Finances

[Rab a dab doo]

That's doesn't include the money Mel's going to sue EFL for yet does it ?

[Gritty]

10 minutes ago, RoyMac5 said:

Crap, that is way too much money - how did it get like that (yeah, I know). ?

High wages and write offs. Which we had again last year

Key point is that for next couple of seasons we are likely to have very little to spend on wages until the 31.5mn loss made in 18/19 drops out of the p&s calculation (unless we manage to sell a few players for very large sums)

 

[Ghost of Clough]

14 minutes ago, RoyMac5 said:

Crap, that is way too much money - how did it get like that (yeah, I know). ?

17/18 was -£32.8m without the stadium. That period also had a profit on players and managers of about £5.5m taking us to -£38.3m. Improvements elsewhere (mainly £2m amortisation, several million in wages) reduced losses by just under £7m.

It’s worth noting that Lampard officially joined Chelsea on July 4th which may have fallen inside the 18/19 period (see Ince as an example), which would have improved the losses. We also reached a Playoff Final, which also shouldn’t have been forecast.

[Van der MoodHoover]

16 minutes ago, RoyMac5 said:

Crap, that is way too much money - how did it get like that (yeah, I know). ?

So there must be the "run rate" loss of wages + expenses exceeding income. We seem to be trying to run this at about 13m.

Then for that season we had all those loan fees which would be extra cash losses.

Plus we presumably took the hit on the write-offs of residual values for johnson, Butterfield, Thorne, blackman + any other disposals?

 

The sad thing about that season is the permanent transfers of jozefzoon, malone have racked up a further 6m write-off losses yet to come through.

[Gritty]

The fact that it's over 4 years and not 3 as I mistakenly thought makes it a bit better although covid impact on revenues could counteract the benefit a bit.

I'll have a look. But doesn't change that we are in belt tightening mode 

 

[Ghost of Clough]

5 minutes ago, Van der MoodHoover said:

So there must be the "run rate" loss of wages + expenses exceeding income. We seem to be trying to run this at about 13m.

Then for that season we had all those loan fees which would be extra cash losses.

Plus we presumably took the hit on the write-offs of residual values for johnson, Butterfield, Thorne, blackman + any other disposals?

 

The sad thing about that season is the permanent transfers of jozefzoon, malone have racked up a further 6m write-off losses yet to come through.

18/19, despite being forecast at losses of £31.5m only included about £4.6m of amortisation. 19/20 saw a big jump to over £25m which is where I see the big write offs of Johnson, Butterfield and Blackman - we may have even written off Anya, given we knew he wouldn’t be leaving. 

[RamNut]

24 minutes ago, RoyMac5 said:

Crap, that is way too much money - how did it get like that (yeah, I know). ?

Amortisation? Hopefully that’s one off pain

So +15, -31.5, but yeah if true that thumping loss is going to be a problem for 2 years thereafter.

[Gritty]

My real hope is that fans more generally appreciate that we have our hands tied for a bit which means if we are going to rely on youth and some cheaper players, we adjust our expectations a little

Young players form will fluctuate.  We might have some players come in who bust a gut but aren't quite of the quality level we ideally want.  But, if they give their all, we just need to support them all regardless and not get frustrated if we're not challenging for promotion. 

I hope we do challenge for top 6 of course.  But I don't expect it and think we need to just ride this period out

We do seem to be getting our house in order.  But the legacy of the past will be with us for a while longer

[Gritty]

4 minutes ago, Ghost of Clough said:

18/19, despite being forecast at losses of £31.5m only included about £4.6m of amortisation. 19/20 saw a big jump to over £25m which is where I see the big write offs of Johnson, Butterfield and Blackman - we may have even written off Anya, given we knew he wouldn’t be leaving. 

19/20 accounts aren't out so where did you see the 25mn write-off? That's massive.  Are you sure that's not in 18/19?

[RamsFan10]

It may be small but the star player clause we got last season when Rooney signed was 1.5m according to the Athletic. Not sure that will even cover his wages though. 

[G STAR RAM]

5 minutes ago, Gritty said:

19/20 accounts aren't out so where did you see the 25mn write-off? That's massive.  Are you sure that's not in 18/19?

It was disclosed in the Independent Panels report on the EFL charges.

[Van der MoodHoover]

6 minutes ago, Ghost of Clough said:

18/19, despite being forecast at losses of £31.5m only included about £4.6m of amortisation. 19/20 saw a big jump to over £25m which is where I see the big write offs of Johnson, Butterfield and Blackman - we may have even written off Anya, given we knew he wouldn’t be leaving. 

Blimey....so if the 31.5m - 4.6 gives us 26.9m of cash losses, was that significantly higher than usual because of loan fees, or other "special items". 

Weve had so much turbulence in terms of management turnover, litigation (Rush), odd cash deals (Claire ince), I have completely lost sight of what our "bau" net revenue position looks like. As you seem to be quite au-fait with the accounts, what's your take?

[Ghost of Clough]

8 minutes ago, Gritty said:

19/20 accounts aren't out so where did you see the 25mn write-off? That's massive.  Are you sure that's not in 18/19?

Pg30 of the Decision document. 

[Gritty]

5 minutes ago, Ghost of Clough said:

Pg30 of the Decision document. 

Ok. So that suggests that in addition to a massive 31.5mn loss in 18/19 we're heading for a mammoth loss in 19/20 too.

Gulp.....

