m in 2020. The majority of this income relates to amounts received from the Government Furlough Scheme (£1.4m).
Matchday revenue plummeted from £4.4m to £1.4m (67%) as fans were unable to attend most games. Only two games were played with fans which were capped at 2,000 fans (10% of capacity). With fans returning to The Den in 2021/22, most of matchday revenue should be recovered unless new restrictions are introduced.
Broadcast revenue fell from £9.4m to £8.4m (11%) as the club fell three places in the league and suffered the impact of COVID-19. A strong FA Cup run may help boost broadcast revenue.
Commercial revenue remained stable at £2.7m. The club remain with the same shirt (Huski Chocolate) and kit (Macron) sponsors so likely much of the same in 2022.
Millwall’s revenue took a hit as it felt the impact of playing behind closed doors. The club will be hoping for a full season with fans to boost revenue back towards £16m. A play-off push in the second half of the season will be the main aim to be in with a chance of Premier League riches.
Operating costs rose from £25.4m to £26.1m (3%) as Millwall steadied its cost base in light of falling revenue. Profitability was however damaged by slightly rising costs and a revenue reduction.
Millwall’s wage bill rose from £18.9m to £20.8m (10%) as the club failed to slow wage growth significantly.
This and falling revenue led to a worrying wages to revenue ratio of 167%. This means that for every £1 generated in revenue, Millwall are paying out wages of £1.67. For comparison, UEFA recommend a maximum ratio of 70%, which Millwall are more than double of. The return of fans and rising revenue will push the ratio back towards the 115% of 2020. However, Millwall will be looking at how it can better manage its wage bill while remaining competitive to avoid large losses.
Other operating costs fell from £6.5m to £5.3m due to matchday cost savings.
Millwall is a typical Championship club which operates in a financially ‘interesting’ league. The majority of clubs have wages to revenue ratios in excess of 100% which requires ownership funding and leads to large losses. Millwall will be hoping to manage this better and will see a rise in revenue in 2022 which should help with profitability at a minimum.
The Lions do not often spend significant sums in the transfer market and 2020/21 was no different. While the chart above and Transfermrket.com suggest no transfer spend, the accounts of Millwall indicate a transfer spend of £1.5m and income of £1.6m.
Millwall signed Kieftenbeld, Evans and Bennett during the season, while no major outgoings suggest this income came from sell-on clauses from previous sales.
Player amortisation charges fell slightly from £2.2m to £2.1m (2%) as playing squad investment remained stable. Limited spending to date in 2021/22 will likely see this fall slightly.
Profit on player sales rose from £0.1m to £0.7m as the club looked to have benefitted from a sell-on clause or two. It is unclear who this could have related to.
No major outgoings in 2021/22 to date will likely see a small number here unless any sell-on clauses are triggered.
Millwall is owed a net £0.2m in transfer fees.
The Lions does not rely on the transfer market nor spend significant sums in the market. This means it often has a marginal impact on its finances. This was once again the case in 2021 and is likely to be the same story in 2022.
Millwall recorded its largest ever loss in 2021 and kept the streak of losses going since it started in 2003.
Before player trading, Millwall recorded an operating loss of £11.6m, up from £8.0m in 2020 (45%). This was almost entirely driven by the loss of matchday revenue. The return of this revenue stream in 2022 should improve this picture, although the club will be losing its furlough income of £1.4m which will offset this.
After player trading, operating losses were £13.1m, up from £10.1m (29%). As mentioned, player trading has a minimal impact on the Millwall finances, and this appears unlikely to change.
Net finances costs of £0.7m saw Millwall record a loss before tax of £13.8m, up from £10.9m in 2020.
Millwall is a loss-making club as it competes in the uber-competitive EFL Championship. The current wage structure of Millwall and most Championship clubs does not allow for profitability unless significant player sales are achieved, or parachute payments are in effect. Millwall will however be hoping to reduce these losses to ease the burden on its owners.
The losses incurred by Millwall saw the club require significant funding from both its owners and the EFL.
Millwall’s cash reserves rose from £0.6m to £1.3m. This was driven by cash inflows from financing (from the EFL and its owner) of £15.8m which were used to offset cash outflows from its operations (£13.8m), player trading (£0.1m) and capital expenditure (£1.2m).
Of this financing cash inflows, £7.9m was received from both the EFL (loan) and its owners (capital injection – non-repayable).
Therefore, debt levels rose significantly from £12.0m to £19.9m. Millwall received £8.3m in loans (£7.8m outstanding) from the EFL to pay off its HMRC debts. The repayment terms are unknown.
In addition, the club has a £20m credit facility with its owners and is currently using £10m of this facility. It is due to have a steep interest rate of 12%, however interest is currently being waived on this facility.
The club also has long-term lease liabilities of £2.3m.
Millwall’s net debt hence stands at £18.5m, a significant increase on the £11.4m figure in 2020.
Millwall is a typical Championship club, relying on its owners for financial support to continue operating. The pandemic opened eyes further on the plight and unsustainability of a typical Championship club, so it will be interesting to see how the EFL tackles this in the future. Millwall will however be looking to slowly improve its situation while remaining competitive and eyeing a play-off place.
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