| Swans Finance Situation 10:42 - Dec 29 with 24201 views | blaine_scfc |
Chris Wathan just tweeted an article which may be of interest. Apologies if already been posted.
@ChrisWathan: Good analysis of the main figures from Swansea City's accounts by the ever-excellent @SwissRamble https://t.co/igZtpbLC9a |  | | |  |
| Swans Finance Situation on 20:21 - Jan 4 with 1765 views | Starsky |
| Swans Finance Situation on 19:06 - Jan 4 by Glyn1 |
Seriously?
Anyway, our stadium will be below average even for the Championship so it still needs to be expanded. [Post edited 4 Jan 2016 19:16]
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Well you say that but whilst long term we need extend to build the fan base. Short term the extension will only add a few million to our income.
The payback could take over 5 years. |  |
| It's just the internet, init. |
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| Swans Finance Situation on 20:24 - Jan 4 with 1755 views | exiledclaseboy |
| Swans Finance Situation on 16:46 - Jan 4 by jackonicko |
I don’t know how Swissramble got early sight of the financial statements, but the club accounts are now filed at Companies House. I took a quick look and there isn’t a huge amount to add to his excellent, in depth analysis.
I would only add that these results show yet again what a tight spot the club are now in, financially. I remember posting on here when the 2014 results were published that the balance sheet was creaking. It’s now gone way beyond creaking.
As variously reported above, the accounts were extended to a 14 month period to align with the PL reporting season, so the year end is now July. This would have made the P&L look a bit more terrifying than it otherwise would have done, as we would have seen virtually zero revenue in June & July, but would have continued to incur monthly outgoings.
But it is not good reading. Revenues were £102.9m (excluding player trading/amortisation releases), and operating expenses were £102.4m. After some incidentals, that leaves a gross profit of just £455k. There is not much activity below the gross profit line, leaving a net profit of £493k.
Things look a bit better when player trading gets added in. Although gross profit turns into a whacking £16.9m loss, that is turned back into a net profit of £1.8m once the sale of Bony is added back in. Looking at the cash flow statement, you can’t reconcile transfer fee and profit on disposal with the cash inflows per the cash flow statement, suggesting the funds are still being paid in instalments. You can’t reconcile precisely, but I would guess we were still owed over £10m from Man City at the start of this season. The balance sheet shows debts to the club of over £11.5m that are due more than 12 months from the balance sheet date, suggesting some payments are structured over quite a long time. Don’t be banking on much of the Bony money being available this January.
It’s clear that wages and salaries have run away this year. Even allowing for a 14 month period, wages are up at £72.9m, against £56.1m the year before. I’m sure there are a few signing on fees in that, but add in social security costs (ie National insurance contributions) and we spent over £80m on wages in the period. Buried in note 26 of the accounts is part of the reason why. As at 31 July 2015, we were committed to pay signing-on fees of over £19m (compared with just £2.1m at the end of May 2014). I’ll repeat for the avoidance of doubt: £19m!
Wage costs of £80m virtually wipes out the entire TV income (£85.1m) which leaves only the (relatively paltry) commercial income of £10m and match day income of £7.7m to fund everything else that the club wants to do.
And you wonder why the stadium expansion hasn’t happened.
The impact of those rising costs is then shown on the increasingly strained balance sheet. The days of referring to the club as debt free are gone. Total creditors now exceed £65m, of which £30m is merely categorised as “other creditors” which is not particularly helpful. Would need management accounts to unpick that! However, we have a £15m overdraft (which presumably would be cleared in early August when £20m+ is received from Sky in their upfront facility payment). However, there is also an £8m “other loan” to an undefined third party (not a related party, so not funds from one of the directors or shareholders). I’m guessing this might be a loan to pay for Landore/Fairwood — as its clear this “investment” can no longer be paid for out of free cash flow (as there isn’t any!).
There are also the usual related party transactions with directors and shareholders. Usual stuff, pored over in great detail in previous years, but nothing particularly new or significant. Huw J took a slight paycut :)
The cash flow statement is what concerns me. Just £6m of cash flow was generated from operating activities in the year (compared to £19.2m last year). Some of that decrease is due to the longer accounting period, but not all of it. Big increases in signing on fees, player wages, an increase in overall headcount (over 300 people are now on the payroll of the club!) and general running costs.
