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Charlton lose £9.9m

http://news.bbc.co.uk/sport2/hi/football/teams/c/charlton_athletic/7159063.stm


Charlton Athletic plc chairman Richard Murray has revealed that the club made a net loss of £9.9m in the financial year ending 30 June 2007.

The net loss for the previous season, 2005/06, was £8.1m, although turnover has decreased to £35.9m from £41.9m.

There was an overall operating loss of £11.8m before player sales, which brought in £11.3m, and amortisation.

After their relegation from the Premier League, the sale of striker Darren Bent to Tottenham brought in £15.5m.

However, Bent's previous club Ipswich were entitled to a sell-on fee as part of the deal, which earned the Addicks a net fee of £12.9m.

As well as relegation, the 2006/07 season also saw Charlton go through three managers - Iain Dowie, Les Reed and Alan Pardew.

Comments

  • Charlton plc chairman Richard Murray has revealed the Addicks made a net loss of £9.9m during the last financial year. Making his annual report for 2007, he revealed relegation from the Premier League in May had understandably had a big financial impact on the club last season, with a significant reduction in turnover to blame for overall operating losses of £11.8m, despite profits of £11.3m from player sales.

    "On behalf of the board of Charlton Athletic plc, I present the company's annual report for the year ending June 30th, 2007.

    It was very disappointing for the football club to lose its Premier League status in May 2007 after seven consecutive seasons in the top flight, especially after the significant investment made in the first-team squad during the previous summer. The team eventually finished in 19th place in the Premier League having spent most of the season fighting to avoid relegation.

    In the domestic cup competitions, defeat at home to Wycombe Wanderers at the quarter-final stage of the Carling Cup was then followed by a third-round defeat away to Nottingham Forest in the FA Cup.

    The season will also be remembered as much for the management changes and upheavals as the football played. Iain Dowie was appointed head coach in June 2006 to replace Alan Curbishley, with Les Reed as his assistant coach. Your board replaced Iain Dowie with Les Reed in November. Results on the pitch were such that your board then decided that a further change was necessary, and Alan Pardew was appointed first-team manager on Christmas Eve. In my opinion, Charlton Athletic now have the right man to bring future success to The Valley.

    A significant reduction in turnover resulted in operating losses of £11.8m for the financial year, with higher amortisation charges relating to player costs contributing to an overall loss for the period of £9.9m, despite profits recorded from player sales of £11.3m. The majority of the revenues earned from the disposal of players relate to the sale of Darren Bent to Tottenham Hotspur for £15.5m, from which additional fees are due to Ipswich Town.


    Financial report

    This financial year recorded a fall in turnover to £35.9m due principally to the reduction in the Premier League merit award received, lower matchday revenues and a reduction in cup revenues when compared with the previous year.

    Merit award payments are based on the football club's finishing position, and 19th in the Premier League resulted in a 75 per cent reduction in the value of this award, demonstrating that the financial effects of a poor season and relegation are felt in that season as well as those that follow. The team also received lower facility fees for the season, which represent earnings from the 11 matches shown live on BSkyB.

    Overall the receipts from the Premier League from broadcast contracts and other central commercial activities and sponsorships fell by nearly 14 per cent.

    Season-ticket sales were lower for 2006/07, with 17,188 holders at the end of the season, a fall of eight per cent over the previous season. Match by match sales improved, mitigating to some degree lower seasonal revenues, but combined revenues fell five per cent when compared with season 2005/06. I was pleased that overall attendances at The Valley remained high at an average for the season of 26,197, utilising nearly 96 per cent of the capacity of the stadium.

    Other matchday commercial operations generated revenues at the same level as the previous season. There was little success in the domestic cup competitions and associated revenues fell by more than £1.5m from the previous season when the team reached the quarter finals of the FA Cup.

    Ongoing investment in the Valley Express coach service, that provides subsidised travel for matches at The Valley, was continued for this season, with a record 4,124 supporters using this service for our match against Wigan Athletic in March. I strongly believe that this travel service is helping us maintain and develop our support base throughout Kent and the surrounding regions.

    The commercial sponsorship income was boosted by a full year's earnings from the Llanera club sponsorship that was signed in December 2005. We have developed this relationship in the United Kingdom through Blue Sun World, the Llanera agent, and in conjunction with the Charlton Athletic Community Trust. Other sponsorship arrangements thrived, including those with Axis Europe, T-Mobile and of course Joma, although I was disappointed that both the EMC and Onside Television commercial arrangements were terminated and provided no revenues in this period.

    Of course, I am pleased that our other main sponsors and partners continue to support Charlton Athletic, in particular Courage, Gallions Housing Association, Greenwich Council, Greenwich Community College, Greenwich Leisure Ltd, Kent Messenger, Ladbrokes, London Leisure College, OMM Sport and Paddy Power. A number of these sponsorships are managed in conjunction with the Charlton Athletic Community Trust, enabling the continued development of sporting and educational courses throughout the region.
  • Amortisation of players accounts for £3.7m of the loss (from 2006).

    Proceeds from issue of ordinary shares accounted for £5.5m in 2006, but no new money came in this year.

    "Merit award payments are based on the football club's finishing position, and 19th in the Premier League resulted in a 75 per cent reduction in the value of this award, demonstrating that the financial effects of a poor season and relegation are felt in that season as well as those that follow. The team also received lower facility fees for the season, which represent earnings from the 11 matches shown live on BSkyB.

    Overall the receipts from the Premier League from broadcast contracts and other central commercial activities and sponsorships fell by nearly 14 per cent."



    That accounts for most of the difference between the two years, had we not sold Darren Bent the figures would have been much worse.

    What I can't tell is whether this includes all the incoming money from the sale of D Bent, plus the sales of Rommedahl etc, who I think transferred after the June year end. Now we can see why there isn't the money to acquire Danny Mills...or perhaps any other players this January, unless one or two are shipped out first.

    Alternatively some inward investment is necessary...
  • In the programme it mentions the sales of Diawara, Young and Rommedahl ..."after the balance sheet date"..... so those receipts are not included.

    The programme also states that a number of directors have made loan facilities available totalling £9 million.
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