£10m FFP Bill

[RamNut]

3 hours ago, ramblur said:

As my earlier, reasoned, inoffensive rebuttal of your allegation was removed for some reason, I'll try again.( and I hope some members saw my earlier post before it was removed). In the context used there's precious little difference between ' acknowledge' and 'admit', so you did effectively say that I wouldn't admit it.

I was was trying to make a specific point which was to look at the overall performance not just Ffp, and at overall spending not just wages.

you had already previously stated that even for the football club only, the loss for 16-17 was £24m prior to player sales. I was looking at the sevco 5112 accounts and simply observed the scale of the losses across the group prior to transfer income. The counter arguments that these go beyond the football club and ffp relevant figures was irrelevant to the point i was trying to make. The second counter argument that these accountancy periods are different to the football club accountancy periods may be true but isn't necessarily relevant either. Nor is the fact that there may be further transfer income yet to show.  Just taking the group accounts at face value (prior to all the bits extraordinary income - which i said i didn't understand but maybe you could explain) the losses on normal trading did not look at all good (quote: to my untrained eye).

....and they don't. And these losses have to be funded primarily by annually selling our better players (not good) or mel (up to him, but unsustainable).

i also observed the line in the accounts which reference £95.6m debt to MM (which was increasing) simply to reference the scale of MM input.

I stick to my point which was about overspending across the group, and the conclusion that we have to address this andmove away from a scenario where we have to sell our best players to reduce the losses, because this undermines any progress we might make.

as for the level of wages compared to income - this is a rough barometer indicative of a healthy or unhealthy situation. You totally invented a comment attributed to me regarding the club being bankrupt since 2007. Back then wages as a percentage of income were lower - from memory - somewhere around 50% of income when we had £15m of parachute money, and @95-100% of income thereafter.

i acknowledged the fact that wages > turnover is commonplace across the championship, but we can't take any comfort from that. Its not good news. It just means the whole thing is a mess. (I said "looks bankrupt" and please don't come back with a technical definition of bankruptcy and start arguing about that - which is exactly what you then did). I was trying to discuss a general point about costs exceeding income. Across the group the operating losses are something  which - i think - should be a concern.And thankfully we are hearing about cost cutting measures.The cost of the academy is reported to be @£5m. That is quite a significant chunk of income which we have already spent on player wages. MM can chose to fund it, but it might seem that someone became somewhat complacent about some of the spending (now being addressed).

 All championship clubs are struggling - which is why i said we can't afford to crow about aston villa. Our income of @ £25m can be compared to say chelski whose income is £325m. The premier league clubs are awash with television revenues so that their wages are actually less than their income (in stark contrast to the championship). I think spurs deserve some credit for keeping wages (from memory) around 50% of income, but the tv revenues just transform everything. 

The end.

 

[The Scarlet Pimpernel]

16 minutes ago, RamNut said:

I was was trying to make a specific point which was to look at the overall performance not just Ffp, and at overall spending not just wages.

you had already previously stated that even for the football club only, the loss for 16-17 was £24m prior to player sales. I was looking at the sevco 5112 accounts and simply observed the scale of the losses across the group prior to transfer income. The counter arguments that these go beyond the football club and ffp relevant figures was irrelevant to the point i was trying to make. The second counter argument that these accountancy periods are different to the football club accountancy periods may be true but isn't necessarily relevant either. Nor is the fact that there may be further transfer income yet to show.  Just taking the group accounts at face value (prior to all the bits extraordinary income - which i said i didn't understand but maybe you could explain) the losses on normal trading did not look at all good (quote: to my untrained eye).

....and they don't. And these losses have to be funded primarily by annually selling our better players (not good) or mel (up to him, but unsustainable).

i also observed the line in the accounts which reference £95.6m debt to MM (which was increasing) simply to reference the scale of MM input.

