Grimsby Town: Seven Seas

Introduction

Remember ITV Digital? The board of directors of Grimsby Town certainly do. They are still blaming the demise of the company for the financial woes of the club 15 years after the Monkey advertised channel went kaput in…err…March 2002.

For those of you unfamiliar with the company. ITV Digital went bust after signing a £105 million per season TV deal for live broadcast of Football League matches.

To give some context, the current Sky deal for the Football League is worth about £60 million.

Whoever signed the contract on behalf of the Football League was clearly put on the naughty step, as it ended up losing about £180 million when ITV Digital went into administration. Grimsby, like many small provincial clubs, were hit hard by the event, as TV rights generated about 60% of the club’s income in 2002. The club was relegated in 2003, and that was the last time the club was in the top two divisions.

Since then it’s been a struggle for the club in terms of both league position and finances. But how much of this misfortune can be put at the door of ITV Digital?

That’s a shame, as we like Grimsby here at the Price of Football. Not only can you get a great fish and chips pre match, there is also the experience of the final game at the end of the 2002/3 season, between Grimsby and Brighton, which took place on a Sunday afternoon.

Both sides had to win to have a chance of avoiding relegation, and to get to the match on time we ended up spending our first (and possibly last) Saturday night in Cleethorpes.

A great time was had by all, shapes were thrown on the dancefloor of some memorable nightclubs. The highlight however was being offered by a local lady of indeterminate age and morality a chance of a romantic encounter behind a skip after buying her a drink, on the grounds that she’d ‘never had a Cockney’.

What she would have offered for if a bag of chips had been offered as well was sadly never clarified.

The offer was declined, partly because of fear (she claimed to have four children by three different fathers, all of whom were apparently in prison), and partly because we feared her genital cleanliness was as impressive as her knowledge of geography.

The financial consequences.

The ITV Digital demise certainly cost Grimsby money, in 2002 it accounted for 70% of total income that season.

However, the club would have suffered financially too if the club had been relegated. This is because the TV deal was very much skewed towards clubs in the Championship.

Worse was to happen in 2009/10, when the club was relegated to the National Conference, which was not covered by the EFL TV deal. This explains why income took another dive in 2011, as the club took its time to come to terms with a new life.

Latest results

Grimsby eventually returned to the EFL in 2016/17, and have just published their first set of financial results since being once again part of the 92.

The first thing to say about Grimsby is a positive one. The club has not hidden behind Companies Act legislation and produced abbreviated accounts, which do not show key metrics such as income, wages and profits.

Here at the Price of Football we are hugely disappointed that so many clubs (8 in League One and 17 in League Two) are not transparent and show the full picture of their finances to fans, who are the spiritual and emotional, if not necessarily the financial, owners. The Football Association could do something here, but their silence on this governance issue is damning.

Impact of promotion

Promotion has been good for Grimsby, with income rising by 24% and average attendances up 21% to 5,259, the sixth best in the division. The rise in attendances only made a £30k increase in matchday revenue, mainly because the figures for the previous season were boosted by Grimsby getting promoted via the playoffs at Wembley, which was a big payday for the club.

Wages also took a hit since the administration. The club does seem to have had some bad years where wages were as high or higher than income, but have taken back control ((c) All Brexit Voters) of wage levels in recent years. Whilst wages rose by 30% in the first season back in League 2, this was more than covered by the benefits of return to the EFL.

Player signings

Grimsby have never been a wealthy club, known for big signings, and this is reflected in the sums paid for players since 2002.

2016/17 resulted in Grimsby having their highest player outlay since before ITV Digital went bust. On the plus side, the club also sold the splendidly named Omar Bogle to Wigan. Whilst Grimsby have not disclosed the fee, a bit of accounting fun and games suggests that total player sales for the year generated £1,066,000.

It does appear that some Grimsby fans are unhappy with the ownership of the club. The largest shareholder is John Fenty, a local businessman and Conservative councillor, who has we think about 42% of the shares.

Owner investment

Like many provincial clubs, Grimsby are dependent upon the owners for financial support.

From what we can see, the total invested in the club by the board is as follows:

It certainly appears that the board (presumably Fenty) has put money into the club, especially after relegation to the Conference/National League. How wisely the money has been spent is best dealt with by those with local knowledge. Many seem to think that Fenty’s decision making is on a par with my ability to do ballroom dancing whilst blindfolded.

There doesn’t, however, appear to be much of a correlation between the fall of ITV Digital and the owners writing out cheques to cover losses. Grimsby made an operating loss of just £111,000 between 2002 and 2017, although is should be emphasised that this period was bookended by £1 million profits in both 2002 (as the club had received some money from ITV Digital) and 2017 (due to the sale of Omar Bogle).

Where the club goes from here is open to conjecture. Attendances are down 15%, as second season syndrome kicks in. In Russell Slade they have an experienced EFL manager, and currently sit just three points off a playoff position.

Promotion to League 1 is worth about £400,000 a season extra in TV income. Whether Grimsby could then survive in the bear pit of the Championship, where we are estimating total losses to exceed £300 million, is debatable, but the likes of Burton, who were the team who relegated Grimsby into non-league football, have shown it can be done.