Latest club accounts

[Drew_3]

EP says we lost £5.3M this financial year. I am in no way panning the club on this, nor am i defending them, I do not profess to know the in's and out's of finances within a large (or small for that matter!) buisness, but I find this to be incredible and does not sound "well run".

The article says that depreciation of assets and player values account for more than £5m of the debt, surely you dont say we brought a player for £500k now he is only worth £200k so thats a loss of £300k?

*Edit* Sorry this should probably have been in Club Policies, Mods please move

[Bandini]

A hundred pages.

[1871 Royal]

Players are never "worth" what a club pays for them ....

Just have to look at Andy CaROFLoLOLLOL for that.

Sounds a bit misleading to me when talking about losing money over depreciation on assets because surely those assets will not always depreciate, for example, we bought ALF for around £350k (I am willing to be corrected) and now, a few months after we have bought him he is worth £250k, thats saying we have 'lost' £100k but who is to say that in 2 months time he wont be worth £500k, a 'profit' of £150k.

Just don't buy this story. Very misleading IMO.

Also, in for the first page, and before it gets moved ....

[melonhead]

do they give any other detail?

does this mean we'll need to sell another 5 million worth of players in the summer? cos im not sure we have that in the club right now...........

worrying times

[Wycombe Royal]

You also need to understand the difference between accounting profit and the actual cash movements. If we have lost £5.3m in the year due to depreciation of assets then this is not cash that has been lost as depreciation is not a cash item.

As for players I always thought it was their contract that was the asset and that is what is depreciated. So a player with six months to go an a contract may have an asset value of practically nothing, yet he could be sold in the January transfer window for a few million. I may be wrong on that assumption though.

But we don't know which assets have been depreciated - it could be players, it could be the stadium, it could be the training ground, etc......I guess we'll have to wait and see when the accounts are published.

[Svlad Cjelli]

I posted this elsewhere a few days ago, but I'll copy it here to answer the "well-run" question.

By any criteria of being well-run we undoubtedly are - we know exactly what our financial situation is, we are not tied into long-term contracts so we have financial flexibility, we pay our bills and have liquidity and no massive interest overheads - and we are in complete control of our finances (unlike most other football clubs). And we survived relegation, financially, unlike so many others. Why does "well-run" have to equal "making a profit" - because the latter is impossible the way football finance is currently structured.

Why does everyone equate "well-run" with "making a profit" ? - that's absolutely impossible in today's football.

The financial loss was always esimated last year at being £4m - in the end (probably due to play-off income) it's come in at £3.5M. No great surprises there.

[Svlad Cjelli]

do they give any other detail?

does this mean we'll need to sell another 5 million worth of players in the summer? cos im not sure we have that in the club right now...........

worrying times

Not really - results are for last year, and the loss was smaller than expected, so good times, really - just the usual EP stirring wthout understanding.

[JC]

As the accounts are to 30th June I assume they would not include the income from the sale of Matt Mills and Shane Long

[melonhead]

do they give any other detail?

does this mean we'll need to sell another 5 million worth of players in the summer? cos im not sure we have that in the club right now...........

worrying times

Not really - results are for last year, and the loss was smaller than expected, so good times, really - just the usual EP stirring wthout understanding.

phew

[melonhead]

As the accounts are to 30th June I assume they would not include the income from the sale of Matt Mills and Shane Long

even better!

whoop whoop

probably got some sort of war chest for jan!

[Mid Sussex Royal]

I am no accountant but thought depreciation of fixed assets is a balance sheet entry rather than the day to day running of the business?

This has just given the old git the excuse for next summer's fire sale although we do not have any assets anywhere near this amount.

[Mid Sussex Royal]

As the accounts are to 30th June I assume they would not include the income from the sale of Matt Mills and Shane Long

No but they include Gylfie sale and we were told the black hole at the time was £4M - and what about the cup run?

[Wycombe Royal]

Also aren't these the first set of account without parachute payments. If so then surely a large loss is predictable and further to that it underpins why we have had to make substantial sales and cuts to the playing squad since relegation.

[Extended-Phenotype]

Is this some sort of sh/t way for Madge to flog 5.3m worth of players to fill a 'black hole' that essentially is just estimated depreciating value of the junk players he couldn't sell?

What a genius.

[Svlad Cjelli]

Also aren't these the first set of account without parachute payments. If so then surely a large loss is predictable and further to that it underpins why we have had to make substantial sales and cuts to the playing squad since relegation.

Yes, exactly. The EP has done nobody any favours by sensationalising something that everyone knew about anyway.

[melonhead]

As the accounts are to 30th June I assume they would not include the income from the sale of Matt Mills and Shane Long

No but they include Gylfie sale and we were told the black hole at the time was £4M - and what about the cup run?

world wide recesssion, increased cost of credit, loss of revenue with reduced gates, wage bill still substantial
other stuff.....dunno

[rhroyal]

You also need to understand the difference between accounting profit and the actual cash movements. If we have lost £5.3m in the year due to depreciation of assets then this is not cash that has been lost as depreciation is not a cash item.

As for players I always thought it was their contract that was the asset and that is what is depreciated. So a player with six months to go an a contract may have an asset value of practically nothing, yet he could be sold in the January transfer window for a few million. I may be wrong on that assumption though.

But we don't know which assets have been depreciated - it could be players, it could be the stadium, it could be the training ground, etc......I guess we'll have to wait and see when the accounts are published.

Obviously cash is highly important, but you can't go discounting losses saying "It's only depreciation."

Ultimately losses mean the club is worse off than they were 12 months ago. End of.

[Wycombe Royal]

You also need to understand the difference between accounting profit and the actual cash movements. If we have lost £5.3m in the year due to depreciation of assets then this is not cash that has been lost as depreciation is not a cash item.

As for players I always thought it was their contract that was the asset and that is what is depreciated. So a player with six months to go an a contract may have an asset value of practically nothing, yet he could be sold in the January transfer window for a few million. I may be wrong on that assumption though.

But we don't know which assets have been depreciated - it could be players, it could be the stadium, it could be the training ground, etc......I guess we'll have to wait and see when the accounts are published.

Obviously cash is highly important, but you can't go discounting losses saying "It's only depreciation."

Ultimately losses mean the club is worse off than they were 12 months ago. End of.

Not necessarily, there are businesses out there that turn a loss nearly every year but which are doing quite well and continuing to grow, yet you have others who always turn a profit and go out of business. The reason is nearly always cash flow. The problem is that non-finance people always see the profit or loss as the be-all and end-all of how is business is doing yet it is probably the least important financial statement that a business produces.

[Harpers So Solid Crew]

If the players and the Stadium have decreased in value by £5.3m does it really matter, I assume we are talking about the players that are here and those sold do not come into the equation.

Or as has been alluded now that we have sold the jewels what is left is less valuable. So the assets of the players are now say, £15mill, but were £20m at the start, so the money from the players went into an income pot, and it is less likely that we will be able to fill that pot again from what we have, so will have to cut the cloth accordingly.

[Drew_3]

If the players and the Stadium have decreased in value by £5.3m does it really matter, I assume we are talking about the players that are here and those sold do not come into the equation.

Or as has been alluded now that we have sold the jewels what is left is less valuable. So the assets of the players are now say, £15mill, but were £20m at the start, so the money from the players went into an income pot, and it is less likely that we will be able to fill that pot again from what we have, so will have to cut the cloth accordingly.

Forgive me if I miss understand, but by that reckoning does that not mean that if we had a team reckoned to be worth 20m then we sold 10m and the team is still worth an estimated 15m, are we not now better off?