So £7.5 losses cover 10% by R. Murray (£750k) and 45% each by Slater/Cash and Jimenez (£3m each). .
This is probably what most of us had been assuming, myself included, but it's not right. The ongoing losses are not being funded by a series of rights issues to which all shareholders subscribe, but by loans from CAFCH. What this means is that Richard Murray is not covering 10% of the losses. Indeed, based on these accounts he is not injecting any new money into the Club and will begin to take money out as his loans are repaid. He does, however, retain 10% of the equity which will benefit him if and when the Club is sold.
Your key point still holds of course. The current situation is sustainable so long as whoever is writing the cheques - and we don't really know who that is - is prepared to keep doing so.
A couple of additional points. First, somebody said that it might make sense to spend more money, increasing the losses, to expedite promotion to the EPL, on the basis that this is the only way out. Whilst certainly one option, it's a dangerously seductive strategy. I wonder if this might be where Jimenez and Cash fell out. Jimenez wanting to go for it, Cash preferring to stick to the original plan and budget?
Second, great credit to the owners for continuing to fund (however they're doing it) and, so far anyway, for holding on to the players who might be most saleable (Solly, Stephens). This shows commitment. However, it's extraordinary that Chris Powell hasn't been put under intense pressure to prune his squad. Paying wages to players who aren't going to get a regular game, especially now we're more or less safe, really is burning money for nothing. If the Club is holding out for transfer fees, for BWP for example, it may regret failing to simply focus on cutting the wage bill.
Mundell
Richard Murray did say, or this is how I understood it anyway, that he is liable to contribute 10% of any money which is put into the club. Perhaps I misunderstood him. It was during this summer when he said that.
I see that NYA has posted on his blog that there were debts to trade creditors of £1.3m at June 30th. And there, my friends, is the answer to many of your questions about what went on last summer (sounds like the title of a film!).
Although worth noting it was £1.2m at 30 Jun 2010 and £2.3m (!) at 30 Jun 2011....
Ah. That is also a good point. 2.3m....
I was trying to workout what the 2.3m could possibly be. Well, by 30 June 2011, we had already acquired most of the players who formed last season' s successful new influx, so I guess a hunk of it it must be transfer fees and new wages for which we'd become liable. Whereas this close- season, not sure. When did we sign Wilson?
I see that NYA has posted on his blog that there were debts to trade creditors of £1.3m at June 30th. And there, my friends, is the answer to many of your questions about what went on last summer (sounds like the title of a film!).
Although worth noting it was £1.2m at 30 Jun 2010 and £2.3m (!) at 30 Jun 2011....
Ah. That is also a good point. 2.3m....
I think I have the answer to that. In previous years trade creditors will include other clubs. For example Danny Green was signed on June 29th 2011 and Rhoys Wiggins on June 30th 2011, but the fees will have been paid in 2011/12. There will be other football payments in there and likely in 2010 as well. As we know clubs don't pay full fees up front. But on June 30th 2012 we hadn't signed anyone, so there was no new football debt to count in.
I'm reading all these comments and numbers on here but I haven't got a f******g clue what it means.
Situation we are in is a bit like owning a corner shop on knightsbridge with loyal customers.
Despite the loyal customer base you dont sell enough to pay for all the stock and rent and each year you are running up further debt but your mum and dad (the owners) keep subbing you to keep the shop open in the hope that Tescos will see its potential and invest in it one day(ie new investors) and pay off your debts and help you turn it into the next Harrods (the premiership) where you will start making a profit and be sorted.
Second, great credit to the owners for continuing to fund (however they're doing it) and, so far anyway, for holding on to the players who might be most saleable (Solly, Stephens). This shows commitment. However, it's extraordinary that Chris Powell hasn't been put under intense pressure to prune his squad. Paying wages to players who aren't going to get a regular game, especially now we're more or less safe, really is burning money for nothing. If the Club is holding out for transfer fees, for BWP for example, it may regret failing to simply focus on cutting the wage bill.
Isn't the reality though that they are boxed in? If they stop funding the club they stand to lose what they've already put in. Ditto if they sell the better players and the team gets relegated, increasing the losses, or at least can't get promoted with the players it has. They ultimately rely on the alchemy of getting promoted without investing more than they can ever get back, which will take skill, judgement and a very large slice of luck.
