Midlands Thread including Burton and Derby

HertsWolf

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In another thread, an innocuous comment was made by El Guapo about the finances of Championship clubs. This was originally intended to be a response in that thread, but over a few days it has grown to much more than that.

It is long-winded but others may be interested in the figures if not the commentary.
The figures are from analysis and reporting by The Guardian and Insider Media and relate to the accounts filed in mid 2014 (the latest accounts published by most). This means the figures are already 15 months out of date and a lot can happen in 15 months in football. Clubs have new owners, debts has been paid down, funds have been raised, gates have gone up - or down, players have been bought (mainly by Derby) and sold (mainly by Blackburn).

However, the overall state of affairs at the time was clear. A handful of clubs were either in the black (Wolves, Preston, Rotherham) or had “easily manageable” debt (Burnley and MK Dons). A couple of clubs (Bolton and QPR) have huge debts (£360m between them) requiring someone to have deep pockets (but plenty of football investors do). Beyond that it becomes more complex.

A group of clubs had debt up to around £50m that could be reduced by on-field success or commercial revenue, while there’s a smaller group who had bigger debts…up to £85m or so. Two of those – Hull and Cardiff have recent PL residence to add to their coffers – but there are four clubs – Ipswich, Blackburn, Middlesbrough and Brighton – whose fans may be somewhat more concerned for the future. Three of these clubs – all but Brighton – were spending more on wages than their turnover (see table lower down). It’s one thing to have debt but there’s the old adage that if you are in a hole, the first thing you should do is stop digging. If the owner wants to keep funding the losses, then all well and good. But you better hope that owner stays healthy and happy.

Then there are a group of five clubs who had high indebtedness, £30m to £50m, with just one of them (I think) – Reading – benefitting from parachute payments. Three of the other four - Leeds, Charlton and Forest - have had enthusiastic new owners since then so much has probably changed for the better.

Declared Debt and Loans Table at mid 2014 (latest accounts)
Wolves........(£7.0m)
Preston.......(£0.6m)
Rotherham.....(£0.1m)
Watford.......£ 4.1m
Burnley.......£ 4.6m
Wigan.........£ 9.4m
MK Dons.......£10.3m (Debt not stated)
Birmingham....£11.7m (Debt not stated)
Sheff Weds....£12.7m
Derby.........£14.6m
Brentford.....£19.2m
Bournemouth...£21.5m
Fulham........£24.0m
Bristol City..£25.6m
Leeds United..£33.0m (Debt not stated)
Huddersfield..£37.4m
Charlton......£44.1m (Debt not stated)
Nottm Forest..£46.1m
Reading.......£47.1m
Hull City.....£64.8m
Brighton......£62.5m (Debt not stated)
Middlesbrough.£76.0m (Debt not stated)
Blackburn.....£79.8m
Cardiff City..£81.1m
Ipswich.......£82.4m
QPR..........£179.6m
Bolton.......£182.1m


So 15 months ago, the four worst clubs had debts and loans totalling just over £0.5 billion in debt, and just three clubs had cash in the bank. It is perhaps significant that all three of those with net funds in the bank (and six of the nine least-indebted) have recently been in League 1.
Were any of the eight most-indebted clubs to be relegated into League 1, they might struggle to survive let alone get back up again.

So much for debt, what about spending in the 2013/14 and 2012/13 seasons?
Because of the huge difference in everything, it’s appropriate to split the table – shown below – into three to reflect which division the clubs were in at the time.

Turnover and Wages Table (ordered by ‘good’ ratio of turnover to wages)
..................Turnover...Wages...TO/Wages
......................................Ratio
Hull City....(PL)..£88.5m...-£38.6m...2.29
Cardiff City.(PL)..£79.9m...-£46.7m...1.71
Fulham.......(PL)..£91.3m...-£60.4m...1.51

Average............£86.5m...-£48.6m...1.83

Watford......(Ch)..£16.7m...-£11.9m...1.40
Derby........(Ch)..£20.2m...-£14.5m...1.39
Brighton.....(Ch)..£24.0m...-£18.0m...1.33
Leeds United.(Ch)..£25.3m...-£20.1m...1.26
Reading......(Ch)..£38.1m...-£30.1m...1.26
Sheff Weds...(Ch)..£13.9m...-£11.1m...1.25
Wigan........(Ch)..£37.0m...-£30.0m...1.23
Charlton.....(Ch)..£12.7m...-£10.4m...1.22
Birmingham...(Ch)..£20.1m...-£18.0m...1.12
Bolton.......(Ch)..£30.6m...-£27.6m...1.11
Huddersfield.(Ch)..£10.8m...-£11.8m...0.92
Ipswich......(Ch)..£13.6m...-£13.9m...0.98
Middlesbrough(Ch)..£12.8m...-£14.4m...0.89
Blackburn....(Ch)..£30.4m...-£34.5m...0.88
Burnley......(Ch)..£15.5m...-£18.8m...0.82
Nottm Forest.(Ch)..£16.5m...-£24.0m...0.69
Bournemouth..(Ch)..£10.1m...-£17.0m...0.59
QPR..........(Ch)..£38.7m...-£66.4m...0.58

