Gambling with our financial future

[tomsdubs]

Southampton did nothing on a shoestring budget, they have wealthy owners and managed to sell two youngsters for big fees. Schneiderlin was 1.2m in league one for a start. 1m for Lambert also.

[eddie]

​Ah, but are you worth 8 times more than that handsome champagne socialist Miliband?

​Touché

[ramblur]

​Good spot Ramblur,  haven't got time to look on the Club's website because of my age and the time it takes to load up,

"regulations relating to club ownership were amended so that clubs will now be required to notify The Football League if an individual acquires a club shareholding of 10% or more.  This is in addition to the existing requirement to publish this information on their website.
 
This will also apply to an individual with a significant interest in one club who acquires a stake of 10% or more in another club, at home or abroad."
Read more at http://www.football-league.co.uk/news/article/2015/football-league-clubs-focus-on-the-future-2483914.aspx#5IFgYEitSzjYIgRs.99

 

So, if MM has 10% ownership or more in DCFC then it should be public knowledge?

​When are things ever that simple,Utch? I'll start by saying I've looked at the sites of several clubs and had a very mixed bag of results - some just listed their boards,without any reference to shareholdings,and only one among my sample (Brum) made any reference to Football League Regulation No. 94. One or two did give actual percentages.

Our own site simply lists "Lead owners" ,comprising Appleby,Luby,Mallett,Morris,Ricketts,Vertin,Wilson.

The big question is does this list merely represent the largest investors,or does it mean those owning 10% or more ? I'd be a lot more confident of the latter if there'd been a pattern of compliance with the information required amongst other clubs. I've a feeling we've been listing 'lead owners' for a number of years -it may even date back to the aftermath of the Martinovich episode.

[cloughandtaylor]

​Southampton have had quite a bit of financial backing from their Swiss owners i believe (the Liebherr family). But they have also earned big from developing talen - Walcot, Oxlade Chamberlain, Bale plus all the lot they just managed to palm off on Liverpool.

we haven't as yet had any signifcant payback from our academy investment

​No, walcott and co was years ago, they came up two divisions on a shoe string, then off loaded Lambert.......

[ramblur]

Several years ago,following claims of "skeletons in the cupboard", I embarked on an exercise to try and locate same.I've decided to post my findings here,rather than start a new thread.The real purpose of this post now is to try and show just how expensive it is to run a football club,as I don't want to open old wounds. What I aimed to do was add together the direct operating costs to the admin expenses found in the P/L statement to get total expenditure.I then deducted total wages to give the non wage running expenses and finally took out the so called 'paper charges' of depreciation,amortisation and impairments. I concentrated on the operating P/L,rather than the final headline P/L (which includes P/L on player sales and net interest charges).Here are the results from 07/08 through to 13/14,and given in that order:-

£8.564m,  £10.073m, £8.348m, £7.34m, £7.139m, £6.557m, £7.95m

To give a flavour of what these charges represent (although far from exhaustive),you would find the old favourites like Heat and Light (bung in floodlighting and undersoil heating if you like),Telephone, PP&S, Insurances (there could be many),Cleaning/Laundry,Travel,non wage element of  pitch maintenance (stadium & training ground),Stadium/Training ground maintenance etc. Although merchandising has now changed,because of the way our accounts were presented,the expenditure figures in the earlier years look to me to have included stock purchases(adjusted for opening/closing stock difference)-in other words a merchandising trading/profit and loss account was embedded within the P/L statement.This certainly changed in 13/14,and may have part changed in 12/13. 

Apart from a bit of a spike in 08/09,the figures appear to be fairly consistent,which is what you might expect.It's really wages and amortisation that give the greatest fluctuations each year.

The figures were higher than I expected - as I said,just goes to show how expensive it is to run a club of our size. Don't forget that these figures exclude interest payments.

[ramblur]

Just to point out that the adjusted merchandising stock purchases figures could be fairly substantial (though not massive).If I had any way of working them out/estimating them I would have stripped them out of the figures for earlier years,as they don't represent expenses in the normal sense of the word. Unfortunately though,it can't be done.

On the flip side,the turnover in earlier years included merchandising turnover,as opposed to profit.Current years' merchandising turnover appears to be some kind of profit share (as opposed to actual turnover).

[CornwallRam]

Just to point out that the adjusted merchandising stock purchases figures could be fairly substantial (though not massive).If I had any way of working them out/estimating them I would have stripped them out of the figures for earlier years,as they don't represent expenses in the normal sense of the word. Unfortunately though,it can't be done.

On the flip side,the turnover in earlier years included merchandising turnover,as opposed to profit.Current years' merchandising turnover appears to be some kind of profit share (as opposed to actual turnover).

​Is the merchandise change a result of it being outsourced to GLD? Presumably all we get now is a share of the profits, rather than the hassle/accounting issues of running it al ourselves. 

[ramblur]

​Is the merchandise change a result of it being outsourced to GLD? Presumably all we get now is a share of the profits, rather than the hassle/accounting issues of running it al ourselves. 

