Monday, 28 January 2013

Accounts and new owners?

It would be difficult to add anything to the excellent analysis by the New York Addick of the club's annual accounts, although I will be taking a close look myself: Accounts

The bottom line is that we lost £7.5m last year and are likely to lose £7.5m again this year, extra income being balanced out by extra costs. It is particularly of concern that wages are 100 per cent of turnover. Not only is this double the level recommended by Deloitte Sports Business, it is also way above most Premiership clubs with the exception of Manchester City who manage 114 per cent.

Given that, it is good that someone is footing the bill while the search for new owners goes on. One payment missed to Revenue and Customs and the club would be in trouble.

As the New York Addick points out, attendances remain a matter for concern. Clearly our home form does not help, although one also has to take account of how much discretionary leisure spending is being squeezed. We also look a lot better than Millwall (short to re-run their historic encounter with Luton at Kenilworth Road).

It has been widely reported that gentlemen of Middle Eastern appearance were being shown around on Saturday. They may not have been impressed by the game, but the reported attendance of 20,000+ sounded good. Given that walk up sales were reportedly sluggish, it's fortuitous that the East Stand was relatively crowded and that the gaps in the West would not have been evident to anyone sitting there.


NewYorkAddick said...

Another fun way to think about turnover being less than wages/salaries is to note that it implies that even every member of staff (on both the playing and operational side) worked for nothing, we would still lose money! You can't help thinking there may be a cost problem in the rest of the business too.

Anonymous said...

A few comments:

a) At the VIP forum on Thursday, Michael Slater pretty much poo-pooed all recent rumours about foreign investment, even going so far as to explain how one of them started (based on a completely ludicrous set of assumptions made by whoever started the rumour). I see no reason to believe the current rumours.

b) I would imagine that the "salaries" figure for last season includes some possibly substantial bonuses to the players/staff? Is there any specific mention in the accounts for bonuses?

c) If done well, then the players' salaries won't be *significantly* more than last season - i.e. if the contracts didn't allow for a hefty uplift then it may well be that the extra few £million from being in the Championship is not necessarily all eaten up by improved salaries.

So increased revenue this season, possible one-offs (bonuses) last season and a mostly unchanged team *might* make this season's accounts look better. But then the loan players we have had in would not have come cheap...

Sciurus Carolinensis Nemesis said...

One or more board members having friends of eurasian or south asian appearance is hardly basis for investment speculation really is it?

LordDofB said...

Michael Slater said that the gentlemen in question were 'potential sponsors'