I stick to my point which was about overspending across the group, and the conclusion that we have to address this andmove away from a scenario where we have to sell our best players to reduce the losses, because this undermines any progress we might make.

as for the level of wages compared to income - this is a rough barometer indicative of a healthy or unhealthy situation. You totally invented a comment attributed to me regarding the club being bankrupt since 2007. Back then wages as a percentage of income were lower - from memory - somewhere around 50% of income when we had £15m of parachute money, and @95-100% of income thereafter.

i acknowledged the fact that wages > turnover is commonplace across the championship, but we can't take any comfort from that. Its not good news. It just means the whole thing is a mess. (I said "looks bankrupt" and please don't come back with a technical definition of bankruptcy and start arguing about that - which is exactly what you then did). I was trying to discuss a general point about costs exceeding income. Across the group the operating losses are something  which - i think - should be a concern.And thankfully we are hearing about cost cutting measures.The cost of the academy is reported to be @£5m. That is quite a significant chunk of income which we have already spent on player wages. MM can chose to fund it, but it might seem that someone became somewhat complacent about some of the spending (now being addressed).

 All championship clubs are struggling - which is why i said we can't afford to crow about aston villa. Our income of @ £25m can be compared to say chelski whose income is £325m. The premier league clubs are awash with television revenues so that their wages are actually less than their income (in stark contrast to the championship). I think spurs deserve some credit for keeping wages (from memory) around 50% of income, but the tv revenues just transform everything. 

The end.

 

So really Ramnut you are making a statement saying we, like most championship clubs are making losses each year which either the owner has to cover or else we need to sell players to cover or a bit of both? I'm not trying to be clever I just want to make sure I understand?

[RamNut]

1 hour ago, The Scarlet Pimpernel said:

So really Ramnut you are making a statement saying we, like most championship clubs are making losses each year which either the owner has to cover or else we need to sell players to cover or a bit of both? I'm not trying to be clever I just want to make sure I understand?

Yes. But more than we should be.

 its the necessity for player sales that bothers me. the fact that the rest of the championship are struggling too is no comfort. As someone pointed out the clubs with parachute payments are potentially at a significant advantage. Its an unhealthy situation. I don't know what the answer is except perhaps for a wider distribution of tv revenues. The only thing we can do is to tackle spending.

Example 1: What are we selling players to cover? Wages to players we don't even want.

example 2: if we employ 10 too many academy coaches at say £30k per annum (guess). That would means selling a player for @1m every 3-4 years just to fund that waste (or more input from MM)

 

[The Scarlet Pimpernel]

1 hour ago, RamNut said:

Yes. But more than we should be.

 its the necessity for player sales that bothers me. the fact that the rest of the championship are struggling too is no comfort. As someone pointed out the clubs with parachute payments are potentially at a significant advantage. Its an unhealthy situation. I don't know what the answer is except perhaps for a wider distribution of tv revenues. The only thing we can do is to tackle spending.

Example 1: What are we selling players to cover? Wages to players we don't even want.

example 2: if we employ 10 too many academy coaches at say £30k per annum (guess). That would means selling a player for @1m every 3-4 years just to fund that waste (or more input from MM)

 

So what would you like to see happen if you were directing the club?

[RamNut]

8 minutes ago, The Scarlet Pimpernel said:

So what would you like to see happen if you were directing the club?

Maybe we already are doing everything. My point was really to try to highlight the problems to some fellow posters in order to help the club. Last year we went backwards in my opinion, perhaps in chasing one last dash for promotion. For me, GR was pursuing his own agenda at cost to the club.

Do not buy any more over 30s. We have acknowledged that buying midfielders was a mistake when bryson and hughes got injured and that we should have loaned players. Why not have loaned cameron jerome? Why acquire another wage burner.

Whatever happened to putting players on the transfer list.

If senior players are not in the team, then actively try to shift or swap.

If no-one wanrs them then offer them a free transfer? Get them off the wages. 

In fairness we did try to get a few out on loans, but then we went and signed a few more.

[ramblur]

On 23/05/2018 at 17:11, ramblur said:

The headline loss in 16/17 was just under £8m, after transfer profits of just over £16m. If you stripped these out of the result, you'd be left with a loss of c£24m based on 'normal' income and expenditure, or £2m/ month. It would be going some to add 50% to that this year, based on known transactions, so I think that aspect's drivel.

