Derby County Accounts 13/14

[Chris_D]

me either, but I'm sure that circa £7m spend figure casued many to think it inlcuded the loans as it seems so high without!  

We've probably spent another mil or two with loans!

[ramblur]

​There's £867k in the P&L for "changes to management/coaching staff," The layout isn't great but I think that is part of the £4m increase in note 4.

 

That strange box threw me out when I first looked at the accounts,until I realised it was just a note! Never seen that kind of thing before. 

[ramblur]

One final thing I forgot to report on concerns Note 24 ,"Contingent Liabilities",comparative 12/13 figures given in brackets:-

Signing and other bonuses due to players under the terms of their contracts      £552k (£797k)

Maximum liability under sell on clauses  £2.673m (£2.601m).

Neither of these are provided for in the 13/14 accounts,merely noted as possible future liabilities.Signing on fees are often spread over the length of contracts, and the word "maximum" in relation to the second item implies capping.

Of course this relates to 13/14 only and doesn't feature anything to do with the £7m+ purchases mentioned in PBSE.

 

[Chris_D]

What dates does FFP run from / to each season?

Is it 1 June start?

[G STAR RAM]

One final thing I forgot to report on concerns Note 24 ,"Contingent Liabilities",comparative 12/13 figures given in brackets:-

Signing and other bonuses due to players under the terms of their contracts      £552k (£797k)

Maximum liability under sell on clauses  £2.673m (£2.601m).

Neither of these are provided for in the 13/14 accounts,merely noted as possible future liabilities.Signing on fees are often spread over the length of contracts, and the word "maximum" in relation to the second item implies capping.

Of course this relates to 13/14 only and doesn't feature anything to do with the £7m+ purchases mentioned in PBSE.

 

​Interesting the club is able to quantify the maximum liability under sell on clauses.

This would seem to indicate that the sell on clauses are either capped or specified amounts as opposed to percentages.

[davenportram]

​Interesting the club is able to quantify the maximum liability under sell on clauses.

This would seem to indicate that the sell on clauses are either capped or specified amounts as opposed to percentages.

most likely capped otherwise we could pay out more than received if a specified amount

something like '250,000 or 10% whichever is lower"

[G STAR RAM]

most likely capped otherwise we could pay out more than received if a specified amount

something like '250,000 or 10% whichever is lower"

​Excellent if true.

I always assumed clauses would be x% of sell on value.

[davenportram]

​Excellent if true.

I always assumed clauses would be x% of sell on value.

but if it was just a % then there would be no way of knowing maximum liability of sell ons.

[Gritty]

So, if we assume the investors invest the maximum possible under FFP, how much additional can we spend on wages/transfers combined next season?

i.e. if we are limiited to losses of Xmn under FFP; and are currently losing X-Ymn a season because of the wage bill, we only have Y mn additional to spend on wages

Any increases in wages above Y has to be met with a reduction in wages by a player leaving?

And any transfer fees have to be paid for by sales?

 

[Diag Ram]

So, if we assume the investors invest the maximum possible under FFP, how much additional can we spend on wages/transfers combined next season?

i.e. if we are limiited to losses of Xmn under FFP; and are currently losing X-Ymn a season because of the wage bill, we only have Y mn additional to spend on wages

Any increases in wages above Y has to be met with a reduction in wages by a player leaving?

And any transfer fees have to be paid for by sales?

 

​Assuming that the limits don't change for this season (I think they are set to increase from the season after next), then the maximum loss the club can make, after adding back certain costs, such as depreciation costs for buildings, plant etc, youth development costs and any investment in community schemes, is £8m. It's hard to tell last year how close the club was to this limit, as you can only find out what depreciation was, other excluded costs aren't disclosed in the accounts. At a rough estimate I would say that the club was £2.5m away from the £8m limit above which an embargo is imposed.

Transfer costs go onto the company's balance sheet and are released over the duration of the player's contract. For example, if Thorne cost £2.5m, and his contract was for 5 years, then the club would incur a cost of £500k a year.

The biggest worry for this season is that revenue will take a hit due to us missing out on the play offs, and wages costs will almost certainly increase, due to Bent, Ince, new contracts etc. And that's before loan fees etc. If Hughes is sold before the club's accounting year end (30 June), then provided this could be included in profit (but I'm not sure if it will be as the transfer window opens on 1 July I think? Happy to be corrected here) then we would have some wiggle room.

