Club Finances

[Mr Popodopolous]

Given that we read on an annual basis that we are regularly posting losses, this did make me wonder. After all, plenty of clubs seem to have major debt but still spend fairly big, especially the top ones. And I think I readf on here that wage budget wise it is 60 odd percent of turnover.

With this in mind, can anyone provide any insight into the following?

1) Club losses/profits

2) Club debt

3) Wage budget

[Eddie Hitler]

Given that we read on an annual basis that we are regularly posting losses, this did make me wonder. After all, plenty of clubs seem to have major debt but still spend fairly big, especially the top ones. And I think I readf on here that wage budget wise it is 60 odd percent of turnover.

With this in mind, can anyone provide any insight into the following?

1) Club losses/profits

2) Club debt

3) Wage budget

Year to 31 May 08 (current year available in September), £'000:

Headline loss (1,998)

Of which:

Interest (469)

Player purchases / sales (profit effect) (780)

Operating loss (749)

This latter figure is the best measure of the underlying business as it is not distorted by big player purchases or sales. The year before it was (2,457) which shows the benefits of being in the championship, even though the headline loss last year looked better at (882) because of £2m proifts on player sales.

The players' wage biill is not sepaprately disclosed although it's a fair assumpion to say it makes up most of the total wage bill.

Wages were up to £8.5m from £5.6m the previous year; they are best compared agaisnt turnover and represented 69% of turnover this year, an impovement from the 74% of the previous year again showing the benefit of being in the championship. The club don't publicise their budgets but 70% of turnover looks to be the general aim.

Debts in their widest sense are (brace yourself) £15.3m although this is a misleading figure because there is a huge accruals / deferred income figure of £7.4m which is unexplained. I'm hoping this is primarily deferred income that will be released to P&L next year so should not be regarded as a true debt.

Debts in the commonly understood sense are £5.6m, although part of this is a reclassification of equity and only £2m is orthodox debt. There isn't the disclosure we have seen in previous years as to the owner of this debt but Steve Lansdown / Keith Dawe would be expected to have stumped this up.

Accumulated losses are £17m and the reason the debt is so much smaller than this is because of the issuance and purchase of new shares by directors.

My overall view is that the company is in a good financial state for a football club, though would be a basket case if it was an ordinary company. That's football....

[bully]

Year to 31 May 08 (current year available in September), £'000:

Headline loss (1,998)

Of which:

Interest (469)

Player purchases / sales (profit effect) (780)

Operating loss (749)

This latter figure is the best measure of the underlying business as it is not distorted by big player purchases or sales. The year before it was (2,457) which shows the benefits of being in the championship, even though the headline loss last year looked better at (882) because of £2m proifts on player sales.

The players' wage biill is not sepaprately disclosed although it's a fair assumpion to say it makes up most of the total wage bill.

Wages were up to £8.5m from £5.6m the previous year; they are best compared agaisnt turnover and represented 69% of turnover this year, an impovement from the 74% of the previous year again showing the benefit of being in the championship. The club don't publicise their budgets but 70% of turnover looks to be the general aim.

Debts in their widest sense are (brace yourself) £15.3m although this is a misleading figure because there is a huge accruals / deferred income figure of £7.4m which is unexplained. I'm hoping this is primarily deferred income that will be released to P&L next year so should not be regarded as a true debt.

Debts in the commonly understood sense are £5.6m, although part of this is a reclassification of equity and only £2m is orthodox debt. There isn't the disclosure we have seen in previous years as to the owner of this debt but Steve Lansdown / Keith Dawe would be expected to have stumped this up.

Accumulated losses are £17m and the reason the debt is so much smaller than this is because of the issuance and purchase of new shares by directors.

My overall view is that the company is in a good financial state for a football club, though would be a basket case if it was an ordinary company. That's football....

Your last sentence is spot on - not the real world is it!

Interesting - wages rose by £3m - £60k per week.

We know how some of that happened although we did offload some league 1 players to soften the blow.

Sounds like we handed some retained former league 1 players some big pay rises - inevitable I guess and presumably their contractual right.

That's ok if those rewarded play like CCC players consistently and we avoid the transfer fees of signing replacements - however, I think some have run out of steam and must be replaced and if GJ agrees then the wage will will rise substantially.

[City Ben]

Excellent summary Eddie. Thanks for beating me to it and saving 10 mins of my life!

