Millwall - Hard Times

Millwall narrowly missed out on bouncing back to the Championship at the first time of asking, losing 3-1 against Barnsley in the League One play-off final. Although this was not the outcome that Lions’ supporters would have desired, there were plenty of encouraging signs for The Den faithful. As chairman John Berylson observed, “This was going to be a rebuilding year and that has proved to be the case.”

The previous season had seen Millwall relegated after five years in English football’s second tier, which Berylson had described as “a massive disappointment to us all.” In truth, it cannot have been that big a surprise, given that his club had finished just above the relegation zone in each of the preceding seasons (19th, 20th and 16th).

Millwall’s progress in 2015/16 owed a lot to manager Neil Harris, who had been appointed interim manager in March 2015, then confirmed as permanent manager soon afterwards following improved performances by the team.

The club had struggled under his predecessors Ian Holloway and Steve Lomas, but Harris brought hope that he could be as successful as Kenny Jackett, who not only delivered promotion to the Championship in 2010, but also took the club to the FA Cup semi-final in 2013, where Millwall lost to the then Premier League club and eventual winners, Wigan Athletic.

"Back on board"

In his first full season Harris succeeded in restoring the club’s sense of identity and connection with the supporters. Of course, when many think of Millwall, they focus on the reputation of some of the club’s supporters, who have certainly been a “bit tasty” in the past, leading to the “no-one likes us, we don’t care” image.

However, even though some issues remain, this obscures the huge amount of work done in the community, e.g. the Millwall Community Trust. As Harris said, “this goes a little under the radar.” In reality, the local community is at the heart of the club, a recent example being when Millwall supported a successful campaign to save Lewisham Hospital A&E department.

The fans’ notoriety is just one of the challenges facing Millwall, though they also struggle with their geographical proximity to many bigger London clubs. On top of that, they have only competed twice in the top flight in their history (1988-89 and 1989-90) – though they did briefly lead the league in September 1989.

Furthermore, Millwall have always operated under severe financial constraints, once entering administration in 1997 before being bought out by Theo Paphitis, a local boy made good (and erstwhile star of Dragons’ Den).

The financial problems were eased in 2007, when Chestnut Hill Ventures (CHV), which has interests in financial services, retail, property and sport, invested £5 million into the club with Berylson becoming chairman. CHV is incorporated in America and own just over 70% of Millwall, but a crucial link with the supporters is also there with the Fan on the Board.

"The band wore blue and white shirts"

As you might expect, the club’s strategy is fairly down-to-earth, according to chief executive Andy Ambler, “developing a squad of players for the longer term who understand the Millwall philosophy… with the aim of gaining promotion to the Championship at the earliest opportunity with a squad that is capable of competing at that higher level.”

Harris is very much singing from the same song sheet: “You don’t have to be the best player. It hasn’t got to be 1,000 passes a game, it’s got to be high tempo, aggressive and you can’t ever shirk a challenge. It’s frowned upon.”

This has resulted in a focus on youth, as Ambler outlined: “There is a greater emphasis on younger players, mostly graduating from the Youth Academy. This is key to the strategy of the club, under the direction of Scott Fitzgerald. It is intended to invest further into the Academy, both in the quality of coaching and the facilities used, to enhance the opportunities to develop future players for the club. The directors regard this as a vital part of the future success of the club.”

Berylson is of the same opinion, “Having funded the Academy for some time, it is encouraging to see so many good young players coming through, which will be vital going forward. I want one or two young lads coming out of the Academy each year who can play (for the first team).” Recent examples of the production line include midfielder Ben Thompson and right-back Mahlon Romeo.

Millwall’s financials show quite clearly why they have to find a strategy that works for them, the most recent example being the hefty £12.0 million loss they reported in 2014/15. This was slightly higher than the previous season’s £11.7 million loss, despite revenue climbing £0.7 million (7%) from £10.5 million to £11.2 million.

Commercial income rose £0.4 million (26%) from £1.5 million to £1.9 million, mainly due to the refit of the retail outlet and improved merchandise. Match day income was also up £0.3 million (8%) from £4.3 million to £4.6 million, despite lower average attendances. Broadcasting income was flat at £4.7 million.

However, costs came under pressure, as the wage bill increased by £1.3 million (9%) from £13.9 million to £15.2 million, which the club ascribed to the full year cost of strengthening the football management team and increases in player salary costs. Other expenses also rose by £0.7 million (15%) from £4.8 million to £5.5 million, due to “increased investment in the pitches at both The Den and the training ground, as well as a higher cost of football agent fees.”

Profit on player sales fell £0.3 million to just £0.1 million, but player trading benefited from a £0.4 million (38%) fall in player amortisation from £1.0 million to £0.6 million. On the other hand, depreciation rose by £0.2 million (67%) from £0.2 million to £0.4 million.

Interest payable was slashed by £1.1 million from £2.8 million to £1.7 million, still very high for a club of Millwall’s size, as CHV agreed that no interest would accrue in respect of the £20 million loan facility from 1 January 2015 to 30 June 2016 (when interest will begin to accrue again unless CHV agrees otherwise).

Of course, most Championship clubs suffer very heavy losses, usually subsidised by their owners, so Millwall’s losses were by no means exceptional in this division, though they were among the largest. In fact, only five Championship clubs reported losses larger than Millwall’s £12 million in 2014/15, namely Bournemouth £39 million, Fulham £27 million, Nottingham Forest £22 million, Blackburn Rovers £17 million and Brentford £15 million.

Very few clubs are profitable in the Championship with only seven making money in 2014/15 – and most of those are due to special factors, such as high player sales, loan write-offs, land revaluation or high parachute payments. Top of the pile were Blackpool with an £8 million profit, thanks to their “unique” business model that seems designed purely to favour their owners.

Millwall have struggled financially for many years, accumulating £63 million of losses in the last decade. The last time that they (very nearly) broke-even was way back in 2004, though the loss was only £2 million in 2011, when Berylson described the results as “a very big step forward” and the reduction in losses as “encouraging”.

The previous season the chairman had claimed, “I feel we have managed to reduce costs and become more efficient in almost every area, however there is still work to be done.”

Unfortunately, these improvements proved to be something of a false dawn, as losses rose to £6 million in 2013, then more than doubled to around £12 million in the last two seasons. This was frustrating, but perhaps only to be expected when looking at earlier comments from Berylson: “All our efforts must be focused on giving our manager the resources to continue to achieve the progress we have shown on the field.”

