It would be interesting to know how tge Roland purchases hsve been structured. Fir instance polish Pete may be a net £700k but it maybe made up of deferred payments and appearances / goals
We could perhaps take this offline? The cup numbers are on the Trust website and have been confirmed as materially correct. Obviously they will be higher next season as we will at last win a quarter final I agree that player sale revenue is not operating but it is key to CAFC, it is cash in the bank and will continue, albeit it is the most volatile revenue stream. The one unknown for me would be the Jenkinson appearance bonusses. I completely underestimated this revenue stream last March as we had surprise payments from Cardiff and Palace. Ps the asset revaluation appears to be somewhat higher than you report at £9.7M but it ain't cash. A long time since I was near M&a / tax prejects so best not to speculate as to the timing and motivation of this adjustment.
That's in the Baton 2010 (group) accounts - it's £5m in the CAFC Limited accounts. I assume the rest must be from Holdings, which I haven't looked at, and may relate to the training ground.
Assume this revaluation been booked through other comprehensive income? it isn't cash or loss reducing in anyway in reality. Just a pure accounting adjustment meaning that if we sold the revalued assets (presumably our London real estate) now at our estimated valuation that the 5m "profit" would then translate into cash.
Doubt RDs grand break even plan involves suppressing losses in a way that doesn't actually reduce funding requirements.
Edit: RE: timing of revaluation - likely nothing more to it than the past owners looking to sell and wanting to ensure they get as much cash as possible by valuing at current market values. General accounting policy only requires revals every 5 years as well so could just be a coincidence. More likely the former though.
Companies with freehold property assets i.e. land & buildings are obliged to revalue said assets in their balance sheet periodically, often every 3 to 5 years. Any increase in value does not impact the operating or pre-tax profit for the year in any way. The revaluation is reflected 'below the line' in a revaluation reserve because it is not a realised profit i.e. it hasn't materialised as cash cos the property hasn't been sold. The revaluation is only intended to make the accounts more 'useful' overall. Property revaluations are pretty much meaningless in assessing a business's trading profits or losses. The timing of any revaluation most likely is imposed by accounting regs and the auditors' view of the fairness of the accounts. Post-Balance Sheet Events are as the name suggests transactions after 30 June 2013 of a material nature (takeover) or size (transfer fees paid/received) which occur before the date the accounts are signed off. Again they are declared in the notes to the accounts to make the document more 'useful' overall.
All that can really be taken from the 2013 accounts is that charlton lost slightly less money than in the year to 30 June 2012.
Understood and the point I was trying to make - hence why I said it was just a pure accounting adjustment and not in any way reducing the working capital needed to fund the business.
Most owners looking to sell a business will do a reval before they sell as adds weight to their asking price in terms and they can do it outside the normal cycle if they ensure all assets of the same class are included in this.
It would be interesting to know how tge Roland purchases hsve been structured. Fir instance polish Pete may be a net £700k but it maybe made up of deferred payments and appearances / goals
It would indeed. I understand that in fact the entire amount quoted has already been transferred, and that even more may be due based on performances; which is why the whole deal around this player gets me agitated.
However it is also possible that he effectively has been bought not by CAFC, but by Staprix. It seems to me that this possibility is one of the implications of a network. That's why I think the most important and legitimate questions to put to RD are around how e network is expected to function, both financially and operationally.
The FA Cup revenue is mostly in the public domain - prize money, TV fee - and I can work out the rest from the ticket prices. It will fall a bit short of £1m IMO.
Quite right but what isn't in the public domain is what the players' contracts say about bonuses for progressing through the various rounds of the cup. My limited and ancient knowledge of a typical contract indicates that the player bonus pool becomes more and more lucrative as the competition progresses. What can be said with some confidence though is that the players will have taken a significant slice of the Cup revenue.
"So in short despite promotion to the Championship, limited investment in new players and a respectable 9th place finish, the club's finances remain perilous with a £6m running annual loss and long-term debt of £30m."
We will, it seems, have to wait to this time next year (when the accounts for the current year are published) to find out how the RD takeover has impacted on those figures and in particular the debt. Some may have been written off by the previous owner in order to allow the sale to go through but we don't know if that is the case or how much.
The plus side is that RD has deep pockets and can fund on-going losses if he wants to, something TJ and MS couldn't, and KC no longer wanted to, do.
The flip side is that RD wants the club to "break even" (according to the Burnley chairman) sooner rather than later and it's not clear how he will choose to address the £6m annual loss. Investment via equity, huge shirt/Stadium sponsorship of the Staprix Valley, increase commercial income, cut costs, sell players, etc, etc while at the same time fixing the pitch, building the new Sparrows Lane building and, we hope, strengthening the squad.
I still think RD will be good for us as he is said to be in it for the long term and he has the resources to cover debts like this. But I also still feel that we are in for a bumpy few years as he balances the books and gets the club on an even keel.