I can't see how we can comply

[RamNut]

squad-wise and wage-wise things are the best that they’ve been for years.

The Rooney wage and the Bielik fee are strange anomalies, but the squad is leaner, hungrier, and younger.
The deadwood is becoming more manageable, so I really hope we don’t start selling the young players. 
I’d rather sell Lawrence if we can. 

Malone, jozefzoon and Davies are almost certainly another big chunk of total loss we will have to offset.
Waghorn, Marriott And Bielik present further risk.
 

But the flip side is
sibley, knight, bird, Wilson, Lowe, bogle, ebosele, Whittaker, brown, thompson, Buchanan, ibrahim.......

Plus the freebies / cheapo signings.....Te weirik, shinnie, Marshall, Holmes, Evans, 
 

 

[Ghost of Clough]

11 minutes ago, Van der MoodHoover said:

Blimey....so if the 31.5m - 4.6 gives us 26.9m of cash losses, was that significantly higher than usual because of loan fees, or other "special items". 

Weve had so much turbulence in terms of management turnover, litigation (Rush), odd cash deals (Claire ince), I have completely lost sight of what our "bau" net revenue position looks like. As you seem to be quite au-fait with the accounts, what's your take?

I don’t think the loan fees were that much. When you consider the profits on stadium/players/managers and the amortisation changes, all that’s left is a £6m difference in wages, loan fees an all the other little bits. 
Looking at the players who left, the majority of that £6m will be wages.

Revenue in 17/18 was just under £30m. Sponsorship will have definitely gone up thanks to Rooney (I would have thought not just through 32Red), increased income from RamsTV, more games on Sky, plus fluctuations due to the Playoffs... we’d probably be looking at close to £33m in normal circumstances.

If you exclude parachute payments, only Leeds in recent years have had considerably more revenue. Villa were at about £36.5m and Norwich about £33.5m. West Brom would have been next best last season at just over £28m.

 

4 minutes ago, Gritty said:

Ok. So that suggests that in addition to a massive 31.5mn loss in 18/19 we're heading for a mammoth loss in 19/20 too.

Gulp.....

I can't see how we can comply

Almost certainly. The £20m increase in amortisation charge will only be slightly offset by the reduction in wages. Lampard compensation could be in 18/19 or 19/20, and the only other notable outgoings were Thomas and Delap. Total losses look set to be higher in 19/20 than 18/19.

[Ghost of Clough]

12 minutes ago, RamNut said:

squad-wise and wage-wise things are the best that they’ve been for years.

The Rooney wage and the Bielik fee are strange anomalies, but the squad is leaner, hungrier, and younger.
The deadwood is becoming more manageable, so I really hope we don’t start selling the young players. 
I’d rather sell Lawrence if we can. 

Malone, jozefzoon and Davies are almost certainly another big chunk of total loss we will have to offset.
Waghorn, Marriott And Bielik present further risk.
 

But the flip side is
sibley, knight, bird, Wilson, Lowe, bogle, ebosele, Whittaker, brown, thompson, Buchanan, ibrahim.......

Plus the freebies / cheapo signings.....Te weirik, shinnie, Marshall, Holmes, Evans, 
 

 

Davies’ age would suggest his book value is at (or very close to) £0.

[RamNut]

3 minutes ago, Ghost of Clough said:

Davies’ age would suggest his book value is at (or very close to) £0.

Still £2.5m to write off over the term.

 

[BramcoteRam84]

I understood that due to Covid while the accounting period will now be 4 years, it will still be profits/losses cumulative over 3 years, with the 3rd year an average of 19/20 and 20/21.

Im unclear now whether it’s £7.2m profit from 17/18 or £14.7m, if the former then we can lose max £15m average across 19/20 and 20/21 and if the latter then it’s £23m. Either way with the snap shot we’ve seen of how 19/20 is going with the £25m hit in player amortisations, we are definitely in belt tightening mode. Covid impact will further impact this. 
 

The positive is we have time to react. Our wages will be in a much better position but not enough to bridge the gap with the Covid impact to consider. Promotion makes the problem go away but if that doesn’t happen we will still comply with P&S if we have to but it will involve a fire sale of some of our young stars. 
 

Let’s hope the EFL see sense and scrap these ridiculous rules and get a salary cap in place. It’s the only way to make football sustainable and a level playing field. There should be legally enforceable rules about owners standing behind their investments.

Mel made mistakes early on but ultimately realised it wasn’t sustainable and moved to tighten the purse strings. That’s responsible ownership but P&S punishes him for bad buys 5 years later even though he could afford it and has now course corrected to a more sustainable model, yet has to sell the ground to himself to comply with P&S?! ??? It’s just bonkers, and it’s no longer about making clubs sustainable its a weapon for clubs to do each other over.

[Jourdan]

Reading this thread and the talk of the club losing close to £3 million per calendar month, it makes me wonder if Sibley’s lack of appearances in pre-season has some connection to our financial situation.

Does anyone else suspect that he might be being wrapped in cotton wool in case a PL club makes a move?

If he has the kind of impact Eze had at QPR last season for example, he could be worth £20 million or more this time next year.

But maybe our need to balance the books is more pressing and he’ll be sold in this window?

There is only him and Bogle in the squad currently who could generate a significant transfer fee, to be brutally honest.

The club were probably hoping Bielik would have added to his value by this point, but with his injury history and lack of game time in the top two tiers, it was a sizeable risk.