That approach is all too understandable in the ultra-competitive Championship, but Ambler recognised that it was not sustainable in the long-run: “Putting aside the (Financial Fair Play) rules, we should not be running this club at £8 million losses every year. We’ve got to find a strategy to increase revenues and get the best possible quad without spending too much money.”

One method used by clubs to fund their operating shortfall is selling players, though to be fair this is not an enormous money-spinner outside the top flight with the most profit made by Norwich City £14 million, followed by Ipswich £12 million, Leeds United £10 million and Cardiff City £10 million. Indeed, Millwall noted in their 2014 accounts “a trend towards lower transfer fees outside of the Premier League.”

That is certainly true, but Millwall’s profit from player sales of £108,000 in 2014/15 was one of the lowest in the Championship, only ahead of Rotherham United and Bournemouth.

In truth, Millwall have rarely made big money from player sales, the last reasonable sum being received in 2010/11 when Steve Morison was sold to Norwich City – which also helps to explain the overall lower loss that season.

You have to go all the way back to 2004 and 2005 to find the last time that Millwall reported £3 million of profits from player sales: 2004 included the sale of Steven Reid to Blackburn Rovers (plus an insurance settlement following the premature retirement of Richie Sadlier); 2005 included the sales of Tim Cahill to Everton, Darren Ward to Crystal Palace and Scott Dobie to Nottingham Forest.

The 2015/16 accounts will be boosted by a sell-on fee arising from the sale of Aaron Tshibola from Reading to Aston Villa for £5 million, as he was on Millwall’s books until the age of 13, though the amount has not been divulged. Otherwise, most departure were basically released for nothing.

Millwall’s underlying profitability has been getting worse, as seen by the reduction in EBITDA (Earnings Before Interest, Depreciation and Amortisation). This is considered to be an indicator of financial health, as it strips out once-off profits from player trading and non-cash items. This has been consistently negative at Millwall, but has declined in the last five years from minus £1.5 million in 2011 to minus £9.4 million in 2015.

The size of Millwall’s negative EBITDA was far from uncommon with 15 clubs generating cash losses between £4 million and £12 million. In fact, only four Championship clubs had a positive EBITDA in 2014/15 (Blackpool, Wolves, Birmingham City and Rotherham) In stark contrast, in the Premier League only one club (QPR) reported a negative EBITDA, which is testament to the earning power in the top flight.

The only real revenue growth that Millwall have generated recently was off the back of their promotion to the Championship in 2010/11, when income rose by nearly 60% (£4.4 million) the following season. Berylson said that this was “as a result of higher attendances and commercial sponsorship, but most significantly a greater share of the Football League central television and sponsorship revenues.”

However, since that first season back, match day and commercial income have actually fallen, leaving TV as the only growth revenue stream. It is true that match day income was higher in 2013, benefiting from an FA Cup run to the semi-final.

Andy Ambler put his finger on the problem when he said that “the opportunities to increase revenue streams are very dependent upon the success of the team.” Thus, relegation at the end of the 2014/15 season will obviously have had an adverse impact on Millwall’s revenue.

This was confirmed by Ambler: “It is inevitable that operating in League One will reduce all revenue streams of the company. This may be mitigated should the team have a successful season as attendances and match day income are affected by the team’s performance and the club’s position in the league.”

Given the lack of growth, it is unsurprising that Millwall had the fourth lowest revenue in the Championship in 2014/15 with £11 million, only ahead of Rotherham United, Huddersfield Town and Brentford, and just behind neighbours Charlton Athletic. To place this into perspective, four clubs enjoyed revenue higher than £35 million (more than three times as much as Millwall): Norwich City £52 million, Fulham £42 million, Cardiff City £40 million and Reading £35 million.

Ambler noted that other clubs enjoyed “substantially more spending power than Millwall due to the parachute payments they receive.” Not only does this “create stiffer competition within the league”, but means that it is far from an even playing field.

However, even if we were to exclude this disparity, Millwall would still find themselves near the bottom of the table, though the revenue differentials would be smaller. That said, clubs like Leeds United, Brighton and Hove Albion , Derby County and Middlesbrough still managed to generate more than £20 million without the benefit of parachutes, thanks to their ability to attract larger crowds and earn money commercially.

Only 17% of Millwall’s revenue was sourced from their commercial operations in 2014/15 (up from 14% the previous season). The majority was derived from broadcasting with 42%, just ahead of match day 41%.

Millwall’s match day income increased by £0.3 million (8%) from £4.3 million to £4.6 million in 2014/15, despite a 2.5% fall in the average attendances from 11,182 to 10,902. This was partly because they hosted two more cup games, though ticket prices were also raised (around £1 a game) after many years of price freezes.

Commercial director Alan Williams commented, “It's a 4% rise and that helps our finances. A slight increase in revenue will make it a little bit more palatable for the chairman to maintain his current level of investment. We have to make money but we're sensitive to the fact that we must offer value for money. An increase after four years without an increase is acceptable I think.”

The match day income is not too bad, albeit less than half of table-topping Brighton (£9.8 million), especially as Millwall’s attendance was the fourth smallest in the Championship, only ahead of Brentford, Bournemouth and Rotherham. In contrast, Millwall’s average attendance of 9,108 in 2015/16 was the sixth highest in League One, even though it dropped by around 1,800 (16%).

This continued a trend of declining attendances, which have plummeted by around 3,300 from the recent peak of 12,439 in 2010/11 when Millwall finished ninth in their first season back in the Championship. That’s over a quarter of their crowd that have stopped turning up.

As a result, Millwall have frozen ticket prices for both the last two seasons in an attempt to boost crowds. As Williams said, “As everybody knows, this team plays better when the fans are behind them. When The Den is really rocking, the atmosphere is second to none.”

Some fans might have anticipated a price reduction in League One, though in fairness the club had not increased prices when the club had gained promotion. In any case, last month Ambler said that season ticket sales for 2016/17 were up on last year, presumably linked to the better displays on the pitch.

In the Premier League, the vast majority of all but the elite clubs’ income is derived from broadcasting, but this is not the case in the Championship. Here, most clubs receive just £4 million of central distributions, regardless of where they finish in the league, comprising £1.7 million from the Football League pool and a £2.3 million solidarity payment from the Premier League.

However, the clear importance of parachute payments for clubs relegated from the Premier League is once again highlighted in this revenue stream, greatly influencing the top eight earners, though it should be noted that clubs receiving parachute payments do not also receive solidarity payments.

