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17/18 Financial Results


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5 minutes ago, Hinzy9 said:

£80m according to BBC

Ah, thanks.

So either it's being paid in installments and we're going to be getting a fat chunk of money every year for a few seasons. Which would be pretty great in terms of FFP.

OR we were on the brink of losing £65m that year. Which would only be possible, in my mind, if we'd been constantly restructuring historical payments over past seasons to stay above FFP and they all came to roost this year.

 

Not got a clue which.

 

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Really puts the press about us in the last few weeks into context.

I understand some people think the fan forums are just fluffy PR parades but Mel’s clearly very much invested in this club. In a financial sense and a personal sense.

Not the move of someone who’s about to scamper.

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22 minutes ago, SuperDerbySuperRams said:

I was under the impression that FFP was only related towards footballing related activity. How would the stadium sale help improve that situation? 

It's a 'football' stadium innit?

And I'd assume Mel will be open to selling it back in the future so it sounds like a brilliant piece of business.

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20 minutes ago, LazloW said:

Hmm.  So the football club no longer own the stadium.  I’m sure clever people will explain what  this all means in practical terms but that the kind of thing that would bother me a bit.  While it’s Mel it will probably not be considered a problem, but isn’t this the kind of mess Coventry have gotten into? 

Still, I won’t throw my dummy out until there is a bit more info.  I’m sure there must be some positives to it.

I'm also a little concerned by this.

It's not a problem whilst Mel is a key part of the club but becomes problematic if he walks away from the club & even worse, he either passes away and/or there is a poor relationship with a future Derby County owner. Its almost never a positive move separating club from their ground & it makes the possibility of the club making a profit much harder in future years, now that rent overheads will be hitting the P&L.

If its purely a FFP ruse, I would hope there is some contractual provision for the club being able to buy the ground back from Mel at a future point.

Just FYI, Coventry never owned their own ground (always Coventry City Council & a local charity) but SISU's sole interest in Coventry City was acquiring ownership of the Ricoh.

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2 minutes ago, The Key Club King said:

So the £40m profit on the stadium sale has allowed us to get around FFP and post a £15m profit? Without it I assume this would be a loss of £25m for the year? Without such a clever financial trick we'd be having points docked I suppose.  

I've no doubt about Mel's good intentions for the club and I'm not concerned about the sale of the stadium but if I was a fan of a competitor I would say this is a highly dubious way to circumvent FFP. 

Having done it now, I hope we can reduce costs to a sustainable level and by sustainable I mean whatever Mel and FFP allow.

Didn’t know they had said how much we sold it for, however you are right in that the headline loss figure has been buried amongst the stadium sold headlines.

This club is amassing massive debt on a daily basis, yet here we are praising MM for something most of us don’t really understand what it means.

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6 minutes ago, The Key Club King said:

So the £40m profit on the stadium sale has allowed us to get around FFP and post a £15m profit? Without it I assume this would be a loss of £25m for the year? Without such a clever financial trick we'd be having points docked I suppose.  

I've no doubt about Mel's good intentions for the club and I'm not concerned about the sale of the stadium but if I was a fan of a competitor I would say this is a highly dubious way to circumvent FFP. 

Having done it now, I hope we can reduce costs to a sustainable level and by sustainable I mean whatever Mel and FFP allow.

Which is absolutely bonkers. Ignoring when and over how long the payments are made, we signed the likes of Lawrence, Huddlestone, Wisdom, Jerome and Davies for roughly £11 million. We then sold Ince, Hughes, Christie and Russell for a good £18/19 million and still would be at a £25 million loss for just the year without the stadium sale. What on earth is going on for it to be that bad? I believe the season before (16/17) we posted losses of £7 million and the season before that (15/16) £14.7 million. How can the 17/18 season in which we made profit in terms of player sales, be substantially worse than the 2 seasons prior combined which included Pearson's, McClaren's and Clement's sackings, signings like Vydra and Anya, plus Clement's £30 million spending spree? It's surely not all down to just wages? Because the wage bill was huge in those other seasons too.

