| Quick look at the financial statements 13:32 - Dec 28 with 23418 views | Nigeriamark |
As I mentioned in another post I have put together some of the data from the financial statements in a table & will give a simple/factual statement as to what they dhow. Clearly what we can do in the future is still a better of opinion but at least this gives a view on what the state of finances are as of end of May 2018. Unfortunately this is the first year where very detailed information is given, but I have looked at the balance sheet for the last 10 years which gives some insights.
I have attempted to explain how to look at these from the point of view of someone who may not be familiar with these documents so sorry if some of the explanations seem obvious
Table 1 - 2017 & 18 full financials
To May 18 To May 17
Gross Rev 5,412,000 6,000,000
Cost of sales -3,830,000 -3,161,000
Admin costs -1,943,000 -1,563,000
Distribution costs -31,000 0
Other income/loss 108,000 133,000
Intrest payable/received -23,000 -45,000
Total Profit/Loss -307,000 1,364,000
Exceptional income 1,429,000 -2,330,000
P/L on normal business -1,736,000 -966,000
Net assets 2,571,000 2,878,000
Table 2 - Exceptional items
2018 2017
Transfer fees 711,000 2,166,000
TV Money 455,000 17,000
Prize money 263,000 147,000
Total. 1, 429,000. 2,330,000
Table 3 - Increase in asset value last 10 years
GBP Assets
to May 18 -307,000 2,571,000
To May 17 1,356,000 2,878,000
to May 16 -419,000 1,522,000
to May 15 1,426,000 1,941,000
to May 14 -65,000 515,000
to May 13 -372,000 580,000
to May 12 353,000 952,000
to May 11 480,000 599,000
to May 10 143,000 119,000
To May 09 -24,000
I have split the next section into 3, How to read financials ( very basic) followed by what I think the Rochdale financials are saying ( mainly factual + some reasonable "guestimates", and finally a brief summary
READING FINANCIALS
Although gross revenue is important, it is not relevant until you take away what you have spent. This gives us the net revenue, which is also called profit or loss. This is the money that if you run at a profit you can put into your bank and if you run at a loss you need to take out of your bank. Many companies will look at this from 2 perspectives:-
1. How the " normal" operation is running - This looks only at income and expenditure that is predictable and occurs every year. This would include gate money, sponsorships, EFL money etc as incomes and Salaries, maintenance etc. This profit loss on normal business is an indication of the general health of the business and if positive means that you are not requiring something that cannot be guaranteed to happen to balance the books
2. Total operation - This is as above but then adds in items that are not guaranteed to happen. For income this could be Transfer fees and sell ons received, Money from drawing a big club in a cup etc. For expenditure this could be a fee paid for a player. If positive and you are running a positive normal operation this would be considered " cream on top" and could be used to fund something not initially planned. If normal business is negative then you would need to use this additional income to cover the loss
Unfortunately we only have exceptional item breakdown for 2018 & 2017 so hard to judge trends
3. Table 3 - Increase/decrease in assets
Although we do not have full financials, we have the asset value over 10 years. In 2009 the club had a negative value but over the last 10 years we have recorded a total of approx 2.6m profit so we stand as of May 2018 with assets of 2.571m. Although this is an average of 260,000 a year, it is not a smooth increase but swings dramatically between + 1.4m and - 400,000. We can estimate below the reason for this
WHAT DO THE FINANCIALS SEEM TO BE SAYING
1. Normal Business. The club has lost about 2.7m over 2017 & 2018 or approx 110,000 per month. Revenue from gates actually increased slightly, but Salaries jumped significantly as did Admin cost. It would seem that as a result of a large transfer/sell in 2017, the club then pushed out the boat on players or other staff
Based on the fact that we have never had massive increases in staff, income, crowds etc I would estimate that we have probably incurred losses on normal business in most if not all of the last 10 years
