Dundee United have posted a loss of more than £2.8 million following their relegation to the Championship last season, accounts for the year ending June 2023 show.
The Tannadice outfit sustained an operating loss of £5m, up by £3.1m from the previous year.
United’s total wage costs during the 2022/23 campaign stood at £6.9m following a signing spree that saw the likes of Steven Fletcher, Aziz Behich and Dylan Levitt arrive in Tayside.
Those costs were up by 18% compared to the 2021/22 campaign, while the wage-to-turnover ratio rose to 86% from 71%.
While the likes of Glenn Middleton, Mark Birighitti and Levitt arrived for undisclosed fees, United spent a combined £377,000 on new arrivals.
It was candidly acknowledged within the accounts that the “club and in particular the footballing department over-extended itself in expenditure which resulted in the club exceeding budgeted costs”.
The overall loss includes a £425,000 notional interest charge on loans from the Scottish Government and owner Mark Ogren.
Those figures were slightly assuaged by a solid turnover of £8.1m, boosted by 5,800 season ticket sales which contributed more than £1m to the coffers.
Around £700,000 was pocketed from their European tie against AZ Alkmaar.
A major source of income came from player sales, a category which included the sell-on received for Harry Souttar’s £15m switch from Stoke to Leicester City.
United earned £2.6m – up from £1.2m in 2021/22 – and, given there were few other financially consequential outgoings in the period, most of that fee can be credited to Souttar.
“Extremely challenging”
Ogren, who has overseen more than £13 million of investment since arriving in December 2018, told Dundee United’s official website: “A full review was conducted in the summer across the club.
“Dropping down to the Championship is extremely challenging financially for the business. The board estimate a £2-3 million drop in turnover.”
And United spelled out the stark steps taken to remedy that shortfall.
The accounts noted that United’s 2023/24 budget is a mammoth £4.6m less than the actual costs spent in 2022/23, while costs from July to December in 2023 are more than £2 million less than at a similar stage last season.
Ogren added: “The board are confident that despite the difficulties of 2022/23, we remain on course to achieve the long-term aim of being a sustainable and leading competitor within the Scottish Professional Football League.”
United’s AGM will take place in Lounge 87 at Tannadice Park on February 1.
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