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4 minutes ago, Cam the Ram said:

Which is absolutely bonkers. Ignoring when and over how long the payments are made, we signed the likes of Lawrence, Huddlestone, Wisdom, Jerome and Davies for roughly £11 million. We then sold Ince, Hughes, Christie and Russell for a good £18/19 million and still would be at a £25 million loss for just the year without the stadium sale. What on earth is going on for it to be that bad? I believe the season before (16/17) we posted losses of £7 million and the season before that (15/16) £14.7 million. How can the 17/18 season in which we made profit in terms of player sales, be substantially worse than the 2 seasons prior combined which included Pearson's, McClaren's and Clement's sackings, signings like Vydra and Anya, plus Clement's £30 million spending spree? It's surely not all down to just wages? Because the wage bill was huge in those other seasons too.

As I said in an earlier post, I think this comes down to one of two things.

Either the stadium purchase is being paid for in yearly installments, which would make things look worse if that season the stadium sale only brought in 20m rather than the full 80m (which is what it is according to the BBC, not 40m, which would make a one-year loss 65m, not 25m - unless I'm misunderstanding something there).

Or, we kept restructuring payments to keep afloat in earlier years and pushed them back until 17/18.

The first option seems more likely to me but either are possible.

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Just now, SaintRam said:

As I said in an earlier post, I think this comes down to one of two things.

Either the stadium purchase is being paid for in yearly installments, which would make things look worse if that season the stadium sale only brought in 20m rather than the full 80m (which is what it is, not 40m, which would make a one-year loss 65m, not 25m).

Or, we kept restructuring payments to keep afloat in earlier years and pushed them back until 17/18.

The first option seems more likely to me but either are possible.

Yeah, BBC's just posted about the fee being £80 million

Let's hope you're right because a £65 million loss within a single year seems like something only Villa could achieve ?

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4 minutes ago, Cam the Ram said:

Which is absolutely bonkers. Ignoring when and over how long the payments are made, we signed the likes of Lawrence, Huddlestone, Wisdom, Jerome and Davies for roughly £11 million. We then sold Ince, Hughes, Christie and Russell for a good £18/19 million and still would be at a £25 million loss for just the year without the stadium sale. What on earth is going on for it to be that bad? I believe the season before (16/17) we posted losses of £7 million and the season before that (15/16) £14.7 million. How can the 17/18 season in which we made profit in terms of player sales, be substantially worse than the 2 seasons prior combined which included Pearson's, McClaren's and Clement's sackings, signings like Vydra and Anya, plus Clement's £30 million spending spree? It's surely not all down to just wages? Because the wage bill was huge in those other seasons too.

possibly large write offs for players leaving for free at their end of their contracts?  we've probably taken a view of being more prudent with the maintenance of carrying values, writing down Chrissy for example

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4 minutes ago, Cam the Ram said:

Yeah, BBC's just posted about the fee being £80 million

Let's hope you're right because a £65 million loss within a single year seems like something only Villa could achieve ?

Some light should be shed on the full situation, if not by Mell in some interview or forum later on, when we get the numbers for this season and next. If there's a moderate loss after shedding a lot of wages and selling Vydra then perhaps we were genuinely looking at a £65m loss last year.

If things are looking rosy-ish, my bet would be on instalments for the stadium.

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I don't understand the negativity over this transaction. It has enabled us to avoid a breach of ffp and given us time to get our finances in order. 

The questions 'what if MM sells the ground to a SISU?' are irrelevant. He could have sold the whole club to a SISU anyway. The fact that they're now owned by 2 separate companies owned by MM makes no practical difference. 

I would think that MM would put protective measures in hand, should the worst happen. 

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11 minutes ago, Ghost of Clough said:

Given 16/17 saw a £7.9m loss thanks to profit on sales of £16.2m, I would have expected roughly £25m loss in 17/18.

The stadium was valued at £41m apparently which isn't too far off

Actually, @Cam the Ram this does make some sense. I can put my finger on how £25m could be lost. I'm struggling to do the same for £65m.

So perhaps this purchase is being made in two installments of £40m? 

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23 minutes ago, SaintRam said:

Ah, thanks.

So either it's being paid in installments and we're going to be getting a fat chunk of money every year for a few seasons. Which would be pretty great in terms of FFP.

OR we were on the brink of losing £65m that year. Which would only be possible, in my mind, if we'd been constantly restructuring historical payments over past seasons to stay above FFP and they all came to roost this year.

 

Not got a clue which.

 

Former makes sense. Instalments over 4-5 years potentially. 

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Mel brought this up at the forum last week.

This is a move to help DCFC's numbers AND to safeguard in the event of a sale of the club. Would prevent any new ownership demanding a mortgage or sale of the stadium. That said, maybe it makes DCFC a harder sell if PPS doesn't come with it?

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