Partick Thistle FC: Finance Update For Supporters

Monday 26th August, 2024 at 4:00pm

The Board of Partick Thistle Football Club are pleased to provide a comprehensive update to supporters regarding the financial position of the club and our plans for the rest of this season and beyond.

This update is published ahead of a Board Q&A event on Tuesday 27th August which will provide all supporters with an opportunity to ask questions to PTFC Board members.

 

Setting the scene

In the summer of 2023, days after the end of the 2022/23 season, the club provided a financial update to supporters which painted a bleak picture. The accounts published for this period showed that a loss was returned for the year of £356,000, which could have been in excess of £600,000 without the income derived from the cup run which took us to Ibrox.

Since then, the Club Board and its directors present and past, alongside the trustees of majority shareholder The PTFC Trust, have worked tirelessly to improve the club’s overall financial health. There have been many positive developments on this front, thanks in no small part to the unrelenting support of Thistle fans.

In the most recent financial year, we made a loss of £170,000 in our accounts which are currently being audited. This is an improvement of £186,000 on the previous financial year and we are working to build on this in the current financial year.

However, the realities of competing in the second tier of Scottish football mean that, until promotion is achieved, maintaining a position of break even or better is usually only possible in one of a few ways:

• lucrative cup runs (mainly through playing Celtic or Rangers, which we last did in February 2023)
• player trading
• increased revenues from commercial partners and supporter groups

The absence of the first two components during the past 18 months, compounding the significant losses inherited from 2022/23, is why the £500,000 investment in the club in October of last year was so critical.

 

Investment in October 2023

As a reminder, 10 months ago PTFC Director Donald McClymont along with Stewart Smith and Mark Tyndall invested £500,000 in the first phase of a proposed £1million investment into the football club. In our announcement at the time, the club stated that: “This funding is a key part of the first stage of rebuilding the club and has been completed as part of a package of measures in addition to attracting new sponsorship and commercial revenues, to improve long-term stability and ensure a strong Partick Thistle Football Club for generations to come.”

So where has this money been invested? We can break this down as follows:

• Legacy debt – At the end of Season 2022/23, the club’s balance sheet showed that it owed £226,000 more to its creditors than it had available in terms of cash plus monies owed to the business by outside parties. Almost half of the investment was required to balance the books.
• Academy and Women’s team investments – Prior to last year the Academy contributed to the club’s income by paying for apprentice salaries and for rental of space at The Wyre Stadium at Firhill. During the close season last year, the decision was taken not to close the Academy so that we could continue to benefit from the pathway to the first team that has seen talent such as Ben Stanway and Ricco Diack become first-team squad regulars. It has also given us the opportunity to earn significant revenues from player trading as was the case with the transfer of Cieran Loney to Everton, for a potential six-figure sum. This decision meant that £115,000 had to be found within the club’s accounts to fund the modern apprentice’s salaries, a necessity to qualify for Club Academy status, and to provide an increased donation to support Brian Graham and the Women’s team to the most successful season in the club’s history.
• Maintenance, refurbishment and equipment – £132,000 has been invested in essential stadium maintenance, facilities and equipment to ensure the renewal of the stadium’s safety certificate, required to enable us to host football matches, and to enhance areas such as the Alan Rough Lounge for matchday hospitality.
• Whilst some cost savings were found to support the investment above, the draft accounts for the last financial year show that the club only has £75,000 more assets than liabilities on its balance sheet.

 

What have we achieved since and where are we now?

The most recent financial year saw commercial revenues increase by £117,000 vs the one before, thanks to the new sponsorship deals with partners such as Wyre and Clydebuilt.  We’ve also generated £64,000 of additional revenues from football activities, despite not getting as far in the cups and not benefitting from a lucrative away cup tie as we did in February 2023 at Ibrox. This is largely due to increased season ticket sales.

There has also been a magnificent contribution from supporters, largely through The Jags Foundation but also via other sources, which has exceeded £200,000. It is no exaggeration to say that the fan community around this club is absolutely responsible for us being where we are today and that, without that support, the continued drive to return to the top-flight would not be possible.

All of this has allowed us to spend a little more on the areas that make a difference, such as developing our hospitality offering, maintaining the stadium and improving player facilities.

We are working hard to grow our off-field revenues further this year and have budgeted for an additional £100,000 being generated. Part of this has been funded by increased sponsorship of the club by Donald McClymont who has now contributed around £100,000 over the course of the last two seasons. The club are committed to generating fresh, sustainable commercial revenues and to this end we have recruited a General Manager with proven experience of professionalising and developing commercial operations within football, and we have also worked hard to establish lasting relationships with our existing partners as well as forging links with new organisations across the city and beyond.

These are the key elements of our plan to help make the club Premiership-ready as we all work together to help drive us towards our goal – to be back in the Premiership and to then establish ourselves as a regular mid-table finisher with genuine European aspirations.

However, it’s a reality of Scottish lower-league football that without cup runs or significant cup draws we will struggle to remain competitive and profitable without further increasing our revenues. This must be the focus as we move forward.

It should also be recognised that the club will benefit in the coming season from a very generous donation of £200,000 from Donald McClymont which has been topped up to £300,000 by another anonymous party. Many fans will recognise that this season presents a unique opportunity for several clubs to attempt to get out of the Championship and these donations have enabled us to arm the manager with the tools that we hope will allow us to compete with these rivals at the top of the table as the season unfolds.

