Forest & Debt

[Bristol Boy]

We all wondered why Forest wanted to sell Holt to us and didn't spend big to get them that extra mile.

It could have been to help with Debt...not that it was likely unless they can find someone willing to pay £20+ Million for Commons & Tyson!

This is from the Forest Forum:

In short we're *****d.(Expletive Delted)

Just looking through the set of accounts which Colin sent me and they show Forest to have Long Term Liabilities of 30.3 million. 29.8 million of that is in the form of long term loans to Doughty. On top of that is the outstanding millions on the Trent End Bond.

The ideal solution would be for Doughty to write that off as a bad investment (afterall it was his incompetence which was responsible for the accumulation) and then hand over control to another party. However, there's little immediate chance of that. Prepare for a long stint in the football wilderness.

It goes on to say how the money doesn't have to be paid back to Doughty until they're in the Prem, but it goes to show the mess tat some clubs are in financially.

Seems like they needed promotion much more than we did from that standpoint.

I wonder what our debt to the Board is??

[Drew Peacock]

We all wondered why Forest wanted to sell Holt to us and didn't spend big to get them that extra mile.

It could have been to help with Debt...not that it was likely unless they can find someone willing to pay £20+ Million for Commons & Tyson!

This is from the Forest Forum:

In short we're *****d.(Expletive Delted)

Just looking through the set of accounts which Colin sent me and they show Forest to have Long Term Liabilities of 30.3 million. 29.8 million of that is in the form of long term loans to Doughty. On top of that is the outstanding millions on the Trent End Bond.

The ideal solution would be for Doughty to write that off as a bad investment (afterall it was his incompetence which was responsible for the accumulation) and then hand over control to another party. However, there's little immediate chance of that. Prepare for a long stint in the football wilderness.

It goes on to say how the money doesn't have to be paid back to Doughty until they're in the Prem, but it goes to show the mess tat some clubs are in financially.

Seems like they needed promotion much more than we did from that standpoint.

I wonder what our debt to the Board is??

That is an awful lot of interest to pay every year if they are at commercial rate, or maybe the interest gets added to the loan.

They are well and truly expletive deleted.

[The Man In Black]

You could say Leeds are worse off, even after going into administration and looking for creditors to accept 1% of what they are owed. Bates will pay 500k for Leeds and probably get away with it this time, and even get new backers - but if they don't bounce straight back, they'll be in the brown stuff as well.

If that happens, how do you think that lenders will view clubs in the future? Imagine you lent them £1million and you are offered just £10,000 in return.

I think it will make them a MUCH riskier prospect for even small loans, and this could affect a lot of clubs' access to finance.

In short, Leeds' incompetence could have a wide effect for football at large.

[zookeeper]

Just looking through the set of accounts which Colin sent me and they show Forest to have Long Term Liabilities of 30.3 million. 29.8 million of that is in the form of long term loans to Doughty. On top of that is the outstanding millions on the Trent End Bond.

It may well be a problem but it would be very hard to make any real judgements on this based on one aspect in isolation, which is why they prepare whole statements rather than snapshots.

I would imagine that the assets of Forest account to a fair amount and it may well be that they equal the equity and liabilities.

I would be more interested to see if the reason for the loans being required is still there and if they are making substantial losses on an annual basis.

[devonrobin]

It may well be a problem but it would be very hard to make any real judgements on this based on one aspect in isolation, which is why they prepare whole statements rather than snapshots.

I would imagine that the assets of Forest account to a fair amount and it may well be that they equal the equity and liabilities.

I would be more interested to see if the reason for the loans being required is still there and if they are making substantial losses on an annual basis.

its a worry with the size of their crowds that their still making a loss

what hope is there for the rest of us

[havanatopia]

its a worry with the size of their crowds that their still making a loss

what hope is there for the rest of us

thats a 30 million debt; it does not mean they are making an operating loss.

