The Mail Bag
How much does EFC owe?
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I know profits are up but does anyone know how big a debt problem EFC has? The Independent reckoned it was around £40 million which is a whole lot of Bovril. But they don't really know, do they? It's all guesswork as far as I can tell.
I've been reading about the demise of Pompey and the massive debt over at MUFC and LFC.
Sure, it would be a terrible shame if our American neighbours went bust; but how likely is it that the same could happen to EFC?
COYB
Roy Haygarth, Posted 01/03/2010 at 17:43:55
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I would have thought our debt was a little higher although you have to understand what is actually meant by debt.
In 2008 we were about £65m in debt (£25m securitised debt and a £40m overdraft).
Last year Robert Elstone said the debt had risen by £16m in the last 12 months so could be anywhere between £40-80m as i doubt we’ve made much inroads in repaying or reducing the debt.
Wages are about 65-70% of turnover and income from gate receipts is stable
In 2008 we were about £65m in debt (£25m securitised debt and a £40m overdraft).
Last year Robert Elstone said the debt had risen by £16m in the last 12 months so could be anywhere between £40-80m as i doubt we’ve made much inroads in repaying or reducing the debt.
Wages are about 65-70% of turnover and income from gate receipts is stable
How does a stadium move make us money? I’m not asking that in a snotty way - genuinely curious. I understand how say, Arsenal moving from 38,000 Highbury to the 60,000 Emirates would make them money, but have always been confused about the assumption we would make money from something that would cost us at least £150m (and that would only buy us a two-bob box). It would have to be the naming rights deal of the century.
The Group borrowings seem to be around 40 million. 22 million of that is the 25 year loan which still has 17 years to run. 62% of our turnover is spent on wages. These figures are taken from the latest accounts released.
So to answer your question, we are in a good financial position when compared with our peers. For example, Villa the apparently ’better run’ club are in debt in excess of 60 million.
So to answer your question, we are in a good financial position when compared with our peers. For example, Villa the apparently ’better run’ club are in debt in excess of 60 million.
In "The Sun" West Ham owner David Sullivan says a "rich privtae individual" has leant millions to 3 prem clubs to keep them afloat. I know I know. The sun. David Sullivan. But the name Philip Green did spring to mind as did the names Everton, Tottenham and Fulham spring to mind.
Premier League clubs’ turnover, wages and debt 2007-08Club
Note that these older figures don’t account for loans that were thought to be equity (in Portsmouth’s case). Doesn’t apply to Everton
Debt (£ms)
Turnover (£ms)
Wages (£ms)
Wages/turnover
(Left to Right)
Arsenal 416 223 101.3 45%
Aston Villa 73 75.6 50.4 66.6%
Blackburn Rovers 17 56.4 39.7 70%
Bolton Wanderers 52 59.1 39 67%
Chelsea 701 213.6 149 68%
Everton 39 76 44.5 59%
Fulham 197 53.7 39.3 73%
Hull City (2007 figures) 1 9 6.9 77%
Liverpool 280 (est) 159 80 (est) 50%
Manchester City 147 82.3 54.2 66%
Manchester United 699 256.2 121.1 47%
Middlesbrough 93 48 34.8 73%
Newcastle 106.2 100.8 74.6 74%
Portsmouth 57.7 70.6 54.7 78%
Stoke City 2.3 11.2 11.9 106%
Sunderland 69.2 63.6 37.1 58%
Tottenham Hotspur 65 114.8 52.9 46%
West Bromwich Albion 8.9 27.2 21.8
West Ham United 36 57 44.2 76%
Wigan Athletic 66.4 43 38.4 89%
Total 3126.7 1800 1095 55%
Since then, Aston Villa’s debt has increased to £80m + and their wage turnover ratio has increased by 5%
Fulham still owe Al-Fayed £197m loan.
Hull and Stoke have inccured debt since these figures in player transfers.
Basically, Everton have remained relatively static. The wages:turnover ration may be now about @63% but as people have complained there hasn’t been any purchases through inccuring more debt.
The £20million overdraft that was so much highlighted by KEIOC - at end 2008 (height of finanical crisis) , was basically a contingency fund during that uncertain period where no one knew what the economy was going to do, what availability of finance would be etc.
There has been no net increase in the debt as far as I’ve read at Everton... the overdraft hasn’t been used according to the accounts.
The amortisation of player contracts refers to potential loss of value on the company books - am I right?