In 2015/16 clubs received parachute payments ranging from £10.5 million to a massive £25.9 million. In fact, two of the clubs receiving the largest payment, namely Burnley and Hull City, went on to gain promotion. As the saying goes, “money talks”.

Nevertheless, it should be noted that these payments are not necessarily a panacea, for example Middlesbrough also secured promotion last season, even though their broadcasting income of £6.2 million in 2014/15 was less than half the size of those clubs boosted by parachutes.

From 2016/17 parachute payments will be even higher, though clubs will only receive these for three seasons after relegation. My estimate is £75 million, based on the percentages advised by the Premier League (year 1 – £35 million, year 2 – £28 million and year 3 – £11 million). Up to now, these have been worth £65 million over four years: year 1 – £25 million, year 2 – £20 million and £10 million in each of years 3 and 4.

There are some arguments in favour of these payments, namely that it encourages clubs promoted to the Premier League to invest to compete, safe in the knowledge that if the worst happens and they do end up relegated at the end of the season, then there is a safety net. However, they do undoubtedly create a significant revenue disadvantage in the Championship for clubs like Millwall.

Following relegation, Millwall will have received even less TV money: £680k from the Football League central distribution and a £360k solidarity payment, amounting to just over £1 million. As Ambler said, “The major factor to affect football-related income (in 2015/16) is the reduction in League and TV levies, which drops away dramatically in League One.”

Millwall’s commercial income in 2014/15 rose by £0.4 million (26%) from £1.5 million to £1.9 million, but this was still one of the lowest in the Championship, only ahead of Wigan £1.5 million. Again, few Championship clubs score big commercially, but six clubs earned more than four times as much as Millwall: Norwich City £12.8 million, Leeds United £11.3 million, Brighton £8.9 million, Watford £8.6 million, Derby £8.5 million and Wolves £7.8 million.

The club has two shirt sponsors: Wallis Teagan, a local building and maintenance company, have extended their arrangement for the 2016/17 season; while the back-of-shirt sponsor is taken by Oil Brokerage Limited. In the past, Millwall have, rather admirably, foregone commercial income when taking Prostate Cancer UK as their sponsor in 2013/14.

The Italian company Errea has replaced Macron as the kit supplier from the 2016/17 season. The shirt will be a striped design replicating the kit worn by the record-breaking Millwall side of 50 years ago that went 59 home league games without defeat.

Ambler expects commercial income to go up in future, as the 2015/16 accounts will benefit from a full year of operation of the new retail outlet and kiosks, while it is also hoped that the successful staging of a Wigan Warriors rugby league game at The Den will open up new opportunities.

"Jimmy, Jimmy"

Nevertheless, perhaps the best opportunity that Millwall has to generate more revenue is by developing the land adjoining the stadium. They have a regeneration plan to create affordable housing, student accommodation, retail and office space, a hotel and conference centre plus a facelift for the stadium.

However, Lewisham council has thrown a spanner in the works by unexpectedly preferring to allow a private developer, Renewal, to undertake the entire regeneration programme. It has threatened to sell the freeholds of the land next to The Den on which the club (and the Millwall Community Trust) hold leases, using Compulsory Purchase Orders if necessary.

Millwall’s view is that the football club should be at the heart of a “thriving and brighter community”, while its own development scheme “provides an opportunity to bring more financial stability to the club by generating non-football revenues, which are vital to the long-term future of Millwall FC.”

"Advice for the young at heart"

This was reinforced by Ambler: “It’s a once-in-a-lifetime chance to make sure what is built on our doorstep actually works for the club.” He added, “If this goes against us, it makes it more difficult to thrive and become self-sufficient. We haven’t got enough income generation outside the actual football that will help us when we do need injections of cash.”

Berylson went further, describing the decision as “a challenge which threatens the club’s very survival.”

Indeed, a petition to “Defend Our Den” gained over 19,000 signatures, which must have been a contributing factor to the council deferring the decision in a February meeting. That was good news, but hardly definitive, as Ambler admitted: “We are under no illusion this is over or the battle is won and would urge people to keep signing the petition. We have effectively gone into extra-time.”

At least the deferral allows the club more time to state its case and work towards a more beneficial partnership with the council.

Millwall’s wage bill in 2014/15 rose £1.3 million (9%) from £13.9 million to £15.2 million, leading to a slight increase in the wages to turnover ratio from 132% to 135%. Since being promoted to the Championship in 2010, Millwall’s wages have shot up by £8.8 million (138%), while revenue has only grown by £3.7 million (50%) in the same period.

The 2013 rise included significant bonuses for reaching the FA Cup semi-final, while the 2014 increase was partly due to the high cost of loan players, e.g. Steve Morison, together with those recruited to cover injuries.

Up until 2013 Millwall had managed to keep the wages to turnover ratio below 100%, though it was still on the high side, but wages have really outpaced revenue since then. Ambler neatly summed up the dilemma: “There will be continued pressure to increase further the budget if needed to remain competitive.”

Of course, wages to turnover invariably looks terrible in the Championship with no fewer than 10 clubs “boasting” a ratio above 100%, but Millwall’s 135% was the fourth highest (worst), only behind Bournemouth 237% (inflated by promotion bonus payments), Brentford 178% and Nottingham Forest 170%.

That said, Millwall were hardly one of the big spenders in the Championship, as Ambler explained, “Despite the continuous rise in the player wage cost, the club is still budgeted to have one of the lower quartile wage bills in the league.” In fact, Millwall’s wage bill was only the 17th highest in the Championship in 2014/15, significantly lower than clubs benefiting from parachute payments, e.g. Norwich City £51 million, Cardiff City £42 million and Fulham £37 million.

Naturally the wage bill will have fallen in 2015/16, as explained in the accounts: “A substantial reduction in the player salary budget for this year. This is due to the Divisional Pay Structure policy of the club whereby the salary of players is reduced as a result of playing in a lower division and reflects the expiration of a number of contracts which were not renewed at the end of last season, many of which were for highly paid players.”

Another aspect of player costs that had been steadily rising at Millwall is player amortisation, which is the method that football clubs use to expense transfer fees. In line with higher sums spent on bringing players into the club, player amortisation grew from just £63k in 2007 to a peak of £1.0 million in 2014, though it did fall back to £0.6 million in 2015.

As a reminder of how this works, transfer fees are not fully expensed in the year a player is purchased, but the cost is written-off evenly over the length of the player’s contract via player amortisation. As an illustration, if Millwall were to pay £2 million for a new player with a five-year contract, the annual expense would only be £0.4 million (£2 million divided by 5 years) in player amortisation (on top of wages).