2. Total Business. After over 110 years of business, we find ourselves with assets of approx 2.6m a figure also earned over the last 10 years. The fact that year end 2015 and 2017 account for more than this amount and the fact that we have full details of 2017 show that the biggest individual factor in getting to where we are is not the way the club runs it's normal business, but its dependence on exceptional items. This is not regular though and it is primarily through these 2 exceptional years ( not sure which transfers or sell ons would be hear). Prize money and TV money is also contributing, but it is the transfers that have got us to where we are. We have still lost money in 4 of the last 9 years even with all the windfalls
3. Assets. These would confirm my above points. Most of the normal business is under our control and the nature of the market we compete in suggest that although I don't have the detail, it is likely to have followed a similar loss making pattern. I would guess that in league 2 the gross revenue and costs were lower but we also did not achieve the same level of income from TV money, transfers etc. As a result we would have been running losses but not 110,000 per month
SUMMARY
1. Rochdale is a loss making club based on normal business and I would estimate probably always have been. In an effort to stay in league 1 we have "pushed out the boat" since the league 2 days, but increases in revenue from ticket sales will probably not have got anywhere near covering this. Sponsorships increased in 2018 but with lack of detailed data before 2017 it is hard to see if this is a trend
2. Unlike earlier years we have been relatively successful in the selling market, but not every year. As a result we have turned normal losses into a profit and our assets have risen. If we are to maintain the squad, level of spending we incur in league 1 we are going to have to "guarantee" a supply of players that we can sell on at a profit ( + try to win cup ties for prize money and a possibility of money spinning ties)
Over the last 5 years we seem to have a set of financials that a lot of EFL clubs would love, but it is dependent on continuing with our "selling club" model. It is not a lack of ambition but a financial imperative, much that it pisses of many fans.
My final comments would be based on "appetite for risk". You can take my data and moving forward justify any course of action based on your personal appetite for risk. For example:-
1. We could buy players in January or hand money back to fans with lower cup tie tickets and justify this by saying we believe we will continue to be successful in identifying and selling on talent
2. We could manage with what we have ( or free transfers) and maximise ticket prizes with the justification that transfers could dry up and we need to take a less risky policy in terms of what we spend.
That is why for example no-one is actually wrong if they say the Newcastle tickets should be 22 or 27 GBP. It depends on what you believe in terms of where we are now, what the future holds ( which no-one knows), and what your personal risk profile is
Clearly like everyone else I have a view of what we should do going forward, but in the interest of trying to make this factual view of the numbers I won't be the first to comment
This email is long enough but happy to answer any questions. For some of the more detailed numbers (. salaries etc 2017 & 18) , I have added a link at the bottom
1 question I would like to know is what "Admin" includes as it is a large amount & has increased. If I have this info I could probably do a better analysis but at this stage I have assumed it is part of normal business
https://s3.eu-west-2.amazonaws.com/document-api-images-live.ch.gov.uk/docs/wfryK
[Post edited 28 Dec 2019 13:35]
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| Quick look at the financial statements on 11:28 - Jan 2 with 2121 views | StudiousDale |
A great and informative read, so thanks to all who have provided figures/research. One quick question - is there any suggested figure for Hill's weekly wage? 39 months (and 33 in a lump sum) could be a very substantial figure... for example £500k if he was on £3k a week. | | | |
| Quick look at the financial statements on 16:55 - Jan 2 with 1972 views | Nigeriamark |
I am not sure who said we would budget to lose 400k in FY 2019 on normal operations, but we lost 1.7m in FY 2018 before transfer fees etc, and we even had the Spurs money that year I think
The Squad in FY2019 wasn't trimmed, the 500k in fees you mention is less than the 750k we got in 18 so although we haven't received any financials ( but we should in March) I can't see anything other than a similar loss on normal business, and an even bigger loss on total business.
