£10m FFP Bill

[ramblur]

54 minutes ago, HantsRam said:

Well, there's a lot of truth in what you say. 

The only "fair" element of ffp is - I think - stopping clubs loading up with debt then going out of business and reinventing themselves having "done a Leicester ".

It doesn't stop clubs being run in an unsustainable way if a sugar daddy is prepared to write off losses.

(Hmm sounds like Mrs Hants......)

So of course it isn't fair inasmuch as not all clubs will have such a backing organisation. 

In actual fact, it ceased to be financial fair play some time ago, probably when the new 3 year cycle came in. Got a feeling that 'sustainability' might have been inserted somewhere instead, but I'm not absolutely sure of that. I only still refer to it as 'FFP' because that's the term members have become used to

[ramblur]

4 minutes ago, bigbadbob said:

So we do owe  mel Morris  £95 million after all then

If by 'we' you mean the club, then the answer's no. The only entity that can return money to him is Sevco 5112, either by share sales or dividends from the Club. As Sevco 5112 owns the equity of the Club, then any dividends declared by the Club would flow to Sevco 5112, and hence Mel could extract this if he wished. Not much chance of that outside a long stay in the Premiership though.

[RamNut]

@ramblur

i'm going to have to pick the bits out of this....

Quote

The £21m loss you quoted is the consolidated loss for a 10 month period only, and is distorted by the fact that (amongst other things), that 10 month period excludes very substantial transfer profits.

And thats healthy is it? That a thumping loss has to be offset by substantial player sales.

Fine and dandy that For 12 months the figures would be different, but what a way to get out of the poo.

Quote

the 15/16 consolidated loss of £36m included the full impairment of £21m  of goodwill, which generated a paper loss in a company within the group which wasn't the Club, so the real, tangible loss was only c£15m.

Fine. But there was also a £9m profit that year on player sales to reduce the overall losses.

Quote

I don't know where you got the measly £8m funding from, as it's been way more than that

I didn't say it was £8m. Look back in this thread and you can find whoever said it. (I can't be bothered). The point i was making was that it is way more than the £8m quoted. Which you have now confirmed. ?

My real interest is in trying to determine what a sustainable model should look like, and i don't think a sustainable model should rely on big dollops of annual income from player sales or sugar daddies. Obviously increasing revenues as far as poss, but there are going have to be some radical cuts in my humble opinion if we are ever to achieve it on championship level turnover. 

QED.

 

[archied]

All this back and forth stuff re debts / state of club ,,,, here’s my simple take that is the bottom line for me ,,, do derby county have legal debts that mel Morris could if he chose legally demand repayment on and have the club wound up by courts tomorrow? Are the club in debts anywhere else of this nature ? 

Seems to me this is what s being implied by ramnut and disputed by ramblur ,,, the rest is just the same as most clubs ie mel Morris could stop funding us and we would have to reduce spending drastically not just ffp related cuts ,,, you could say the same of pretty much every club in the country to varying degrees 

sorry to take it to such simple terms but for me that’s the crux of the matter ,

if the academy’s costs are not part of ffp figures where is the problem in mel Morris seeing it as his pet project that develops young players and could help the club long term ,, he perhaps gets real pleasure from this part of his spend on the club ,,, I’m failing to see the problem but perhaps that’s just me ?

[RamNut]

1 hour ago, archied said:

All this back and forth stuff re debts / state of club ,,,, here’s my simple take that is the bottom line for me ,,, do derby county have legal debts that mel Morris could if he chose legally demand repayment on and have the club wound up by courts tomorrow? Are the club in debts anywhere else of this nature ? 

Seems to me this is what s being implied by ramnut and disputed by ramblur ,,,

No. I have never said any such thing. 

I simply observed the statement in the group accounts that i quoted word for word and posted the actual page from the accounts. (See below). The reason was to show the level of subsidisation, and the fact that it is recorded as a debt. As is typical on this forum, i then get misquoted and the original point is completely lost in a fog of nonsense.

I was also trying to highlight the true level of the annual losses prior to player sales because i think the true position is worse than is portrayed by some. Which it clearly is. 

 

 

[RamNut]

2 hours ago, archied said:

the rest is just the same as most clubs ie mel Morris could stop funding us and we would have to reduce spending drastically not just ffp related cuts ,,, you could say the same of pretty much every club in the country to varying degrees 

sorry to take it to such simple terms but for me that’s the crux of the matter.

Totally agree with regards to championship clubs. As i keep saying wages exceed turnover and all the clubs are making substantial losses. Isn't that bizarre? I could say that all championship clubs are technically bankrupt but then some accountant would come on here squealing about the definition of bankruptcy. I think most folk surely get the point.

if every year we have to sell our best players to fund over spending how will we ever build anything? Thats seems to be the situation at the moment. It will be interesting to see how things develop when so many senior pros are out of contract in 2019.

Its not sustainable to have mel funding the club to this degree and there are signs that things are going to change to some degree.

[RamNut]

2 hours ago, archied said:

if the academy’s costs are not part of ffp figures where is the problem in mel Morris seeing it as his pet project that develops young players and could help the club long term ,, he perhaps gets real pleasure from this part of his spend on the club ,,, I’m failing to see the problem but perhaps that’s just me ?

Totally agree again. If mel is prepared to fund the losses fine.....but that ultimately seems to end up recorded as a debt which Is increasing.