Even so, Millwall’s player amortisation of £0.6 million was still one of the lowest in the Championship, especially compared to those clubs relegated from the Premier League in recent times, i.e. Norwich City £13.2 million, Cardiff City £11 million and Fulham £10.7 million. This highlights how little money Millwall have spent in the transfer market.

Although there have been many player movements at Millwall, many of them have been free transfers with several being released. The objective in most seasons seems to be to balance the books, but it is also striking to see how little has been raised from player sales after 2007.

In the nine years since then there have been net sales of £1.6 million, almost entirely due to Steve Morison’s departure in 2011. Ironically, Morison was one of only two signings made by Harris last summer, while selling or releasing 18 players following relegation.

Millwall’s net debt decreased in 2015 by £9.7 million from £29.8 million to £20.1 million, as gross debt was cut from £30.3 million to £20.8 million, while cash was slightly higher at £0.6 million. Debt had been steadily rising from £7.3 million in 2011, but the 2015 reduction was largely due to CHV waiving £8.4 million of unpaid interest.

In addition, £2.8 million of the cash raised from issuing £12.4 million of new share capital was used to repay loans. This was similar to the open offer in 2011, where £7.9 million of the £10.1 million cash raised was used to convert loans into equity.

Without CHV effectively writing-off £19.1 million of debt through this combination of equity conversion and waiving interest, gross debt would have been almost twice as high as the current balance at around £40 million.

In 2013 various loan facilities and PIK notes provided by CHV, ranging from 9% to 15%, were consolidated into a new loan facility amounting to £20 million at 12%. This is a non-convertible loan secured by a fixed and floating charge over current and future assets.

Although this is a fair amount of debt for a club of Millwall’s size, it could be described as “soft” debt, as it is owed to the owners. It was originally repayable in July 2015, but the repayment date has been extended twice, most recently to July 2017.

Furthermore, it was nowhere near being the largest debt in the Championship. To place Millwall’s £21 million balance into perspective, four clubs had debt over £100 million, including Brighton £148 million, Cardiff City £116 million and Blackburn Rovers £104 million. Bolton Wanderers have not yet published their 2015 accounts, given their much-publicised problems, but their debt was a horrific £195 million in 2014.

The 2014 accounts noted, “Finance costs are now increasing annually as the level of borrowing by the company increases”, though it might surprise some supporters to see that Millwall’s net interest payable of £1.7 million was the highest in the Championship in 2014/15, ahead of Cardiff City £1.3 million, Blackburn Rovers £0.9 million and Ipswich Town £0.7 million.

Of course, Millwall did not actually pay any interest. Indeed, as we have seen, the owners have in fact written-off substantial sums of accrued interest. As a technical aside, Millwall credited the write-off directly to the retained reserves and not to the P&L as some other clubs have done in similar circumstances.

The cash flow statement reveals the extent of the owners’ support with £35 million of funding provided in the last seven years through £24 million of loans and £11 million of share capital.

It should be noted that a total of £22.5 million has been raised by issuing new share capital, but £10.7 million was used to convert loans into equity, while there were £0.5 million of costs associated with the open offer, leaving £11.4 million of available cash.

On top of this, after the 2015 accounts were closed CHV bought more shares, raising a further £2.6 million.

These share offerings “strengthened the balance sheet and reduced the company debt position, whilst providing the funds for the football club to continue to progress.”

The owners’ funding has been almost entirely used to simply cover the club’s losses: £32.5 million (92%) since 2009. In contrast, very little money has been spent on player purchases (£1.4 million net) and infrastructure investment (£1.0 million).

This is the issue with CHV as owners: on the plus side, they have picked up the tab by covering losses every season; on the other hand, there has been a lack of investment in the playing squad and the club’s facilities.

That said, it is clearly imperative that Berylson continues to put his hand in his pocket and he has promised to do so: “I have agreed to fund the club on an ongoing basis by way of shares and am as fully committed as ever.”

"Right Said Fred"

Millwall have toiled to comply with the Football League’s Financial Fair Play (FFP) regulations, actually failing to meet the target in 2014/15. The maximum loss allowed was £6 million, assuming £3 million was covered by equity investment, and after excluding allowable deductions such as infrastructure and academy investment.

However, the Football League confirmed that Millwall would “not face any further sanction following the club’s relegation to League One, as it was not deemed to have gained any significant advantage.” If the Lions had managed to stay up, that would have triggered a transfer embargo, as was the case with Nottingham Forest, Fulham and Bolton Wanderers, while Bournemouth were fined £7.6 million after promotion to the Premier League.

Following Millwall’s relegation to League One, they had to comply with that division’s Salary Cost Management Protocol (SCMP). As a rule, player salary costs cannot be more than 60% of revenue, though there is a higher, transitional target of 75% for clubs like Millwall in their first season after relegation.

Importantly, for these purposes, equity investment from owners is classified as revenue, which helps explain CHV’s recent issue of share capital. Consequently, Millwall have confirmed that they are in compliance with the SCMP regulations.

"Shane is the Name"

Even though dropping to League One would hardly have been part of the club’s playbook, things are looking up at The Den. Manager Neil Harris has done a good job to date and has given the fans something to cheer about: “The biggest thing for me is that the club has to have an identity, the team has to have an identity, a Millwall identity. It has to have a spirit about it.”

Harris continued, “I think there was a little bit of heart and soul lost with the fans in the team, especially last year with relegation.” However, performances were much improved in 2015/16, even though they fell at the last (play-off) hurdle. Ambler is certainly keeping the faith, “I think the run we had in the second half of the season has given people a lot of optimism for this year. We are hopefully going to challenge in the top six.”

Let’s hope so, as this is a club with strong links to its community. Somewhat at odds with their reputation, it is clear that many do care.

Huddersfield Town - New Rose

In the end, Huddersfield Town comfortably avoided the drop in 2015/16 by finishing 19th, three places and 11 points above the relegation zone, thus continuing their fight to consolidate their position in the Championship, albeit in the lower reaches.

On the one hand, this could be viewed as effectively running to stand still, given that the Terriers also finished 19th in their first season back in the Championship in 2012/13, while they similarly struggled in the intervening seasons: 17th (2013/14) and 16th (2014/15).

On the other hand, this has represented something of a recovery for Huddersfield, as their promotion from League One in 2012 was the first time that the Yorkshire club had graced England’s second tier for 11 years. They defeated Sheffield United in the play-off final after winning a nerve-wrecking penalty shoot-out 8-7 despite missing their first three penalties.