Average..(ex QPR)..£20.3m...-£19.1m...1.06

Rotherham....(L1)..£11.0m...-£ 4.8m...2.29
Wolves.......(L1)..£32.6m...-£17.9m...1.82
MK Dons......(L1)..£ 4.4m...-£ 3.5m...1.26
Preston NE...(L1)..£ 6.1m...-£ 5.7m...1.07
Bristol City.(L1)..£ 6.1m...-£ 9.9m...0.62
Brentford....(L1)..£ 3.3m...-£ 8.9m...0.37

Average............£10.6m...-£ 8.4m...1.26

On the one hand, it’s notable that Hull, Cardiff and Fulham all did the PL quite well, getting more revenue in than paying out for wages. But on closer examination, both Cardiff and Hull seemed to pay a huge price to get to the Promised Land in the first place (£31.0m and £25.6m pre-tax losses respectively the season they went up). Fulham’s debt, possibly as a result of their longer PL tenure, was less than half of Hull and Cardiff’s.
Only eight of the Championship clubs had turnover greater than wages, with Derby and Brighton managing things the ‘right way’ round most conspicuously.
Seven – and it includes the higher-debt teams of Blackburn, QPR, Forest, Middlesbrough and Ipswich – had greater wage bills than their turnover. More surprisingly, this naughty group also includes Huddersfield (because what did they do with all those wages?) and Burnley (because overall their finances are better than most others).
Encouragingly for their long-suffering fans both Bolton or Leeds were on the ‘good’ side of the turnover vs wages line.
With the exception of Brentford, whose wage bill was just over a third of their revenue, and Bristol City, the League 1 contingent seem to be particularly carefully financed, with three clubs paying less wages than revenue (notably Preston and Wolves, although the latter had a Championship wage bill still).
Experience (from their attitude to the transfer market this summer) suggests Bristol City can probably manage their debt and kick on, but I would be worried if I was a Brentford fan: there’s a new ground to build, with quite small gates and lower than average revenue while they were paying almost three times on wages as the club’s entire turnover in 2013/14. If things go wrong at the likes of Leeds, Derby, Wednesday, there’s big gates and the consequent commercial revenue to provide income, but Brentford may find the going tough if young Matthew turns to stamp-collecting or pigeon-racing.

Wages and salaries are always a point of heated discussion, and these are reported by the clubs annually. However, this will include all salaries and wages, except – probably – directors. It also won’t include contract staff such as most stewards and catering staff.

The three PL clubs wages bill isn’t surprising, but it is interesting to compare the Championship and League 1 clubs with the average PL spend (£48.5m) of those three ‘typical’ low-end PL clubs as an index. The second index compares each club’s wages bill with the Championship average (£19.1m) excluding QPR’s wage bill (as including it would absurdly skew the rest of the data).
The finishing league position is also shown.

Wages & Salaries (by Division)
Fulham.......(PL)...£60.4m
Cardiff City.(PL)...£46.7m
Hull City....(PL)...£38.6m
Average.............£48.5m

.........................Index of Wage Bill to:
.............................PL ave....Ch ave
......................................(ex QPR)
QPR..........(Ch 4)..£66.4m....137.....*348
Blackburn....(Ch 8)..£34.5m.....71......181
Reading......(Ch 7)..£30.1m.....62.....*158
Wigan........(Ch 5)..£30.0m.....62.....*157
Bolton......(Ch 14)..£27.6m.....57......145
Nottm Forest(Ch 11)..£24.0m.....49......126
Leeds United(Ch 15)..£20.1m.....41......105
Burnley......(Ch 2)..£18.8m.....39.......98
Birmingham..(Ch 21)..£18.0m.....37.......94
Brighton.....(Ch 6)..£18.0m.....37.......94
Bournemouth.(Ch 10)..£17.0m.....35.......89
Derby........(Ch 3)..£14.5m.....30.......76
Middlesbrough(Ch 12).£14.4m.....30.......76
Ipswich......(Ch 9)..£13.9m.....29.......73
Watford.....(Ch 13)..£11.9m.....24.......62
Huddersfield(Ch 17)..£11.8m.....24.......62
Sheff Weds..(Ch 16)..£11.1m.....23.......58
Charlton....(Ch 18)..£10.4m.....21.......54
(* = in PL that season)