As regards 2020, I don't actually know how much the wage bill has been trimmed by, but I agree it should be a better year. However to cover any 2019 loss + what will still be an operating loss on normal business in 2020, I would imagine that the transfer fees & TV money would need to be of the order of 3m to break even over the 2 years on total business
We shouldn't be budgeting by cherry picking 1 year where we are doing relatively well, but need to use some sort of average. Any good players we sign will expect 3 year contracts, so you need to be able to predict revenues, TV money, transfers etc over a similar time period which is clearly not possible. Accordingly you then have to build in a level of risk, which as I said earlier is quite a "personal appetite"
I am not saying it is wrong to push out the boat, but if we did and transfer money dried up we would potentially run out of money very quickly ( remember that Assets are not necessarily cash but our ground too and would we want to be taking out loans against that?). I would say I am a moderate risk taker and I would rather see us only bring in new players as we get rid of existing ones rather than add more. However if the club decided to take a bigger risk I would still support the decision. | | | |
| Quick look at the financial statements on 18:17 - Jan 2 with 1889 views | TalkingSutty |
It sounds like you are suggesting that we are losing about £1.7 million/ season if we don’t sell a player or two, that’s a wrong assumption. Last season the outgoing Chairman suggested we lose about 400K/season but obviously Hills budget was increased by about 300K, when he stated that, none of the Directors challenged his comments. . Losing £400/500k / season is a sum that wasn’t disputed in a recent discussion with the CEO...we all know that we have to sell players or have some luck with cup draws to eat into that deficit. Bill Goodwin who was temporary CEO for a few months prior to his departure at the start of this year was on board with the financial figures and would confirm that we run roughly at the deficit which is suggested.
The playing budget must have been cut this season, a look at the squad will tell you that. If you are suggesting that the deficit has now risen to £1.7 million then why has it suddenly more than trebbled ,because it’s not been spent on recruitment and wages? If what you are suggesting is correct then the Club will probably go bust in a few years.
This calendar year we have brought in roughly over £2.5 million in extra money, money that wasn’t budgeted for, admittedly £900k of that will be paid during this year so we will have to wait fir that. Recently we have had the Hogan money, Dawson add on, Spurs, United , Newcastle money. We have also received very large sums in FA Cup television money, alongside transfer fees for Magahey, Adshead, Rafferty, Cannon. Now let’s just say that your assumptions that we are now losing £1.7 million/ year are correct, how wiould we possibly be able to even think about funding a new training complex on top of those hugh losses? I don’t think you have your forecasts right to be honest. For instance, you are suggesting we probably lost about £2.4 million pounds Year ending 2018 if you include the Spurs/ FA cup money, that can’t be right.
To be honest if we can’t make ends meet with the finances we’ve had coming into the Club over the last few years there is some thing going wrong. The transfer fees from Dawson, Hogan , numerous other players and the money from games against Spurs/ United/ Newcastle and the television and prize monies that generated are riches that other lower league clubs can only dream of.I don’t believe any other Club of our size in the lower leagues has brought in more money..money that more than makes up for our low attendances. Maybe we should look at the inside page of the matchday prigramne and the excessive amount of staff that the Club is now employing. The Club has never generated as much money as we have done over the last few years, this calendar year in particular. [Post edited 2 Jan 2020 18:35]
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| Quick look at the financial statements on 18:48 - Jan 2 with 1822 views | Nigeriamark |
I'm not suggesting or assuming anything or saying it is every season. I have just taken the numbers that have been submitted by the club themselves and have added a link that you can check yourself i.e facts. I also haven't said we are losing 2.4m in 2018, in fact I have quoted the actuals which I will repeat below
On normal business to YE 2018 we lost approx 1.7m
Transfers & exceptional items pulled 1.4m of that back
So in the end we lost 300k
So who disputed or said what in conversation is irrelevant once people have to legally produce a document stating the actual figures.
Perhaps last season there are some items no-one knows anything about and we will know in a few months
I'm not disputing that the current season will be better either but we are currently gambling on continued transfer money. Nothing wrong with that as long as it is within an acceptable level of risk, but if we keep pushing out the boat based on 1 good year we will get into real difficulty very quickly if transfer money dries up next season because most new players contracts will be 3 years and I can guarantee that if it goes tits up during the 2020/21 season they will still quite rightly expect to be paid in full as would all our other creditors.
