The only way is down for Queens Park Rangers

All but relegated, QPR provide a valuable lesson in how not to run a club with Premier League aspirations

The former Northern Ireland international and ex-chairman of the Professional Footballers' Association, Derek Dougan, once wrote a book titled How Not To Run Football. Dougan, who died in 2007, would have found Queens Park Rangers an interesting case study for an updated version. Like Leeds United, Ports-mouth and others, they are the latest club to live the dream beyond their means and find it becoming a nightmare.

Today they visit Reading knowing both clubs are almost certainly relegated – just as the Premier League's most lucrative broadcasting deal kicks in and the Football League adopts stringent new financial rules that allow losses of only £4m per year. So it is crucial that they go down in good health.

Reading will, having been run prudently by Sir John Madejski before he handed over to the Russian Anton Zingarevich, who confounded all those expecting a mini-Abramovich. By keeping wages under control, not making marquee signings and inserting relegation clauses into contracts, Reading will be in comparatively good shape. As Madejski put it: "We've built this brick by brick and we haven't gone for a quick fix. QPR have got all the hallmarks of quick fix, or allegedly quick fix."

Rangers appear to have made all the worst mistakes of Leeds and Portsmouth, leaving fans fearful they could end up in a similar position; not just in the lower divisions but in administration and uncomfortably close to oblivion.

Professor Tom Cannon of the University of Liverpool, a specialist in football finance, says that relegation (only West Ham of the last nine teams to go down came back up) means they will be facing the worst of both worlds: "Football League regulations are much tougher and QPR have spent so much to stay in the Premier League that the chance of parachute payments balancing the books are really small.

"You can't charge Premier League admission prices in the Championship, crowds and match-day revenue will go down and many of the commercial deals I'd guess will have break-clauses in the event of relegation," he adds. "Then there are the players on long-term contracts they will struggle to sell."

New managers with rich owners tend to want new players. Neil Warnock, Mark Hughes and Harry Redknapp were no exception and agents have had a field day with 24 signings in the four transfer windows since the Malaysian businessman Tony Fernandes became chairman in August 2011; on the latest figures only Manchester City and Liverpool spent more on agents' fees.

Rangers were the third highest net transfer spenders in 2012, even before splashing out £20m on Christopher Samba and Loïc Rémy at the start of this year; several other high-profile players were also able to demand huge wages because they came on free transfers, and will be disinclined to move on now unless the club pays up their contracts.

In speculating to accumulate, newly promoted clubs face a difficult balance. The two who also came up the season before last, Norwich City and Swansea City, have shown that it can be done and, as our panel shows, they are in a far healthier position than QPR in every facet of their operation. Crucially, each has survived a change of manager too.

If there is a single indicator of financial health it is the ratio between wages and income. Norwich's figure is the best in the League at under 50 per cent and would be even lower if the salary figure did not include their large catering staff, who under Delia Smith produce significant profits. Swansea, at 53 per cent, could still attract the players to win a trophy.

In their Championship-winning season, QPR spent almost £30m on wages when their income was barely half that – a ratio of 183 per cent. Last season it was reduced to "only" 91 per cent of turnover, with the 12th highest wage bill in the League but only the 17th highest income.

Loftus Road, with a capacity of less than 19,000, was immediately identified as a problem by Fernandes, but having already committed to funding a new training ground, a stadium means only further expenditure; hence a recent £15m loan from Barclays, which in turn has pushed up the club's debts to around £100m.

There was widespread relief when Fernandes bought out the old regime, and brought the wealthy Mittal family back into the fold. Original (and successful) Premier League members, by 2001 they were in the third tier and in administration. The chaotic regime of Flavio Briatore and Bernie Ecclestone was captured in the documentary The Four Year Plan – four years in which they went through six managers.

Fernandes made all the right noises about profitability and long-term sustainability and seemed to have an ideal track record in building up comparatively small businesses like his budget airline Air Asia and the Lotus (now Caterham) Formula One team. Yet neither he nor his chief executive, Phil Beard, had football experience or contacts.

As Professor Cannon says: "If you look at successful entrepreneurs, what often happens is that they think football's easy. They think they can do it better, as I think happened to some degree at Newcastle United. Tony Fernandes' plan was to make QPR major players, even when you've already got in London three of the country's top five clubs."

The one positive appears to be the board's genuine long-term commitment, exemplified in securing planning permission last Thursday for the new training ground. "They have enough resources to see them through, as long as they can meet the tough new regulations," Cannon says. "If they keep putting their hands in their pockets, they can avoid becoming another Portsmouth. But it's not going to be a quick fix."

The bottom line

These three teams were promoted two years ago but their finances last season were very different:


Capacity 18,680/26,840/20,650

Turnover £64m/£74.6m/£65.2m

Wages £58.4m/£36.8m/£34.6m

Ratio 91.2%/49.3%/53.1%

Profit -£23m/+£16m/+£17m

Debts £89m/nil/nil

All figures to 31 May 2012

Reading v Queens Park Rangers is on Sky Sports 1 today, kick-off 1.30pm

Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Colombia's James Rodriguez celebrates one of his goals during the FIFA World Cup 2014 round of 16 match between Colombia and Uruguay at the Estadio do Maracana in Rio de Janeiro, Brazil
sportColombian World Cup star completes £63m move to Spain
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
Fair trade: the idea of honesty boxes relies on people paying their way
travelIt seems fraught with financial risk, but the policy has its benefits
Antoine Griezmann has started two of France’s four games so far
Life and Style
techYahoo Japan launches service to delete your files and email your relatives when you die
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Caption competition
Caption competition
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary