City release accounts - Ouch!

[Hxj]

1 hour ago, ExiledAjax said:

So the 'value' of the 'asset' is essentially fixed when you sign them. Say you sign Jon for £4m on a 4 year contract. Jon is worth a total of £4m, which is accounted for at a rate of £1m a year in amortisation. So he is worth £4m in year one, then £3m, then £2m, then £1m. At any point if we sell Jon for less than he is worth at the time of sale, we have to account for the difference as 'impairment'.

We sell him in year 3 for £1m. That is a £1m loss, as he was worth £2m at that point, so £1m goes into the 'impairment' column.

Being a pedant for these things if you buy Jon for £4 million in the summer transfer market and he has a four year contract he is worth £3 million at the end of year 1, £2 million at the end of year 2, £1 million at the end of year 3 and nothing at the end of year 4, unless of course you own Derby County, but I wont go there today.

If you sell Jon for £6m at the end of year two, you make a profit on disposal of £4m.  (£6m received - £2m value).  This increases your profit/reduces your loss.

If you sell Jon for £1m at the end of year two, you make a loss on disposal of £1m.  (£1m received - £2m value).  This increases your loss/reduces your profit.

If Jon has a cardiac event at the end of year 2 and you decide that he is unlikely to play again you impair his carrying value to nil, as he is no longer part of your cash generating enterprise. You make an impairment adjustment of £2 million. Which increases your loss/reduces your profit.

Profits and Losses arise on disposal, impairments on valuation adjustments.

Edited December 30, 2021 by Hxj

[ExiledAjax]

3 minutes ago, Hxj said:

Being a pedant for these things if you buy Jon for £4 million in the summer transfer market and he has a four year contract he is worth £3 million at the end of year 1, £2 million at the end of year 2, £1 million at the end of year 3 and nothing at the end of year 4, unless of course you own Derby County, but I wont go there today.

Pedantry is important and useful here. No need to apologise. I want to be corrected on this.

If you sell Jon for £6m at the end of year two, you make a profit on disposal of £4m.  (£6m received - £2m value).  This increases your profit/reduces your loss.

If you sell Jon for £1m at the end of year two, you make a loss on disposal of £1m.  (£1m received - £2m value).  This increases your loss/reduces your profit.

If Jon has a cardiac event at the end of year 2 and you decide that he is unlikely to play again you impair his carrying value to nil, as he is no longer part of your cash generating enterprise. You make an impairment adjustment of £2 million. Which increases your loss/reduces your profit.

Your heart attack example is more in line with my own understanding of traditional 'impairment'. 

Profits and Losses arise on disposal, impairments on valuation adjustments.

It feels like this is a question of language then. Nagy going for £0 when he still had £750K in his amortisation pot - that's just a loss then, not strictly an 'impairment'? Are losses on transfers commonly accounted and labelled as 'impairments' in football accounts?

 

[Hxj]

22 minutes ago, ExiledAjax said:

Nagy going for £0 when he still had £750K in his amortisation pot - that's just a loss then, not strictly an 'impairment'?

Yep.

 

22 minutes ago, ExiledAjax said:

Are losses on transfers commonly accounted and labelled as 'impairments' in football accounts?

Nope.  Losses on sale/disposal and Profits on sale/disposal.

 

In football accounts you will normally see impairments in the season when a team gets relegated from the Premier League.  The argument there is the profit making enterprise has been severely harmed and therefore the contracts are worth less.  Personally I think that those adjustments have more to do with maximising the costs that go through the Premier League income years, making hitting Championship FFP easier.

Edited December 30, 2021 by Hxj

[Fuber]

On 28/12/2021 at 19:21, shelts said:

Sold some top class players and bought players that where the cheap option that didn’t work 

They weren't the cheap option for the most part. That's the problem.

That's why we are, where we are.

[Davefevs]

2 hours ago, Hxj said:

Thanks - I have a couple of questions if you don't mind.