So yes we can probably increase the quality of our team for the 2020/21 season, but if transfers dry up who will pay out the extra salaries for year 2 or 3 of these contracts? Clearly we could use up our assets or sell/take loans against the ground. We may also continue to get good money via our youth policy, but as we have increased our wage bill we would need to get even more from transfers than in previous years.
Bury tried gambling actual money today against possible increased income in the future and got promoted but would you say it worked out well for them? Same with Stockport [Post edited 2 Jan 2020 18:52]
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| Quick look at the financial statements on 19:27 - Jan 2 with 1755 views | kiwidale |
Mark thanks for your input and the time to compile it, just one thing, it's very rare for Dale to offer 3 year deals not that it would skew your'e figures or forecast. You rightly point out ongoing sales are the key without which, no amount of cost cutting certainly in the short term can fix.
Just to add if the current level of spend is what is necessary to compete in league one then Championship football would bankrupt us as it has done for several clubs recently. [Post edited 2 Jan 2020 19:30]
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| Quick look at the financial statements on 19:38 - Jan 2 with 1725 views | TalkingSutty |
Well you quoted us losing 1.7 million in year ending 2018 and suggested that might not have included the Spurs cup run/ money which would have taken it up to roughly £2.4 million if you included prize money/ TV money/ gate receipts .
If you look at the make up of our squad this season, the wage bill must be smaller, the CEO actually stated that we would be going with a smaller budget this year because we overspent last season. He was correct in what he said. I don’t believe the majority of players that we sign want 3 year deals, i don’t think it’s normal that we sign players on those terms.
We aren’t just reliant on raising income from selling players, we have three cup competitions and maybe bonus television money that can also eat into the deficit. We have to keep recycling players and recruiting to keep competitive and improve the odds of finding a saleable asset and improving the product on the pitch.
Obviously finances will always be tight but with the L1 solidarity payment and increase in away support etc, coupled with all the extra income we’ve generated over the last few years we should be able to fund the manageable debt. The key I think is to look after the product on the pitch rather than diverting monies elsewhere, a competitive first team will generate money. | | | |
| Quick look at the financial statements on 20:21 - Jan 2 with 1655 views | Nigeriamark |
I suggest you click the link I provided and doing it yourself. The YTD May 2018 numbers are in detail so you can work it out yourself. I did not suggest the Spurs money might not be there. Quite the opposite, It should be in the 1.4m of exceptional items as I think the game was in Feb/March
In terms of being reliant on transfers, you are not correct. To operate at the level of salaries and operating costs we are almost entirely reliant on the transfer fees otherwise we would need to knock about a million of the salary bill to make ends meet. The Cup runs and prize money are useful but nowhere near the level of transfer money we have funded the club with. They are even less reliable than transfers because even if we get to the later rounds of a cup there are more poor draws available than good ones. After Liverpool in the late 90's we went years without a big draw. We have just had Spurs, MUFC and Newcastle in a 3 year period but I don't expect that be regular
I am not actually disagreeing with you that we couldn't gamble more on better players, but you then have to accept the consequences if it doesn't work because whatever actual money you pay on the squad, it has to be paid in addition to what you are already running up in bills.just 3 players on 1 grand a week for 2 years adds 300k in costs. I agree we need better players but would prefer that it is funded by booting out non performers to free up wages rather than just adding players. The club did significantly increase the budget prior to the 2017/18 season ( I assume because of the 2016/17 windfall) which Hilly spent on the biggest squad we have ever had, yet we had our worse 2 seasons. Accordingly costs increased, but revenue didn't in proportion and I think that 2018/19 numbers due in march will show we are losing money hand over fist on normal business. However I can't prove that because there may be a big windfall I am not aware of. IMO January is not the best time to spend unless we can get loans or 6 month contracts like last year but again it is just my opinion | | | |
| Quick look at the financial statements on 20:56 - Jan 2 with 1600 views | TalkingSutty |
I agree with your last paragraph but I’m not suggesting taking a gamble on better players, i’m suggesting we carry on doing what has proven to be successful over the last ten years or so, going back to Lambert, Murray etc etc. As you rightly say, constantly look to recycle the squad and get rid of the dead wood. We have a blueprint that works, sign players on free transfers and improve them to sell on. It’s easier said than done but there is no reason why we can’t continue to do it. Cut out the old players who will be some of our highest earners and utilise the wages saved to bring in a younger replacement in the hope of selling them for big bucks.