Furthermore, the club that had been “thrice champions” of the old First Division in the 1920s needed to bounce back after going into administration in 2003 with debts of almost £20 million. As chairman Dean Hoyle observed in Town’s centenary season in 2008/09, “It is all too easily forgotten that six years ago the club which had existed for over 90 years was in ruins with no infrastructure, just eight players and debt ridden.”

"Mr. Hudson"

Ken Davy, the chairman of rugby league club Huddersfield Giants, lead a consortium that saved the club, though it is fair to say that he divided opinion among supporters. Although his cash undoubtedly prevented Town’s demise, some fans felt that this was more to do with ensuring that the Giants would not have to bear the burden of the (shared) stadium costs on their own.

This feeling was exacerbated when Town’s share in the stadium was transferred to one of Davy’s companies, leaving the football club as mere tenants. Either way, Davy sold his ownership in Huddersfield Town to local businessman and fan, Dean Hoyle, a few years later.

Hoyle, the founder and previous owner of Card Factory, had bought a 30% shareholding and joined the board in April 2008, before increasing his stake to 70% in June 2009, when he became Chairman. In February 2010 he acquired the remaining shares for 100% ownership.

As part of the deal, Town finally managed to secure an interest in the stadium in September 2013 when they bought 40% of Kirklees Stadium Development Limited (KDSL) for a nominal consideration of £1, though they also settled £2 million of Davy’s outstanding loans.

"Tommy, can you hear me?"

Since Hoyle took control, Huddersfield have made solid progress, though the promised “managerial stability” in the “New Era” has been something of a mirage. After long-serving manager Lee Clark was sacked in February 2012, Simon Grayson guided the club to promotion from League One, but he was then dismissed a year later, as Mark Robins was brought in to avoid relegation.

Just one game into the 2014/15 season, Robins was shown the door, to be replaced by Chris Powell, who survived until November 2015 for “failing to meet the club’s objectives”.

This paved the way for the arrival as head coach of David Wagner, the former manager of Borussia Dortmund’s second team. A retired German-American footballer, Wagner is the first person born outside of the British Isles to manager Huddersfield Town. He is a close friend of Liverpool manager, Jürgen Klopp, and his teams play in the same energetic, progressive style.

This attempt to find a competitive edge is typical of Town’s strategy: the club needs to find innovative ways to compete, as they suffer from significant financial constraints. Hoyle summarised the approach as “over-achieving (compared to our rivals) through focusing on player coaching, player recruitment and development and using the resources we have as best we can.”

"I'm in love with a German film star"

Hoyle continued, “The club has shown it can compete and make some progress in the Championship.” However, he is now aiming higher: “Everyone at the club is ambitious to do much better than just survive in this division. That means being more positive and being prepared to take a few more risks in implementing our plans.”

The hiring of Wagner is the clearest evidence in support of this modified stance, as Hoyle observed, “We don’t just want safety, but to push on and to excite our supporters. We were looking for a new style of organization, fitness and play.”

Hoyle added that Wagner “understands and believes in the club’s plan of producing and developing its own players. He has trust in young players, which is attractive to us.”

Something needs to change at Huddersfield Town if they want to reduce the club’s reliance on cash support from Hoyle, who at the last count had pumped in around £45 million in loans and share capital, and become financially self-sufficient

Huddersfield Town’s pre-tax loss slightly increased in 2014/15 from £6.8 million to £7.0 million, as “off-the-field, the economic trading conditions remained difficult.” This was reflected in revenue falling by £0.4 million (4%) from £10.8 million to £10.4 million, very largely due to match day revenue dropping by £0.3 million (9%) from £3.4 million to £3.1 million. Commercial income also fell slightly to £3.1 million, while broadcasting revenue was flat at £4.2 million.

Although the wage bill was unchanged at £13.3 million, other expenses were £0.9 million (20%) higher at £5.6 million. In terms of player trading, profit on player sales showed a small increase to £1.8 million, while player amortisation was £0.5 million lower at £1.8 million.

Income from participating interests, mainly from the share in KSDL, rose £0.2 million to £1.1 million, though the notes to the accounts suggest that much of this came from the amortisation of negative goodwill created on consolidation.

Of course, as Hoyle noted, “Most Championship clubs suffer very heavy losses subsidised by their owners”, adding, “Professional football at the Championship division has intense rivalry. The impact of the Premier League and willingness of Championship owners to inject ever-increasing amounts of cash into their clubs is significant and wide-ranging.”

Indeed, no fewer than ten Championship clubs reported losses larger than Huddersfield’s £7 million in 2014/15, with Bournemouth £39 million, Fulham £27 million and Nottingham Forest £22 million “leading the way”.

So, hardly any clubs are profitable in the Championship with only six making money in 2014/15 – and most of those are due to special factors.

Ipswich Town were top of the profit league with £5 million, but that included £12 million profit on player sales. Cardiff’s £4 million was boosted by £26 million credits from their owner writing-off some loans and accrued interest. Reading’s £3 million was largely due to an £11 million revaluation of land around their stadium. Birmingham City and Wolverhampton Wanderers both made £1 million, but were helped by £10 million of parachute payments apiece.

Actually, the only club to make money without the benefit of once-off positives were Rotherham United, who basically just broke even – and ended up avoiding relegation to League One by a single place.

That said, losses are nothing new for Town, as the last time they made a profit was way back in 2006 – and that was less than £100k. In fact, since Hoyle came on board, the club has suffered higher losses, amounting to more than £36 million in seven years.

However, even though 2015/16 is expected “to be another challenging year commercially, especially in terms of ticket sales”, Hoyle has forecast the club’s losses to dramatically reduce, partly due to a reduction in the wage bill, but largely due to higher player sales.

Profits from player sales can have a major impact on a football club’s bottom line, but it’s not an enormous money-spinner outside the Premier League with the most profit made by Norwich City £14 million, followed by Ipswich £12 million, Leeds United £10 million and Cardiff City £10 million.

Huddersfield only made £2 million from this activity in 2014/15, largely from the transfers of Adam Clayton to Middlesbrough (part of a swap deal with Jacob Butterfield) and Oliver Norwood to Reading.

In fact, the only lucrative transfer Town have made in recent years was the £8 million sale of Jordan Rhodes to Blackburn Rovers in 2012/13, which generated a £7 million profit.

However, the club has stated that “a key part of our strategy is to buy and sell players for profit to reinvest and contribute to our total football expenditure, viability and FFP (Financial Fair Play) compliance.