It’s clear we will have some significant challenges if relegated. I hope we have solid relegation clauses and thought carefully about the timing of cashflows from parachute payments. These accounts are littered with red flags for companies that are "overtrading", and therefore at much higher risk of going into default.
Now, I accept football clubs are different to other private companies, as you have much greater certainty over cash flow. That at least is a positive by-product of our dependency on media rights.
The new manager choice is a very big call for Huw. Very. |
I've avoided this thread up up now because frankly figures and accounts don't interest me and I find them deathly boring. But I'm absolutely terrified after reading that analysis. Someone reassure me. Please. |  |
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| Swans Finance Situation on 20:27 - Jan 4 with 1748 views | monmouth |
| Swans Finance Situation on 20:24 - Jan 4 by exiledclaseboy |
I've avoided this thread up up now because frankly figures and accounts don't interest me and I find them deathly boring. But I'm absolutely terrified after reading that analysis. Someone reassure me. Please. |
If we hadn't sold Bony we'd be right up the shitpipe.
Feeling better? |  |
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| Swans Finance Situation on 20:28 - Jan 4 with 1744 views | exiledclaseboy |
| Swans Finance Situation on 20:27 - Jan 4 by monmouth |
If we hadn't sold Bony we'd be right up the shitpipe.
Feeling better? |
No. Try harder. Are we f*cked if we go down? | |
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| Swans Finance Situation on 20:33 - Jan 4 with 1713 views | Starsky |
| Swans Finance Situation on 20:24 - Jan 4 by exiledclaseboy |
I've avoided this thread up up now because frankly figures and accounts don't interest me and I find them deathly boring. But I'm absolutely terrified after reading that analysis. Someone reassure me. Please. |
No matter how much extra sky revenue is generated by the renewed Premier rights contracts, the agents will take it off the clubs for the players.
The clubs in turn are dull enough to do this.
So, the more TV money there is, the bigger divide there is between the players and the fans.
Sky sports sucks doesn't it? | |
| It's just the internet, init. |
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| Swans Finance Situation on 20:33 - Jan 4 with 1707 views | plasjack |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
Afraid so back to being a selling club hoping for a play off place like our last promotion. |  | | |
| Swans Finance Situation on 20:38 - Jan 4 with 1692 views | Thornburyswan |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
Depends - if we went into a tail spin & end up in the National League then definitely but if we (1) have all our players on wages slashed if we go down contracts & (2) use the incoming transfer fees + parachute monies to help consolidate in the Championship then we go back 6/7 years but with much better training/youth facilities & a stronger image outside the Prem to attract young players.
Help any? |  | | |
| Swans Finance Situation on 20:39 - Jan 4 with 1683 views | morningstar |
| Swans Finance Situation on 19:06 - Jan 4 by Glyn1 |
Seriously?
Anyway, our stadium will be below average even for the Championship so it still needs to be expanded. [Post edited 4 Jan 2016 19:16]
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Spot on Glyn. If we go down any parachute money we receive should go on stadium expansion. And more executive boxes, hospitality lounges and nice things like that. Oh, and some cake, I love a bit of cake me. |  |
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| Swans Finance Situation on 20:40 - Jan 4 with 1680 views | exiledclaseboy |
| Swans Finance Situation on 20:38 - Jan 4 by Thornburyswan |
Depends - if we went into a tail spin & end up in the National League then definitely but if we (1) have all our players on wages slashed if we go down contracts & (2) use the incoming transfer fees + parachute monies to help consolidate in the Championship then we go back 6/7 years but with much better training/youth facilities & a stronger image outside the Prem to attract young players.
Help any? |
Partly, thanks. | |
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| Swans Finance Situation on 20:40 - Jan 4 with 1678 views | monmouth |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
Probably not. We'd have to sell a few and the contracts need to have relegation clauses though I would think. We won't be flush though.
I'd like to see an up to date position as this is still months out of date. It will presumably have got worse though. I wonder if Ayew's signing on is in there? Maybe here's another real reason why leicester's offer to loan Dyer was grasped so readily.
The trading position may be a little better than it seems as part of the wage bill will presumably include the position bonus so won't eat up all the sky money...although it might have gone up given our additions.