Second, great credit to the owners for continuing to fund (however they're doing it) and, so far anyway, for holding on to the players who might be most saleable (Solly, Stephens). This shows commitment. However, it's extraordinary that Chris Powell hasn't been put under intense pressure to prune his squad. Paying wages to players who aren't going to get a regular game, especially now we're more or less safe, really is burning money for nothing. If the Club is holding out for transfer fees, for BWP for example, it may regret failing to simply focus on cutting the wage bill.
Isn't the reality though that they are boxed in? If they stop funding the club they stand to lose what they've already put in. Ditto if they sell the better players and the team gets relegated, increasing the losses, or at least can't get promoted with the players it has. They ultimately rely on the alchemy of getting promoted without investing more than they can ever get back, which will take skill, judgement and a very large slice of luck.
That's almost certainly their plan but its going to take a lot of very, very shrewd wheeling and dealing in the transfer market to get this squad up to play off standard.
At the moment we have some players definitely up to top six standard; Hamer, Solly, Morrison and Stephens with others like Wiggins, Pritchard, Cort, Jackson and Kermorgant not all that far away but others who are really struggling like Wagstaff, Kerkar, BWP, Hollands etc. who are really struggling to be good enough for the CCC.
Bridging that gap and getting our number of players good enough for the top six up to 8/9 players is going to be very, very tough.
Just back from the VIP meeting with Michael Slater and Chris Powell. One point made to MS was that supporters were anxious about the extent of the annual losses. He said very clearly that there was no need to be anxious. That he and TJ were not in it for the short term and that he "transferred £1m a month into the club" and would continue doing so
I'm reading all these comments and numbers on here but I haven't got a f******g clue what it means.
Situation we are in is a bit like owning a corner shop on knightsbridge with loyal customers.
Despite the loyal customer base you dont sell enough to pay for all the stock and rent and each year you are running up further debt but your mum and dad (the owners) keep subbing you to keep the shop open in the hope that Tescos will see its potential and invest in it one day(ie new investors) and pay off your debts and help you turn it into the next Harrods (the premiership) where you will start making a profit and be sorted.
Sort of ;-)
Haha go it, cheers mate.
I don't usually like taking notice of the political/financial side of the club but I'm a bit worried when you put it like that, that's its gonna eventually have impact with what happens on the pitch.
So £7.5 losses cover 10% by R. Murray (£750k) and 45% each by Slater/Cash and Jimenez (£3m each). .
This is probably what most of us had been assuming, myself included, but it's not right. The ongoing losses are not being funded by a series of rights issues to which all shareholders subscribe, but by loans from CAFCH. What this means is that Richard Murray is not covering 10% of the losses. Indeed, based on these accounts he is not injecting any new money into the Club and will begin to take money out as his loans are repaid. He does, however, retain 10% of the equity which will benefit him if and when the Club is sold.
Your key point still holds of course. The current situation is sustainable so long as whoever is writing the cheques - and we don't really know who that is - is prepared to keep doing so.
A couple of additional points. First, somebody said that it might make sense to spend more money, increasing the losses, to expedite promotion to the EPL, on the basis that this is the only way out. Whilst certainly one option, it's a dangerously seductive strategy. I wonder if this might be where Jimenez and Cash fell out. Jimenez wanting to go for it, Cash preferring to stick to the original plan and budget?
Second, great credit to the owners for continuing to fund (however they're doing it) and, so far anyway, for holding on to the players who might be most saleable (Solly, Stephens). This shows commitment. However, it's extraordinary that Chris Powell hasn't been put under intense pressure to prune his squad. Paying wages to players who aren't going to get a regular game, especially now we're more or less safe, really is burning money for nothing. If the Club is holding out for transfer fees, for BWP for example, it may regret failing to simply focus on cutting the wage bill.
Mundell
Richard Murray did say, or this is how I understood it anyway, that he is liable to contribute 10% of any money which is put into the club. Perhaps I misunderstood him. It was during this summer when he said that.
Prague,
That's interesting. It's not what the accounts tell us that's for sure. There are two possible explanations.
First, he would be liable if there were a rights issue - unless he was prepared to be diluted - so that contributing 10% of any money invested into the Club might be what he would do in some circumstances, but not necessarily in all circumstances. It seems that Loans were the preferred form of financing during the year to end June 2012. Could be that there has been a rights issue since. We'll see, but I'd bet not.