I agree with your comments Henry but the additional question I have for RD is "when you talk about break even, do you refer to CAFC or to Staprix?". Because it seems to me that asking CAFC to break even next season is a bit arbitrary if he measures his profit (and dividends) through Staprix (which he is perfectly entitled to do). Thinking about it from my business perspective in Prague, a big 'network" will not tolerate losses in a unit it has bought in Prague, because the Czech Republic is not big enough to promise big future profits. But if it acquires something in Moscow it may tolerate losses for perhaps three years because profitability in Russia brings you big wonga.
Although hard figures are not yet available I now seriously suspect that he is already turning a profit in Hungary, assuming he has escaped from the tax scandal. So, would unexpected profitability there be used to help fund losses here, where the ultimate reward of FAPL TV money is his biggest potential prize? Only he can tell us. He may believe it is none of our business. That is our task, to persuade him otherwise.
I don't get all this potential profit malarky on getting to the Premier League. Everyone talks of this potential windfall you get, but at the same time your related costs go through the roof. Most prem clubs (to me) seem to be in the red.
What bottom half Premiership clubs post a sizeable profit each year ?
I don't think I could be anymore confused. How can annual accounts include sales of both shelvey and yann/Stephens. Can someone who knows whatever they're talking about explain in layman terms what votv have published.
The sale of Yann and Stephens have nothing to do with these accounts nor are they post balance sheet events as they moved seven months after the year end 30th June. Just looked it up and Shelvey moved to Swansea on 3rd July 2013 which triggered a "six figure bonus" with Button moving a few weeks later. No exact amounts were reported but my guess is that these two make up the £570K.
With a million coming in for Yann and Stephens and an unknown bonus for Jenkinson, transfer profits might be somewhere in the region of £2M this season.
Except that, as I have pointed out to you several times, we have shelled out serious money for Polish Pete. And you have made up that "million" for YK and Stephens, haven't you? This doesn't help anybody.
Never let the facts get in the way of a good argument eh Prague? See links below... there are far more civilized ways to ask for information rather than calling someone a liar! I heard it was £600K for Stephens but can't find a link right now. And I thought it was £400K for Yann but the link below suggest higher.
Not sure you read the reply to your repeated posts re Piotr Parsycek. The fee will be amortised over the life of the deal so perhaps a £100K charge for this season.
The new sparrows lane building will be capital expenditure and so depreciated at 2% a year, the reccomended rate for buildings. Even this may be exempt in full or in part under FPP as it relates to the youth academy
As for the pitch, whether this hits the P&L will again depend if the expenditure is capital or revenue. If its capital (and I'd suggest new drainage would be) then this again will be written down over a number of years rather than all be included in next years accounts.
As such these two are read herrings.
In terms of playing the system then we either need to boost income or reduce costs in order to comply with FFP. The Network is ideal for you to be able to play the system. i.e. you can offshore your expensive players by signing them to network clubs and then loaning these players back for "free" Income can be boosted by sponsorship etc as henry says.
However, though the network puts us in a good position to play the system I somehow don't think this will happen. All of the noises and actions coming out of the club and RD have been about running football as a business and breaking even. Our cost base was run down by TJ and MS prior to the sale through need and the desire to make the figures look more attractive. With the sales or transfer of 3 players (Kermy, Stephens and Alnwick) and the signing of only one non network player permenently (Pete the pole) from a group perspective Charlton is already beng run at a lower cost than when they bought it plus there is probably a net gain since takeover on transfer dealings. This is enhanced further if Pete the Pole was already a target for the group, just bought with CAFC money rather than Standards, helping to offset the tax on the gain.
I don't get all this potential profit malarky on getting to the Premier League. Everyone talks of this potential windfall you get, but at the same time your related costs go through the roof. Most prem clubs (to me) seem to be in the red.
What bottom half Premiership clubs post a sizeable profit each year ?
Swansea. £15m latest year. Supporters Trust agreed to take a dividend of 400k, but hold it in reserve so they can participate in future equity increase and maintain their 20% share.
I agree with your comments Henry but the additional question I have for RD is "when you talk about break even, do you refer to CAFC or to Staprix?". Because it seems to me that asking CAFC to break even next season is a bit arbitrary if he measures his profit (and dividends) through Staprix (which he is perfectly entitled to do). Thinking about it from my business perspective in Prague, a big 'network" will not tolerate losses in a unit it has bought in Prague, because the Czech Republic is not big enough to promise big future profits. But if it acquires something in Moscow it may tolerate losses for perhaps three years because profitability in Russia brings you big wonga.
Although hard figures are not yet available I now seriously suspect that he is already turning a profit in Hungary, assuming he has escaped from the tax scandal. So, would unexpected profitability there be used to help fund losses here, where the ultimate reward of FAPL TV money is his biggest potential prize? Only he can tell us. He may believe it is none of our business. That is our task, to persuade him otherwise.