Unless someone wants to enlighten us.
I don’t think Everton have any major financial concerns, except the need to expand revenue.
Other clubs have become more indebted over the past 18months, more so than they worth, but Everton have stayed pretty static.
Note that these older figures don’t account for loans that were thought to be equity (in Portsmouth’s case). Doesn’t apply to Everton
Debt (£ms)
Turnover (£ms)
Wages (£ms)
Wages/turnover
(Left to Right)
Arsenal 416 223 101.3 45%
Aston Villa 73 75.6 50.4 66.6%
Blackburn Rovers 17 56.4 39.7 70%
Bolton Wanderers 52 59.1 39 67%
Chelsea 701 213.6 149 68%
Everton 39 76 44.5 59%
Fulham 197 53.7 39.3 73%
Hull City (2007 figures) 1 9 6.9 77%
Liverpool 280 (est) 159 80 (est) 50%
Manchester City 147 82.3 54.2 66%
Manchester United 699 256.2 121.1 47%
Middlesbrough 93 48 34.8 73%
Newcastle 106.2 100.8 74.6 74%
Portsmouth 57.7 70.6 54.7 78%
Stoke City 2.3 11.2 11.9 106%
Sunderland 69.2 63.6 37.1 58%
Tottenham Hotspur 65 114.8 52.9 46%
West Bromwich Albion 8.9 27.2 21.8
West Ham United 36 57 44.2 76%
Wigan Athletic 66.4 43 38.4 89%
Total 3126.7 1800 1095 55%
Since then, Aston Villa’s debt has increased to £80m + and their wage turnover ratio has increased by 5%
Fulham still owe Al-Fayed £197m loan.
Hull and Stoke have inccured debt since these figures in player transfers.
Basically, Everton have remained relatively static. The wages:turnover ration may be now about @63% but as people have complained there hasn’t been any purchases through inccuring more debt.
The £20million overdraft that was so much highlighted by KEIOC - at end 2008 (height of finanical crisis) , was basically a contingency fund during that uncertain period where no one knew what the economy was going to do, what availability of finance would be etc.
There has been no net increase in the debt as far as I’ve read at Everton... the overdraft hasn’t been used according to the accounts.
The amortisation of player contracts refers to potential loss of value on the company books - am I right?
Unless someone wants to enlighten us.
I don’t think Everton have any major financial concerns, except the need to expand revenue.
Other clubs have become more indebted over the past 18months, more so than they worth, but Everton have stayed pretty static.
Oh and Manchester United’s debt increased even after Ronaldo was sold and the bond issue scheme went ahead (to reduce "interest" or bond dividend payments from 14% to 8%), upto £720million.
Man City, is a funny one, as is their spending a loan or equity?
West Ham, well as you can see their turnover is less than ours , they had the post-Tevez payment/fines amongst other things so that the debt stood at £110million before Sullivan and Gold took over and paid down a chunk of it.
Oh and Liverpool were late in publishing their accounts in 2009 with companies house. Lets just say they’ve no doubt done some imaginative accounting, and the rumour is RBS want a significant paydown in July 2010 (£100million).
Man City, is a funny one, as is their spending a loan or equity?
West Ham, well as you can see their turnover is less than ours , they had the post-Tevez payment/fines amongst other things so that the debt stood at £110million before Sullivan and Gold took over and paid down a chunk of it.
Oh and Liverpool were late in publishing their accounts in 2009 with companies house. Lets just say they’ve no doubt done some imaginative accounting, and the rumour is RBS want a significant paydown in July 2010 (£100million).
@Matt Bone.
Have no idea where you get the £65million figure from.
Unless it is the £40million (22m secured) and £14million bank loans...
and you’ve added the £20 million over draft of 2008 on?
But the fact is according to the last accounts that overdraft was never used in 2008/2009...
and an overdraft only becomes "debt" when its used...
I hope you know this?
Have no idea where you get the £65million figure from.
Unless it is the £40million (22m secured) and £14million bank loans...
and you’ve added the £20 million over draft of 2008 on?
But the fact is according to the last accounts that overdraft was never used in 2008/2009...
and an overdraft only becomes "debt" when its used...
I hope you know this?
I hope someone can enlighten me because I’m certain Elstone stated that the debt was over £75 million last year.
The last set of accounts published do not show that much.
Is it possible we owe Green on a side letter which is not shown in the accounts?
It seems most clubs have financial problems mostly caused by the necessity to compete.