Your second paragraph suggests we need to raise a million pound through player sales every season to operate as we are now. In other words we are losing £1 million/ season if we don’t? If I’ve got that wrong I apologise, I’ve never heard that £1 million figure quoted before. Neither selling a player or making money in the Cup is guaranteed but we normally do a bit of both. I’m actually glad that juggling the financial balls is so precarious because it backs up my theory that we can’t afford to purchase and fund our own training complex, we couldn’t afford it now as a L1 Club so it would be practically impossible in L2 with the loss of funding and low attendances. We are struggling to make ends meet as it is and we’ve never had as much money coming into the Club in our history as we have now. | | | |
| Quick look at the financial statements on 21:19 - Jan 2 with 1557 views | Dalenet |
But the numbers do suggest that we need that kind of money from players sales and cup runs to cover operating losses. In 2019/20 that may be lower because of the cutting of playing budget, but I can see how the extra cash can easily be swallowed. DIrectors have a duty of care in running the club prudently so I can only assume that the 2018 budget had allowed for expected future exceptional income. But we can't rely on that every year
I agree we can't afford a training complex if these numbers are true. We do need a replay against Newcastle at SJP to add another lump of cash
The upcoming fans forum should make this clearer for us. | | | |
| Quick look at the financial statements on 21:29 - Jan 2 with 1535 views | James1980 |
What would crowds be like if we were in the Championship?
Would the increase in crowd and other money be enough to sustain the club for one season at least? | |
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| Quick look at the financial statements on 21:36 - Jan 2 with 1521 views | TalkingSutty |
I think you get £7 million/season in payments from the EFL as a Championship Club and obviously home attendances would increase. It would be viable but you would have to sign players on short contracts or ensure there was a relegation clause in place.i dont think it would do us any financial harm if we planned it properly but it would take a minor miracle not to be relegated in the first season. We couldn’t afford to pay the wages of Championship standard footballers even with a much increased budget. | | | |
| Quick look at the financial statements on 21:54 - Jan 2 with 1486 views | 49thseason |
"We can’t afford to purchase and fund our own training complex, we couldn’t afford it now as a L1 Club so it would be practically impossible in L2 with the loss of funding and low attendances".......
Which makes doing a deal with the Rochdale Sports Club at Redbrook an even more obvious way forward.
The Government is putting £500m into football pitches to increase the amount of football that can be played. This is the wettest town in England with a population of over 50K, The Club, Council and RSC need to get their heads together and make a bid for half a dozen or more all-weather pitches and the upgrading of the pitches at St Clement's to create a complex that can be used as a training facility and academy pitch, whilst still being usable for Lacrosse and St Clements. RAFC might be able to lever some money in via an FA grant.
And bearing in mind this is one of the worst wards in the country for early deaths, the local NHS might be able to add some money to the pot too.