In fact with crowds of 20k plus they should be making a healthy profit or at least breaking even if they are paying back the interest on a monthly basis.

[Stoke_Gifford_Red]

its a worry with the size of their crowds that their still making a loss

what hope is there for the rest of us

Firstly I have not seen anywhere that it mentions a loss still being made. Secondly I believe Crewe always make profits, and look at the size of their crowds.

[Eddie Hitler]

Firstly I have not seen anywhere that it mentions a loss still being made. Secondly I believe Crewe always make profits, and look at the size of their crowds.

I would guarantee a loss is being made. Very few League 1 & 2 make a profit; Crewe and Walsall are the known execeptions. With Forest's squad they will be making a twatting great loss. I will have a poke around on their boards to see quite how much.

To answer the original question our debt to the board was £0.6m end of last season, plus overdraft / other loans of £1.4m. This is down from a £5m debt the previous year because of a share issue in the year.

As we've been losing about a £1m a year (big improvement on a few years ago) the debt end of this season, taking into account the sale of Cotterill, should be down to about £1m.

But that £1m will ratchet up this summer due to new signings which, after all, we all want to see.

[Eddie Hitler]

I would guarantee a loss is being made. Very few League 1 & 2 make a profit; Crewe and Walsall are the known execeptions. With Forest's squad they will be making a twatting great loss. I will have a poke around on their boards to see quite how much.

How much? Or rather HOW MUCH?

Forest P&L Year Ended 31 May 06:

Turnover £7.9m

Expenses

Wages £9.5m

Other £4.4m

Interest Payable £1.6m

Loss for the year (£7.6m)

Net Worth of club (£26m) - that's a negative btw

[Deckard79]

Makes you relieved to have a sensible chairman such as SL, doesn't it?

As much as some of us might hate the fact he doesn't splash out on the bigger names... it all makes good long-term sense for this football club that our debts remain manageable.

[Bristol Boy]

I would imagine that the assets of Forest account to a fair amount and it may well be that they equal the equity and liabilities.

£30m?? The ground might be worth that as devt property but it's not likely Doughtly will sell it

I would be more interested to see if the reason for the loans being required is still there and if they are making substantial losses on an annual basis.

Yes & Yes

[zookeeper]

How much? Or rather HOW MUCH?

Forest P&L Year Ended 31 May 06:

Turnover £7.9m

Expenses

Wages £9.5m

Other £4.4m

Interest Payable £1.6m

Loss for the year (£7.6m)

Net Worth of club (£26m) - that's a negative btw

Wow that's huge!

The most scary thing to me is the turnover to wage ratio at about 1.2 to 1.

I believe that city had a rate of about 60% of their turnover being spent on wages a couple of years ago and I would hope that it has been reduced since then.

The annual interest payment pays for about 10 players wages in League one!

[Eddie Hitler]

£30m?? The ground might be worth that as devt property but it's not likely Doughtly will sell it

The ground is included in the accounts.

Summary balance sheet:

Fixed assets (ground) £6.1m

Players regs £1.9m

Other assets £1.0m

Total Assets £9.0m

Current Liabilities £2.7m

Long Term Liabilities £30.3m

Total Liabilities £33m

Net Shortfall £24m

I don't know the diff between this shortfall and the quoted net worth of (£26m), may be an asset wrote-down.

You would say administartion is the obvious way out but as the vast majority of the debt is due to Doughty this would be fairly pointless. He could just write-it off himself and avoid the ten point deduction.

I don't really see where they can go from here. They can do a secured loan on the ground to cover next year's loss but that's the one trick this pony has. And if they do that they'll probably lose their ground.

If Doughty is determined to hang on they have had it. They'd have lost a stack of money even if they had been promoted.

Leeds v Forest in the 4th division? Tough on the loyal fans but looks very possible.

[samo]

Leeds v Forest in the 4th division? Tough on the loyal fans but looks very possible...

...and slightly funny too.