It seems your damned if you do and damned if you dont.
The sooner some financial regulation comes the better.
The last set of accounts published do not show that much.
Is it possible we owe Green on a side letter which is not shown in the accounts?
It seems most clubs have financial problems mostly caused by the necessity to compete.
It seems your damned if you do and damned if you dont.
The sooner some financial regulation comes the better.
I guess that as long as we can service the debt it matters little how much we owe. Football finance is the finance of the loony bin and as long as banks don’t start calling in their loans and you can pay your dues to HMRC you ain’t got too many problems. Only relegation and ground moves seem to spark crisis — that is if you are lucky enough to avoid Fake Sheiks-and Peter Storrie as your CEO!
Jay Harris - I don’t know if it’s £75 million or not but the point you make is very valid. As I see it this is the BIG problem with Kenright’s tenure, in as much as we don’t know how much or under what term’s his "Ghost backers" have loaned him money.
No reason why he should tell us either but it does explain why he evidendly now has no more room to manouvre.
Whatever our official dept he’ll be selling players in order to stay in control.
So let's ignore the club accounts, and speculate about Bill Kenwright committing fraud by not disclosing or paying tax on monies received into the club through ’ghost’ investors. The BIG problem is people fabricating things to suit their own views.
The sense of irony when people label Kenwright as a ’liar’ is comical.
The sense of irony when people label Kenwright as a ’liar’ is comical.
Honestly, I’m fairly certain it is around £70-80m in various forms.
Eugene; a new stadium would make us more annual turnover via a larger capacity and improved corporate features in the ground. It wouldn’t make us "rich", but there’s a reason we’re desperate to move grounds at the moment as we can’t piss in any sort of pot whilst at Goodison.
We need a wage cap.If there was a wage cap we would be able to afford a shiny new ground. Also, a wage cap would appeal to any would be investors.
Marc, what you say seems to me to be accurate. I fear that this summer we will lose either Rodwell or Pienaar. I think that the cashing in of Lucas Neil was ominous.
"The sense of irony when people label kenwright a liar is comical"
So anyone who labels Kenwright a liar is actually, in fact, a liar themselves.
You couldn’t make it up.
So anyone who labels Kenwright a liar is actually, in fact, a liar themselves.
You couldn’t make it up.
The more I think about football finance, the dafter it all seems. Whether the debt is £40M, £50M or £60M,we certainly can’t afford a new ground. The failure of the DK project almost certainly saved Everton from disaster and I think Kenwright recognised the fact!
Dan Brierly...
Where are these latest accounts you’re talking about?
The last accounts had the debt at £60 mill and since then we’ve had notifications of further debts for £20 mill...
In the words of Kenwright...we are at the very edge of our means...
Where are these latest accounts you’re talking about?
The last accounts had the debt at £60 mill and since then we’ve had notifications of further debts for £20 mill...
In the words of Kenwright...we are at the very edge of our means...
"So let’s ignore the club accounts, and speculate about Bill Kenwright committing fraud by not disclosing or paying tax on monies received into the club through ’ghost’ investors. The BIG problem is people fabricating things to suit their own views" stunning own goal Dan, how do you equate having ghost investors to tax evasion - come on you made that one up yourself as some pitiful pro Kenshite support and I think plenty of folk have already asked the question about the accounts using Elstone’s own quote that it had gone up another £20m from last year.
2009 debt was £37.9 million
http://www.football-finances.org.uk/everton/debt2.htm
The debt for 2010 should come down due the sale of Lescott.
http://www.football-finances.org.uk/everton/debt2.htm
The debt for 2010 should come down due the sale of Lescott.
Brian
We sold Lescott and spent the money on Bily, Distin and Heitinga. It was pretty clear we didn't have a pot to piss in before he was sold.
I'd be truly amazed if the debt came down anytime soon...
We sold Lescott and spent the money on Bily, Distin and Heitinga. It was pretty clear we didn't have a pot to piss in before he was sold.
I'd be truly amazed if the debt came down anytime soon...
Brian Baker — I’m afraid that’s a bit too simplistic a view; that money will already be gone and won’t have been used to pay back dept, only service new ones.
Servicing dept is very complicated, even more so in the current economic climate. The banks are prepared to lend based on future revenue, notably TV monies, but the interest payments on this are now massive. Our Revenue is rising but cannot keep pace with the raised costs each time we have to re-negotiate.