The only way I can see us falling foul of FFP is if the EFL objected to the 15/16 exceptional income - bit late in the day now, though, and it looked perfectly legal to me.

I see the topic of Butters, Bradders and Nick has cropped up. In 14/15 ( the last year before new arrangements came in) the yearly amortization was £3.320m , and the total net book value of players' regs was £7.39m - this implies that under the old method values wouldn't have been amortised down to zero for over 2 years.

The 15/16 figure was £3.370 m, a rise of £50k, but you can't fall into the trap of thinking that this just related to new 15/16 business, as some of the 14/15 stuff may have fallen out. Let's just say, looking at an extreme position, that total residual values of £7.39m were allocated to the 14/15 'members' b/fwd, thus meaning that the whole £3.32m falls out, and that the whole of the £3.37m relates to new 15/16 business. Shackell must account for over £1m of that (you have to add agents' costs. + League levy to fee), so you've only less than £2.37m left for the rest . If you wanted this to eventually bring the Butters/ Bradders residual values down to zero, this would imply all in fees for the pair of 4x £2.37m = £9.5m, which wasn't the case (even without agents' fees and levy). Don' t forget this scenario is an extreme situation ,which makes the assumption outlined earlier, and also implies no amortization for any regs other than Butters, Bradders and Shacks.

I maintain we have a potential problem over Nick, Bradders and Butters, and would agree with @Spanish .

To confirm the normal income and expenditure loss to be #24m.

[Curtains]

36 minutes ago, RamNut said:

Maybe we already are doing everything. My point was really to try to highlight the problems to some fellow posters in order to help the club. Last year we went backwards in my opinion, perhaps in chasing one last dash for promotion. For me, GR was pursuing his own agenda at cost to the club.

Do not buy any more over 30s. We have acknowledged that buying midfielders was a mistake when bryson and hughes got injured and that we should have loaned players. Why not have loaned cameron jerome? Why acquire another wage burner.

Whatever happened to putting players on the transfer list.

If senior players are not in the team, then actively try to shift or swap.

If no-one wanrs them then offer them a free transfer? Get them off the wages. 

In fairness we did try to get a few out on loans, but then we went and signed a few more.

Davies , Wisdom and Huddlestone had good seasons though. 

[ramblur]

On 23/05/2018 at 18:43, ramblur said:

Absolutely none whatsoever, as far as I can see. I think £2m/month (roughly) still applies on normal income, and I still think we need to cut at least £5m off net expenditure next year, but I don't see that as a particular problem. I think the £3m is absolutely ridiculous, but I struggle to see which of the 2 claims is more absurd.

To show the very bare minimum I think we need to cut.

[ramblur]

On 24/05/2018 at 10:57, ramblur said:

Match income is only part of total revenues and if that fell it could be more than made up for in other areas. It's quite likely that amortization may have risen by £1m+ (charge against FFP) in 17/18, due to our having signed 3 older players this year.

I'd agree that a loss of £24m on normal trading is far too high, and I'm sure Mel agrees.

Where I have no trouble agreeing that #24m on normal trading is far too high.

[Curtains]

MM can’t win can he. 

A few years of club stagnation with the Academy playing all the games might help. 

Sell all or best players. 

Thats the way to do it. 

[Spanish]

25 minutes ago, RamNut said:

Maybe we already are doing everything. My point was really to try to highlight the problems to some fellow posters in order to help the club. Last year we went backwards in my opinion, perhaps in chasing one last dash for promotion. For me, GR was pursuing his own agenda at cost to the club.

Do not buy any more over 30s. We have acknowledged that buying midfielders was a mistake when bryson and hughes got injured and that we should have loaned players. Why not have loaned cameron jerome? Why acquire another wage burner.

Whatever happened to putting players on the transfer list.

If senior players are not in the team, then actively try to shift or swap.

If no-one wanrs them then offer them a free transfer? Get them off the wages. 

In fairness we did try to get a few out on loans, but then we went and signed a few more.