 

 

[Ramet]

9 hours ago, ramblur said:

Give me strength, how many more times do I have to say this.The £21m loss you quoted is the consolidated loss for a 10 month period only, and is distorted by the fact that (amongst other things), that 10 month period excludes very substantial transfer profits. I added up all the income and expenditure in the 10 month consolidated accounts, and then added up all the income and expenditure in the full year Club's accounts. When I subtracted the consolidated figures from the Club's figures ( which I'd guessed would account for the missing 2 months) and then adjusted the £21m consolidated loss to account for these differences, guess what figure I came up with? Exactly the Club loss, which I expected. Now folks may not understand the next bit, and I had to think about it myself. The consolidated accounts included the 10 month Sevco loss, together with (a small) 10 month Global Derby loss, but the expenditure figures in the consolidated accounts obviously reflected the expenditure forming these losses. Therefore, I could have left both losses and expenditure in,which I did, because it was easier, or deduct these losses from the £21m, and also deduct same from the expenditure (same difference). Thus I can confidently say (and I wouldn't say it otherwise) that if the consolidated accounts had featured the full year, then the loss posted would have been the club loss of £7.9m + the full year version of the 10 month Sevco 5112 loss of £3.6m + a pretty insignificant Global Derby loss - a figure far less than the £21m you spout. Have a look at the extracts you posted, and you might just see a reference to a 10 month period in the consolidated accounts.

Again, as I've already said, the 15/16 consolidated loss of £36m included the full impairment of £21m  of goodwill, which generated a paper loss in a company within the group which wasn't the Club, so the real, tangible loss was only c£15m.

The amounts you quoted in your last sentence are again distorted by a 10 month period, but if it makes you happy,£50m+ was introduced into the Club via equity in 15/16, with £40m+ in 16/17, though a good proportion of the latter appears to have been advance funding for this year ( also equity). I don't know where you got the measly £8m funding from, as it's been way more than that ( a situation that is about to change). As well as funding cash deficits on operations, Mel has also spent quite heavily on infrastructure and also appears to have spent quite significantly on enterprises to drive income streams, a good thing which the Club will benefit from significantly - things like 'The Yard' and Rams TV.

Because of the nature of double entry book keeping, when Mel introduces cash into Sevco ( to buy equity in the Club) -a debit- there has to be a corresponding credit (in this case a loan), and it's merely a record of what he's done. If you want to worry yourself to death over what's happening in holding companies, then work away, and see how many disciples you get ( and I wouldn't include @HantsRam without checking his posts.) If you really want some fun and games, have a look at the Global Derby and Sevco5113 accounts for 15/16, but don't expect me to respond to anything - I'll just sit back and have a chuckle. I can give you a cast iron guarantee that there are some juicy false assumptions to be made there.

For the benefit of others, the only thing I'm concerned about is the activity within the Club's ( and associated 3 'satellite' companies') accounts. I couldn't give a fig what's happening in holding companies' accounts. Members can either trust me or not on these issues; I'm past caring anymore. Countless hours of what's left of my life have now been spent on these wretched issues, and there won't be much more spent, particularly if I have to keep repeating stuff time and time again.

Ramblur you are a ledge. Dont let these guys wind you up.people with less knoledge will always find it hard to follow.Mel as iv said before is going nowhere soon they should be thanking him for the money he has pumped into the club in a bid to move it forward.yes id be daft to say he hasnt made mistakes but with the cash hes put in he is the one that is taking account and footing the bill for his own mistakes. Ramnut is just concerned that mel will pack up and want him money back and i do understand that, but the investment in the academy is the only place that will come from. Mel is a very good businss man and will know that profit comes from good investment  and time.

[RamNut]

He winds himself up.

[Ramet]

2 hours ago, RamNut said:

He winds himself up.

I understand your frustration but ramblur is very very knowledgeable on this sort of thing and to date hes never been wrong. I agree when you look at some figures they dont look great but thère are actions being put in place to rectify and bring the house back in order. Some mistakes have been made but all great people will say thats the only way to become successful. As a club we are in a good position for the future even if it does not appear that way at the minute.

[CornwallRam]

12 minutes ago, Ramet said:

I understand your frustration but ramblur is very very knowledgeable on this sort of thing and to date hes never been wrong. I agree when you look at some figures they dont look great but thère are actions being put in place to rectify and bring the house back in order. Some mistakes have been made but all great people will say thats the only way to become successful. As a club we are in a good position for the future even if it does not appear that way at the minute.

Hi Mel?

[Ramet]

13 minutes ago, CornwallRam said:

Hi Mel?

I can assure you im not mel lol

[RadioactiveWaste]

5 minutes ago, Ramet said:

I can assure you im not mel lol

But that's exactly what Mel would say....

[eddie]

A little knowledge is a dangerous thing.

[RamNut]

6 minutes ago, eddie said:

A little knowledge is a dangerous thing.

As you prove everyday.

[Derbylad92]

6 hours ago, archied said:

if the academy’s costs are not part of ffp figures where is the problem in mel Morris seeing it as his pet project that develops young players and could help the club long term ,, he perhaps gets real pleasure from this part of his spend on the club ,,, I’m failing to see the problem but perhaps that’s just me ?

thats all good but when we do get a good youngster in we sell them for half of the players value but that must just be 'the derby way' 

[Ramet]

1 minute ago, Derbylad92 said:

thats all good but when we do get a good youngster in we sell them for half of the players value but that must just be 'the derby way' 

Name 1? Hendrick went for 10mil good price id say.and hughes 9mil and that was all we could get.alot of talk with hughes very very few offers

[Ramet]

And before you say yes hughes was less than expected but you can only get what someone is willing to pay.plus is that not all part of the plan it making it a more sustainable business.make profit on player ,sell and strengthen with the profit.all the managers that have come in have all had the opportunity to use the youth and none have.well lets see what lampard does .........

[AshfieldRam]

I don't think i've understood anything that i've just read in this thread ?

 

Can't we just all have a whip round? 

[Ramet]

Not a bad idea ashfield