As a with club we now have no physical assets left, other than players, as everything else has been sold, sold & leased back or mortgaged. It appears Bill’s "Friends" (I won’t say "Ghost backers" as this seems to offend Dan!) won’t lend him any more cash, so it looks like player sales will be Bill’s only option to stay in charge.
Dan Brierley — Don’t try to deliberately misquote me. Where above have I accused him of lying? Where have I accused him of Fraud/Tax evasion?
I’m sure it’s all legal and above board but get real, even the government loses billions from the accounts (PFI projects don’t show on official Government department but we still owe £10s if not £100s of billions), as why declare something when you’re legally not obliged too?
Perhaps if Bill was more open about say: "Why our manager has had to run certain player acquisitions past 'friends'..." (I hope you appreciate me not calling them 'ghost backers' anymore!) this might clear up some confusion/speculation.
Let’s just hope Bill’s friends don’t ask him to pay back money they’ve lent any time soon. If they did, I’m guessing we’d be fucked!
To clear the confusion, the accounts are on the official website. And as for the additional money we have taken on in debt, can people provide some sources for it? The same applies to Elstone’s statement that the debt is £70 million.
My apologies if I picked it up wrong, Marc, but I still don't understand your point. You mean people outside of EFC, are funding transfer moves? I don't see how this is possible, as the transfer fees are in the books, so anybody lending money to the club must be listed as a creditor.
My apologies if I picked it up wrong, Marc, but I still don't understand your point. You mean people outside of EFC, are funding transfer moves? I don't see how this is possible, as the transfer fees are in the books, so anybody lending money to the club must be listed as a creditor.
Lee Kidd, you say..
"Eugene; a new stadium would make us more annual turnover via a larger capacity and improved corporate features in the ground."
WOULD!?
I think you mean ’could’.
And wherever there’s a could there’s a couldn’t.
Seriously it’s not guaranteed is it?
I mean from a purely mathematical standpoint, we can’t fill the 41,000 seats we have, so how do we fill 55,000?
"Ah yes" you might say "but if it’s all new and gleaming with no obstructed views, they will come!"
Maybe...but again, where there’s a maybe there’s a maybe not.
So let’s have a look at what we kind of DO know.
Given our present finances (’courtesy’ of potless Bill and his amazing lack of imagination), there’s a good chance much of the money for a new ground would have to come through a combination of the following three different revenue streams.
1) Telly money.
2) Loans.
3) Supporters money (ie: money we generate in season tickets and by buying Everton related tat).
Now re 3) it's possible that there could, over a period of time, be a substantial hike in the prices, like there was at Utd
This could mean some blues saying "I can’t afford it, I’m gypping it", resulting in a loss of some support (and remember — unlike Utd, we don’t have 100,000 glory-hunting Devon nob-heads waiting for our season tickets)
As for the boxes and businessmen?
Again this COULD help generate money, but remember we are Everton.
A VERY special name....to us.
But to your average name-dropping, Sky-nob, freebie-loving businessman, ’Everton’ is another way of saying ’Not United, Chelsea, Arsenal or Liverpool’ (or for that matter Man City....Tottenham..).
I’m not saying any new ground is doomed and I know we can’t just stay the way we are forever, but as far as I can see, there is definitely no ’would’ anything as far as revenue is concerned.
I do accept that if you waited until 100% sure of a thing before you did it, you’d never do anything, but if you’re talking probability (and we should be!) I think 50-50 is about fair right now as regards the success or failure chances on any new stadium.
"Eugene; a new stadium would make us more annual turnover via a larger capacity and improved corporate features in the ground."
WOULD!?
I think you mean ’could’.
And wherever there’s a could there’s a couldn’t.
Seriously it’s not guaranteed is it?
I mean from a purely mathematical standpoint, we can’t fill the 41,000 seats we have, so how do we fill 55,000?
"Ah yes" you might say "but if it’s all new and gleaming with no obstructed views, they will come!"
Maybe...but again, where there’s a maybe there’s a maybe not.
So let’s have a look at what we kind of DO know.
Given our present finances (’courtesy’ of potless Bill and his amazing lack of imagination), there’s a good chance much of the money for a new ground would have to come through a combination of the following three different revenue streams.
1) Telly money.
2) Loans.
3) Supporters money (ie: money we generate in season tickets and by buying Everton related tat).
