In a nutshell:
Revenue from match day, broadcasting and commercial = £21.5m
Operational expenses which includes wages, the running of the sites, ‘other costs’ = £47.0m (depreciation & amortisation might be in here as well).
Gain on player trading = £10.0m
21.5 - 47 + 10 = somewhere close to the £15m loss.
The devil will be in the detail, particularly the ‘others’ and the outgoings to the board members. Need to see the actual CH filing for this. Operational expense is up nearly 10% on the year before, not good.
The onus is still very much on the ownership group to keep plugging a gap each month of up to £2m. We’re not blessed with saleable assets which can reduce that.
We need a Leeds promotion and the Piroe clause money.
This all feels about right to me. Reflecting on the last 3 yrs accounts while sweeping leaves …
- we turn over about £20 m
- we spend about £40 m. I do actually think this will be player wages and other legit expenses. It doesn’t look like a situation where the shareholders are scalping the business through excessive fees, salaries, etc
- to bridge the gap we have either sold players or drawn in cash from shareholders
I’ve worked with plenty of cr*p businesses over the last 20 years and the club is, sadly, reliant on shareholders (whether through equity or loans) to stay afloat. It’s all about cash flow, not profit.
Why do the investors do this (as someone else asked)? It’s the gamble that you can cheaply assemble a squad which can sneak a promotion. If you’re a rich person doing this with pin money, and you love football and have a big ego, then, I guess, why not. Everyone thinks they can win at FIFA manager.
More sustainably there seem to be only two approaches:
- bring costs into line, which means a dramatic reduction, and presumably a lower quality player pool, which risks relegation and a further fall in income (the snake eating its tail), but eventually find financial equilibrium. The trouble is, that might be the third, if not fourth, division (where we were when I came in).
- run it at a ‘manageable’ loss (how much depends on shareholder parameters) and plan/ hope for a big sale of an academy product every year or so.
I’ll look forward to looking at accounts too but whilst the numbers may shift around the picture will be the same.
One other thing that caught my eye is the dilapidation provision (basically, we need to give the stadium back in the condition we received it) which looks like quite a lot of £ out each year.
Not great!
www.walesonline.co.uk