I agree. Four of the six questions remain unanswered and so collectively we fans need to keep asking them.
Not aggressive, not rude but probing questions that go to the heart of how the club is to be run, financed and moved forward.
There is no need to have total disclosure or to give a commercial advantage to opposition clubs. Actually it seems RD is happier to share info on his business plan with a competitor (the Burnley Chairman) than with key stakeholders and investors in his business (the fans) so the "We're just fans, we have no right to be told anything, know your place" argument falls straight away.
Prague, As the owner of the network he has to take a network view. Also he will be looking to make a profit not just break even accross the whole company. Remember that not all of the network is owned by Staprix. Upjest and I assume St Truden are outside.
Presumably Standard is making a profit at the moment which is funding the network expansion. If we ever make it to the prem we can't expect all of that income gained to be invested in CAFC, it will be used in other areas of the network or to expand the network, just like Standards profits are being used on us presently.
Medium term I expect he will want all business unts to at least break even when in the second division, making a profit when in the top division.
I don't think I could be anymore confused. How can annual accounts include sales of both shelvey and yann/Stephens. Can someone who knows whatever they're talking about explain in layman terms what votv have published.
The sale of Yann and Stephens have nothing to do with these accounts nor are they post balance sheet events as they moved seven months after the year end 30th June. Just looked it up and Shelvey moved to Swansea on 3rd July 2013 which triggered a "six figure bonus" with Button moving a few weeks later. No exact amounts were reported but my guess is that these two make up the £570K.
With a million coming in for Yann and Stephens and an unknown bonus for Jenkinson, transfer profits might be somewhere in the region of £2M this season.
Except that, as I have pointed out to you several times, we have shelled out serious money for Polish Pete. And you have made up that "million" for YK and Stephens, haven't you? This doesn't help anybody.
Never let the facts get in the way of a good argument eh Prague? See links below... there are far more civilized ways to ask for information rather than calling someone a liar! I heard it was £600K for Stephens but can't find a link right now. And I thought it was £400K for Yann but the link below suggest higher.
Not sure you read the reply to your repeated posts re Piotr Parsycek. The fee will be amortised over the life of the deal so perhaps a £100K charge for this season.
But Henry your repeated assertion that "RD is happier to share info on his business plan with a competitor" doesn't stack up! It has been rebutted on another thread as nothing he said added to what was in the communications to CAFC fans and groupings. I really don't think it helps to paint Roland Duchatelet as the big bad wolf unless one wanted to run a continuous negative campaign against him and the club? In any event this aspiration is not part of a buisness plan - it is a strategic goal which in turn may mean a whole range of things - this depends entirely upon the timespan being referred to. The business plan falls out of the strategy and is far more detailed including the HR implications both on and off the pitch.
Am I being pedantic? Perhaps! But I am making this differential for a reason: Some believe that the fans have a right to be informed about every aspect of the business but this is simply unworkable for a number of reasons. In truth some just want details out of curiosity and perhaps the reflected glory of being ITK.
In my mind what is far more realistic and indeed commercially advantageous (as it encourages fans to buy in to the vision) is for the new owner to share elements of the vision and strategy NOT the detail.
It is unfortunate that the Daily Mail and Evening Standard ran negative stories on our club at a time when there was maximum uncertainty and a very high chance of relegation - perhaps as high as 50%? But it is our choice as to whether we believe them and more importantly whether we wish to continue this aggressive tabloid style attack on our club. We can react to rumours and snippets or we can share information and add it to a collective pool which can be utilised for supporters to develop a sober analysis in fair wind and foul.
When I was on the Trust Board and wrote and commisioned articles about the club there was a policy of sticking to facts and analysis whilst leaving speculation to a minimum. I hope this continues and that the board continues to work with the likes of NYA and others to bring light to the financial and football strategy.
I am afraid that meaningless rants and speculation on message boards like this can only convince the club to keep its cards close to its chest. The irony is that the responsible release and digestion of corporate comms might just encourage a bigger flow and will occupy the space which in turn will squeeze the rumours and speculation. Ultimately this responsibility lies with Duchatelet and the club communications team but perhaps fans and their "leaders" have some role to play?
The FA Cup revenue is mostly in the public domain - prize money, TV fee - and I can work out the rest from the ticket prices. It will fall a bit short of £1m IMO.
Quite right but what isn't in the public domain is what the players' contracts say about bonuses for progressing through the various rounds of the cup. My limited and ancient knowledge of a typical contract indicates that the player bonus pool becomes more and more lucrative as the competition progresses. What can be said with some confidence though is that the players will have taken a significant slice of the Cup revenue.
