Luton Town have been praised for proving football clubs in the Championship can ‘break even and survive in the second tier’ after accounts filed for 2019/20 show they made an operating profit of over £3million.
The Hatters, who have just finished 12th in the league, were one of ten second tier clubs slapped with a transfer embargo by the EFL last month for not filing their financial accounts, despite the government granting an extension to do so, due to the coronavirus pandemic. It was then revealed that the Football League’s governing body had taken advantage of the same scheme.
However, Town released a strongly worded statement in response, ruling out the possibility of ‘financial Armageddon’ or any threat to their summer transfer plans, with the ban now expected to be lifted now that the accounts have been filed.
Chief executive Gary Sweet then when on talkSPORT radio to explain that it was a temporary accounting anomaly, brought about by the EFL’s inability to adjust to a Companies House deadline extension on the submission of accounts.
And despite a spat with presenter and former Crystal Palace owner Simon Jordan, who was shown to mouth silently “he’s talking rubbish” on the station’s video feed, Sweet went on to say that when the club’s accounts were eventually filed they would “register a small profit”.
These latest set of figures highlight Sweet’s comments from a year ago when he said that Luton could come out of the pandemic on a good position, compared to the Championship rivals.
Commenting on Twitter about Luton’s prudent management, Kieran Maguire of the Price of Football podcast, wrote: ‘Luton made an operating profit of over £3m in 2019/20 mainly due to player sale profits of £9m and income almost doubling following promotion to the Championship. #LTFC show clubs can break even and survive in the second tier.’
He also highlighted how, ‘Luton received £463k from the furlough scheme in 19/20’, while they ‘spent almost £2m on signings in 2019/20 and had player sales of £9m’.
That would likely account for the club record €1.5m they splashed out on Croatian International goalkeeper Simon Sluga, having sold Academy product James Justin to Premier League Leicester City and Jack Stacey to then top-flight Bournemouth.
And Luton’s impressive performance on balance sheet, follows a stellar season in which they finished 12th in the Championship, having only avoided relegation on the final day of the previous season.
That top half of the table position saw Town finish above a host of bigger spending clubs, some of whom, have been exposed for financial irregularities, like relegated Sheffield Wednesday and Derby – who could still be relegated after the EFL won an appeal over misconduct charges brought against the Rams.
An independent league arbitration panel concluded that a disciplinary commission was wrong to dismiss the league’s expert accountancy evidence, which demonstrated that Derby’s policy of regarding the amortisation of player registrations was contrary to standard accounting rules.
