#Millwall’s 2018/19 financial results covered a season when they just avoided relegation from the Championship by finishing 21st, but did reach the FA Cup quarter-finals. Manager Neil Harris left in October 2019, replaced by Gary Rowett. Some thoughts in the following thread.
#Millwall achieved “the best result for many years” by reducing their loss from £5.0m to just £0.7m, as revenue increased by £2.8m (18%) to £18.4m and profit on player sales and loans rose by £6.9m, partially offset by £5.6m growth in expenses. 
#Millwall revenue increase was largely driven by broadcasting income, up £2.4m (32%) to £10.0m, partly reflecting televised cup games, though commercial also rose £0.4m (16%) to £2.7m. Match day was “static” at £5.6m.
#Millwall wage bill surged £3.5m (26%) from £13.4m to £16.9m, while player amortisation more than doubled, rising from £0.6m to £1.3m. Other expenses increased £1.3m (23%) to £6.8m, largely due to ground and event costs, but net interest payable was down £0.2m to £0.6m.
To put this into context, the #Millwall loss of £0.7m was one of the better financial performances in the Championship. As Finance Director Mark Fairbrother observed, no club in this division is consistently profitable. No fewer than 9 clubs posted losses above £20m.
#Millwall bottom line benefited from £5.4m profit on player sales (plus £1.5m player loans), compared to £10k loss the previous season, due to the lucrative transfer of George Saville to Middlesbrough. Still a lot lower than Bristol City’s amazing £38m profit from this activity.
#Millwall have lost £61m in the last 10 years, though the losses have been falling – from £12m in 2015 to £1m in 2019. However, this season’s figure will be adversely affected by lower player sales and higher wages, and may not have a financially rewarding cup run like 18/19.
#Millwall have rarely made big money from player sales. In fact, the £5.4m profit reported in 2018/19 from Saville’s sale to Middlesbrough is as much as the previous 13 years combined, when the highest year was £1.7m in 2011, mainly Steve Morison’s move to Norwich City.
#Millwall EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), considered as a proxy for cash operating profit, as it strips out player sales and exceptional items, fell from £(3.4)m to £(3.8)m, though still much better than the 2105 low of £(9.4)m.
In fairness, only three clubs in the Championship managed to generate positive EBITDA, so #Millwall £(3.8)m was actually one of the better performances, placing them in the top five. To put this into perspective, Birmingham City’s EBITDA was a hefty £(30)m.
#Millwall revenue has grown by £8.4m (84%) in the two years since promotion from League One, rising from £10.0m to £18.4m. This is mainly due to TV money, up £7.3m, with smaller increases in commercial £0.6m and match day £0.5m.
Despite the growth, #Millwall £18m revenue is still one of the smallest in the Championship, though they have overtaken Reading and Ipswich Town. However, it was only around a quarter of Aston Villa £69m, Sunderland £64m and Middlesbrough £62m (2017/18 figures).
As #Millwall chief executive Steve Kavanagh said, “The quality and wealth of many of the clubs playing in the Championship continues to rise, with an increasing number of clubs in receipt of parachute payments from the Premier League”, led by Stoke, Swansea & WBA, all with £43m.
#Millwall broadcasting income rose by £2.4m (32%) to £10.0m, due to increases in central payments plus televised cup games. The lucrative TV deal in the top flight (with clubs receiving between £95m and £150m) helps explain why so many Championship clubs “go for it”.
#Millwall attendance increased from 13,376 to 13,635. Crowds are obviously higher in the Championship than League One, but it is worth noting that the current average is actually the highest since they enjoyed a brief period in the top flight (old Division One) in the late 80s.
That said, #Millwall attendance was still one of the lowest in the Championship, only above Wigan, Brentford, Rotherham and Hull City. To give some idea of the strength of competition, 12 clubs had crowds of 20,000 or more. Season ticket prices have been frozen for 6 years.
#Millwall commercial income rose £0.4m (16%) to £2.7m, mainly due to the introduction of LED advertising boards around the pitch. However, this is still one of the lowest in the Championship, miles below the likes of Leeds United £22m, Bristol City £16m and Norwich City £14m.
#Millwall have new shirt sponsors from 2019: front – Huski Chocolate five-year agreement is “the biggest in the club’s history”; back – The Energy Check for 3 years. The kit supplier is Macron.
#Millwall wage bill rose by £3.5m (26%) from £13.4m to £16.9m. CEO Kavanagh: this “reflects the continued policy to recruit players of Championship calibre. As recruitment took place or contracts of existing players were renewed, the club needed to offer competitive terms.”
#Millwall wages to turnover ratio increased from 86% to 92%, which is not great, but is actually among the lowest (best) in the Championship. In fact, more than half the clubs in this ultra-competitive division have ratios over 100% with Birmingham 202% “leading the way”.
#Millwall directors’ remuneration increased 9% from £287k to £312k, but this was still significantly lower than the likes of Sunderland £2.0m, Cardiff City £1.4m, Reading £1.4m and Fulham £1.2m.
#Millwall player amortisation more than doubled from £0.6m to £1.3m, reflecting more investment in the squad. However, this is still very low, highlighting the club’s philosophy of giving home grown players from the academy opportunities in the first team.
To further emphasise #Millwall’s conservative approach in the transfer market, their £1.3m player amortisation was the third lowest in the Championship, only ahead of Ipswich Town and Burton Albion, and a lot lower than big-spending Middlesbrough and Aston Villa, both £24m.
#Millwall’s player trading objective in most seasons seems to be to balance the books. Even though they broke their transfer record twice in 2018/19 with Ryan Leonard and Tom Bradshaw, they have still ended up averaging net sales of £0.5m over the last two seasons.
#Millwall gross debt was unchanged at £10m of loan notes., where repayment has been extended again to July 2021. This would be around £30m higher without the owners Chestnut Hill Ventures (CHV) effectively writing-off debt by waiving interest and converting loans into equity.
Although debt is high in the Championship, most of it is provided by owners who charge little or no interest. #Millwall chairman John Berylson’s company CHV charges 12% per annum on the loan notes, but interest payments have been frequently suspended (latest to June 2020).
#Millwall cash flow statement reveals the extent of Berylson’s support with £48m of funding provided in the last 10 years through £28m of share capital & £21m of loans, including £2.85m of shares in 2018/19. Net player sales generated £2.1m with £3.4m transfer fees still owing.
The owners’ £48m funding since 2010 has been almost entirely used to cover the club’s losses of £45m over this period. In contrast, very little money has been spent on infrastructure investment (£2.3m) and hardly anything on player purchases – less than £1m (net of sales).
#Millwall’s best opportunity 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.
The “very good news for the club” is that an agreement has finally been reached with Lewisham council, with the threat of Compulsory Purchase Orders being removed, so that it now looks like #Millwall’s scheme to transform the area around the stadium can go ahead.
Under FFP #Millwall are allowed to incur E39m losses over the 3-year monitoring period, though they can make deductions for academy, community and infrastructure. The club is “well within this limit”, even after an estimated larger loss for the 2019/20 season.
#Millwall’s stated objective is “to take steps to enable the club to become an established Championship side”, though they are “not going to be throwing money at it”. That said, it looks like Berylson will have to continue funding the club’s losses for the foreseeable future.