Now re 3) it's possible that there could, over a period of time, be a substantial hike in the prices, like there was at Utd
This could mean some blues saying "I can’t afford it, I’m gypping it", resulting in a loss of some support (and remember — unlike Utd, we don’t have 100,000 glory-hunting Devon nob-heads waiting for our season tickets)
As for the boxes and businessmen?
Again this COULD help generate money, but remember we are Everton.
A VERY special name....to us.
But to your average name-dropping, Sky-nob, freebie-loving businessman, ’Everton’ is another way of saying ’Not United, Chelsea, Arsenal or Liverpool’ (or for that matter Man City....Tottenham..).
I’m not saying any new ground is doomed and I know we can’t just stay the way we are forever, but as far as I can see, there is definitely no ’would’ anything as far as revenue is concerned.
I do accept that if you waited until 100% sure of a thing before you did it, you’d never do anything, but if you’re talking probability (and we should be!) I think 50-50 is about fair right now as regards the success or failure chances on any new stadium.
Hmm. Let’s see...
---------------------------------------------
Lee Kidd, you say..
"Eugene; a new stadium would make us more annual turnover via a larger capacity and improved corporate features in the ground."
WOULD!?
I think you mean ’could’.
And wherever there’s a could there’s a couldn’t.
Seriously it’s not guaranteed is it?
etc....
----------------------------------------------
Nope. It’s certainly not guaranteed, but at least it would open up the possibility - and to me that seems better than than stagnating as perpetual also rans, both on and off the pitch
---------------------------------------------
Lee Kidd, you say..
"Eugene; a new stadium would make us more annual turnover via a larger capacity and improved corporate features in the ground."
WOULD!?
I think you mean ’could’.
And wherever there’s a could there’s a couldn’t.
Seriously it’s not guaranteed is it?
etc....
----------------------------------------------
Nope. It’s certainly not guaranteed, but at least it would open up the possibility - and to me that seems better than than stagnating as perpetual also rans, both on and off the pitch
Dan,
Company balance sheet, May 2009.
Creditors (within one year) = £67mill
Creditors (after one year) = £11mill.
Now, I’m certainly no accountant... so if I’m wrong then please correct me.
Company balance sheet, May 2009.
Creditors (within one year) = £67mill
Creditors (after one year) = £11mill.
Now, I’m certainly no accountant... so if I’m wrong then please correct me.
Aiden, you say...
"..but at least it would open up the possibility".
Ffs!
Look.
Erm...right.. I think if you LOOK at what I wrote, I accepted that....didn’t I?
See the bit where I wrote ’maybe’?
(NB: in this context and most others, ’maybe’ is VERY like it ’possibly’!).
What I was suggesting to Lee....and now to you and to anyone else who thinks that a new ground would "open up the possibility" of changing our fortunes for the better, is to also accept that a new ground, to a club with our finances and board, is EVERY BIT as likely to ’open up the possibility’ of total fucking ruin.
"Ok well what’s YOUR solution?"
This - we all relax, stop screaming ’NOW NOW NOW!"
And until we have money in place, we remain where and as we are.
I would LOVE a spanking new ground, but I’m not prepared, RIGHT NOW, to risk all for a swankier version of something we already have.
But I’ll tell you what, I’ll give you the last word on this.
Here are two possibilities (AND THEY ARE!)
You (honestly) pick the one you think is most likely.
1) Bill Kenwright and the board sort us out with a new 55,000 seater stadium. It’s full each home game including all the corporate boxes. As a result of the increased revenue, Everton are able to add to the team (nb: Bill managed to keep all our best players!) and we go on to become a regular big-4 side. Basically the stadium and Everton FC are a huge success.
2) Bill Kenwright and the board sort us out with with a new 55,000 seater stadium. We only get more than 40,000 for Liverpool and Utd (and not much more!). As a result of price-hikes, many season-tickets remain unsold. The corporate side of things is hugely over-estimated, major companies preferring the big-four. Financially the whole thing is a disaster and debts and the interest on them mount. We have to sell anything that fucking moves (so Yak’ll be staying). As are best players have gone, we can’t compete on the pitch, we’re relegated and end up having ’shitty ground’ sung at us by Coventry fans
Possible Epilogue.
At one home game (QPR), an Evertonian (let’s call him Aiden) turns to his mate and says "This is shiteI blame Kenwright and all those who were pushing to move out of Goodison, even though we didn’t have to and even though we had no money - GRRR!" (before turning cherry red, being overcome by a waves of guilt and thinking "I wish we were perpetually stagnating in the Premier League with the ’also rans’")
"..but at least it would open up the possibility".