1. As far as I can see the only player acquired for a fee in the 2020/21 period was Joe Williams, there is nothing else in the accounts that the £2 million additions refer to anything else, so is it more likely that the £750kk impairment refers to JW and his injury problems (rather than Nagy's departure).

I suspect the difference of £750k (£2m minus Williams £1.25m) might well be a pair of loan fees for Mawson and Sessegnon () even though Mark Ashton once said to Senior Reds he never paid loan fees.  I know for a fact that to be a lie.  Mr Ashton very prone to lie to make him look better.  I’m not sure Fulham loan a £20m asset for wages alone!

1. Which leads on to - where the hell did the £6.2 million profit on player trading come from.  There's nothing in the accounts to indicate that there were significant contingent receipts receivable in 2020 or received in 2021.  Does that mean that we received £6.2 million for Smith and Eliasson?

I suspect these are indeed player sale add-ons from the likes of Webster and Brownhill, non-relegation and / or appearance clauses or the like.  Plus Kelly appearance clause(s).  From my estimates we made circa £3m transfer profit from Eliasson, Szmodics, Jonny Smith and Morrell.

 

 

[sh1t_ref_again]

7 hours ago, spudski said:

Does anyone else think the excuse of not being able to compete against teams in this division with parachute payments exaggerated?

Granted some teams like WBA and Fulham seem to do well with it. But there are many others who struggle with parachute payments and even get relegated.

Yes...we may never win the league, but I don't see how, like other teams, you can aim for top 6.

I'd say this league is pretty even by the majority.

So whilst it's great to have the money, you still have to buy and sell wisely, and get players motivated and well drilled/coached.

 

 

Nope, it's the most rigged unfair competition I can think of.

To prove the point, if you look at the promoted sides since PP, at least 2 every year have been promoted with PP and a number of years all places have been PP teams.

[Ivorguy]

In error

Edited December 30, 2021 by Ivorguy

[BigAl&Toby]

On 29/12/2021 at 19:14, Mr Popodopolous said:

Okay there's no doubt that fixed charge holders have a great deal of security as far as their position goes- nor do I intend to question your expertise or experience.

Since this arose IIRC in the 2019/20 accounts, yes he is the lender. Floating charge is good, Fixed Charge even better.

Let's be fair the Championship is a money pit- it is a loss making League in the main, even our sole profit was brought about through £38m in Profit on Player disposal (2018/19)- could we have been run better? Certainly. Is it possible to compete at the right end of this League and consistently turn a profit? I don't think so. I believe that Kieran Maguire said it was the biggest loss making League in Europe- we often hear of wages exceeding 100% of turnover...even the financial safety rules aren't all that safe, £39m losses in 3 years plus allowable costs to show on the P&L!? Higher if in PL for a year or 2 before.

Anyway yeah back to your expertise- am interested in this stuff.

Am I right in thinking that default on the loan and the stadium would revert verbatim- lock, stock and barrel- to Pula. Or is it the case e.g. that if a default occurs then SL can bump up the rent payments big time as it reverts to Pula directly.

Additionally, I notice that the Interest Payments are steadily bumping up- some of it will be Bank Overdraft, some related to HP (Hire and Purchase)- but I believe that a good chunk will be back to SL/Pula- whoever.

Morning @Mr Popodopolous. Enjoy last night?! We did!

I’ve not got an issue with the costs of being in this league. I don’t like it but it is what it is.

Not sure about how the effect of the debenture would work at BS3. I can’t recall now who holds it but given how we’ve been set up I believe it will be Steve as the UBO of his investment empire.

And I suspect that whatever clauses exist will enable him to do whatever he’s able to legally do. Whether he can increase rents would I’d guess be part of that - but I’d imagine that other creditors might have a view of the ultimate happened for the UBO - they could argue they’ve been preferred over Steve.