This requires some urgent discussion and planning now, not soon or sometime, this is an opportunity to create a great facility for the club and the town and need all hands on deck now. | | | |
| Quick look at the financial statements on 23:00 - Jan 2 with 2796 views | tony_roch975 |
as you say TS "we’ve never had as much money coming into the Club in our history as we have now" yet "we are struggling to make ends meet" - and there in a nutshell is our (and most EFL clubs') dilemma. Lower league football is no longer viable without either risking the very existence of a club on an outside investor, or a greater share of the Premier League cake or Government subsidy. | |
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| Quick look at the financial statements on 23:05 - Jan 2 with 2772 views | judd |
But what has changed in our model that was heralded by so many other clubs? That is the nub. | |
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| Quick look at the financial statements on 00:03 - Jan 3 with 2682 views | tony_roch975 |
nothing (we're still nearer to breaking even than most could dream of and our Academy is the envy of many) - it's just that all costs have risen faster than income, especially player wages which have increased by 1500% in 20 yrs. [Post edited 3 Jan 2020 0:04]
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| Quick look at the financial statements on 01:39 - Jan 3 with 2638 views | kiwidale |
I'm not sure if your figures are right but nice for some a 1500% increase in salary over 20 years. The problem is player wages as the income goes up so does a players/agents demands, if the share of the FA pool was to increase by 50% so would players wages. Ask the players at Bury or Bolton if they cared if the club went bust they only cared once the payments stopped, some of them are still trying to get blood out of a a stone. Do you think that Hill cares about our financial problems? [Post edited 3 Jan 2020 1:45]
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| Quick look at the financial statements on 06:17 - Jan 3 with 2605 views | TalkingSutty |
My point exactly. All of a sudden there seems to be a groundswell of opinion that the Club is in financial meltdown but when you look at the extra money we have been generating I dont see how that can be the case. I realise Hill overspent but the increase in his budget must have been agreed at Boardroom level so the current Directors have also got to shoulder some of the blame for that. Nobody knows the details of the pay off to Hill and Beech but I don’t think it was the full amount of the contract they had owing.
The extra money we have brought in since the start of this year through our cup exploits/ television revenue and transfer dealings will have covered all those extra expenses. The wage bill hasn’t suddenly spiralled out of control, in fact we were told that the budget would be brought back in to line this season and looking at the makeup of the squad that’s whats happened, the squad is a lot smaller and padded out with youth players who will be on low wages. Anyway, it’s up to the shareholders to analyse the finances, I’m sure plenty are taking note of the extra revenue we have managed to generate. I just don’t see what has suddenly changed at the Club because we haven’t signed a load of high profile players on big wages or appointed an expensive management team. To be honest I don’t like the idea that one of the Club Directors is also the CEO, that’s not a personal attack on David Bottomley i just don’t think it’s a healthy set up. It’s not a normal situation at a football club and it’s an appointment that will always generate suspicion from fans, it would do at any football club. The CEO should be an outside appointment and preferably somebody with a proven track record in that line of work. [Post edited 3 Jan 2020 6:52]
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| Quick look at the financial statements on 07:28 - Jan 3 with 2577 views | nordenblue |
Spot on TS and a very good post yet again, there seems to be a fair few holes in this financial "mess" situation we're apparently now trying to sort out...on the surface something doesn't quite add up or we're only getting part of the story at least.. | | | |
| Quick look at the financial statements on 07:53 - Jan 3 with 2551 views | D_Alien |
What will interest me at the forum a week on Monday won't just be what is presented, but how its presented and by whom
TS' point about the unease around the CEO role needs to be addressed by the club, otherwise the context in which club finances are presented and discussed will remain unhealthy, irrespective of the balance sheet
That role was engineered, so we are right to ask what else is being engineered away from the public gaze. Will the forum allay these suspicions, or will it add to them? | |
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| Quick look at the financial statements on 08:40 - Jan 3 with 2510 views | Nigeriamark |
Nobody's saying the financials are a mess. They have done well recently in terms of total business but less well in terms of normal business ( without transfers, TV money etc). Easy to pick a year where transfers & TV money will be good but because the normal business is worsening there will need to be more and more transfers required to fill the gap
The point is that in 2017/18 we decided to increase the level of risk and yet we came very close to going down which would have been a financial disaster. This risk is built on regular transfers and if the transfers dry up and based on the higher outgoings in the last couple of years then we will be in a mess in the future ( same if we get relegated). 2019/20 looks like being a good year but what about future years or the 2018/19 end of year? Who is our next big transfer or sell on? Also this reduction in salaries this year, how much is it by? | | | |
| Quick look at the financial statements on 09:15 - Jan 3 with 2466 views | TalkingSutty |
You’re right in what you are saying but you’ve been a fan long enough to know that this has always been the case, we’ve always had to sell players to try to balance the books and I don’t see any reason why that should suddenly come to a stop. Every Club has to do the same thing.