​Yep.Although I said I can't estimate figures for purchases,anyone with a far better idea of mark ups/profit margins (all I suspect is that they'd be fairly high) might want to play with the following turnover figures from 07/08 to 11/12,and given in that order:-

£1.807m, £1.703m, £1.578m, £1.461m, £1.217m

If you think you could have a fair stab at it,simply deduct purchase figures you calculate from the non wage expenses I calculated for each of these years,to get a better comparison over all the years (e.g. if you think there's a 100% mark up,then 07/08 would lead to a £0.903m reduction in my figure.Not suggesting this is the mark up though-just chose an easy figure to work with.).

Significantly,the 12/13 figure slumped to £314k,which of course strongly indicates this to be the first profit share year.

Going back to my original post,some may have expected the non wage expenses  in 07/08 to be higher.However,you have to bear in mind that a Prem season involves fewer matches,which would impact on expenses (even away games involve expenses).By the same token,13/14 would have meant more matches,what with cup runs and play offs. (and thinking about it,we had a good cup run in 08/09).

[Rev]

Yep.Although I said I can't estimate figures for purchases,anyone with a far better idea of mark ups/profit margins (all I suspect is that they'd be fairly high) might want to play with the following turnover figures from 07/08 to 11/12,and given in that order:-

£1.807m, £1.703m, £1.578m, £1.461m, £1.217m

If you think you could have a fair stab at it,simply deduct purchase figures you calculate from the non wage expenses I calculated for each of these years,to get a better comparison over all the years (e.g. if you think there's a 100% mark up,then 07/08 would lead to a £0.903m reduction in my figure.Not suggesting this is the mark up though-just chose an easy figure to work with.).

Significantly,the 12/13 figure slumped to £314k,which of course strongly indicates this to be the first profit share year.

Going back to my original post,some may have expected the non wage expenses  in 07/08 to be higher.However,you have to bear in mind that a Prem season involves fewer matches,which would impact on expenses (even away games involve expenses).By the same token,13/14 would have meant more matches,what with cup runs and play offs. (and thinking about it,we had a good cup run in 08/09).

Thought you would like to know @ramblur, having met with Mel he was very interested in your posts, praised you highly for the accuracy of your interpretations and pondered getting you to meet with the CFO in the future, so keep up the good work!

[ramblur]

Thought you would like to know @ramblur, having met with Mel he was very interested in your posts, praised you highly for the accuracy of your interpretations and pondered getting you to meet with the CFO in the future, so keep up the good work!

Thanks for that,reveldevil, and apologies for late reply - I'm just emerging on the other side of a very nasty chest infection.That's very generous of Mel,and I'm relieved that I'm at least getting a lot of it right with so many unknowns to deal with. The fact that he doesn't seem to mind my work merely reinforces my belief that this administration has nothing to hide.

Unfortunately,for various health reasons, I simply can't risk a trip to England.I'm to be started on a new drug next month to try and get me off these wretched steroids,so I'll see what happens then.The bad news is that I reacted very badly to the last alternative tried and had to be taken off it.

Thanks for your report on events (and thanks to the others) and I'm pleased you all seem to have had an enjoyable day.

[needles]

Thanks for that,reveldevil, and apologies for late reply - I'm just emerging on the other side of a very nasty chest infection.That's very generous of Mel,and I'm relieved that I'm at least getting a lot of it right with so many unknowns to deal with. The fact that he doesn't seem to mind my work merely reinforces my belief that this administration has nothing to hide.

Unfortunately,for various health reasons, I simply can't risk a trip to England.I'm to be started on a new drug next month to try and get me off these wretched steroids,so I'll see what happens then.The bad news is that I reacted very badly to the last alternative tried and had to be taken off it.

Thanks for your report on events (and thanks to the others) and I'm pleased you all seem to have had an enjoyable day.

He's not the only one who likes your work ramblur, it's great to get properly researched and balanced commentary on the finances. We've all been through the mill a time or three when it's gone wrong. Webb rescuing us, Maxwell, the three amigos farce...shudder. Good luck on the new drug and keep up the good work when you can, it is massively appreciated by many of us I'm sure.

[ramblur]

He's not the only one who likes your work ramblur, it's great to get properly researched and balanced commentary on the finances. We've all been through the mill a time or three when it's gone wrong. Webb rescuing us, Maxwell, the three amigos farce...shudder. Good luck on the new drug and keep up the good work when you can, it is massively appreciated by many of us I'm sure.

Thanks needles,and I'll continue to do what I can. Every time I want to be less active I see posts that irritate me.I hate to see anyone (whoever it may be,and whatever I may think of them personally -not saying I dislike them) being unfairly attacked,especially when such attacks often appear to derive from a position of ignorance of the actual facts.

[robglosta]

Thanks needles,and I'll continue to do what I can. Every time I want to be less active I see posts that irritate me.I hate to see anyone (whoever it may be,and whatever I may think of them personally -not saying I dislike them) being unfairly attacked,especially when such attacks often appear to derive from a position of ignorance of the actual facts.

Absolutely, great posts and ones which I always keep an eye out for. 

[ramblur]

Absolutely, great posts and ones which I always keep an eye out for. 