Then again I suspect one of the professionals within the Merchant Venturers would be able to provide Steve with a justification for him doing what he does - auditors, valuers …….

Uncle Steve is in a unique position. He has us by the short and curlies……

I wonder if “his” £40m loss is all part of his financial planning? I’m buying an Ifor Williams trailer today from a chap in the Forest of Dean. Tax deductible it is. Wonder if Steve can deduct his £40m from his tax bill?

Makes you wonder…….

[Mihai]

That are the weekly wages of our players ? Damn... now I know why no clubs came to us. That are shitty salaries except a few. How in the hell we wanted to sign Dwight Gayle a few years ago cause we couldn't affor not even half of his wage.

[Pezo]

3 hours ago, Mihai said:

That are the weekly wages of our players ? Damn... now I know why no clubs came to us. That are shitty salaries except a few. How in the hell we wanted to sign Dwight Gayle a few years ago cause we couldn't affor not even half of his wage.

Are you saying we should pay more?

[Mihai]

19 hours ago, Pezo said:

Are you saying we should pay more?

Based on this crysis no. But I assume these were the average salaries even 2 years ago. Why the hell clubs in Championship are transfering players for millions when they pay them like shit. The football is done, only the rich clubs can acheive something and we are not and we weren't  before one of these clubs.

I don't want to be a negative post but I never knew the salaries of our footballers. Now that I know them, I also know that we can't ever keep our best players and that we will never sign a proven top player because we are not attractive enough.

Let's hope this will change in 5-10 years and that we will enjoy many more Championship seasons in the future until we can step up.

[Mr Popodopolous]

On 30/12/2021 at 16:00, Hxj said:

Thanks - I have a couple of questions if you don't mind.

1. As far as I can see the only player acquired for a fee in the 2020/21 period was Joe Williams, there is nothing else in the accounts that the £2 million additions refer to anything else, so is it more likely that the £750kk impairment refers to JW and his injury problems (rather than Nagy's departure).
2. Which leads on to - where the hell did the £6.2 million profit on player trading come from.  There's nothing in the accounts to indicate that there were significant contingent receipts receivable in 2020 or received in 2021.  Does that mean that we received £6.2 million for Smith and Eliasson?

 

Morrell and Szmodics too IIRC?

[Davefevs]

7 hours ago, Mr Popodopolous said:

Morrell and Szmodics too IIRC?

Correct, but not enough to get it anywhere near £6.2m.

My guess was add-ons from Webster, Brownhill and / or Kelly, either appearance based or non-relegation bonuses.

[Bristol Rob]

4 minutes ago, Davefevs said:

Correct, but not enough to get it anywhere near £6.2m.

My guess was add-ons from Webster, Brownhill and / or Kelly, either appearance based or non-relegation bonuses.

Eliasson?

[Monkeh]

On 03/01/2022 at 21:07, Mihai said:

Based on this crysis no. But I assume these were the average salaries even 2 years ago. Why the hell clubs in Championship are transfering players for millions when they pay them like shit. The football is done, only the rich clubs can acheive something and we are not and we weren't  before one of these clubs.

I don't want to be a negative post but I never knew the salaries of our footballers. Now that I know them, I also know that we can't ever keep our best players and that we will never sign a proven top player because we are not attractive enough.

Let's hope this will change in 5-10 years and that we will enjoy many more Championship seasons in the future until we can step up.

You do realise that the wages include every player not just first team don't you,

That's the 15 and 16 year olds on 120 quid a week to over paid strikers on 27k a week

[grifty]

On 03/01/2022 at 21:07, Mihai said:

Based on this crysis no. But I assume these were the average salaries even 2 years ago. Why the hell clubs in Championship are transfering players for millions when they pay them like shit. The football is done, only the rich clubs can acheive something and we are not and we weren't  before one of these clubs.

I don't want to be a negative post but I never knew the salaries of our footballers. Now that I know them, I also know that we can't ever keep our best players and that we will never sign a proven top player because we are not attractive enough.