That's a very good point. One thing I believe NYA has overlooked is that I think CAFC's share of the away FA Cup ticket receipts will show up as "matchday income" in 2014, which should be more than enough to show an increase on 2013.
I have to say that I'd completely forgotten Button. If his transfer fee was amortised in the accounts over the two-year term of his contract then presumably it will offset (a chunk of) the transfer income in the 2013/14 accounts (and reported here as a post-balance sheet event).
It's interesting that CAFC Ltd owed Baton £18.4m, but Baton owed the BVI parent company £15.4m (due after more than one year). Of course, we know that RM had a stake in Baton but presumably not in the BVI company. Can anyone make sense of this? There is £3m shown as "share premium account", but I don't know what that is.
But Henry your repeated assertion that "RD is happier to share info on his business plan with a competitor" doesn't stack up! It has been rebutted on another thread as nothing he said added to what was in the communications to CAFC fans and groupings. I really don't think it helps to paint Roland Duchatelet as the big bad wolf unless one wanted to run a continuous negative campaign against him and the club? In any event this aspiration is not part of a buisness plan - it is a strategic goal which in turn may mean a whole range of things - this depends entirely upon the timespan being referred to. The business plan falls out of the strategy and is far more detailed including the HR implications both on and off the pitch.
Am I being pedantic? Perhaps! But I am making this differential for a reason: Some believe that the fans have a right to be informed about every aspect of the business but this is simply unworkable for a number of reasons. In truth some just want details out of curiosity and perhaps the reflected glory of being ITK.
In my mind what is far more realistic and indeed commercially advantageous (as it encourages fans to buy in to the vision) is for the new owner to share elements of the vision and strategy NOT the detail.
It is unfortunate that the Daily Mail and Evening Standard ran negative stories on our club at a time when there was maximum uncertainty and a very high chance of relegation - perhaps as high as 50%? But it is our choice as to whether we believe them and more importantly whether we wish to continue this aggressive tabloid style attack on our club. We can react to rumours and snippets or we can share information and add it to a collective pool which can be utilised for supporters to develop a sober analysis in fair wind and foul.
When I was on the Trust Board and wrote and commisioned articles about the club there was a policy of sticking to facts and analysis whilst leaving speculation to a minimum. I hope this continues and that the board continues to work with the likes of NYA and others to bring light to the financial and football strategy.
I am afraid that meaningless rants and speculation on message boards like this can only convince the club to keep its cards close to its chest. The irony is that the responsible release and digestion of corporate comms might just encourage a bigger flow and will occupy the space which in turn will squeeze the rumours and speculation. Ultimately this responsibility lies with Duchatelet and the club communications team but perhaps fans and their "leaders" have some role to play?
Not only are you acting like a child and throwing insults around at me and Praque (no wonder you "left" the Trust board". Seems even your previous friends in the Trust have lost patience with you) but you are wrong.
You make up numbers, believe things from blogs that suit your argument and fail to see the difference in what RD is reported to have said to the Burnley Chair and what he has said elsewhere. Airman and Covered End had demolished your financial guesses again and again to which you only responses are "Can we take this off line?" or "I meant to include those figures".
For clarification RD has not said PUBLICLY that he expects the club to break even NEXT SEASON.
For clarification RD has not said PUBLICLY that he is around for the LONG TERM. Nor has he said how long LONG TERM is.
What you are confusing is the crumbs you were so willing to believe when they were whispered in your ear. You lapped them up and the Club laughed away as you believed the spin. Bit like that finance article you let David Joyes edit in "Style and Content". You promised a second article on the club's finances with more analysis but it never appeared, surprise, surprise
I was wrong though to call you an attack dog. Being attacked by you is like being savaged by a dead sheep.
But Henry your repeated assertion that "RD is happier to share info on his business plan with a competitor" doesn't stack up! It has been rebutted on another thread as nothing he said added to what was in the communications to CAFC fans and groupings. I really don't think it helps to paint Roland Duchatelet as the big bad wolf unless one wanted to run a continuous negative campaign against him and the club? In any event this aspiration is not part of a buisness plan - it is a strategic goal which in turn may mean a whole range of things - this depends entirely upon the timespan being referred to. The business plan falls out of the strategy and is far more detailed including the HR implications both on and off the pitch.
Am I being pedantic? Perhaps! But I am making this differential for a reason: Some believe that the fans have a right to be informed about every aspect of the business but this is simply unworkable for a number of reasons. In truth some just want details out of curiosity and perhaps the reflected glory of being ITK.
In my mind what is far more realistic and indeed commercially advantageous (as it encourages fans to buy in to the vision) is for the new owner to share elements of the vision and strategy NOT the detail.