Wolves.......(L1 1)..£17.9m.....37
Bristol City(L1 12)..£ 9.9m.....20
Brentford....(L1 2)..£ 8.9m.....18
Preston NE...(L1 5)..£ 5.7m.....12
Rotherham....(L1 4)..£ 4.8m.....10
MK Dons.....(L1 10)..£ 3.5m......7


QPR spent three times as much on wages as the division average, and almost four times the amount spent by the club that finished one position above them. Despite the obvious retort that they were hampered by PL wages from the previous season, it’s a weak argument. Other clubs – including Reading that season – have managed just fine after being relegated. Some clubs even went down two divisions yet managed to have no debt and run at a profit….

There appears to be less correlation between the wages bill and league position than might be imagined: the three clubs with the lowest Championship wage bills finished 18th, 16th and 17th (remembering that these statistics don’t include clubs that have been relegated: only one of the six clubs that finished below 18th that season is still in the Championship).

Three clubs spent only three-quarters their turnover on wages and finished 3rd (Derby), 9th (Ipswich) and 12th (Middlesbrough): certainly good management all-round at Derby.

Then there are four clubs which paid out in wages around the same as turnover. Burnley were promoted behind Leicester and Brighton finished in the play-offs. Leeds (15th) and Birmingham (21st) had the right idea, the right intent but the wrong players or manager!

Bolton and Forest paid way more for wages than their turnover, paying a small fortune to end up mid-table in 14th and 11th. They could have done what Wednesday did instead and pay half that for mid-table mediocrity.

The pre-tax profitability table pretty much echoes what has already been written. Only Preston and Rotherham were consistently profitable, or thereabouts and at the other end of the scale, red ink supplies were running low at PCWorld near QPR, Bolton and Blackburn’s grounds, with Middlesbrough and Cardiff seemingly keen to emulate these clubs. Wolves had one of the bigger losses sliding out of the Championship but turned a significant profit getting out of League 1.

Regardless of the debt situation, there is a number of clubs who clearly were shooting for break-even (or better) each year….from MK Dons, Wednesday, Birmingham and Reading to Huddersfield and Charlton (and probably Fulham). Big crowds and the discovery of a home-grown superstar should get any of them comfortably into the black. Beyond that, running a loss for a season or two surely would seem to require promotion or big commercial revenues (Derby, Ipswich, Bristol City, Wolves, Brighton).
However, for some, the size of the debts or losses (or both) must surely require daddy’s deep pockets for salvation (Brentford, Forest, Hull, Middlesbrough, Cardiff).
For QPR, Blackburn and Bolton, the future seems bleaker: QPR have a shot at promotion again, but Bolton and Blackburn seem to be heading the other way.