So the answer is, I don't have a clue. I haven't looked at the accounts but those short term creditors mentioned by Jacko were a big surprise to me. Unless they are balanced by a big receivable and it's just a timing issue; similarly the overdraft. There's some potential questions for the next forum maybe? | |
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| Swans Finance Situation on 20:44 - Jan 4 with 1660 views | morningstar |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
No we wont, Brynnie said I was the most pessimistic person he'd ever met on here if I didn't think we would go back up with 4 years parachute money to feast on. Knows his stuff does our Bryn. | |
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| Swans Finance Situation on 20:49 - Jan 4 with 1638 views | londonlisa2001 |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
The problem we have if we go down is two fold in my view.
Firstly, I have said before, these deals where instead of spending out on a transfer fee we spend out on signing fees spread over the contract are not good news. If, say, we owe Ayew £70k per week (including his sign on fee) then we will find it difficult to get a 'real' value for him if we go down, because other clubs will wait us out knowing we can't afford to keep him on our books for the championship - they'll assume we are desperate to get rid of his wages and so will offer us less than he may be worth. In some ways that is not dissimilar to remaining instalments of a transfer fee to other clubs, but it is certainly worse than what we used to do which is account for the whole lot in one go (I suspect we haven't done that for quite some time from the creditors figure).
Also, we have spent, in my view, too much and too quickly on training / academy facilities and players. Although investing for the future is great, it will cost (someone estimated - not sure if accurate) £2.5m a year to keep it going. If we can't afford that in a lower division, then some of what we have spent will not see a return.
We're not buggered if we go down, but it is certainly the case that we are not the well managed machine we appeared to be.
The issue, from what jacko has said (and the swiss ramble thing which I've just looked at) is that we have effectively looked more profitable than we really were in previous years and only now caught up. By that, I don't mean that we have done anything wrong, but it seems that we account for sky revenue over the 9/10 months of the year that we 'earn' it rather than it being a direct match to 12 month costs (it must be the case that the other clubs do the same). We have now matched up to the sky revenue period (hence the extra two months of the costs). In future years, that will right itself to a direct match,so we'll again show profits, but it must be the case that say 3 or 4 years ago, we reported a profit that hadn't taken that into account (hence the £15/16m profit that we made that was effectively a match against these 'extra' costs now).
Nothing wrong with that, as our retained profits figure will have caught up to match now, but the payment of fairly large dividends etc may have been a little premature. It'll be interesting if we pay dividends out this year. | | | |
| Swans Finance Situation (n/t) on 20:50 - Jan 4 with 1635 views | waynekerr55 |
| Swans Finance Situation on 20:40 - Jan 4 by monmouth |
Probably not. We'd have to sell a few and the contracts need to have relegation clauses though I would think. We won't be flush though.
I'd like to see an up to date position as this is still months out of date. It will presumably have got worse though. I wonder if Ayew's signing on is in there? Maybe here's another real reason why leicester's offer to loan Dyer was grasped so readily.
The trading position may be a little better than it seems as part of the wage bill will presumably include the position bonus so won't eat up all the sky money...although it might have gone up given our additions.
So the answer is, I don't have a clue. I haven't looked at the accounts but those short term creditors mentioned by Jacko were a big surprise to me. Unless they are balanced by a big receivable and it's just a timing issue; similarly the overdraft. There's some potential questions for the next forum maybe? |
I'm sure Huw and Leigh will tell us all is rosy in the garden and that there's no benefit for the trust owning 25%... [Post edited 4 Jan 2016 20:50]
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| Swans Finance Situation on 20:51 - Jan 4 with 1625 views | plasjack |
| Swans Finance Situation on 20:44 - Jan 4 by morningstar |
No we wont, Brynnie said I was the most pessimistic person he'd ever met on here if I didn't think we would go back up with 4 years parachute money to feast on. Knows his stuff does our Bryn. |
Like them up the road and many clubs far bigger than us who have had parachute payments swallowed up by large contracts and players who nobody wants. | | | |
| Swans Finance Situation on 21:03 - Jan 4 with 1563 views | blaine_scfc |
Again, this may be a stupid question, I haven't got the knowledge that some seem to have on here in regards to revenues, profit and loss etc, but is being in the premiership sustainable for us?
We don't spend on players like other clubs do, and the ones we have spent on, we have generally moved on at a profit, but the words that stick out to me is £65 million in debt?!? Our commercial department are a bit of a shambles according to the figures, how do things get better? | | | |
| Swans Finance Situation on 21:08 - Jan 4 with 1545 views | Wingstandwood |
| Swans Finance Situation on 17:20 - Jan 4 by trampie |
I don't disagree but comparing ourselves to other clubs we are still doing well off the field, I think the club expected to kick on this season with Gomis, Ayew, Shelvey, Fernandez, Williams, Siggy etc spending accordingly, with bigger tv money coming in next season not a bad time to try and kick on either but it hasn't happened.