It is unfortunate that the Daily Mail and Evening Standard ran negative stories on our club at a time when there was maximum uncertainty and a very high chance of relegation - perhaps as high as 50%? But it is our choice as to whether we believe them and more importantly whether we wish to continue this aggressive tabloid style attack on our club. We can react to rumours and snippets or we can share information and add it to a collective pool which can be utilised for supporters to develop a sober analysis in fair wind and foul.
When I was on the Trust Board and wrote and commisioned articles about the club there was a policy of sticking to facts and analysis whilst leaving speculation to a minimum. I hope this continues and that the board continues to work with the likes of NYA and others to bring light to the financial and football strategy.
I am afraid that meaningless rants and speculation on message boards like this can only convince the club to keep its cards close to its chest. The irony is that the responsible release and digestion of corporate comms might just encourage a bigger flow and will occupy the space which in turn will squeeze the rumours and speculation. Ultimately this responsibility lies with Duchatelet and the club communications team but perhaps fans and their "leaders" have some role to play?
Not only are you acting like a child and throwing insults around at me and Praque (no wonder you "left" the Trust board". Seems even your previous friends in the Trust have lost patience with you) but you are wrong.
You make up numbers, believe things from blogs that suit your argument and fail to see the difference in what RD is reported to have said to the Burnley Chair and what he has said elsewhere. Airman and Covered End had demolished your financial guesses again and again to which you only responses are "Can we take this off line?" or "I meant to include those figures".
For clarification RD has not said PUBLICLY that he expects the club to break even NEXT SEASON.
For clarification RD has not said PUBLICLY that he is around for the LONG TERM. Nor has he said how long LONG TERM is.
What you are confusing is the crumbs you were so willing to believe when they were whispered in your ear. You lapped them up and the Club laughed away as you believed the spin. Bit like that finance article you let David Joyes edit in "Style and Content". You promised a second article on the club's finances with more analysis but it never appeared, surprise, surprise
I was wrong though to call you an attack dog. Being attacked by you is like being savaged by a dead sheep.
sorry henry but this is a quote from the bbc from his press conference with powell murray etc
Duchatelet insists he is with Charlton "for the long-term" and his ultimate goal is to see the Addicks return to the Premier League.
I do however think long term is a term meant for about 6-7+ years rather than 15-20. But if a very good offer comes in then whatever his visions are he might be tempted to sell
I do however think long term is a term meant for about 6-7+ years rather than 15-20. But if a very good offer comes in then whatever his visions are he might be tempted to sell
Bit like Slater's explanation of the position last August then … :-)
The FA Cup revenue is mostly in the public domain - prize money, TV fee - and I can work out the rest from the ticket prices. It will fall a bit short of £1m IMO.
Quite right but what isn't in the public domain is what the players' contracts say about bonuses for progressing through the various rounds of the cup. My limited and ancient knowledge of a typical contract indicates that the player bonus pool becomes more and more lucrative as the competition progresses. What can be said with some confidence though is that the players will have taken a significant slice of the Cup revenue.
That's a very good point. One thing I believe NYA has overlooked is that I think CAFC's share of the away FA Cup ticket receipts will show up as "matchday income" in 2014, which should be more than enough to show an increase on 2013.
I have to say that I'd completely forgotten Button. If his transfer fee was amortised in the accounts over the two-year term of his contract then presumably it will offset (a chunk of) the transfer income in the 2013/14 accounts (and reported here as a post-balance sheet event).
It's interesting that CAFC Ltd owed Baton £18.4m, but Baton owed the BVI parent company £15.4m (due after more than one year). Of course, we know that RM had a stake in Baton but presumably not in the BVI company. Can anyone make sense of this? There is £3m shown as "share premium account", but I don't know what that is.
Share Premium is the amount paid above the par value of the shares.
So, for example, if Charlton has 1,000 £1 ordinary shares issued then the par value is £1,000. If Tone and Mike (or representative company) paid £3,001,000 for those shares then the £3m is treated as "share premium."
The FA Cup revenue is mostly in the public domain - prize money, TV fee - and I can work out the rest from the ticket prices. It will fall a bit short of £1m IMO.
Quite right but what isn't in the public domain is what the players' contracts say about bonuses for progressing through the various rounds of the cup. My limited and ancient knowledge of a typical contract indicates that the player bonus pool becomes more and more lucrative as the competition progresses. What can be said with some confidence though is that the players will have taken a significant slice of the Cup revenue.
That's a very good point. One thing I believe NYA has overlooked is that I think CAFC's share of the away FA Cup ticket receipts will show up as "matchday income" in 2014, which should be more than enough to show an increase on 2013.
I have to say that I'd completely forgotten Button. If his transfer fee was amortised in the accounts over the two-year term of his contract then presumably it will offset (a chunk of) the transfer income in the 2013/14 accounts (and reported here as a post-balance sheet event).
