Julian Rhodes predicts City will be one of the better-off clubs in League One after revealing a £1.5m profit from their promotion campaign.

The club have now paid back the £1m loan that fellow owner Mark Lawn pumped in four years ago, with the remainder of the cash being included in Phil Parkinson’s player budget.

Nobody in the division can go close to matching the financial muscle of hot favourites Wolves, who are thought to have a £23m war chest thanks to their latest parachute payment.

But Rhodes believes the Bantams are still in a good position to make an impact on their return to the third tier.

He said: “The majority of wage bills in League One last season were under £2m. We’re going to be over that.

“Look at the bottom half of League One and they were operating on the same kind of level as the top seven in League Two.

“The indications are that a lot of clubs are also reducing their budgets because of the recession.

“We’ve been in that situation before and it’s horrible. A club might come down with a £5m wage bill but look closer and there could be a number of players in that on £10,000 a week.

“They can’t get rid of them and have to honour those contracts. We had that with the likes of Ashley Ward. But I was encouraged by what I saw of last season’s figures and thought we would have a very good budget for that level. If theirs are coming down more, then that gives us a great chance.”

City’s profits have been boosted by the sale of the separate company which Rhodes, his father David and Lawn created to take over the Valley Parade office block.

Their financial year does not officially end until Sunday but Rhodes was keen to see that Lawn finally got back his money, including interest, that he handed over in March 2009.

He added: “It was something Mark probably thought would never happen. He was happy to leave it.

“But the whole idea when he put that money in was that he would get it back one day if we ever did achieve anything like have a good cup run, sell anybody or generate some income.

“He’d agreed to lend it at the start of the 2008-2009 season when we pushed the boat out but we didn’t actually need it until the March.

“Unfortunately it didn’t work out and we didn’t get promoted so the loan has just been sat there unpaid.

“Mark was quite prepared to roll the loan over but I think it was important that we get back to living by our own means. We’ve got a positive balance sheet for the first time since God knows when.

“The good thing is that we’re not only completely debt free now – because that was the only real one that we had – but it gives us another £500,000 to add to this year’s budget.”

Yeovil won promotion to the Championship last season with a wage bill which was barely over £1m, arguably the lowest in that division.

In contrast, City’s ended up one of the highest in League Two as a result of wage bonuses and the added expense from their unprecedented achievement in reaching two Wembley finals and winning promotion.

Rhodes said: “We took a calculated risk at the start but what a great season we had.

“This year will be slightly different. We’re going to have an overspend from what we can normally afford with the excess from last season and we can still strengthen in January if we need to.

“We were looking at setting the budget even higher to really have a go but I think we’ll be a little bit more conservative.

“It’s still a very competitive budget and it doesn’t rule out spending in January if we’re doing well. We did that this year in terms of transfer fees and wages.

“And we won’t be in the position where we will have to sell anyone, even if we get knocked out in the first round of every cup.”

Rhodes was famously quoted in the past about the prospect of back-to-back promotions should City finally break free from the bottom division. Having achieved that goal at the sixth time of asking, the joint-chairman chose his words carefully on the odds of their success snowballing through a second season.

“Of course it’s a possibility,” he smiled. “I did say that once we got the first promotion then I wouldn’t be surprised if it was followed by another.

“And I wouldn’t be surprised – but I’m not guaranteeing it.”