I get fixated on the residual value of players mostly because it adds a complexity which for obvious reasons we don't get the whole picture.  Every year you are expected to revalue the squad based on a realistic onward selling value.  Maybe you would look at Butters and decide that he has had a few poor experiences recently and perhaps is stock is low.  You may prudently value him at £1m.  looking at George, series of injuries followed by a loss of form, contract up for renewal perhaps value him at £1m or nil if there is a danger that he will walk at the end of the contract.  This is all well and good but if you are up against FFP maybe you can't do this without incurring penalties.  So you are almost forced into maintaining Butters at a higher figure and you are forced to extend GT's contract..  If you are not prudent about making tough decisions over residual values then at some time you have to face the consequences, or hope someone injects more funds, or you get promotion.  One year's extravagance can lead to many years of constraints.  Cut costs where you can and sell players that have a positive impact on FRR (Vyds).  Hence 'If no-one wanrs them then offer them a free transfer? Get them off the wages' may not be the attractive option it may first appear.  if we are in a mess in this area don't expect Vyds money to go anywhere other than balancing the books and paying for those mistakes

@RamNut am I making any sense or ............?

 

[ramblur]

On 10/06/2018 at 17:02, ramblur said:

I keep mentioning normal (bread and butter) income and expenditure, so I'd better explain what I mean by this, and I'll do it by citing the kind of things that I'd exclude from this. I'll start off with the recent compo received. We can't expect to receive this every year, so it can't be included in the underlying position. In the past we've generated exceptional income by the cancellation/waiver of loans. These same debts can't be cancelled/ waived in future years, so that's excluded as well. We will have received play off / cup income this year, which could be non recurring, but there's not much I can do about this as both are lost within global figures ( however, in 13/14 the Club did give a flavour of the play off income). You could argue that transfer dealing is an annual part of a club's business, but it can swing wildly from year to year, so can't be considered to be part of the underlying position.

Therefore, when I say we need to shed a minimum of £5m of net expenses from the 16/17 result to get us in line with (just) the average annual maximum FFP loss, I mean this on the basis of the underlying normal   income/ expenditure position. Put quite simply, if we don't do this then we have to rely on exceptional income/ transfer profits to bale us out, not a great position to be in.

Where I show what I consider normal stuff to be. When I say bare minimum, it really needs to come down much more than that, and I'm sure Mel agrees.

A paper loss re goodwill impairment of #21m appearing in the consolidated accounts has nothing to do with the Club's position, neither does the other 15/16 item I highlighted earlier, a paper profit in Sevco 5112 of c#60m. Such things only distort the position in respect of the Club, particularly to the untrained eye.

[KCG]

I enjoy Ramblur's educated insights and evidenced comments. It makes a change from the pure, unsubstantiated bull poo we read from many.

Ramblur... for your health I would suggest that you ignore the trolls, their raison d'être in life is to take the piss. Just carry on presenting the facts. If some choose to question you with pure supposition, the intelligent amongst us will take your reasoned view above the bull poo.

[ramblur]

16 minutes ago, KCG said:

I enjoy Ramblur's educated insights and evidenced comments. It makes a change from the pure, unsubstantiated bull poo we read from many.

Ramblur... for your health I would suggest that you ignore the trolls, their raison d'être in life is to take the piss. Just carry on presenting the facts. If some choose to question you with pure supposition, the intelligent amongst us will take your reasoned view above the bull poo.

Thanks mate, but the bottom line is, that after years of highly demanding financial posts, I've finally grown weary of it all - I want to do something else with what's left of my life, and leave all this to someone else.

I've done football posts, and it's a breeze; just key in what comes into your head. Compare this to searching accounts, extracting figures and then trying to construct posts that a layman might at least have a chance of understanding. It starts to take a heavier and heavier toll the older you get. Come 9am next Tuesday my account is set to cancel. I've even got cataracts, and am told that the 'blue' light of computer screens is something to be avoided,so in 4 days time my browsing is set to plunge dramatically anyway, until I can get them fixed. I intend to see out the 4 days though, and give members last chances to ask me things.

Anyway, enjoy your footie.

[ilkleyram]

1 hour ago, RamNut said:

Yes. But more than we should be.

 its the necessity for player sales that bothers me. the fact that the rest of the championship are struggling too is no comfort. As someone pointed out the clubs with parachute payments are potentially at a significant advantage. Its an unhealthy situation. I don't know what the answer is except perhaps for a wider distribution of tv revenues. The only thing we can do is to tackle spending.