It's interesting that CAFC Ltd owed Baton £18.4m, but Baton owed the BVI parent company £15.4m (due after more than one year). Of course, we know that RM had a stake in Baton but presumably not in the BVI company. Can anyone make sense of this? There is £3m shown as "share premium account", but I don't know what that is.
Share Premium is the amount paid above the par value of the shares.
So, for example, if Charlton has 1,000 £1 ordinary shares issued then the par value is £1,000. If Tone and Mike (or representative company) paid £3,001,000 for those shares then the £3m is treated as "share premium."
The accounts for the year to 30 Jun 2011 clearly show that £3m of shares were issued by Baton during that year. It is not clear whether the equity was injected before or after the Jan 2011 takeover.
The accounts for the year to 30 Jun 2011 clearly show that £3m of shares were issued by Baton during that year. This was the only equity injection during the Jimenez/Slater period.
without wishing to be obsessed by one point, so the 1M a month that we were being told was being put into the club by MS wasnt in the form of increased equity?
excellent article and thanks for that NYA. easy to follow for the layman and yet also depth of technical.
further evidence that the TJ&MS reign ran us on a wing and a prayer, really playing a game of poker with the club.
again a question that ive raised many times before - why does a 20K or so average attendance (with potential of 22-25K in the championship i believe with the right "product" being served up) London club need to run at a 6M a year operating loss?
To fully understand the CAFC group of companies cash flow will take a little time but it can be explained rationally and without resort to personal insults. As NLA suggests some of the banter and exchanges might shed light or perhaps entertain! To move from being an attack dog to a dead sheep in just one week shows that my medication is working... or perhaps that is all about perceptions?!
Really the irony about the discussion is that all of the P&L numbers were released in the programme last September. But we have new owners now and perhaps more perspective or do we?
Of course it takes to do this stuff properly so I will revisit the forecast for this season. I would welcome any critique and any challenge / additional information. Personally I think it helps to discuss the reality of CAFC particularly where the club can't or won't release current numbers. If an individual seeks to undermine the whole piece of work based on one error or allegations of distortion then I think that says more about them than it does the author.
Let's all be clear and recognise that there has been a lot of change and I would expect there to be a lot more in the next 12 months. So discussions can become heated. But to dismiss previous works by the Trust and my current statements as club propaganda is missing the point - by quite a distance.
Let us also be crystal clear - The forecast made in March 2013 for June 2013 was out by £1M relating solely down to underestimating transfer revenue. The forecast made last October for this season is also going to be out by about £1M for a number of reasons including player sales and the cup run plus big changes in the squad and indeed management. Bottom line is that one is never going to get a forecast spot on unless one has access to the information. And do we really need to be that precise? Some choose to shoot the messenger but the reality is that CAFC losses are reducing. The average age of the squad is getting younger every window. And that this is being executed by a brand new set of people in change. We are surrounded by change which breeds fear and uncertainty. Some choose to attack the agents of change (or the messengers) but personally I choose to look for information, evidence and at Standard Liege to see where things might go....They have just awarded their head coach a two year extension and have gone back to the top of the league.
Above there are some fundamental messages I am trying to communicate but best if I take some time to consider the words and numbers over the weekend.
HI / SR, turn in the digs and silly chat please gents, either contribute to the debate in an adult way or if not give it a wide berth.
Its an interesting discussion on an interesting topic and 99% of us don't want it side-tracked.
Thank you.
I don't know about that
To us thick folk their argument is worth visiting the thread for the rest of it goes over my head like a scud missile
You and me both NLA. I remember when the Rothman's Yearbook told you all the stats you needed to know about yer club. These days you need to take along legal advice and a degree in accountancy to the Player of The Year do to understand what's going on...
With the exception of that one small equity injection (which may have come from Murray pre-takeover), the club was financed via debts to the ultimate holding company (CAFC Holdings), which has since been replaced effectively by Staprix NV. We don't yet know how the Jan 2014 takeover was structured but we should know more in a year's time when the 2013/14 accounts are disclosed.
So long as the ability to finance the deficits in this way remains intact (ie the money doesn't run dry) then in a sense the fact that it is debt rather than equity doesn't make an awful lot of difference.
I've argued consistently on here and elsewhere that whilst the dominant creditor is also the owner, they wil seek to desperately avoid administration since recoveries will be dire. Thus the ongoing addition to the debt pile can simplistically be viewed a little like equity permanent capital.
Comments
Most owners looking to sell a business will do a reval before they sell as adds weight to their asking price in terms and they can do it outside the normal cycle if they ensure all assets of the same class are included in this.
However it is also possible that he effectively has been bought not by CAFC, but by Staprix. It seems to me that this possibility is one of the implications of a network. That's why I think the most important and legitimate questions to put to RD are around how e network is expected to function, both financially and operationally.
Excellent summary NYA
If I may quote
"So in short despite promotion to the Championship, limited investment in new players and a respectable 9th place finish, the club's finances remain perilous with a £6m running annual loss and long-term debt of £30m."