Pre Tax Profits or Losses (showing division for both seasons)
.................2013/14.........2012/13.....2012 to 2014
Preston NE....(L1)..+£16.4m...(L1)..-£ 1.0m....+£15.4m
Wigan.........(Ch)..+£ 2.6m...(PL)..+£ 0.8m....+£ 3.4m
Rotherham.....(L1)..+£ 0.2m...(L2)..-£ 0.4m....-£ 0.2m
Watford.......(Ch)..-£ 0.3m...(Ch)..+£ 0.1m....-£ 0.2m
MK Dons.......(L1)..-£ 1.7m...(L1)..-£ 2.5m....-£ 4.2m
Sheff Weds....(Ch)..-£ 5.6m...(Ch)..-£ 3.7m....-£ 9.3m
Birmingham....(Ch)..-£ 5.5m...(Ch)..-£ 4.1m....-£ 9.6m
Reading.......(Ch)..-£ 7.3m...(PL)..-£ 2.3m....-£ 9.6m
Huddersfield..(Ch)..-£ 6.8m...(Ch)..-£ 4.0m....-£10.8m
Charlton......(Ch)..-£ 5.7m...(Ch)..-£ 6.0m....-£11.7m
Brentford.....(L1)..-£ 8.7m...(L1)..-£ 4.5m....-£13.2m
Derby.........(Ch)..-£ 7.1m...(Ch)..-£ 7.1m....-£14.2m
Burnley.......(Ch)..-£ 7.9m...(Ch)..-£ 7.6m....-£15.5m
Hull City.....(PL)..+£ 9.4m...(Ch)..-£25.6m....-£16.2m
Ipswich.......(Ch)..-£ 7.2m...(Ch)..-£ 9.8m....-£17.0m
Bristol City..(L1)..-£ 9.5m...(Ch)..-£13.0m....-£22.5m
Wolves........(L1)..+£ 8.5m...(Ch)..-£33.1m....-£24.6m
Bournemouth**.(Ch)..-£10.3m...(L1)..-£15.3m....-£25.6m
Brighton......(Ch)..-£10.6m...(Ch)..-£15.3m....-£25.9m
Leeds United..(Ch)..-£20.3m...(Ch)..-£ 9.4m....-£29.7m
Nottm Forest..(Ch)..-£23.9m...(Ch)..-£ 8.0m....-£31.9m
Fulham........(PL)..-£33.0m...(PL)..-£ 2.7m....-£35.7m
Middlesbrough.(Ch)..-£20.4m...(Ch)..-£18.5m....-£38.9m
Cardiff City..(PL)..-£11.7m...(Ch)..-£31.0m....-£42.7m
Bolton........(Ch)..-£ 9.1m...(Ch)..-£50.7m....-£59.1m
QPR...........(Ch)..-£ 9.8m...(PL)..-£65.4m....-£75.2m
Blackburn.....(Ch)..-£41.1m...(Ch)..-£36.5m....-£76.6m
** I think my source for Bournemouth's losses had the figures the wrong way round as the £15.3m loss was for 2012/13 not 2013/14. Now corrected.

Partial Datasets (alphabetical)
Blackpool.....................(Ch)..+£ 4.6m
Leicester City................(CH)..-£34.6m
Millwall......................(Ch)..-£ 1.9m


Conclusions?
Other than “don’t get started on analysing football finances”, none really. It’s all too complex. You are comparing historical figures of clubs who change policies and fortunes very quickly. Few clubs are run very badly, but sadly very few are run well.

I was surprised how little the wages bill was linked to league position, except that a low wages bill did seem to get you quickly into the division below. But once you are spending upwards of around £12m you can get to a good position: Burnley, Derby, Brighton showed that.

The analysis also led me to appreciate that the Burnley, Derby and Wolves management seem cleverer than I thought, but also that Ipswich and Middlesbrough seemed shaky, with considerable debts or loans; that Fulham are quietly “OK”, and how reliant some teams are on their benefactors (Hull and Brentford).

I discovered that neither Birmingham City nor Leeds were as badly off as you might expect, and that I would have been uncomfortable if I were a Brighton or Forest fan with the debts and losses. Much may have changed though.

I am impressed with how Rotherham, Preston and MK Dons made it into the Championship, but also wondering how long Charlton and Huddersfield can stay up. A spell in League 1 might help focus a lot of clubs on the meaning of sustainable financing.

Finally, if your club is not spending in the transfer market, perhaps ask yourself why. If debts were high, or losses were high, or you were spending more on wages than the club's turnover, then your club management is probably now having to focus on club survival: mid- or lower- table mediocrity may be better than your club appearing at The Silverlake in the Vanarama in a few seasons time...or worse. A lack of ambition may actually look a lot like ensuring the books either balance or are capable of balancing in a few years. Before squawking for the owners to go, make sure you have a replacement lined up with pockets at least as deep. So much depends on a wealthy benefactor.

Edits:
24/09/2015
- Watford and Bournemouth figures added (but averages not recalculated)
- Millwall, Blackpool, Leicester, Wigan partial information added
 
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HertsWolf

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Unfortunately, the formatting of the tables, even with a Monotype font doesn't seem to work. Any ideas on how to fix this? Sorted. Not elegant, but readable. (And maybe I should have waited for Veggie Leg's response before putting in a million dots!):dk:
 
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Veggie Legs

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Try using the [ code] and [ /code] tags around the tables, it preserves spacing, e.g.