Let's hope this will change in 5-10 years and that we will enjoy many more Championship seasons in the future until we can step up.

I'd be happy to swap salaries if we are paying them that poorly!

Out of interest, how much did you think we paid them and how much do you think we should pay them to be able to compete?

[Davefevs]

30 minutes ago, Bristol Rob said:

Eliasson?

We’d already included him.

Transfer profit consisted of Eliasson, Szmodics and Morrell.  If we got a fee for Rory Holden, it was nominal, same with Jonny Smith.

Those 3 accounted for about £3m of the £6.2m

[Mihai]

3 hours ago, grifty said:

I'd be happy to swap salaries if we are paying them that poorly!

Out of interest, how much did you think we paid them and how much do you think we should pay them to be able to compete?

I mean, from that picture i see only Kalas going to 8k per week which is the salary of the 3rd goalkeeper choice at Newcastle probably.

I think a lot of clubs are paying a lot better than we do (i am talking about championship football). I know there are even worse salaries at other clubs but good proven championship players won't come here for 6k per week. They will come here if other clubs won't pay them more...and some clubs can do that.

[grifty]

32 minutes ago, Mihai said:

I mean, from that picture i see only Kalas going to 8k per week which is the salary of the 3rd goalkeeper choice at Newcastle probably.

I think a lot of clubs are paying a lot better than we do (i am talking about championship football). I know there are even worse salaries at other clubs but good proven championship players won't come here for 6k per week. They will come here if other clubs won't pay them more...and some clubs can do that.

Ah ok, that 8 is £8m that we paid for him, not the wages. I believe Kalas is on £20-25k p/w. I'm not sure which thread it's on but there's a list I think @Davefevs provided that has the top wages earners for about 8 players.

[Hampshire reds]

Do all clubs have to announce to the public there accounts. if so when by. if we dont why have we done it  

[ExiledAjax]

8 minutes ago, Hampshire reds said:

Do all clubs have to announce to the public there accounts. if so when by. if we dont why have we done it  

Basically yes.

We've done it because it's a legal requirement.

Subject to a few niche (and in the case of an operating football club irrelevant) exemptions, all companies, including football clubs, have to file annual accounts with Companies House. That is a legal requirement under the Companies Act 2006. Those filings are then freely and publically accessible through the online Companies House search service. How extensive those accounts are, and when they have to file them by, depends on the precise nature of the Company in question.

[Davefevs]

5 minutes ago, ExiledAjax said:

Basically yes.

We've done it because it's a legal requirement.

Subject to a few niche (and in the case of an operating football club irrelevant) exemptions, all companies, including football clubs, have to file annual accounts with Companies House. That is a legal requirement under the Companies Act 2006. Those filings are then freely and publically accessible through the online Companies House search service. How extensive those accounts are, and when they have to file them by, depends on the precise nature of the Company in question.

Clubs of City’s size must provide a full set of accounts, some clubs classed as small business are exempt from this and may submit abridged accounts.  Barnsley used to take advantage of that, not sure if they will these days.

For a club with year end of:

May 31st then accounts needs to be in by Feb 2022

June 30th…..Mch 2022

etc.

Basically you get 9 months.

Because of covid, businesses were allowed an extra 3 months to file their accounts.  Some Champ clubs took advantage of that grace period.

[ExiledAjax]

Just now, Davefevs said:

Clubs of City’s size must provide a full set of accounts, some clubs classed as small business are exempt from this and may submit abridged accounts.  Barnsley used to take advantage of that, not sure if they will these days.

Yeh, a lot of L1 and L2 clubs can get away with the short form.

Thanks for adding the detail, hopefully @Hampshire reds is now assured that we aren't publishing highly detailed accounts that are costly and time-consuming to prepare just because we feel like it.

[Bristol Rob]

10 minutes ago, ExiledAjax said:

Basically yes.