[zookeeper]

£30m?? The ground might be worth that as devt property but it's not likely Doughtly will sell it

The ground is included in the accounts.

In fairness to BB he was responding my comment about the assets being able to offset the liabilities which you proved incorrect.

I'm still slightly surprised that the market value of the land is that small.

[Bristol Boy]

thats a 30 million debt; it does not mean they are making an operating loss.

In fact with crowds of 20k plus they should be making a healthy profit or at least breaking even if they are paying back the interest on a monthly basis.

Turnover £7.9m--Wages £9.5m

Explains a lot

[Bristol Boy]

In fairness to BB he was responding my comment about the assets being able to offset the liabilities which you proved incorrect.

I'm still slightly surprised that the market value of the land is that small.

So am I.

I think it would be worth more if sold for devt-which, as I intimated, they really can't do.

I suppose if Doughtly is charging interest on the loan then at least he has some income (5% on £30m = £1.5mpa) but I wouldn't think to many people are queing up to buy it.

[Loderingo]

So am I.

I think it would be worth more if sold for devt-which, as I intimated, they really can't do.

The City Ground isn't that near the City Centre and Nottingham isn't that desirable city with all the gun crime.

[Loderingo]

I would guarantee a loss is being made. Very few League 1 & 2 make a profit; Crewe and Walsall are the known execeptions. With Forest's squad they will be making a twatting great loss. I will have a poke around on their boards to see quite how much.

To answer the original question our debt to the board was £0.6m end of last season, plus overdraft / other loans of £1.4m. This is down from a £5m debt the previous year because of a share issue in the year.

As we've been losing about a £1m a year (big improvement on a few years ago) the debt end of this season, taking into account the sale of Cotterill, should be down to about £1m.

But that £1m will ratchet up this summer due to new signings which, after all, we all want to see.

Yes but income will increase too. It depends if GJ can unearth some cheap gems. Would be interested if anyone had any figures of what they expect the increase in our income and expenditure to be.

[City Ben]

So am I.

I think it would be worth more if sold for devt-which, as I intimated, they really can't do.

I suppose if Doughtly is charging interest on the loan then at least he has some income (5% on £30m = £1.5mpa) but I wouldn't think to many people are queing up to buy it.

The amount that the ground is recorded at in the accounts doesn't necessarily bare any resemblance to the market value of the asset, unless Forest have a policy of revaluing (which I'm not sure of, but would doubt they do). It's recorded at the historical cost - ie what they have spent on it - then depreciated. So the ground could still be worth a heck of a lot on the market.

Funny accounting rules.

[Eddie Hitler]

The amount that the ground is recorded at in the accounts doesn't necessarily bare any resemblance to the market value of the asset, unless Forest have a policy of revaluing (which I'm not sure of, but would doubt they do). It's recorded at the historical cost - ie what they have spent on it - then depreciated. So the ground could still be worth a heck of a lot on the market.

Funny accounting rules.

Possibly. But half of it is over the river and the area is an industrial estate. I don't see why a bit of industrial land in the gun capital of England should be regarded as a property goldmine.

One point I hadn't previously noted - the accounts are for last season. They will probably have lost another £7m this season.

On a lighter note:

A mate from college had always been going on about Notts County (briefly in tha Prem under Warnock), as when I was at college I was always banging on about City. When we played them 10 years ago I suggested a beer weekend so met up with him and two other college mates, who weren't football fans but faniced the trip, and drove up there. I'd never been before and it was relaxing not to have to navigate or drive.

As we got into Nottingham the County fan started directing it us. Then the driver had to start asking. Then the pauses before replies became longer and the replies sounded less convincing. We were getting slightly nervous but as the County fans had never driven we put it down to unfamiliarity with the road network.

Eventually to our great relief he said "there it is, turn down here". We parked up within sight of the ground and got out to stretch our legs. Then we asked two questions "why is nobody else here at 1 o'clock?" and "why is it red?".