The manager is paid a salary and part of his job spec is to try to improve the team and identify new players who we can recruit and hopefully sell on for a profit further down the line. None of us know what will happen from one season to the next but that’s never been any different. You have to speculate to accumulate without going daft and we’ve been excellent at that. Every Club in the lower divisions is in the same boat, financially we are better off than most of them, we aren’t servicing massive debts and paying obscene wages. The biggest gamble of all is to stop investing in the first team, you end up losing games,fans,staff and eventually the Club.
If you are a glass half empty man then you would never take a punt, never carry a manageable debt and probably potter around at non league level but breaking even every season. Taking a calculated risk on players has proven to be very successful for us, we are playing at our highest level ever, reclaimed our Stadium and just had a fantastic last decade on the pitch. It’s not an accident or luck that we have generated so much income in the FA Cup over the last 4 or 5 years or acquired players and sold them on for millions of pounds. That happened because it was a blueprint that the Club took a risk on, we landed on our feet with Keith Hill but we also backed him financially and recruited well. We probably made a financial loss on each of those years but that loss proved to be cost effective when you look at where our Club is now and the finances that manageable debt generated through player sales and winning cup ties as a result of the quality on the pitch. [Post edited 3 Jan 2020 9:34]
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| Quick look at the financial statements on 09:51 - Jan 3 with 2398 views | Nigeriamark |
In a roundabout way we are probably saying the same thing. I talked about 2 types of profit in my original post
1. Profit on Normal operations ( I.e the day to day income and expenditure) - also called general health check of a company
2. Total profit ( The above + Transfers and TV money etc)
Most businesses in markets similar to ours ( not just football) have to make the first at least break even as they don't have many upsides. However football teams like us do. I agree we should run the normal business at a loss because over a number of years we should get some prize money, transfers or TV money. You mentioned yourself that you had heard of a sum of 400k per year in losses. I would agree with that, but in YE 2017 it was almost 970k and in 2018 it was 1.74m which is quite a jump. That is over 100k per month over the last 2 years ( and I don't think YE 2018 will be that much different but we will know for certain in 3 months)
This increase in losses in 2018 means quite simply that no matter how well we have done in the transfer market before, we now have to do even better moving forward because in just 1 year we have added over 800k in normal expenditure.
With assets of 2.6m it would only take 2 years of low transfer activity and lack of TV money to put us into the Bury situation. That is too marginal for me but may be OK for you. There are no wrong or right answers here, it just depends on your appetite for risk. I agree we should be taking some risk but the 2018 numbers look to be too high risk, and some salary cuts are not going to make that up unless it is literally half the squad
Good debate though
PS - The numbers I quote above are in the statement that I posted the link to, I haven't made them up. The total profit numbers are the last line on page 8, The exceptional items ( I have taken transfers, TV money, Prize money) are on page 18, although you have to separate them out from other items. To get to the profit of normal operations you have to deduct the numbers on page 18 from the numbers on page 8 for the 2 years the data is available [Post edited 3 Jan 2020 9:57]
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| Quick look at the financial statements on 10:01 - Jan 3 with 2379 views | SuddenLad |
Which is why selling players like Adshead for £300k is/was a ridiculous thing to do. If we are going to sell our talent, we should at least get a fair and equitable price at the outset, rather than be entirely dependent on future sales. All this 'undisclosed' nonsense only breeds more suspicion as well.
There is a need for more openness and less 'cloak and dagger' nonsense. As has been pointed out elsewhere, anyone visiting a newspaper website or club website of the purchasing club can often find out the terms of transfer fees. Secrecy is pointless when the only party willing to stay tight-lipped is RAFC. | |
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| Quick look at the financial statements on 10:08 - Jan 3 with 2363 views | fermin |
It will be interesting to see the 2019 figures - not sure why it takes them so long after the financial year end to produce them as it can't be that complicated for a relatively small company.