We've done it because it's a legal requirement.

Subject to a few niche (and in the case of an operating football club irrelevant) exemptions, all companies, including football clubs, have to file annual accounts with Companies House. That is a legal requirement under the Companies Act 2006. Those filings are then freely and publically accessible through the online Companies House search service. How extensive those accounts are, and when they have to file them by, depends on the precise nature of the Company in question.

Which can come in handy if you are looking to employ a trade to do any significant work, for example Mr Builder who has a website that alludes to many years of trading, but a companies house search reveals that he has had his company for 3 minutes and is disqualified from being a director, so it's now his pet dog who runs the thing.

(Not exactly accurate, but you get the gist).

[Davefevs]

5 minutes ago, Bristol Rob said:

Which can come in handy if you are looking to employ a trade to do any significant work, for example Mr Builder who has a website that alludes to many years of trading, but a companies house search reveals that he has had his company for 3 minutes and is disqualified from being a director, so it's now his pet dog who runs the thing.

(Not exactly accurate, but you get the gist).

No, nothing worse than getting a multi-million pound Givernment contract to supply PPE, and then find out the bloke is a landlord of your local pub, and you’d not even noticed from the photos in your office (seem on a screenshot of a tv interview) that the landlord was also a friend of yours.

[Bristol Rob]

7 minutes ago, Davefevs said:

No, nothing worse than getting a multi-million pound Givernment contract to supply PPE, and then find out the bloke is a landlord of your local pub, and you’d not even noticed from the photos in your office (seem on a screenshot of a tv interview) that the landlord was also a friend of yours.

And I thought my example was a work of fiction.

Yours.... Well that could never happen.

[Davefevs]

3 minutes ago, Bristol Rob said:

And I thought my example was a work of fiction.

Yours.... Well that could never happen.

Matt Hancock - hold my beer

[Mihai]

4 hours ago, grifty said:

Ah ok, that 8 is £8m that we paid for him, not the wages. I believe Kalas is on £20-25k p/w. I'm not sure which thread it's on but there's a list I think @Davefevs provided that has the top wages earners for about 8 players.

Ohh... Jesus. I watched now so that 8 comes from a thousand and the tree zeros are making it a six zeros number. It is perfectly logical but above "Fee" it sais Contract and I misunderstood.
 

This makes a lot of sense. He has a top league as he is indeed a top league CB. I belive then we have that Wells at around 20k per week but he doesn't even worth 5k per week. He is even worse than Semenyo. 

I am sorry for my mistake, I was totally shocked to think that our top earner have 8k per week...I mean we have bigger salaries in Liga 1 from Romania...  I know Championship as one of the richest leagues when we talk about salaries. It should be in top 10, top 15 for sure, above leagues as Portugal, Romania, Belgium and so on...

Thanks,  my friend !

[Davefevs]

2 hours ago, Mihai said:

Ohh... Jesus. I watched now so that 8 comes from a thousand and the tree zeros are making it a six zeros number. It is perfectly logical but above "Fee" it sais Contract and I misunderstood.
 

This makes a lot of sense. He has a top league as he is indeed a top league CB. I belive then we have that Wells at around 20k per week but he doesn't even worth 5k per week. He is even worse than Semenyo. 

I am sorry for my mistake, I was totally shocked to think that our top earner have 8k per week...I mean we have bigger salaries in Liga 1 from Romania...  I know Championship as one of the richest leagues when we talk about salaries. It should be in top 10, top 15 for sure, above leagues as Portugal, Romania, Belgium and so on...

Thanks,  my friend !

Sorry, 8 point 000 (£8.000m) fee

[Mr Popodopolous]

On 06/01/2022 at 09:12, Monkeh said:

You do realise that the wages include every player not just first team don't you,

That's the 15 and 16 year olds on 120 quid a week to over paid strikers on 27k a week

Plus all non football staff unless we're cross purposes.