Turned out this diehard County fan had never been to the Notts County ground. Ever. And he was from just outside Nottingham and had lived there his whole life before going to college.

We remembered the Notts County ground was nearby so soon found it and saw the game. It turned out to have been a good place to park as it happens.

As he had been so passionate about Notts County, to the extent of storming out of pubs if people took the mickey out of Warnock, it took him a while to live it down.

[Reg Hill]

Makes you relieved to have a sensible chairman such as SL, doesn't it?

As much as some of us might hate the fact he doesn't splash out on the bigger names... it all makes good long-term sense for this football club that our debts remain manageable.

Sorry Deckard, there are some amongst us who will beg to differ on this one. In fact I expect Nick J to be along in just a moment to put you right. He knows about these things you see.

[Bristol Boy]

Makes you relieved to have a sensible chairman such as SL, doesn't it?

Wish we had Steve Gibson of Boro or John Majdeski of Reading who have acheived so much more

As much as some of us might hate the fact he doesn't splash out on the bigger names... it all makes good long-term sense for this football club that our debts remain manageable.

The choice isn't one between a profligate lunatic & "sensible." Clubs like Reading, Middlesborough, Fulham, Blackburn & Bolton have roared past us over the years without commiting financial suicide.A sense of acheivment can sometimes only be gained with the perspective of looking at what others have done, then comparing the distance travelled from their starting point.(Quote]

[kit]

Makes you relieved to have a sensible chairman such as SL, doesn't it?

Wish we had Steve Gibson of Boro or John Majdeski of Reading who have acheived so much more

As much as some of us might hate the fact he doesn't splash out on the bigger names... it all makes good long-term sense for this football club that our debts remain manageable.

The choice isn't one between a profligate lunatic & "sensible." Clubs like Reading, Middlesborough, Fulham, Blackburn & Bolton have roared past us over the years without commiting financial suicide.A sense of acheivment can sometimes only be gained with the perspective of looking at what others have done, then comparing the distance travelled from their starting point.(Quote]

What a load of rubbish. Fulham and Blackburn have definately spent out stupid amounts of money to get where they are. It is only now that there is no extra money coming in that they have to be run sensibly now. Middlesbrough also were a very big spending side to get where they are.

http://www.soccerbase.com/transfers_by_team.sd?teamid=1055 look at 97/98 and onwards that is an awful lot of money to be spending without commiting suicide. If it was that easy then teams like Cardiff, Wolves & probably a lot more would be established in the premier league by now, trouble is they tried to buy their way into the Prem, but came up short and ran out of money.

Bolton and Readings success at the moment is due to good managers more than anything else. Their finances are in check and they have been fortunate enough to have good managers with it.

By the look of your post, your idea is that City should either go out and build a new ground, or splash out excessive amounts of money to buy our way into the premier league. Yes?

[Bristol Boy]

What a load of rubbish.

According to you

Fulham and Blackburn have definately spent out stupid amounts of money to get where they are.

They may have spent large amounts.That doesn't make them stupid, providing they/their owners have it

It is only now that there is no extra money coming in that they have to be run sensibly now.

What? :noexpression: There is more money that ever coming in from Sky, EON, Carling, Johnsons etc, etc

Middlesbrough also were a very big spending side to get where they are.

I don't think you've read the post.Where have I said they didn't??

http://www.soccerbase.com/transfers_by_team.sd?teamid=1055 look at 97/98 and onwards that is an awful lot of money to be spending without commiting suicide. If it was that easy then teams like Cardiff, Wolves & probably a lot more would be established in the premier league by now, trouble is they tried to buy their way into the Prem, but came up short and ran out of money.

Cardiff are building a brand new stadium, have new owners and are in The Championship.Wolves have a new owner who is going to pump £30m into the club with all the old debt written off when Jack Hayward sold him Wolves for £10.

Spending money doesn't mean financial suicide. It isn't the same thing.