To that end, the 2015/16 figures will be boosted by £6.1 million of profits from player sales of £7.6 million, mainly thanks to selling Jacob Butterfield to Derby County (£5 million) and Conor Coady to Wolves (£2 million), though the cash will only be received over the next three financial years. Given that the loss excluding player sales is anticipated to be around £6 million, the club is well-placed to break even next year.

This is just as well, because Huddersfield’s underlying profitability has been getting worse. Most clubs use EBITDA (Earnings Before Interest, Depreciation and Amortisation) as an indicator of financial health, as this strips out once-off profits from player trading and non-cash items. This has been consistently negative at Huddersfield, but has declined from £0.4 million in 2006 to minus £8 million in 2015.

The size of Huddersfield’s negative EBITDA was far from uncommon with 15 clubs generating cash losses between £4 million and £12 million. In fact, only three Championship clubs had a positive EBITDA in 2014/15 (Wolves, Birmingham City and Rotherham) and none of those clubs generated more than £1.5 million. In stark contrast, in the Premier League only one club (QPR) reported a negative EBITDA, which is testament to the earning power in the top flight.

Although Hoyle has said, “We are building a robust financial model by growing our recurring income”, the last time this happened was following promotion from League One, when revenue surged from £7.4 million to £11.3 million in 2013. However, since then revenue has declined by £0.9 million (8%), falling each season in the Championship.

Even after adjusting for the once-off impact of cup runs and play-off matches, underlying revenue (as defined by the club) fell £0.3 million (3%) over that period. In this way, 2013 was boosted by a 4th round FA Cup match with eventual winners Wigan Athletic and 2001 by a narrow 3rd round defeat to Arsenal.

In this way, Huddersfield had the second lowest revenue in the Championship in 2014/15 with £10 million, only ahead of Brentford, but behind the likes of Rotherham United, Millwall and Charlton Athletic. To place this into perspective, four clubs enjoyed revenue higher than £35 million (more than three times as much as Town): Norwich City £52 million, Fulham £42 million, Cardiff City £40 million and Reading £35 million.

As Hoyle noted, “Many Championship clubs benefit from receiving significant and increased parachute payments from the Premier League”. In fact, eight clubs received parachute payments ranging from £10 million to £25 million in 2014/15, which creates a major imbalance in resources.

However, even if we were to exclude this disparity, Town would still find themselves near the bottom of the table, though the revenue differentials would be smaller. As Hoyle admitted, “A large number of our competitors are far bigger than us in scale and ability to grow and generate cash from off-the-field business activities”, examples being Leeds United and Brighton and Hove Albion, who generated £24 million apiece without the benefit of parachutes.

This substantial revenue disparity drives Huddersfield’s strategy, as explained by Hoyle, “This gulf in spending power underlines the need for us to recognise our inability to compete based on the level of finance but instead focus on being smarter and more effective.”

Although he is a relatively new arrival, Wagner is fully on board: “Huddersfield isn’t one of the biggest fishes in the Championship and to get bigger you have to find new ways. We can’t forget we’re Huddersfield. Our long-term aim is to attack the top ten, but we won’t do it with the most money. We have to get our decisions right.”

Huddersfield have a fairly even revenue mix, though match day’s share fell from 32% to 30% in 2014/15. As a consequence, commercial was slightly higher at 30%, while broadcasting continued to lead the way with 40%.

Town’s match day revenue fell £0.3 million (9%) to £3.1 million in 2014/15, partly due to better supported and more attractive clubs being promoted or relegated away from the Championship. In addition, there was no decent cup run: “Early exits and lack of windfall income from cup competitions was again disappointing and frustrating. It reduces our ability to fund exceptional expenditure and investments.”

This is one of the lowest match day revenues in the Championship, only above Wigan £2.4 million and Rotherham £2.1 million. In terms of attendance, it’s a little better with Town’s average of 13,542 more than six clubs in 2014/15.

However, after an initial surge, attendances have fallen every season in the Championship, dropping by 16% from 15,071 in 2012/13 to 12,631 in 2015/16. As Hoyle put it, “The downward trend in attendances and total ticket sales is the major business issue facing the club.”

Although acknowledging that “under performance was damaging”, the club admitted that “it is clear that gates remain under pressure despite value for money season card prices, many match day offers and a relatively recent Championship promotion.”

As a result, Town have taken “radical action to reverse the trend” by introducing incredibly cheap season tickets: adults £179 (around £7.80 a game), under-18s £69 and under-8s £23. The initial run of 10,000 sold out within four days, so the offer was extended to 15,000, after which more “normal” prices would be applied. This is an echo of the £100 season ticket in the centenary season of 2008/09.

Some might consider this initiative as a sign of desperation, but it is clearly also a positive step for the fans, as Hoyle explained: “We decided that with new TV money coming in we would reduce season card prices. Prices have been going northwards, but we want to try a different way. Let’s get the stadium fuller and see where it takes us.”

The stadium itself has been another major issue for Huddersfield with the annual cost and cash drain being “a very heavy burden on the club.” In 2014/15 they paid £918k in rent and other contributions, primarily to repay debt incurred to fund the initial stadium construction cost and subsequent improvements (Riverside stand extension and North Stand build). This debt is forecast to be repaid by 2021, after which the club’s contribution is expected to be “immaterial”.

As part of the 2013 deal, Ken Davy’s company (Huddersfield Sports Pride Limited) transferred back to the football club a 40% share in KSDL, the company that operates, manages and develops the 24,500 seat stadium and its 54 acre site. HSPL, representing the rugby league club Huddersfield Giants, still has a 40% share, while the remaining 20% is held by Kirklees Metropolitan Council.

The participating interest in KSDL contributed £1 million, comprising £1.4 million of income less £0.9 million rent and other expenses, £0.3 million depreciation and £0.1 million interest and tax, which was then boosted by a £1 million credit for amortisation of negative goodwill created on consolidation.

"Episode of Blonde"

That’s a little technical, but this is undoubtedly an important step in the right direction for Town, as Hoyle observed: “When I arrived as chairman in 2009, the club had no share in the John Smith’s Stadium and earned nothing directly or indirectly from the food and drink bought by supporters on its match days either.”

The 2013 deal also allowed the club to renegotiate the catering contract, so from August 2015 there is a new deal with Sodexo, meaning that every penny spent at John Smith’s Stadium on food and drink on a Town match day or event now brings a direct cash benefit.