I was going to post this earlier but as the discussion has moved back to this area here are figures from the accounts from YE2012 to YE2018 extracted by a non-accountant (sorry for the formatting):
Turnover £3,540,097 £2,269,656 £2,717,101 £4,942,625 £3,183,113 £5,793,162 £5,412,319
including
Gate receipts £792,413 £573,037 £807,184 £903,551 £841,975 £942,547 £1,008,962
Transfers £985,715 £228,725 £163,431 £1,804,625 £104,750 £2,165,772 £710,820
Sponsorship/donations £102,782 £162,539 £153,829 £169,373 £185,969 £211,625 £348,055
Development Assocn £205,698 £199,997 £171,282 £165,301 £158,142 £151,058 £142,308
League/FA Pool £1,048,829 £720,772 £654,619 £985,962 £1,086,569 £1,423,284 £1,450,192
TV fees £3,712 £2,970 £19,720 £2,970 £112,220 £16,500 £454,500
Prize money £7,000 £5,000 £124,500 £281,250 £31,000 £147,385 £262,500
[The League Pool figure varies a bit and is significant but I am not sure how it is calculated. More relevant to the recent discussion is that the total of 'exceptional' items like transfers, TV fees and prize money varies from £236k in YE2013 to £2.3m in YE2017 - average of £1m but actual figures are clearly very volatile.]
Cost of sales £2,388,950 £1,897,571 £2,026,587 £2,630,276 £2,782,946 £3,029,178 £3,829,714
including
Wages of players £1,380,621 £1,072,375 £1,180,849 £1,521,786 £1,709,209 £1,903,641 £2,343,414
Social security for players £102,381 £94,796 £104,402 £134,624 £150,406 £181,542 £227,418
Coaching staff and youth £573,088 £497,383 £484,872 £610,389 £503,415 £583,204 £748,001
Other Expenditure £853,359 £801,825 £844,179 £972,777 £902,475 £1,102,274 £1,943,331
including
Ground rent £132,378 £129,286 £141,198 £104,595 £92,051 £96,000 £0
Pitch maintenance £205,660 (YE2018)
Staff wages £204,824 £229,885 £225,430 £239,798 £245,867 £327,956 £571,896
Travel £195,631 £185,107 £224,221 £244,860 £183,213 £251,022 £318,519
Net loss/Profit £349,991 -£375,208 -£104,332 £1,391,126 -£447,201 £1,356,083 -£306,604
I am not sure what the following items actually mean or how relevant they are to the net loss/profit figures in particular, but perhaps someone can explain:
Retained earnings £1,210,305 (2015) £763,104 £2,118,937 £1,814,331
Current Assets (inc cash) £1,101,152 £588,560 £617,504 £2,025,698 £1,205,460 £2,921,941 £2,128,188
Net current assets £549,976 £185,260 £76,630 £1,277,954 £616,837 £2,354,021 £1,208,764
My suspicion is that we are not in financial meltdown (pending publication of the 2019 accounts), but are just being prudent in our expenditure to avoid going into meltdown in the future eg when we get relegated as it will happen at some point sooner or later in my opinion. The unknown is how this season's windfalls relates to the club's pre-existing financial situation ie how much needs to be set aside and how much can be spent. | | | |
| Quick look at the financial statements on 10:18 - Jan 3 with 2343 views | Nigeriamark |
You can produce financial statements within a couple of weeks from the end of a financial year & some big businesses even produce statements for internal use every quarter or at times every month. However not releasing numbers to the general public seems to be common to many businesses, I assume because a lot of companies know that a lot of people won't know how to read them which can lead to misinterpretations, conspiracies etc so prefer to leave it until they are submitted.
It is also very easy to do forecasts on the current year ( or even a couple of years in advance)that a club could chose to release. For example although this financial year doesn't finish until next May, the club could do a set of financials based on what they currently know. Again I am sure they already have this for internal use but like most businesses choose to not let the public know | | | |
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