Otherwise, I've done some rough calculations and the club may need to find around £3m from somewhere. I'm hopeful that increased matchday revenue and sponsorship income will cover a good portion of lost TV revenue.

If the worst does happen, don't be surprised to see us doing a lot business in the summer, as we may be hit with an embargo in January.

I'd like to reiterate that this is all speculative. I have no insider at the club, I'm not their auditor and have no other information other than the accounts. So there may be things that I don't know about or that I've missed which means that we will have no problems.

[Chris_D]

i think it's a £3m loss allowed this season and that owners can inject equity to cover losses between £3m and £6m. seems likely our lot would inject equity if needed. then £2m with equity up to £13m next year.

http://www.bbc.co.uk/sport/0/football/29940463

then £15m losses allowed over three years however you wish to split it from 2016/2017. if you lose more there are sanctions.

so yeah if it's only £6m loss allowed, given losses in last year's accounts and what we spent since, we may go over...?

 

[ramblur]

Hi DiagRam,I've just looked again at the League's piece on FFP,and whilst the new rules take effect from 2016/17,there is a relaxation in 15/16 to lead into the new arrangements.Consequently,clubs can return a maximum negative FFP result of £13m for next season (the figure for 14/15 being £6m).Because of exemptions,my own guess is that we'd be able to report a headline loss of around £8.5m and still comply (but this is only a guess,because of the reasons you rightly point out).Whilst there are far too many variables to even begin to work out a figure,I share your view that we may be in trouble for 14/15 and wouldn't be surprised if the figure you mention were somewhere near right.

I've noticed in the past that June signings seem to appear in the B/S,and thus I'd expect that June sales would appear in P/L. 

[ramblur]

As the quote button doesn't seem to be in evidence,I'll reply to a post Chris made on page 11.There's no set date that FFP runs to,it's just based on a club's accounts for a particular year.If you take 14/15 for example,we run to 30 June,yet other clubs may be 31 May,31 July etc. I even remember one club (think it was Boro) that had a winter year end ,and they changed it a few years ago,probably in preparation for FFP,because otherwise it would have been impossible to meet the 1 December  deadline for submission of results to League. 

From 16/17 it's a maximum of £39m over 3 years if you can provide evidence of secure owner funding and submit 2 years of forecasts.

[Diag Ram]

Thanks Ramblur, I've been looking for rules from after 13/14 season but really struggling to find them for some reason.

Ultiimately, the board took the gamble and splashed out in January thinking play offs would be the consolation prize. Hopefully, if Hughes is sold, then it will be completed in the next 6-7 weeks. I would have thought the board would be well aware of this and considering all options. I have faith that this board is in it for the long haul, as is represented by the equity injections.

[ramblur]

Just like to say to feisty that I was hoping that somebody else would reply to your post.If it hadn't happened by the end of the week I was going to reply myself,so I wasn't ignoring you! 

Diag Ram,you could try going to the League's website and throw "Financial Fair Play" into their search engine.It's not much cop though,and you'd have to sort through a load of unrelated drivel.I can't work out how to post a link on here anymore,but even if I could,the League ones have given trouble in the past and often throw up something entirely different. 

[Chris_D]

the bbc link has an overview, but the full detail is hard to find (at least for me):

http://www.bbc.co.uk/sport/0/football/29940463

cheers Ramblur, accounting year makes more sense.

[ramblur]

    Don't  know what I've just done,probably a complete disaster. How did you manage to get that link into your post,Chris? I can't see an icon for it any more, only "insert other media" at bottom r/h corner (which I've just tried). 

As I thought,complete disaster. 

[Chris_D]

i just copied and pasted the url from the web address into the reply box in amongst my text, the site is optimised for links to go straight into posts. 

[ramblur]

Ok,I'll try again:-

http://www.football-league.co.uk/news/article/2014/20141106-championship-financial-fair-play-rules-rg-2066799.aspx

Bingo-for some reason it wouldn't let me do that before,though I noticed this time that I had to press down on the r click for several seconds.Just hope this link translates ok now.

Just noticed it only talks of sanctions for the 13/14 results,which may explain our spree for this year.However,I'm sure I read somewhere that sanctions would still apply for following seasons (be a bit silly to have limits otherwise).

[ramblur]

Perhaps they think that if they don't publish sanctions from 14/15 onwards,we won't know if they've been applied or not.