Need a good loan striker in January and hope we stay up, if so we probably would not start the new season as one of the 3 teams fancied to go down as we have under achieved so far this season, if we go down Monk and his staff and the players will have a lot to answer for. |
Yes Trampie bang on!........... Monk, his three co-idiots and players will have a lot to answer for. They've all left a rather stinking mile-high pile of doo-dah that Uncle Alan (I support AC 100%) is now expected to clear up! I and many sympathise with Alan Curtis fully and appreciate what he inherited from the 'comedy-quartet' i.e. Monk, Pep, Beattie and KOL. 'Coached' *cough, cough. cough* a team that at times could not even manage one shot on target for an entire game and completely forgot how to defend against the 'bread and butter' footballing phenomenon of corners.
The team has quite a few players of recognised quality. But hey let the slushy-sentimental idiots out there get all misty eyed and reminiscent over the likes of Monk and KOL whom were damn lucky to have had SCFC. Remember that folks it works two ways?
I await that SWEP columnist to be 'third-time-lucky' in his 'attempt-by-article' to get KOL reinstated?.........I wonder if this columnist will be equally eager to campaign to help reinstate any sacked SCFC employees if (perish the thought!) re-budgeting and cuts are required due to possible relegation? [Post edited 4 Jan 2016 21:09]
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| Swans Finance Situation on 21:10 - Jan 4 with 1539 views | monmouth |
| Swans Finance Situation on 21:03 - Jan 4 by blaine_scfc |
Again, this may be a stupid question, I haven't got the knowledge that some seem to have on here in regards to revenues, profit and loss etc, but is being in the premiership sustainable for us?
We don't spend on players like other clubs do, and the ones we have spent on, we have generally moved on at a profit, but the words that stick out to me is £65 million in debt?!? Our commercial department are a bit of a shambles according to the figures, how do things get better? |
We'll always need to sell to buy. That 65m will be ameliorated by unpaid monies in I hope! That's why jacko points at the wage bill. That is eating up the sky payment so, unless we can resist increases and stay up, that leaves little space to move.
I've thought all along that (fear of lack of) sustainability is one of the strong drivers for a share sale (along with barrowloads of personal moolah of course). | |
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| Swans Finance Situation on 21:11 - Jan 4 with 1533 views | trampie |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
No but its not good. |  |
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| Swans Finance Situation on 21:55 - Jan 4 with 1453 views | FearOfAJackPlanet |
Depressing...
Call me boring, but I'd rather we prioritise living well within our means and if that means we go down as we can't compete, then so be it. With this club's history plus the examples of other clubs ripped apart after stretching beyond their means to stay in the top flight I don't want us to even contemplate flying close to the sun on this one.
If we can't live within our means and keep a top flight club on a budget of £100 million then so be it. The club should be managed so that if/when we go down, we're in a strong position, not sh*tting ourselves about debt.Relegation, who gives a toss, the club will still be there to support, I support the Swans not the Premier League, the security of the former shouldn't be risked to remain in the latter.
If we do stay up, I wish we'd try and do something about the wages. £80+ million...'ave a word...it's probably bigger than almost all teams in La Liga and Seria A - and we still have a number of players who came up from League 1 and 2 on the books ffs . |  |
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| Swans Finance Situation on 22:01 - Jan 4 with 1423 views | monmouth |
| Swans Finance Situation on 21:55 - Jan 4 by FearOfAJackPlanet |
Depressing...
Call me boring, but I'd rather we prioritise living well within our means and if that means we go down as we can't compete, then so be it. With this club's history plus the examples of other clubs ripped apart after stretching beyond their means to stay in the top flight I don't want us to even contemplate flying close to the sun on this one.
If we can't live within our means and keep a top flight club on a budget of £100 million then so be it. The club should be managed so that if/when we go down, we're in a strong position, not sh*tting ourselves about debt.Relegation, who gives a toss, the club will still be there to support, I support the Swans not the Premier League, the security of the former shouldn't be risked to remain in the latter.