Ffs!
Look.
Erm...right.. I think if you LOOK at what I wrote, I accepted that....didn’t I?
See the bit where I wrote ’maybe’?
(NB: in this context and most others, ’maybe’ is VERY like it ’possibly’!).
What I was suggesting to Lee....and now to you and to anyone else who thinks that a new ground would "open up the possibility" of changing our fortunes for the better, is to also accept that a new ground, to a club with our finances and board, is EVERY BIT as likely to ’open up the possibility’ of total fucking ruin.
"Ok well what’s YOUR solution?"
This - we all relax, stop screaming ’NOW NOW NOW!"
And until we have money in place, we remain where and as we are.
I would LOVE a spanking new ground, but I’m not prepared, RIGHT NOW, to risk all for a swankier version of something we already have.
But I’ll tell you what, I’ll give you the last word on this.
Here are two possibilities (AND THEY ARE!)
You (honestly) pick the one you think is most likely.
1) Bill Kenwright and the board sort us out with a new 55,000 seater stadium. It’s full each home game including all the corporate boxes. As a result of the increased revenue, Everton are able to add to the team (nb: Bill managed to keep all our best players!) and we go on to become a regular big-4 side. Basically the stadium and Everton FC are a huge success.
2) Bill Kenwright and the board sort us out with with a new 55,000 seater stadium. We only get more than 40,000 for Liverpool and Utd (and not much more!). As a result of price-hikes, many season-tickets remain unsold. The corporate side of things is hugely over-estimated, major companies preferring the big-four. Financially the whole thing is a disaster and debts and the interest on them mount. We have to sell anything that fucking moves (so Yak’ll be staying). As are best players have gone, we can’t compete on the pitch, we’re relegated and end up having ’shitty ground’ sung at us by Coventry fans
Possible Epilogue.
At one home game (QPR), an Evertonian (let’s call him Aiden) turns to his mate and says "This is shiteI blame Kenwright and all those who were pushing to move out of Goodison, even though we didn’t have to and even though we had no money - GRRR!" (before turning cherry red, being overcome by a waves of guilt and thinking "I wish we were perpetually stagnating in the Premier League with the ’also rans’")
Sorry ’our’ best players.
Ciaran, you are looking at the Company balance sheet, not the borrowings
My understanding is that Football Club debts are normally based on what they borrow. This is on page 25 under borrowings. The figure for 2009 is £40.6 million.
If we had to pay back £67 million on loans within a year, we would be bankrupt! We only had a turnover of £80 million, £49 million of which went on player wages.
My understanding is that Football Club debts are normally based on what they borrow. This is on page 25 under borrowings. The figure for 2009 is £40.6 million.
If we had to pay back £67 million on loans within a year, we would be bankrupt! We only had a turnover of £80 million, £49 million of which went on player wages.
Dan,
I would’ve thought that company creditors is the ultimate way of assessing a company’s debt...
Borrowings would be restricted to that accounting period...I would have thought...
We apparently re-negotiated several loans and debts last year... papers filed and available on the net...this would explain why we didn’t go bust... effectively we pay these loans and immediately renegotiate them to keep the cogs turning.
I would’ve thought that company creditors is the ultimate way of assessing a company’s debt...
Borrowings would be restricted to that accounting period...I would have thought...
We apparently re-negotiated several loans and debts last year... papers filed and available on the net...this would explain why we didn’t go bust... effectively we pay these loans and immediately renegotiate them to keep the cogs turning.
People underestimate the latent potential for increasing the fan base.The club has drawn crowds over 50k in the not too distant past and also drawn small crowds under 20k.
Some say ’If we build it they will come’ and we may but only if there is somewhere worth going and something worth seeing when we get there. We underestimate the effect that watching your team play shite week after week can have on the level of support. Give us something worth seeing and we WILL fill the place even if its a 60k stadium
Some say ’If we build it they will come’ and we may but only if there is somewhere worth going and something worth seeing when we get there. We underestimate the effect that watching your team play shite week after week can have on the level of support. Give us something worth seeing and we WILL fill the place even if its a 60k stadium
I teach Accounting so Ive tried to give a quick summary for you based on the figures
Net Loss 6.9M (LY 26k profit)
Current Assets (stuff that can be turned to cash to pay bills in short term >1year) 14.5M
Current Liabilities (this has to be paid in 1 year) 52M. In short they have serious cash flow problems (37.5m more going out than coming in).
