Dundee United Board Confident Despite Impact Of Relegation

Reporting its Annual Accounts for the year ended 30 June 2016, Chairman Stephen Thompson explained that Dundee United remains on track to improve efficiencies across the Club following its relegation to the Ladbrokes Championship last season. The main take-aways include: .    Board confident it has mitigated against the worst effects of relegation .    Club expect £1.5 million of cost savings this financial year .    Previous on-field failure set to cost Club more than £1.5 million of revenues this season The process is well underway, and the full effect will be demonstrated in the next annual financial figures when the Board expects to report cost reductions in the region of £1.5 million. The latest annual accounts show the adverse economic effect of a season of poor football results in the Ladbrokes Premiership which led to eventual relegation. Revenue dropped by 21% to £4.61 million through reduced prize money and the associated drop in match attendance income related to sitting at the foot of the Premiership from October 2015 through to the season end in May 2016. Broadcast revenue was also down as the Club featured in fewer live televised cup games. Commercial income from hospitality and sponsorship remained robust, and the Club benefitted from the first full year of revenue from the £300,000 redevelopment of the GA Engineering Arena. Reduction in income, coupled with a 38% increase in administrative expenses costs - mostly football related - to £1.81 million as the Board invested in its football ambition and took active steps to halt the decline on the football side of the business. In September 2015 First Team Manager Jackie McNamara left the Club, and Mixu Paatelainen was appointed as Head Coach in October 2015. Despite significant investment being made in managerial changes and boosting the playing squad, the team was unable to lift itself from the foot of the table. Mr Paatelainen left in May 2016. The on-field failure was the predominant reason for the Club reporting an operating loss for the financial year of £2.53 million. The sale of three players allowed the company to narrow total losses for the year to £1.55 million. Profit generated in the previous year allowed the company to reduce its debt to £1.2 million down from a peak of £7.3 million in 2007. Mr Thompson said: “Despite the extreme disappointment with the outcome of season 15/16, the Board remains confident that it has taken and continues to take corrective measures to cope with the significant financial impact of relegation. “The appointment of Ray McKinnon as first team manager in May 2016 and the subsequent restructuring of the playing squad was the first step in regaining the Club’s place in the top tier of Scottish football. The new manager has been backed financially to build a team capable of securing a return to the Premiership.” Mr Thompson added: “Much work is being done in parallel with our on-field investment to reduce operating costs even although relegation has added a significant financial challenge. Salary and operating expenses will remain under scrutiny, and because of this ongoing diligence we remain confident that the positive effect will be demonstrated when we report our next figures.”