The stadium is now known as the John Smith’s Stadium, after Heineken bought the naming rights in a five-year deal (2012-17). Originally, it was called the McAlpine Stadium, as the construction company accepted a 10-year deal (1994-2004) as part of its payment. In between, the ground was named the Galpharma Stadium following a sponsorship agreement with a local healthcare firm.

There is the possibility of KSDL developing the land via “The HD One” project. If this is successful, the club claims that it “could have a material positive financial impact”, though others believe that this is more like the proverbial “pie in the sky”.

In the Premier League, the vast majority of all but the elite clubs’ income is derived from broadcasting, but this is not the case in the Championship. Here, most clubs receive just £4 million of central distributions, regardless of where they finish in the league, comprising £1.7 million from the Football League pool and a £2.3 million solidarity payment from the Premier League.

However, the clear importance of parachute payments is once again highlighted in this revenue stream, greatly influencing the top eight earners, though it should be noted that clubs receiving parachute payments do not also receive solidarity payments.

Nevertheless, it should be noted that these payments are not necessarily a panacea, for example Middlesbrough secured promotion last season, even though their broadcasting income of £6.2 million in 2014/15 was less than half the size of those clubs boosted by parachutes.

Looking at the television distributions in the top flight, the massive financial chasm between England’s top two leagues becomes evident with Premier League clubs receiving between £67 million and £101 million, compared to the £4 million in the Championship. In other words, it would take a Championship club more than 15 years to earn the same amount as the bottom placed club in the Premier League.

The size of the prize goes a long way towards explaining the loss-making behaviour of many Championship clubs, given the riches on offer in the top flight. This is even more the case with the astonishing new TV deal that starts in 2016/17, which will be worth an additional £30-50 million a year to each club depending on where they finish in the table.

As an example, I have (conservatively) estimated that the club finishing bottom in the Premier League next season will receive £92 million, which is £87 million more than a Championship club not receiving parachute payments. The TV deals in the Premier League have risen to stratospheric levels, so many Championship clubs have opted to spend big money to improve their promotion possibilities, but it’s a high risk strategy.

Town’s approach was encapsulated by former chief executive, Nigel Clibbens: “There are some clubs taking the view that they will try to get promoted and worry about the consequences later. Get out the other side and you can recoup a lot or all of what you have spent. If not, you are left with very big debts and a problem.”

From 2016/17 parachute payments will be even higher, though clubs will only receive these for three seasons after relegation. My estimate is £75 million, based on the percentages advised by the Premier League (year 1 – £35 million, year 2 – £28 million and year 3 – £11 million). Up to now, these have been worth £65 million over four years: year 1 – £25 million, year 2 – £20 million and £10 million in each of years 3 and 4.

There are some arguments in favour of these payments, namely that it encourages clubs promoted to the Premier League to invest to compete, safe in the knowledge that if the worst happens and they do end up relegated at the end of the season, then there is a safety net. However, they do undoubtedly create a significant revenue disadvantage in the Championship for clubs like Town.

Town’s commercial income in 2014/15 was flat at £3.1 million, comprising commercial £1.6 million, shops £0.6 million, development association £0.4 million, Huddersfield Canalside Limited (a members sporting club) £0.4 million and communications £0.1 million.

This is one of the smallest in the Championship, only above five clubs: Nottingham Forest £3.1 million, Charlton Athletic £2.5 million, Brentford £2.4 million, Millwall £1.9 million and Wigan £1.5 million.

Their shirt sponsor is Pure Legal, a law firm, who replaced Rekorderlig, as Swedish cider brand, initially only for the 2015716 season, though they have since extended for a further three seasons until May 2019. This covers the home shirt, while Radian B (a muscle rub) sponsor the away shirt. From the 2013/14 season Puma have been the club’s kit supplier.

A key element in Huddersfield’s strategy is to increase the amount of football expenditure, including scouting, recruitment, medical, preparation, sports science and analysis, as they “seek to gain every competitive advantage investment in these areas can bring.”

Consequently, since 2008 football expenditure has grown by over 400% from £2.5 million to £12.9 million, while revenue only rose by 119% in the same period. Other expenditure also grew far more slowly: other trading costs 138% and stadium costs 31%.

Town’s wage bill in 2014/15 was unchanged at £13.3 million, though the wages to turnover ratio rose slightly to 128% following the revenue decrease. Interestingly, since promotion to the Championship, wages and revenue have both grown at exactly the same rate, i.e. 40%.

The last time that Town had a wages to turnover ratio below 100% was 2011 (88%). Of course, wages to turnover invariably looks terrible in the Championship with no fewer than 10 clubs “boasting” a ratio above 100%, but Town’s 128% was the sixth highest (worst), only behind Bournemouth 237%, Brentford 178%, Nottingham Forest 170%, Millwall 135% and Blackburn Rovers 134%.

That said, Town’s wage bill of £13 million was the third lowest in the division, only above Charlton £11 million and Rotherham £5 million. To place that into perspective, the highest wage bills were at least £20 million more than Town, namely Norwich City £51 million, Cardiff City £42 million, Fulham £37 million and Reading £33 million. As Hoyle put it, Town are “significantly below many rivals – especially those clubs operating with the benefit of increased Premier League parachute payments.”

Clibbens had argued that the wage bill did not always dictate a club’s finishing position: “The Championship continues to demonstrate year in, year out, that there is much more to achieving success and promotion than simply spending more on player wages than the next club.” That is undoubtedly true, but a larger budget is clearly advantageous.

In fact, Hoyle expected a reduction in the 2015/16 wage bill (estimated at £2 million), while also having a dig at some of the club’s deadwood: “With a number of senior and high-earning, but non-performing player contracts expiring in June 2015 and again in June 2016, this gives an opportunity to both improve and reshape the squad and achieve the most effective use of our available playing budget.”

Another aspect of player costs that has been steadily rising at Town is player amortisation, which is the method that football clubs use to expense transfer fees. In line with the higher sums spent on bringing players into the club, player amortisation has grown under the current ownership from just £60k in 2008 to £1.8 million in 2015, albeit down from £2.3 million the previous season.

As a reminder of how this works, transfer fees are not fully expensed in the year a player is purchased, but the cost is written-off evenly over the length of the player’s contract via player amortisation. As an illustration, if Town were to pay £5 million for a new player with a five-year contract, the annual expense would only be £1 million (£5 million divided by 5 years) in player amortisation (on top of wages).