Second, he is an investor in CAFCH and is contributing via that route!! Seems unlikely!!
By the way, there are advantages to the owners of funding via loans even though loans are, in effect, as risky as equity financing in this kind of enterprise. It's easier for them to get their money out for starters - I doubt they'll ever pay a dividend (which would have to include Richard), but they could easily repay loans (to themselves) if the opportunity arises. So, whilst this approach to funding levers Richard Murray's return (if there is one), which is good for him, his fellow shareholder might be less anxious to realise the equity value created if they have already recouped most of their investment. Hope that makes sense.
Just back from the VIP meeting with Michael Slater and Chris Powell. One point made to MS was that supporters were anxious about the extent of the annual losses. He said very clearly that there was no need to be anxious. That he and TJ were not in it for the short term and that he "transferred £1m a month into the club" and would continue doing so
Not surprised he said that, though he's almost certainly rounding up. The question is by how much? As I've suggested on a number of occasions, a figure of around £10m p.a. won't be far wide of the mark as an estimate of the "contributions" being made by the owners, especially when account is taken of the annual repayments to RBS. Before transfer fees that is.
Just one thing though. It's not Slater's money!! He might be less "composed" if it was!!
Just back from the VIP meeting with Michael Slater and Chris Powell. One point made to MS was that supporters were anxious about the extent of the annual losses. He said very clearly that there was no need to be anxious. That he and TJ were not in it for the short term and that he "transferred £1m a month into the club" and would continue doing so
A million a month? 12 million a year? Crap.
Crap? How much money would you like him to piss up the wall?
I thought Slater didn't have that sort of dough to piss up the wall or that Cash was still willing to burn his money on a lost cause, so where's this mill coming from and why ?
£1 million a month? That's a very poor business plan, how much would be losing if we didn't go up last season? I know it's all about the exit plan, however you still need a door to exit via, when the time comes.
and there we all were trying to get our heads around 500k a month!
But the accounts show new financing of £7M last season which covers the £1M to RBS, purchase of intangibles (new signings and appearance clauses) and operating losses of £5M (less transfers and depreciation which is not cash) I don't see why this £7M or (£6M + £1M to RBS) suddenly jumps to £10M or even £12M pa? That's a big, big difference in terms of how quickly accumulated losses build up and how far away CAFC is away from financial fair play targets... Yes there are a few new signings but gates, tv etc should be up this year
Whoever is putting the money in, I trust it continues until we are promoted or we can get closer to a break even
Just back from the VIP meeting with Michael Slater and Chris Powell. One point made to MS was that supporters were anxious about the extent of the annual losses. He said very clearly that there was no need to be anxious. That he and TJ were not in it for the short term and that he "transferred £1m a month into the club" and would continue doing so
A million a month? 12 million a year? Crap.
Crap? How much money would you like him to piss up the wall?
crap in that a) I doubt it is quite that much b) if it is then it's unsustainable and we are in the crap and c) he has no money so can't say 'I'. Plus any money coming in is purely a loan. Why did someone not ask whose money it actually was coming in?
< crap in that a) I doubt it is quite that much b) if it is then it's unsustainable and we are in the crap and c) he has no money so can't say 'I'. Plus any money coming in is purely a loan. Why did someone not ask whose money it actually was coming in?
Because he had already made it quite clear that he wasn't going to talk about his own finances. NB - he said he "transferred" a million a month. He didn't say it was his own money
He clearly said "Every month I transfer funds". He was clearly, IMHO, making the point that it was his money and no one elses. Believe or don't but that's what he said.
I know that the loss last year doesn't look pretty, but I'm sure that when we were taken over that the new board said that each year the we spend in NPL1, we would make a loss of around that amount. ??? Also with the different level of TV money coming from the NPC, we would be far more able to break even.
So seeing as these were last year's accounts, I think it will be the 2012/13 that will make far more interesting reading.
I know that the loss last year doesn't look pretty, but I'm sure that when we were taken over that the new board said that each year the we spend in NPL1, we would make a loss of around that amount. ??? Also with the different level of TV money coming from the NPC, we would be far more able to break even.
So seeing as these were last year's accounts, I think it will be the 2012/13 that will make far more interesting reading.
The additional revenue is not going to offset an operating loss of that size or anywhere near it, and there will also be some additional matchday and other costs, e.g. wages.