Thanks robglosta. I hope my post in your FFP thread wasn't too complex for the layman,but it's very difficult to give a quick answer on that without outlining any assumptions which are needed !

[StringerBell]

Sensible fans or as Ossie says mardy ***** ?

 

http://www.onefootballforum.co.uk/index.php?threads/sky-bet-transfer-fund.6429/

 

[davenportram]

Yep.Although I said I can't estimate figures for purchases,anyone with a far better idea of mark ups/profit margins (all I suspect is that they'd be fairly high) might want to play with the following turnover figures from 07/08 to 11/12,and given in that order:-

£1.807m, £1.703m, £1.578m, £1.461m, £1.217m

If you think you could have a fair stab at it,simply deduct purchase figures you calculate from the non wage expenses I calculated for each of these years,to get a better comparison over all the years (e.g. if you think there's a 100% mark up,then 07/08 would lead to a £0.903m reduction in my figure.Not suggesting this is the mark up though-just chose an easy figure to work with.).

Significantly,the 12/13 figure slumped to £314k,which of course strongly indicates this to be the first profit share year.

Going back to my original post,some may have expected the non wage expenses  in 07/08 to be higher.However,you have to bear in mind that a Prem season involves fewer matches,which would impact on expenses (even away games involve expenses).By the same token,13/14 would have meant more matches,what with cup runs and play offs. (and thinking about it,we had a good cup run in 08/09).

12/13 season was the first year of the Kappa deal - which was also the year the shop was rebranded the Megastore and I believe they took over running the megastore. The Kappa deal was until 2018, so I think it could be fair to assume that GLD have the gig to run the shop until then.

[Tombo]

Sensible fans or as Ossie says mardy ***** ?

 

http://www.onefootballforum.co.uk/index.php?threads/sky-bet-transfer-fund.6429/

 

Can't say I haven't thought about the point that last guy makes. So many clubs have claimed to be within their means and debt free and able to spend, which later turns out to be rubbish. I remember Coventry fans absolutely adoring Sisu because they told them they were debt free and ready to push for promotion.

Put it this way, if we don't go up having spent this, I will be furious at the way we are run.

If we go up, but have broken FFP, I will be furious. It's not 'promotion at all costs' in my opinion. I want us to get promoted doing it within the rules. Otherwise we can chuck all our medals and trophies in the bin, cos we'll have won them all by ******* cheating.

[ram1964]

Interesting post ramblur,think we have a lot to be grateful for with the present board and owners committing investment through out the club and not just on players.Certainly exciting times for every one affiliated with Derby County ,especially us fans that enjoy throwing our penny worth in at no financial cost to ourselves personally.

I personally believe the club are going in the right direction with all areas of improvement and spending,with some very sensible signings in recent weeks.I think we should also remember whilst spending this money we are also increasing the profile of the club which will attribute greater income with ticket sales,merchandise and TV revenue in the future.

Hats off to the. Board for their continued commitment and focus on the club .

[Duracell]

We're a big club, no wonder we've been in favour of FFP since the start. If the guidelines encourage you to live within your means, surely the clubs with larger means can afford to live more extravagantly?

If Leeds weren't still in a massive mess they would be spending big too because they could afford to. Not too sure what's going on with Wolves but I would imagine FFP benefits them too.

We're one of few clubs who can compete with parachute payment clubs without having to worry about breaking FFP rules. 

There's a lot to be said for the fact that with FFP it's not the amount you spend, but the way in which you spend it which defines whether your club is within the boundaries. 

[StringerBell]

Can't say I haven't thought about the point that last guy makes. So many clubs have claimed to be within their means and debt free and able to spend, which later turns out to be rubbish. I remember Coventry fans absolutely adoring Sisu because they told them they were debt free and ready to push for promotion.

Put it this way, if we don't go up having spent this, I will be furious at the way we are run.

If we go up, but have broken FFP, I will be furious. It's not 'promotion at all costs' in my opinion. I want us to win the league doing it within the rules. Otherwise we can chuck all our medals and trophies in the bin, cos we'll have won them all by ******* cheating.

 

I agree if prefer to do it the right way, the fair way. And I do have some concerns, always told myself I'd never act like a Portsmouth fan.

And also reputation is important - I loved it how a few billed the playoff final as the good guys vs the bad guys so I take your point about cheating.

But then I think it's many of the other clubs who've opted to relax the FFP rules. I was seething about that at the time, we were successfully working towards a long term plan within the agreed guidelines and had endured a fair bit of mediocrity as a result. Then a load of clubs who weren't operating as well and who would have potentially faced embargoes decided to club together and do a U-Turn? How's that fair? As I've said before it wouldn't surprise me if there was an argument for legal action on our part there. So for me there's a part of me that wants Derby to say "well **** you then!"

That poster you were referring to was a Wolves fan. This is the same wolves who were paying Roger Johnson a fortune while they were in the third tier. I wonder which way Wolves voted when deciding whether or not to relax the rules considering they would have likely faced sanctions if the majority of clubs did not vote in favour of allowing greater losses.