Bolton and Readings success at the moment is due to good managers more than anything else. Their finances are in check and they have been fortunate enough to have good managers with it.

Nothing fortunate about it.They have good Chairman-Wealthy Benefactors/Chairman, New Grounds etc.Those Chairman built the grounds & employed the managers while we employed Pulis, Fawthrop, Wilson & Tinnion and stayed put.Add Wigan to that mix.

By the look of your post, your idea is that City should either go out and build a new ground, or splash out excessive amounts of money to buy our way into the premier league. Yes?

No that's what you'd like it to say because on that basis it would fit your argument.

My point, that you have avoided or completely missed, is that the choice isn't profligacy (Leeds) or moving so slowly that you miss the boat which is what we've done in comparsion to Reading, Wigan, Middlesborough, Blackburn & Bolton.

[BIGPHIL]

With reference to Forest wages bill. I thought there were rules inplace to say money spent on wages had to be something like no more than 60% of income. I remember Swindle had to get permission before they could sign, not sure Ince I think, could be wrong with player, wages would possible have exceeded permitted spending.

[bucksred]

With reference to Forest wages bill. I thought there were rules inplace to say money spent on wages had to be something like no more than 60% of income. I remember Swindle had to get permission before they could sign, not sure Ince I think, could be wrong with player, wages would possible have exceeded permitted spending.

I THINK that may have kicked in this season just finished. Has been in League 2 a couple of seasons, I beleive.

[Drew Peacock]

Makes you relieved to have a sensible chairman such as SL, doesn't it?

Wish we had Steve Gibson of Boro or John Majdeski of Reading who have acheived so much more

As much as some of us might hate the fact he doesn't splash out on the bigger names... it all makes good long-term sense for this football club that our debts remain manageable.

The choice isn't one between a profligate lunatic & "sensible." Clubs like Reading, Middlesborough, Fulham, Blackburn & Bolton have roared past us over the years without commiting financial suicide.A sense of acheivment can sometimes only be gained with the perspective of looking at what others have done, then comparing the distance travelled from their starting point.(Quote]

Yes, life's a bitch.

As far as I know Bolton is the only one of those sides not to have had an owner prepared to throw silly money at getting into the Premiership.

For Reading, Middlesborough, Fulham, Blackburn & Bolton look at Leeds, Bradford, Wolves, Notts Forest and Rushden & Diamonds.

A long journey starts with the first step (quote)

95% of all statistics are made up (quote)

Many a mickle makes a muckle (quote)

[Bristol Boy]

With reference to Forest wages bill. I thought there were rules inplace to say money spent on wages had to be something like no more than 60% of income. I remember Swindle had to get permission before they could sign, not sure Ince I think, could be wrong with player, wages would possible have exceeded permitted spending.

That's called Salary Capping and exists in some sports-Rugby League being an example.

As far as I'm aware, despite being proposed there is no such rule in football and Swindon's problem was that they were on the brink of administration or receivership and owed people like Andy King money.From memory, they were told that they couldn't sign more players until they settled certain other debts/wages etc.

[Bristol Boy]

Yes, life's a bitch.

Can be

As far as I know Bolton is the only one of those sides not to have had an owner prepared to throw silly money at getting into the Premiership.

A chap who's name escapes me and it's not Phil Gartside, pumped about £10m in from his business in the IOM the season before last.They have debt as do most businesses, albeit managable.

For Reading, Middlesborough, Fulham, Blackburn & Bolton look at Leeds, Bradford, Wolves, Notts Forest and Rushden & Diamonds.

Like all other things in life & busines, one has to do things right.Football is no different.That's why I pointed out The Chairman/Owners, I did

A long journey starts with the first step (quote)

Quite true, however one has to make that step

95% of all statistics are made up (quote)

That's only police & political statistics

Many a mickle makes a muckle (quote)

Never a truer word spoken-However, can you confirm the unit cost of said Muckle and is it say, as inflation proof as a Bond?