Luton will likely break their record transfer fee this summer but CEO Gary Sweet has explained why at least half of the initial Premier League cash won’t be put into boss Rob Edwards’ “somewhat restricted” war chest.
Town are expected to be in line for a minimum income from top-flight broadcast rights of £100million, while there will be a further £75million over two years in relegation parachute payments should Town go down.
The transfer window opened last week, with the Hatters now trying to shop for players to add to a squad that won promotion to the Premier League via the Championship play-offs last month.
Last summer, Luton broke their transfer record to sign Carlton Morris for £1.3million from Barnsley and it proved a shrew investment as he finished as Town’s top scorer with 20 goals in his first season.
This time around, Sweet and his recruitment team will have far more money to spend, though the club is already forking out up to £13million to upgrade Kenilworth Road to Premier League standards, while almost double will be earmarked for the club’s new Power Court stadium and they’re relocating offices to accommodate more staff.
On Town’s transfer budget, Sweet said: “It’s meticulously calculated. One thing, we’ll set the boundaries and we won’t go beyond it. I think that’s the golden rule of what our success will be, is to have a sensible long-term financial plan, a strategic plan.
“What we’re doing, frankly, is not hiding from this. We’re having to put £12-13million into the stadium. There’s always a few liabilities you’ve got, like bonuses and little sums of money that you might give to other clubs on contingent transfer fees and things like that.
“So, you’re probably into £20-25million by that time. We’re putting a good £25million chunk of the first year into our new stadium.
“So, all of a sudden, you’re whittling down and you’ve got almost half of your guaranteed income from broadcast rights going to effectively infrastructure.
“Building the foundations for the long-term future, so our budget will be somewhat restricted by what is remaining, but we still believe we can be competitive with that.”
And despite riches unlike any Luton have experienced, the first tranche of top-flight money won’t arrive until the middle of July, even though work to replace the old Bobber’s Stand at Kenilworth Road began the day after Town clinched promotion at Wembley.
“There’s a little survival methodology that we’ve had to deploy, between getting promoted, where there’s an awful lot of money that’s been going out and that particular date,” Sweet to BBC 5 Live Sport.
“We’re a club that, generally, isn’t cash short. We operate a really right P and L (profit and loss), we focus on that rather than cash, and we’re OK with the cash.
“We’re actually in a good place from that point of view, but it is hard on clubs getting through to that period.”
But as chief recruitment officer Mick Harford explained about keeping the core of the Championship squad together, Sweet said: “We firmly believe that if a group of players are good enough to get you there, they’re generally good enough to keep you there.
“What we always need to do though, is top up the quality, depending on what division it is.
“In the Championship, for example, we added a little extra athleticism. This time around, we’ve got to add a little bit of technical ability to our squad.
“Those are the things we’re really focusing on, where we’ll spend a little bit of money, not too much, just a little bit of money, but really keep everyone else grounded and keep the momentum that we’ve had over the last couple of years.”
Explaining the “economic gymnastics” of all the improvements to the club’s infrastructure and squad, Sweet added: “We do love a challenge here at Luton and the thing about this is that we rely on process and we’ve done this three times, got promoted. Whist the scales are different, moving form one division into another, the processes do remain the same.
“We’re quite fortunate to have experienced (promotion) three times. We’re relying on those processes and while the process might actually add a nought on to the end of the numbers you’re talking about, it is the same thing.
“We are going to be sensible. Remembering, we got promoted into the Premier League, finished third in the division by having a bottom five or six budget anyway, we’re used to being able to manage that value.
“I think we’re looking at this as an exciting challenge rather than a real problem.”