We will, it seems, have to wait to this time next year (when the accounts for the current year are published) to find out how the RD takeover has impacted on those figures and in particular the debt. Some may have been written off by the previous owner in order to allow the sale to go through but we don't know if that is the case or how much.
The plus side is that RD has deep pockets and can fund on-going losses if he wants to, something TJ and MS couldn't, and KC no longer wanted to, do.
The flip side is that RD wants the club to "break even" (according to the Burnley chairman) sooner rather than later and it's not clear how he will choose to address the £6m annual loss. Investment via equity, huge shirt/Stadium sponsorship of the Staprix Valley, increase commercial income, cut costs, sell players, etc, etc while at the same time fixing the pitch, building the new Sparrows Lane building and, we hope, strengthening the squad.
I still think RD will be good for us as he is said to be in it for the long term and he has the resources to cover debts like this. But I also still feel that we are in for a bumpy few years as he balances the books and gets the club on an even keel.
Although hard figures are not yet available I now seriously suspect that he is already turning a profit in Hungary, assuming he has escaped from the tax scandal. So, would unexpected profitability there be used to help fund losses here, where the ultimate reward of FAPL TV money is his biggest potential prize? Only he can tell us. He may believe it is none of our business. That is our task, to persuade him otherwise.
What bottom half Premiership clubs post a sizeable profit each year ?
addickschampionshipdiary.blogspot.co.uk/2014/01/cherries-agree-fee-for-kermorgant.html
Not sure you read the reply to your repeated posts re Piotr Parsycek. The fee will be amortised over the life of the deal so perhaps a £100K charge for this season.
As for the pitch, whether this hits the P&L will again depend if the expenditure is capital or revenue. If its capital (and I'd suggest new drainage would be) then this again will be written down over a number of years rather than all be included in next years accounts.
As such these two are read herrings.
In terms of playing the system then we either need to boost income or reduce costs in order to comply with FFP. The Network is ideal for you to be able to play the system. i.e. you can offshore your expensive players by signing them to network clubs and then loaning these players back for "free" Income can be boosted by sponsorship etc as henry says.
However, though the network puts us in a good position to play the system I somehow don't think this will happen. All of the noises and actions coming out of the club and RD have been about running football as a business and breaking even. Our cost base was run down by TJ and MS prior to the sale through need and the desire to make the figures look more attractive. With the sales or transfer of 3 players (Kermy, Stephens and Alnwick) and the signing of only one non network player permenently (Pete the pole) from a group perspective Charlton is already beng run at a lower cost than when they bought it plus there is probably a net gain since takeover on transfer dealings. This is enhanced further if Pete the Pole was already a target for the group, just bought with CAFC money rather than Standards, helping to offset the tax on the gain.
I agree. Four of the six questions remain unanswered and so collectively we fans need to keep asking them.
Not aggressive, not rude but probing questions that go to the heart of how the club is to be run, financed and moved forward.
There is no need to have total disclosure or to give a commercial advantage to opposition clubs. Actually it seems RD is happier to share info on his business plan with a competitor (the Burnley Chairman) than with key stakeholders and investors in his business (the fans) so the "We're just fans, we have no right to be told anything, know your place" argument falls straight away.
Presumably Standard is making a profit at the moment which is funding the network expansion. If we ever make it to the prem we can't expect all of that income gained to be invested in CAFC, it will be used in other areas of the network or to expand the network, just like Standards profits are being used on us presently.
Medium term I expect he will want all business unts to at least break even when in the second division, making a profit when in the top division.
In any event this aspiration is not part of a buisness plan - it is a strategic goal which in turn may mean a whole range of things - this depends entirely upon the timespan being referred to. The business plan falls out of the strategy and is far more detailed including the HR implications both on and off the pitch.
Am I being pedantic? Perhaps! But I am making this differential for a reason: Some believe that the fans have a right to be informed about every aspect of the business but this is simply unworkable for a number of reasons. In truth some just want details out of curiosity and perhaps the reflected glory of being ITK.
In my mind what is far more realistic and indeed commercially advantageous (as it encourages fans to buy in to the vision) is for the new owner to share elements of the vision and strategy NOT the detail.
It is unfortunate that the Daily Mail and Evening Standard ran negative stories on our club at a time when there was maximum uncertainty and a very high chance of relegation - perhaps as high as 50%? But it is our choice as to whether we believe them and more importantly whether we wish to continue this aggressive tabloid style attack on our club. We can react to rumours and snippets or we can share information and add it to a collective pool which can be utilised for supporters to develop a sober analysis in fair wind and foul.
When I was on the Trust Board and wrote and commisioned articles about the club there was a policy of sticking to facts and analysis whilst leaving speculation to a minimum. I hope this continues and that the board continues to work with the likes of NYA and others to bring light to the financial and football strategy.
