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The recent financial history of York City
The recent financial history of York City

Summary of City's finances of recent years

The following article was circulated, at the time, as a Trust newsletter.  In addition, it was extensively covered in the Evening Press and is included within the Trust's publication "York the heart of the community" .  It was accompanied by three graphical charts to help demonstrate the key points.

An overview of the financial results of York City, 1996/97 to 2003/04

Good or bad, football and finance is intrinsically linked in the minds of most supporters and in the media. In the case of York City, clearly, money has been at the centre of the evolving saga over the past eighteen months.

This Trust Newsletter provides a brief overview of the financial results of York City since 1996/97 through to the financial outlook for the 2003/04 season about to commence.

When compared to Division Three clubs, Citys financial results compared favourably up to 1998/99, but after that season they got significantly worse and the Club rapidly headed towards insolvency. The Club was plunged into Administration in December 2002 and was on the brink of extinction until the Trusts Rescue Package was put in place on 28 March 2003. Some people said the Club was beyond salvation and that the fans would never do it, but, against all the odds, the supporters of York City did achieve the objective of saving our Club.

Looking back before 1999 relative financial prudence

  • Whilst in Division Two, York City was of similar scale to the average Division Three club, in terms of income generation, the wages bill and annual operating losses.

  • The Club enjoyed windfall returns from the transfer of a number of young players. In the three seasons from 1996/97 to 1998/99, the Club benefited from the net injection of 2.5 million of profits from player trading.

  • The windfall profits from player sales far exceeded the losses from the Clubs day-to-day activities (of approximately 1 million) over those three seasons.

  • At this time, the Club had better net funds (cash reserves) than almost any other Football League club. The Clubs financial position appeared pretty safe compared to other clubs.

Seasons 1999/2000 to 2001/02 a dramatic downturn in Citys finances

  • In 1999 the (then) directors of York City decided to undertake a restructuring, such that the ownership of Bootham Crescent was stripped out of the Club and transferred to a new holding company, Bootham Crescent Holdings Plc.

  • Citys financial results took a significant turn for the worst in the 1999/2000 season.

  • Whilst there was some reduction in income generation (largely driven by Division Three football following relegation at the end of the 1998/99 season), it was the increases in costs that were of greater significance.

  • Costs escalated as the annual wages bill peaked at 2.2 million (in 2000/01) and other costs also increased significantly (to over 700,000 per season).

  • By 2000/01, the Clubs (then) directors had created a wages bill (of 2.2 million) that was more than double the wages bill from just four seasons earlier in 1996/97 (i.e. Citys wages bill increased by 112%, compared to an average increase of 65% amongst Division Three clubs).

  • This cost escalation meant that the Club had one of the worst Wages/Turnover ratios in the history of British football in the 1999/2000 and 2000/01 seasons.

  • Operating losses exceeded 1 million in each of 1999/2000 and 2000/01, far worse than other Division Three clubs.

  • In the three seasons following the creation of BCH, those responsible for running the Club managed to lose over 3 million (from the day-to-day operations 1999/2000 to 2001/02). The windfall transfer monies had been spent and York City was rapidly heading towards insolvency.

    2002/03 on the brink of extinction

  • In April 2002, John Batchelor acquired the Club for 1 from BCH.

  • 400,000 of so-called sponsorship monies from Persimmon were diverted away from the Club.

  • Those responsible for Citys cheque book failed to correct the excess of costs over income in 2002.

  • As a result of the unsustainable financial position, in the last quarter of 2002, creditors were not being paid and the Club was plunged into Administration in December 2002.

  • By the end of December 2002 the Club had accumulated debts of around 1 million. Without corrective action, those debts could have grown further by the end of the season by perhaps a further 0.5 to 0.75 million. The financial situation was very very bad and some people thought the Club was beyond salvation.

    Citys Supporters Trust working to save City

  • To save York City, the Trust had to work a solution to satisfy approximately 1.5 million of liabilities owing by the old football club company.

  • A Business Plan was developed by the Trust and formed an integral part of convincing the Administrator, the football authorities, the Taxman, and the players and their Union to accept the Trusts Rescue Package.

  • As part of the Rescue Package, approximately 1/2 million was raised and applied by the Trust.

  • The historic event of the fans taking control of their own York City Football Club was completed on 28 March 2003.

    Going forward a new financial reality

    Providing a sustainable financial future for York City is one of the most important over-arching tasks for the Club Board to achieve. Integral to this financial objective are the aims of promoting the club in the community and providing a team for City fans to be proud of.

    The Boards of both the Trust and the Club cannot allow the excessive costs and underachieving income generation of the past to continue.

    The new Club Board, appointed by the Trust just three months ago, has been working very hard to generate further income for the Club and to reduce costs. The high level budget for the 2003/04 season is being implemented such that:

  • For the 2003/04 season, the Club aims to at least break-even.

  • Budgeted income of 1.6 million covers the Clubs committed/expected costs (of 1.6 million). The largest part of income (38%) is from gate receipts (season ticket income and match-day entrance). Commercial and other income (including donations) is being increased to over 1/2 million for the first time in Citys history. Approximately 470,000 is budgeted to be received from the Football League and other bodies from the centrally negotiated broadcasting and sponsorship agreements and grant monies (including those to help maintain the youth development system at City).

  • The budgeted total wages bill is being reduced to approximately 1.2 million, yielding a Wages/Turnover ratio at a manageable 75%.

  • Other costs are also being limited wherever possible (to a total of approximately 400,000), cutting out unnecessary expenditure.

    Finance Director Terry Doyle, and his fellow directors, continue to face a testing time trying to balance the books. York City needs the continuing (and growing) support of the people and businesses of York and surrounds to enable a community owned football club to be sustained for future generations.

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