An overdraft of 5.9m need not be paid back (interest charges high though) but short term loans of 10.5m are due this year. The next four years after that do look smaller though. These loans could (and probably will) be met by borrowing further to pay this off. This increases our long term liabilities or by selling Non Current Assets (players being the most logical – most of our family silver is leased now)
Long term Liabilities 37.3m – most of which is long term borrowing at a 7.9%.
Our net debt at that point is 74m -we have players to the value of 39.3m plus other fixed assets of 9.2m. This means that technically the company is worth -26m but since the balance sheet does not show home grown players (concept of prudence dictates this) it looks worse than it really is with all players who came through the ranks at zero. Even so it looks pretty poor from a purely business perspective.
To summarise don’t expect much spending without player sales or investment. Borrowing further is not a particularly good idea given any potential for a fall in revenues in the future .
We should not get carried away with transfer fees received. Agents, players and the taxman get their share and it ends up a good chunk smaller.
Net Loss 6.9M (LY 26k profit)
Current Assets (stuff that can be turned to cash to pay bills in short term >1year) 14.5M
Current Liabilities (this has to be paid in 1 year) 52M. In short they have serious cash flow problems (37.5m more going out than coming in).
An overdraft of 5.9m need not be paid back (interest charges high though) but short term loans of 10.5m are due this year. The next four years after that do look smaller though. These loans could (and probably will) be met by borrowing further to pay this off. This increases our long term liabilities or by selling Non Current Assets (players being the most logical – most of our family silver is leased now)
Long term Liabilities 37.3m – most of which is long term borrowing at a 7.9%.
Our net debt at that point is 74m -we have players to the value of 39.3m plus other fixed assets of 9.2m. This means that technically the company is worth -26m but since the balance sheet does not show home grown players (concept of prudence dictates this) it looks worse than it really is with all players who came through the ranks at zero. Even so it looks pretty poor from a purely business perspective.
To summarise don’t expect much spending without player sales or investment. Borrowing further is not a particularly good idea given any potential for a fall in revenues in the future .
We should not get carried away with transfer fees received. Agents, players and the taxman get their share and it ends up a good chunk smaller.
"We have players to the value of £39.3m "
Shit, did we sell some players while I wasn’t looking?
To summarise — if we were free from all debt then we would be £74 million better off — is that right?
But at the same time, we have eff all in assets. Kind of like me having a mortgage but I’ve long since sold the house?
Shit, did we sell some players while I wasn’t looking?
To summarise — if we were free from all debt then we would be £74 million better off — is that right?
But at the same time, we have eff all in assets. Kind of like me having a mortgage but I’ve long since sold the house?
Sorry — rather than net debt it should say total debt is £74m.
if we sold everything off (on its paper value) we would have –£26m in the bank. Things are never sold at paper value.
Of course the likes of Jack Rodwell and others would not be sold on a free so its not actually that bad.
Yes a little bit like you have sold the house but still have the mortgage scenario but replace the house with Per Krøldrup or similar!
We should also stop being concerned with buying (and selling) players on the drip - its normal business practice to do so. If a player is bought and signs a five year contract there is no reason not to pay for it over that period (assuming of course the other party agrees to this). Mind you — usually Spurs then jump in ahead of us with cash!
if we sold everything off (on its paper value) we would have –£26m in the bank. Things are never sold at paper value.
Of course the likes of Jack Rodwell and others would not be sold on a free so its not actually that bad.
Yes a little bit like you have sold the house but still have the mortgage scenario but replace the house with Per Krøldrup or similar!
We should also stop being concerned with buying (and selling) players on the drip - its normal business practice to do so. If a player is bought and signs a five year contract there is no reason not to pay for it over that period (assuming of course the other party agrees to this). Mind you — usually Spurs then jump in ahead of us with cash!
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1 Posted 01/03/2010 at 18:19:03
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The difference with Liverpool/United is that although their debt is mind-boggling, they can borrow against future earning power. Both those sides will never fold unless they suffer relegation - even then they’d probably be bought out and kept afloat.
I don’t think we’re making any significant profits either - I may be wrong but I think we simply break even at best every year. We’re one of the more stable clubs. I’m guessing our debt stands at around £30-35m, but that’s as much guesswork as the papers.