The take-away from reading the accounts is: Steve Lansdown and Keith Dawe are keeping us afloat. They chucked £4m in in the year to 31 May 2008. Will be interesting to see how much they pump in this current year.

The "Chairman's statement" is also interesting too... it talks at some length about players' contracts, and the risks around keeping wages in check. This is probably because he'll be well aware that our wages:turnover ratio is probably too high. When talking about a salary cap, Rupert Lowe recently suggestd 60% of turnover was something to aim for... but others actually suggest 50%.

Balancing that with improving the squad is the key challenge as far as I see it - and I wish some other posters in this forum would realise this before suggesting that we sign Player X on inflated wages!

[City Ben]

Out of interest... Stoke spent 109% of their turnover on wages last year.

Hmm, good luck lads!

[Mr Popodopolous]

Thanks Eddie, very informative.

I have to say, I had no idea the debt was that high! £15.3million. It certainly explains a lot.

And yes, football seems to exist on a different planet to normal businesses in the main.

[citynut54]

Out of interest... Stoke spent 109% of their turnover on wages last year.

Hmm, good luck lads!

And Burnley spent 114% with the smallest squad in the division!

[Nibor]

Year to 31 May 08 (current year available in September), £'000:

Headline loss (1,998)

Of which:

Interest (469)

Player purchases / sales (profit effect) (780)

Operating loss (749)

This latter figure is the best measure of the underlying business as it is not distorted by big player purchases or sales. The year before it was (2,457) which shows the benefits of being in the championship, even though the headline loss last year looked better at (882) because of £2m proifts on player sales.

The players' wage biill is not sepaprately disclosed although it's a fair assumpion to say it makes up most of the total wage bill.

Wages were up to £8.5m from £5.6m the previous year; they are best compared agaisnt turnover and represented 69% of turnover this year, an impovement from the 74% of the previous year again showing the benefit of being in the championship. The club don't publicise their budgets but 70% of turnover looks to be the general aim.

Debts in their widest sense are (brace yourself) £15.3m although this is a misleading figure because there is a huge accruals / deferred income figure of £7.4m which is unexplained. I'm hoping this is primarily deferred income that will be released to P&L next year so should not be regarded as a true debt.

Debts in the commonly understood sense are £5.6m, although part of this is a reclassification of equity and only £2m is orthodox debt. There isn't the disclosure we have seen in previous years as to the owner of this debt but Steve Lansdown / Keith Dawe would be expected to have stumped this up.

Accumulated losses are £17m and the reason the debt is so much smaller than this is because of the issuance and purchase of new shares by directors.

My overall view is that the company is in a good financial state for a football club, though would be a basket case if it was an ordinary company. That's football....

Football club wage bill was £6.877m.

There's a bunch of info in this thread.

Anybody who wants the accounts drop me a PM, I have them on this PC for the last 4 years for all 3 companies.

[Eddie Hitler]

Excellent summary Eddie. Thanks for beating me to it and saving 10 mins of my life!

The take-away from reading the accounts is: Steve Lansdown and Keith Dawe are keeping us afloat. They chucked £4m in in the year to 31 May 2008. Will be interesting to see how much they pump in this current year.

The "Chairman's statement" is also interesting too... it talks at some length about players' contracts, and the risks around keeping wages in check. This is probably because he'll be well aware that our wages:turnover ratio is probably too high. When talking about a salary cap, Rupert Lowe recently suggestd 60% of turnover was something to aim for... but others actually suggest 50%.

Balancing that with improving the squad is the key challenge as far as I see it - and I wish some other posters in this forum would realise this before suggesting that we sign Player X on inflated wages!

Cheers Ben, it does highlight how much is being pumped into the club doesn't it.

Thanks Eddie, very informative.

I have to say, I had no idea the debt was that high! £15.3million. It certainly explains a lot.

And yes, football seems to exist on a different planet to normal businesses in the main.

I don't think the debt is really that high Mr P, though I can't be 100% certain.

[City Ben]

[Nibor]

For those who are interested and can drag themselves away from transfer gossip... Here are a few noteworthy extracts from this year's Deloitte Review of Football Finances.

Whoops - ignore me.

Any chance you know when this will be published?

[City Ben]

Came out today Nibor - you'll probably have seen the headlines re Prem revenues hitting £2bn on the news by the time I've you've read this.

That's an average of £100m a club. Although there's clearly a huge spread top to bottom - compare that to our measely numbers!