Despite the growth, Town’s player amortisation of £1.8 million was still one of the lowest in the Championship, especially compared to those clubs relegated from the Premier League in recent times, i.e. Norwich City £13.2 million, Cardiff City £11 million and Fulham £10.7 million.

The other side of that coin is player values on the balance sheet have also increased from £149k in 2008, when the ownership structure changed, to £2.6 million in 2015, though Hoyle emphasised that the actual market value was “well in excess” of the book value in the accounts.

Town’s approach in the transfer market appears to be changing. Hardly anything was spent in the four-year period between 2008 and 2012 (according to the Transfer League website), though the club stated that their spending on transfer fees was the highest in League One in the promotion season of 2011/12.

However, in the four years following promotion to the Championship Town have increased their expenditure to £4 million, though this has been more than offset by £16 million of sales (largely Rhodes, Butterfield and Coady) to give £12 million of net sales.

Hoyle explained the approach: “We plan to focus on introducing new players both with proven Championship experience and leadership qualities to strengthen the first team starting group and must maintain a core group of younger players and developing players, coming from our academy or purchases, with value and potential to increase in value, but also an ability to make us better immediately.”

In fairness, many Championship clubs have net sales, but it is striking that last season the two automatically promoted clubs and the four clubs that qualified for the play-offs filled six of the seven top places in the net spend league. As a comparison, Town were comfortably outspent by the likes of Derby County £29 million, Middlesbrough £23 million, Burnley £14 million and Sheffield Wednesday £10 million.

So it is perhaps no surprise that Town have loosened the purse strings a little this summer, making good use of Wagner’s contacts in Germany to bring in several new faces, including Christopher Schindler, the club’s record signing at £1.8 million, from 1860 Munich, Michael Hefele from Dynamo Dresden, Chris Löwe from Kaiserslautern, Jon Gorenc Stankovic form Dortmund II, Ivan Paurevic (a former Dortmund player) from Russian club FC Ufa  and Elias Kachunga (on loan) from Ingolstadt.

In addition, they have signed Southend’s player of the year Jack Payne and signed two internationals on loan from top Premier League clubs, Australian Aaron Mooy from Manchester City and Welsh goalkeeper Danny Ward from Liverpool, while Rajiv van La Parra’s loan deal has been made permanent. This is a clear statement of intent, part of the so-called #WagnerRevolution.

Town’s net debt increased in 2015 by £4.8 million from £37.4 million to £42.2 million, as gross debt rose from £38.4 million to £42.2 million and cash fell from £0.9 million to just £0.2 million. Actually, the debt would have been even higher without the conversion of £3.5 million of loans into share capital in 2014/15 (with another £3 million converted after the accounts closed in November 2015).

Since the change in ownership, debt has risen significantly from £2.9 million in 2009 to £42.4 million in 2015, but the good news is that virtually all of the debt is owed to the club’s owners (Hoyle £41.4 million). It is long-term, unsecured, interest-free and without a repayment date, so this is just about the “softest” debt a club could get.

Even after the steep growth, Town’s was nowhere near being the largest debt in the Championship. In fact, four clubs had debt over £100 million, including Brighton £148 million, Cardiff City £116 million and Blackburn Rovers £104 million. Bolton Wanderers have not yet published their 2015 accounts, given their much-publicised problems, but their debt was a horrific £195 million in 2014.

That said, the vast majority of this debt is provided by owners and is interest-free, so the amounts paid out by Championship clubs in interest is a lot less than might be imagined.

In addition to the financial debt, Town had contingent liabilities of £3.3 million, up from £2.6 million, dependent on future success of the team and player appearances.

The cash flow statement is quite revealing: basically loans from Dean Hoyle are used to cover the operating losses. As the club noted, “it is critical to note the scale of funds injected into the club in recent years”, which amounts to £43 million since 2009.

That has been used to cover £38 million of losses, while a further £5 million has been invested into infrastructure, mainly the academy and the training facility at PPG Canalside. There has been minimal net spend of £0.6 million on players: £12.2 million of purchases less £11.7 million of sales.

The latest accounts bluntly explained the situation: “the club continues to be unable to afford its total football expenditure without shareholder support and cash from selling players”, which is patently not sustainable in the long-term.

More encouragingly, a few months ago Hoyle said, “We are in a really good financial state and I am personally happy, because while the club is very reliant on me, it is becoming less reliant, which is where we need to get to.”

It is equally true that Town have complied with the Financial Fair Play (FFP) regulations in both 2013/14 and 2014/15, having excluded allowable deductions such as infrastructure and academy investment. Each club was allowed a maximum loss of £6 million, assuming that £3 million was covered by shareholder investment. However, from 2015/16 new rules allow losses to more than double to £13 million, funded by a maximum of £8 million equity.

"Schindler - Blue Lines"

This will damage Huddersfield’s prospects, as acknowledged by Hoyle: “Whilst the initial FFP rules had started to reduce losses, the relaxation from 2015/16 will see a marked spike in spending and we expect a very significant increase in player wages and losses at Championship clubs when results are reported after June 2016. This change will widen the gulf in spending and underlines the need for us to focus on being smarter, innovative and more effective and operate in our own way.”

Amongst other things, this means investment in the academy, where the annual cost has increased from £0.95 million in 2012/13 to £1.6 million in 2014/15, though this is offset by £0.8 million of grants from the Premier League and others.

Town are one of the few EPPP Category Two academies, but they are yet to reap the benefits in terms of players progressing to the first team. While the club admits that this is “a long-term process with no quick fixes”, you can detect a hint of impatience when they state, “we now look forward to see the real returns on the investment.”

"At the height of the fighting"

The club’s objective is to “move up the Championship to challenge consistently in the top half and win promotion to the Premier League.” That’s evidently a big ask given their financial challenges, but Hoyle spoke positively, “There is nothing to fear and no need to look enviously at clubs about us. That simply means we must have our own approach.”

Wagner’s arrival has brought renewed hope that the club is moving in the right direction, especially after doing good business in the transfer market, while the return from injury of leading scorer Nahki Wells should also make a difference.

Certainly, Hoyle believes that the new coach is the right choice: “His approach is a winning one. He is up for the challenge of making Huddersfield Town a success on the pitch. I hope that this appointment will reinvigorate us, bring excitement and allow us to make a big stride forward.”

To quote The Specials, this does feel like it might the dawning of a new era for Town. There’s clearly an element of risk in hiring a relatively inexperienced foreign coach, particularly in the rough-and-tumble Championship, but the club’s willingness to find its own model in an attempt to punch above its weight should be applauded.