The Sky FL deal is £195m over three years, of which Championship clubs get 80%. That would work out at about £2.1m a year, compared to bugger all in League One, although there are match fees in the total amount.
Also makes me wonder why they don't just put 12 mil there and make it last the season
Very good point.
I suspect because until it's in the club it's probably invested somewhere/earning interest in a bank, so makes more sense to drip feed it monthly. Once it's in the club it won't grow only shrink.
Also makes me wonder why they don't just put 12 mil there and make it last the season
Very good point.
I suspect because until it's in the club it's probably invested somewhere/earning interest in a bank, so makes more sense to drip feed it monthly. Once it's in the club it won't grow only shrink.
I think NLA meant why not spend it on players in the summer just gone
Comments
Richard Murray did say, or this is how I understood it anyway, that he is liable to contribute 10% of any money which is put into the club. Perhaps I misunderstood him. It was during this summer when he said that.
Despite the loyal customer base you dont sell enough to pay for all the stock and rent and each year you are running up further debt but your mum and dad (the owners) keep subbing you to keep the shop open in the hope that Tescos will see its potential and invest in it one day(ie new investors) and pay off your debts and help you turn it into the next Harrods (the premiership) where you will start making a profit and be sorted.
Sort of ;-)
At the moment we have some players definitely up to top six standard; Hamer, Solly, Morrison and Stephens with others like Wiggins, Pritchard, Cort, Jackson and Kermorgant not all that far away but others who are really struggling like Wagstaff, Kerkar, BWP, Hollands etc. who are really struggling to be good enough for the CCC.
Bridging that gap and getting our number of players good enough for the top six up to 8/9 players is going to be very, very tough.
I don't usually like taking notice of the political/financial side of the club but I'm a bit worried when you put it like that, that's its gonna eventually have impact with what happens on the pitch.
That's interesting. It's not what the accounts tell us that's for sure. There are two possible explanations.
First, he would be liable if there were a rights issue - unless he was prepared to be diluted - so that contributing 10% of any money invested into the Club might be what he would do in some circumstances, but not necessarily in all circumstances. It seems that Loans were the preferred form of financing during the year to end June 2012. Could be that there has been a rights issue since. We'll see, but I'd bet not.
Second, he is an investor in CAFCH and is contributing via that route!! Seems unlikely!!
By the way, there are advantages to the owners of funding via loans even though loans are, in effect, as risky as equity financing in this kind of enterprise. It's easier for them to get their money out for starters - I doubt they'll ever pay a dividend (which would have to include Richard), but they could easily repay loans (to themselves) if the opportunity arises. So, whilst this approach to funding levers Richard Murray's return (if there is one), which is good for him, his fellow shareholder might be less anxious to realise the equity value created if they have already recouped most of their investment. Hope that makes sense.
Just one thing though. It's not Slater's money!! He might be less "composed" if it was!!
or that Cash was still willing to burn his money on a lost cause, so where's this mill coming from and why ?
I know it's all about the exit plan, however you still need a door to exit via, when the time comes.
But the accounts show new financing of £7M last season which covers the £1M to RBS, purchase of intangibles (new signings and appearance clauses) and operating losses of £5M (less transfers and depreciation which is not cash)
I don't see why this £7M or (£6M + £1M to RBS) suddenly jumps to £10M or even £12M pa? That's a big, big difference in terms of how quickly accumulated losses build up and how far away CAFC is away from financial fair play targets... Yes there are a few new signings but gates, tv etc should be up this year
Whoever is putting the money in, I trust it continues until we are promoted or we can get closer to a break even
crap in that a) I doubt it is quite that much b) if it is then it's unsustainable and we are in the crap and c) he has no money so can't say 'I'. Plus any money coming in is purely a loan. Why did someone not ask whose money it actually was coming in?
Because he had already made it quite clear that he wasn't going to talk about his own finances.
NB - he said he "transferred" a million a month. He didn't say it was his own money
So seeing as these were last year's accounts, I think it will be the 2012/13 that will make far more interesting reading.
The Sky FL deal is £195m over three years, of which Championship clubs get 80%. That would work out at about £2.1m a year, compared to bugger all in League One, although there are match fees in the total amount.
The good thing is it is going there but it would be good to understand if this is a Loan or gift upon sale or promotion
Also makes me wonder why they don't just put 12 mil there and make it last the season