I am afraid that meaningless rants and speculation on message boards like this can only convince the club to keep its cards close to its chest. The irony is that the responsible release and digestion of corporate comms might just encourage a bigger flow and will occupy the space which in turn will squeeze the rumours and speculation. Ultimately this responsibility lies with Duchatelet and the club communications team but perhaps fans and their "leaders" have some role to play?
I have to say that I'd completely forgotten Button. If his transfer fee was amortised in the accounts over the two-year term of his contract then presumably it will offset (a chunk of) the transfer income in the 2013/14 accounts (and reported here as a post-balance sheet event).
It's interesting that CAFC Ltd owed Baton £18.4m, but Baton owed the BVI parent company £15.4m (due after more than one year). Of course, we know that RM had a stake in Baton but presumably not in the BVI company. Can anyone make sense of this? There is £3m shown as "share premium account", but I don't know what that is.
Not only are you acting like a child and throwing insults around at me and Praque (no wonder you "left" the Trust board". Seems even your previous friends in the Trust have lost patience with you) but you are wrong.
You make up numbers, believe things from blogs that suit your argument and fail to see the difference in what RD is reported to have said to the Burnley Chair and what he has said elsewhere. Airman and Covered End had demolished your financial guesses again and again to which you only responses are "Can we take this off line?" or "I meant to include those figures".
For clarification RD has not said PUBLICLY that he expects the club to break even NEXT SEASON.
For clarification RD has not said PUBLICLY that he is around for the LONG TERM. Nor has he said how long LONG TERM is.
What you are confusing is the crumbs you were so willing to believe when they were whispered in your ear. You lapped them up and the Club laughed away as you believed the spin. Bit like that finance article you let David Joyes edit in "Style and Content". You promised a second article on the club's finances with more analysis but it never appeared, surprise, surprise
I was wrong though to call you an attack dog. Being attacked by you is like being savaged by a dead sheep.
Duchatelet insists he is with Charlton "for the long-term" and his ultimate goal is to see the Addicks return to the Premier League.
Its an interesting discussion on an interesting topic and 99% of us don't want it side-tracked.
Thank you.
I don't know about that
To us thick folk their argument is worth visiting the thread for the rest of it goes over my head like a scud missile
So, for example, if Charlton has 1,000 £1 ordinary shares issued then the par value is £1,000. If Tone and Mike (or representative company) paid £3,001,000 for those shares then the £3m is treated as "share premium."
excellent article and thanks for that NYA. easy to follow for the layman and yet also depth of technical.
further evidence that the TJ&MS reign ran us on a wing and a prayer, really playing a game of poker with the club.
again a question that ive raised many times before - why does a 20K or so average attendance (with potential of 22-25K in the championship i believe with the right "product" being served up) London club need to run at a 6M a year operating loss?
Really the irony about the discussion is that all of the P&L numbers were released in the programme last September. But we have new owners now and perhaps more perspective or do we?
Of course it takes to do this stuff properly so I will revisit the forecast for this season. I would welcome any critique and any challenge / additional information. Personally I think it helps to discuss the reality of CAFC particularly where the club can't or won't release current numbers. If an individual seeks to undermine the whole piece of work based on one error or allegations of distortion then I think that says more about them than it does the author.
Let's all be clear and recognise that there has been a lot of change and I would expect there to be a lot more in the next 12 months. So discussions can become heated. But to dismiss previous works by the Trust and my current statements as club propaganda is missing the point - by quite a distance.
Let us also be crystal clear - The forecast made in March 2013 for June 2013 was out by £1M relating solely down to underestimating transfer revenue. The forecast made last October for this season is also going to be out by about £1M for a number of reasons including player sales and the cup run plus big changes in the squad and indeed management. Bottom line is that one is never going to get a forecast spot on unless one has access to the information. And do we really need to be that precise? Some choose to shoot the messenger but the reality is that CAFC losses are reducing. The average age of the squad is getting younger every window. And that this is being executed by a brand new set of people in change. We are surrounded by change which breeds fear and uncertainty. Some choose to attack the agents of change (or the messengers) but personally I choose to look for information, evidence and at Standard Liege to see where things might go....They have just awarded their head coach a two year extension and have gone back to the top of the league.
Above there are some fundamental messages I am trying to communicate but best if I take some time to consider the words and numbers over the weekend.
So long as the ability to finance the deficits in this way remains intact (ie the money doesn't run dry) then in a sense the fact that it is debt rather than equity doesn't make an awful lot of difference.
I've argued consistently on here and elsewhere that whilst the dominant creditor is also the owner, they wil seek to desperately avoid administration since recoveries will be dire. Thus the ongoing addition to the debt pile can simplistically be viewed a little like equity permanent capital.