 

Investment tranche 2 – the second £500,000

As trailed in our tranche 1 announcement last October, we are soon going to be asking you, the fans, alongside all our shareholders to consider the sale of a further £500,000 in shares to allow us to build our infrastructure and reserves. As we start the financial year with reserves of only £75,000, there is little margin for error should things not go to plan. The cashflow of a football club is unique in that, we will start the season with significant reserves from season ticket sales and commercial deals which are paid up front but diminish through the season until league prize monies are paid the following summer.

A poor season could lead to lower-than-expected revenues and ultimately depleted cash reserves, We therefore believe it is prudent to ask our supporters as owners of the club to consider increasing our cash reserves to bolster our ability to weather difficult periods, and to allow for targeted investment in new revenue streams.

By accepting the second tranche of investment we can reduce our cashflow risks, whilst ensuring that the fans still own in excess of 65% of the club’s shareholding.

So how would this money be invested? We can break this down as follows:

• Roof repairs – £200,000 invested in a fund for essential stadium roof repairs. The total cost of this project is estimated at £400,000 but can be delivered in sections. Whilst we hope not to have to undertake any of this work until we’re ready to do it all (a sectional approach would represent a slight increase in overall project costs), should the roof deteriorate drastically in the short-term we do not currently have funds on hand to undertake emergency repairs to individual sections. Going forward, the club will set aside £50,000 in each subsequent budget until the £400,000 fund for the work has been established. In the meantime, should an issue arise that accelerates part of these repairs, this reserve would allow us to act immediately.
• Fan experience projects – £100,000 reserved for projects within the club and stadium to be determined by you, the fans. A new working group involving supporters will be established to drive this forward.
• Media and marketing – £35,000 invested to ensure that we market ourselves effectively to potential supporters and partners, and that we effectively monetise the facilities available at The Wyre Stadium at Firhill. This investment will deliver: an overhaul of our website, the establishment of a small, dedicated marketing budget, and an expansion of the media team in order to give us the capacity to realise the commercial opportunities that we have available to us.
• Working capital – £165,000 retained as working capital reserves, to add to the £75,000 we currently have available to protect against future cashflow challenges, and to allow us to invest in revenue-generating activities.

 

What are the alternatives?

The board believe that this club should be aspirational and ambitious. The only way to truly safeguard our financial future is to secure promotion. We want to deliver Premiership football at Partick Thistle and as a board and as individuals we would not be here if we felt that we didn’t have the skills and experience to achieve that goal. To that end, last year’s investment was always labelled as the first half of an overall £1million package. The board have been mindful of the fact that supporters have the right to choose and may not ultimately approve the second half of that investment, but the club has progressed on the basis that this funding is needed if we are to sustain our push for promotion in the medium-term. To go forward in any other way this summer would have meant cutting budgets and scaling back our ambitions.

Should you, the fans, alongside our shareholders, determine when the time comes that it is no longer appropriate to progress with the second tranche of investment then it creates a risk that the club could run out of cash reserves before the end of the season. The reality is that this would probably not happen, but it can’t be ruled out in the event of unexpected adverse conditions (e.g. stadium damage or exceptionally poor on-field results and consequential reduction in prize money).

Without the second tranche of investment, we would make it through to the summer. But then we would have to seriously consider how the club proceeds. Without investment from somewhere, we would need to consider a significant reduction in costs – the easiest and most effective way of delivering savings being in the playing budget – which will ultimately risk setting the club on a cycle we have seen many teams unable to escape from in recent years. Lower investment creates a weaker squad earning less prize money, resulting in even lower investment and a diminishing return year-on-year.

If our ambition is to be maintained, investment will ultimately be needed from somewhere. If not now, then via another source later. Asking fans to raise £500,000 themselves would be a huge undertaking, and if another external source of investment could be found (which is far from guaranteed) then it is unlikely that this money would be available on the same terms.

This is ultimately not a debate that we need to conclude today, this week or next week. But a way forward does need to be agreed soon, and the board will re-emphasise these points, exploring our various options openly and transparently, in the near future when the proposed second tranche of investment is presented to fans and all shareholders for consultation.

 

What happens next and how can fans help?

The most immediate opportunity for supporters to constructively engage with the club’s leadership is at our Board Q&A this coming Tuesday evening. The Board welcome your questions as well as any ideas or suggestions for improvement you may have to help drive the club forward.

Included within this opportunity will be the chance to ask questions about the proposed tranche 2 investment of £500,000, for which the next steps in that process – consultation with supporters – will be spelled out in a separate update in the coming weeks.

Ultimately as a fan-owned club we as supporters can help to realise the vision of a more successful and sustainable Partick Thistle FC. We can do this by encouraging friends and family to experience football and other events at The Wyre Stadium at Firhill and by backing the club as much as we’re able to, whether through sponsorship, buying a season ticket, joining us in hospitality or signing up for our lottery. Helping The Jags Foundation go beyond 2,000 members will provide more funds to all areas of Partick Thistle, and we would urge all fans who have not already done so to join.

Year-on-year the club’s commercial platform strengthens, and we believe that we now have a team in place who can help the club to achieve its ambitions both on and off the field. Competing at this level will always be financially challenging. It would be wrong to suggest that we can maintain our present position indefinitely. But what we can do, by standing together and embracing the challenges that come with fan ownership side-by-side, is buy ourselves the time that we need to achieve promotion.

 

Thank You

As always, we must conclude by thanking all supporters for continuing to do just that, supporting Partick Thistle Football Club on and off the pitch with all your might – future success is impossible without your backing.

We look forward to seeing as many of you as possible at The Wyre Stadium at Firhill on Tuesday evening for our Board Q&A.

Thanks for your support.