Any plausible reason why, just like under the Spiv regime, Murray is still guaranteeing the overdraft?
Under the spivs one reason was the bank wanting a UK based guarantor.
This. it is highly possible that the Guarantee is secured by RM's personal UK based assets and therefore much more appealing as collateral than in the event of having to realise them if based abroad. It could also be that a condition of the bank continuing facilities to the 'new' owners, it insisted upon maintaining the previously established relationship with RM. Nothing to stop RD reorganising his banking requirements elsewhere and therefore releasing RM from his contingent liability.
And this is exactly why the FFP retreat was such a blow. It makes it all the more difficult to compete without breaking the bank.
FFP loss limits doubling next season instead of shrinking to £5m was a real blow because we were well positioned to compete given we could increase player budgets whereas the majority of clubs were shrinking them.
Thing is the FAPL money has gone up now too so effectively the stakes and the prizes have doubled.
Clubs with parachute money have a varied performance in the championship but there are more of them each year as it appears only one(sometimes two) club with parachute money makes it back up each season.
These two factors are going to force up contract values and transfer fees for top players. The better we do between now and May, the more offers will come in.
I still can't believe it costs £89k to cover the pitch. What is the breakdown of that i.e. is there some sort of machinery and heating mechanism involved for that or is it literally a pitch cover on a windable roller?
As @Airman Brown states the interesting thing is that parent company loans have shot up by £13m. On close examination this consists: Operating cash out flow* £5m Player acquisition and capex £5m Paying off mortgage £1.5m Paying off other loans £670k Interest £550k
*normal running of the club including £1.8m profit on player disposals.
We are losing the same amount but all the debt is being centralised in one place. Paying off the mortgage and ex directors just centralises control even further.
Total debts are up from £38m to £47m as some of the above is just moving debt around.
Needless to say, the only way to clear these debts is promotion to the FAPL. Selling players will just put a band aid on the losses.
Elsewhere in the accounts the board announce a laudable ambition of 20,000 crowds in the championship. But that's probably the subject of another thread.
Basically running a football club can't be profitable unless you hit the prem, and even then it's still unlikely unless your brand penetrates intl markets.
It would seem that the financial 'promised land' of the premier league is an illusion.
According to this BBC summary of the latest Deloitte Annual Review of Football Finance (published in 2014 for the 2012-13 season):
“only half the clubs in the Premier League made an operating profit....(that is, profits not including net transfer expenditure).
Overall, operating profits for the 20 Premier League teams were just 4% of revenues, and when the net costs of player trading are added, there are large overall net losses.......
These figures belie the fact that most of England's largest football clubs are run by successful businessmen who make plenty of money in other walks of life”.
The inflationary effect of the new TV deal on transfer fees, players wages and other costs could make this situation worse. A lot of people and businesses make at lot of money out of football but not it seems the supposedly commercial organisations who provide the basic 'product' – the clubs (at any level).
It's not easy for a club like Charlton to make a profit over a lengthy spell in the PL, I'd agree. However, 1) it's possible to make a profit as a yo-yo club if you don't overspend to try to stay up, 2) you can increase the value of the club by gaining promotion and therefore profit from selling it on and 3) the sheer scale of the PL revenues means existing debts - like the £28m and rising to Staprix - become a much smaller percentage of turnover and therefore possible to pay down.
Of course, you have to get there. But I really cannot see RD getting a return on his investment any other way.
I am no financial wizz but it occurs to me that we of course look at things from a CAFC only perspective, but RD looks at it as a network overall and with our youth training it will allow players to progress other clubs like SL where profits can be made.
I am no financial wizz but it occurs to me that we of course look at things from a CAFC only perspective, but RD looks at it as a network overall and with our youth training it will allow players to progress other clubs like SL where profits can be made.
Not a pleasant thought but a network thought.
Or that this isn't an ROI exercise, just a leisure activity.
It's not easy for a club like Charlton to make a profit over a lengthy spell in the PL, I'd agree. However, 1) it's possible to make a profit as a yo-yo club if you don't overspend to try to stay up, 2) you can increase the value of the club by gaining promotion and therefore profit from selling it on and 3) the sheer scale of the PL revenues means existing debts - like the £28m and rising to Staprix - become a much smaller percentage of turnover and therefore possible to pay down.
Of course, you have to get there. But I really cannot see RD getting a return on his investment any other way.
I agree with your conclusion - but as you say “you have to get there”.
However, of your 3 possible PL 'success' scenarios I would have thought only 2) selling the club on once we reach the PL would provide RD with a 'return on his investment'. As for 1), surely to be a 'yo-yo club' if you don't overspend to try to stay up you're probably going to overspend to get back up again each time (particularly in light of the big increase in parachute payments and the effective abandoning of FFP)? And as for 3) although the scale of PL revenues means existing debts become a much smaller percentage of turnover surely that's only going to provide a return on investment if you sell – rather than overspending to stay up or to get back up again each time you're relegated as a yo-yo club?
I am no financial wizz but it occurs to me that we of course look at things from a CAFC only perspective, but RD looks at it as a network overall and with our youth training it will allow players to progress other clubs like SL where profits can be made.
Not a pleasant thought but a network thought.
Even if he funnels an ever-changing cast of EU youngsters through Sparrows Lane and exposes them to English football on the assumption this increases their transfer value, it's hard to see this being profitable against his outlay and continued losses on CAFC.
I'm not convinced playing in England will make them better players in Europe either.
Comments
Thing is the FAPL money has gone up now too so effectively the stakes and the prizes have doubled.
Clubs with parachute money have a varied performance in the championship but there are more of them each year as it appears only one(sometimes two) club with parachute money makes it back up each season.
These two factors are going to force up contract values and transfer fees for top players. The better we do between now and May, the more offers will come in.
According to this BBC summary of the latest Deloitte Annual Review of Football Finance (published in 2014 for the 2012-13 season):
http://www.bbc.co.uk/news/business-26365955
“only half the clubs in the Premier League made an operating profit....(that is, profits not including net transfer expenditure).
Overall, operating profits for the 20 Premier League teams were just 4% of revenues, and when the net costs of player trading are added, there are large overall net losses.......
These figures belie the fact that most of England's largest football clubs are run by successful businessmen who make plenty of money in other walks of life”.
The inflationary effect of the new TV deal on transfer fees, players wages and other costs could make this situation worse. A lot of people and businesses make at lot of money out of football but not it seems the supposedly commercial organisations who provide the basic 'product' – the clubs (at any level).
Of course, you have to get there. But I really cannot see RD getting a return on his investment any other way.
Not a pleasant thought but a network thought.
However, of your 3 possible PL 'success' scenarios I would have thought only 2) selling the club on once we reach the PL would provide RD with a 'return on his investment'. As for 1), surely to be a 'yo-yo club' if you don't overspend to try to stay up you're probably going to overspend to get back up again each time (particularly in light of the big increase in parachute payments and the effective abandoning of FFP)? And as for 3) although the scale of PL revenues means existing debts become a much smaller percentage of turnover surely that's only going to provide a return on investment if you sell – rather than overspending to stay up or to get back up again each time you're relegated as a yo-yo club?
I'm not convinced playing in England will make them better players in Europe either.