If we do stay up, I wish we'd try and do something about the wages. £80+ million...'ave a word...it's probably bigger than almost all teams in La Liga and Seria A - and we still have a number of players who came up from League 1 and 2 on the books ffs . |
My feelings too. If we do hit the initial jackpot by staying up, no way should we just cave into the inflated merry go round. No point in having an academy if it produces f**k all. | |
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| Swans Finance Situation on 22:03 - Jan 4 with 1401 views | NeathJack |
| Swans Finance Situation on 21:55 - Jan 4 by FearOfAJackPlanet |
Depressing...
Call me boring, but I'd rather we prioritise living well within our means and if that means we go down as we can't compete, then so be it. With this club's history plus the examples of other clubs ripped apart after stretching beyond their means to stay in the top flight I don't want us to even contemplate flying close to the sun on this one.
If we can't live within our means and keep a top flight club on a budget of £100 million then so be it. The club should be managed so that if/when we go down, we're in a strong position, not sh*tting ourselves about debt.Relegation, who gives a toss, the club will still be there to support, I support the Swans not the Premier League, the security of the former shouldn't be risked to remain in the latter.
If we do stay up, I wish we'd try and do something about the wages. £80+ million...'ave a word...it's probably bigger than almost all teams in La Liga and Seria A - and we still have a number of players who came up from League 1 and 2 on the books ffs . |
Amen to that. |  | | |
| Swans Finance Situation on 22:06 - Jan 4 with 1387 views | Uxbridge |
| Swans Finance Situation on 20:28 - Jan 4 by exiledclaseboy |
No. Try harder. Are we f*cked if we go down? |
Define fooked.
To be blunt, it depends how sellable our players are. What's most important to me is that the right choices are made now ... Both in this window and in the summer. If we stay up, the new deal ensures the garden is rosy, but I wouldn't personally be prepared to gamble on it. |  |
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| Swans Finance Situation on 22:12 - Jan 4 with 1367 views | Kilkennyjack |
| Swans Finance Situation on 10:26 - Dec 30 by waynekerr55 |
It would be genuinely nice to see us develop more of our own players.
It's a long term project though, and we won't see the fruits of Dave Adams labour for at least another 4 years. |
Agreed Wayne, it was a real joy to see Joey and Ben break through. Of course these local top quality players came through before our recent large scale investments.
Since the investment then nothing.
You are correct about Dave Adams of course, but we had an Academy 4 years ago so why no players being produced ? The problem with always giving the Academy another 4 years is that you end up in a position where nobody is ever accountable.
In a business our investment has to make us money, or we become more like a local charity. |  |
| Beware of the Risen People
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| Swans Finance Situation on 22:29 - Jan 4 with 1331 views | FearOfAJackPlanet |
| Swans Finance Situation on 22:06 - Jan 4 by Uxbridge |
Define fooked.
To be blunt, it depends how sellable our players are. What's most important to me is that the right choices are made now ... Both in this window and in the summer. If we stay up, the new deal ensures the garden is rosy, but I wouldn't personally be prepared to gamble on it. |
It might ensure the garden is rosy in the short term, but we all know the new money will be eaten up by higher wages, bonuses and agent fees unless we can somehow find innovative ways to put together a competitive team that doesn't just involve throwing 100% of your TV income at it and hoping for the best. I remember when we used to have a wage cap, ah, such innocent days...
You get a feeling the board never ever contemplated we'd be in this situation (and who did?) after last season, so pushed the boat out a little financially, secure in the knowledge we'd get a fat wedge in 2016/17 to put things on an even keel before the agents started knocking on the door for contract renewals and the stakes are raised again. | |
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| Swans Finance Situation on 22:30 - Jan 4 with 1325 views | trampie |
| Swans Finance Situation on 22:12 - Jan 4 by Kilkennyjack |
Agreed Wayne, it was a real joy to see Joey and Ben break through. Of course these local top quality players came through before our recent large scale investments.
Since the investment then nothing.
You are correct about Dave Adams of course, but we had an Academy 4 years ago so why no players being produced ? The problem with always giving the Academy another 4 years is that you end up in a position where nobody is ever accountable.
In a business our investment has to make us money, or we become more like a local charity. |
That's not football though, you can have an academy and not produce a top quality first teamer for a decade and then you could have 2 or 3 in 2 or 3 years with them contributing to the success of the first team and getting sold on for millions and millions its not an exact science and not producing a top quality first teamer for 4 or 5 years does not necessarily mean the academy is failing, there again producing a star player that gets sold for a fortune doesn't necessarily mean its succeeding either as there is a lot of luck involved.
Lots of star players are born and not made. | |
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