Example 1: What are we selling players to cover? Wages to players we don't even want.

example 2: if we employ 10 too many academy coaches at say £30k per annum (guess). That would means selling a player for @1m every 3-4 years just to fund that waste (or more input from MM)

 

You've been around a fair old while Ramnut so you'll know that most clubs, most of the time, spend more than they receive in income. And always have done. They continue to survive (mostly, but there have been a few examples over the years where not) on the largesse of banks and owners/investors and in that way are different from most of the business world most of the time.  I guess some owners calculate that they will probably be able to recoup some/all of their money either by selling on or by entry into the EPL; others (and my view is that Mel falls into this category) work on the basis that they might get their money back (and would like to) but get pleasure from investing in an organisation that is important to them and, by extension, important to the people around them - a more emotional investment if you like than the John Henrys or Glazers of this world, or Cardiff or Villa.

As such every club to some degree is a 'selling club', that needs to sell players for financial reasons. The only difference is the degree. But that can also be a fig leaf to cover the fact that football is a game that routinely trades its practitioners - name the manager that has ever expressed themselves completely satisfied with their squad/team. They're always a couple of players short. And get a new manager in and they start all over again - it's not my squad.

You - and Ramblur, and Mel for that matter - are correct.  The degree to which wages (largely that of the players) is overtaking DCFC's income has now reached the point of being unsustainable.  It will be easier said than done to reduce it though given that all of those players probably like playing for a big club with great working facilities, probably like the idea of playing for Frank, have valuable contracts and lawyers and agents; it will be even harder to do so and keep the fan base happy (look at the differences on this board alone about who should stay and who should go) AND maintain a promotion push. And with an inexperienced manager in charge.  To misquote Warren East 'we are a sporting club that's overweight and we need to get fit'. But RR isn't an easy nut to crack anymore than Derby County.

The real irony of the situation we and other clubs find ourselves in is that FFP was meant, in theory, to stop all of this or, at least, make it happen less often.  Instead it appears to be exacerbating the situation with EPL TV money, as well as ambition, competitive instinct and new overseas owners, skewing the situation further.  In the meantime we will depend even more upon Mel (or his successor) continuing to help us through.  It may not be right but t'was ever thus.

It will, even more importantly in my view (in part because I don't see Mel walking away yet), depend upon us. The fans. And our ambitions. We have the ability to affect significantly how Mel sees the club and his role. More importantly, in the short term, we have the ability to affect Frank, Jody Morris and the young/new players that come through plus the older ones that stay - what if we get off to a poor start; what if we have a season like Brian's first season; what if we lose to that lot down the road, or Stoke; what if the younger players aren't up to the job straightaway (Will Hughes and Jeff Hendrick both needed time)? There will be any number of people lining up to say 'I told you so. Too inexperienced. Mel doesn't have a clue'. We can help, if we collectively want to. And if we do, who knows what we can achieve.

[EnigmaRam]

Duck a duck are you lot still bleating in about this balls.

relax, go watch some football ffs

[ramblur]

As a result of something that's happened on here, I'm now going to log off for one last time, and simply let my membership run out to 9am on Tuesday, whereupon my membership will be permanently cancelled. Unfortunately, this means that I won't be able to reply to any quotes, mentions or PMs. Goodbye all.

[Rab a dab doo]

Thanks for all your all your insightful and informative messages over the years I have really enjoyed reading them.

Look after yourself and all the best for the future you'll be sadly missed.

[Rev]

 

 

[Ramleicester]

This is all so pointless..  NO PERSON has sufficient insight, knowledge or understanding of this private company to give any accurate or meaningful views on the finances of this business.

Accounts only give a tiny view of what the strategy, objectives or plans that a business or the owner has.

Bottom line is that the owner says things will not be as before. May be the best thing that has happened that is the joy of the beautiful game. Next season will mainly depend on luck and a possible magic mix of players.

Arguing over stuff nobody really knows enough about just gets people stressed and pi###d off. Try talking football lol.