Code:
                        Index of Wage Bill to:
                            PL ave   Ch ave
                                    (ex QPR)
QPR          (Ch 4)  £66.4m     137   *348
Blackburn    (Ch 8)  £34.5m      71    181
Reading      (Ch 7)  £30.1m      62   *158
Bolton       (Ch 14) £27.6m      57    145
Nottm Forest (Ch 11) £24.0m      49    126
Leeds United (Ch 15) £20.1m      41    105
Burnley      (Ch 2)  £18.8m      39     98
Birmingham   (Ch 21) £18.0m      37     94
Brighton     (Ch 6)  £18.0m      37     94
Derby        (Ch 3)  £14.5m      30     76
Middlesbrough(Ch 12) £14.4m      30     76
Ipswich      (Ch 9)  £13.9m      29     73
Huddersfield (Ch 17) £11.8m      24     62
Sheff Weds   (Ch 16) £11.1m      23     58
Charlton     (Ch 18) £10.4m      21     54
(* = in PL that season)

Interesting stuff anyway, it's hard to compare the details for all sorts of reasons but it gives a good overview.
 

QPR_Matt

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A very interesting, yet worrying read at the same time. Good work getting all that info together!

I am just hoping that our debts/losses are no where near as bad as they previously were. Time will tell if we have actually learnt from our previous fuck ups.
 

MagpieBee

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Interesting stuff, and there is no doubt our success wouldn't have happened had Benham not bought the club. An awful lot of our wage bill is incentive based, you can see the difference between the two League 1 seasons in the above table, where the squad didn't change that much but the wages went massively up. This also means that it drops right down should we have a bad season, still probably larger than our revenue, but much more manageable.

Our main problem is revenue - in that our current ground generates very very little. You can see in the table, we have the smallest revenue, by quite some distance (with MK Dons the only one being close). Our wage bill isn't massive by any comparison, but it isn't sustainable on the current revenue. That's why our new ground is so important. Even if gates don't massively improve, the other revenue streams it will open up will generate a lot of new income into the club.

One benefit was the £8m profit we made from transfers this season, and the break even transfers we had last season. We've been able to build a solid squad without the need for major net-investment, and a lot of that £8m profit will go to paying off debt and covering our revenue shortfall.

The overall debt levels at the club are probably quite a bit higher now than they were then, certainly higher than the £19m quoted above, however most of that is linked to the Training Ground and New Stadium, which both should be good investments in the long run.

All in all, if the new stadium fell through, we'd be screwed. No doubt about that. But we've known that for 10-15 years and with building work starting later this year things look pretty good for the future.

I imagine Bournemouth's accounts would look very similar to ours up until this season.
 

SF_

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Thanks for that, i've been worrying about Charlton's finances for ages.
 

HertsWolf

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Interesting stuff, and there is no doubt our success wouldn't have happened had Benham not bought the club. An awful lot of our wage bill is incentive based, you can see the difference between the two League 1 seasons in the above table, where the squad didn't change that much but the wages went massively up. This also means that it drops right down should we have a bad season, still probably larger than our revenue, but much more manageable.

Our main problem is revenue - in that our current ground generates very very little. You can see in the table, we have the smallest revenue, by quite some distance (with MK Dons the only one being close). Our wage bill isn't massive by any comparison, but it isn't sustainable on the current revenue. That's why our new ground is so important. Even if gates don't massively improve, the other revenue streams it will open up will generate a lot of new income into the club.

One benefit was the £8m profit we made from transfers this season, and the break even transfers we had last season. We've been able to build a solid squad without the need for major net-investment, and a lot of that £8m profit will go to paying off debt and covering our revenue shortfall.

The overall debt levels at the club are probably quite a bit higher now than they were then, certainly higher than the £19m quoted above, however most of that is linked to the Training Ground and New Stadium, which both should be good investments in the long run.

All in all, if the new stadium fell through, we'd be screwed. No doubt about that. But we've known that for 10-15 years and with building work starting later this year things look pretty good for the future.

I imagine Bournemouth's accounts would look very similar to ours up until this season.
There was some commentary I read recently about how much of Arsenal's debt was "good" because it related to property and stadium improvements. I can buy this......at Wolves, significant sums have been invested in a new stand and the training complex, all of which add to the value of the club (however a club may be valued).

I actually wanted to include information for Bournemouth, Wigan, Leicester, Norwich, Watford, Doncaster, Millwall, Barnsley and Posh to see how they compare with the Championship now....but ran out of time and energy!
 

MagpieBee

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There was some commentary I read recently about how much of Arsenal's debt was "good" because it related to property and stadium improvements. I can buy this......at Wolves, significant sums have been invested in a new stand and the training complex, all of which add to the value of the club (however a club may be valued).

I actually wanted to include information for Bournemouth, Wigan, Leicester, Norwich, Watford, Doncaster, Millwall, Barnsley and Posh to see how they compare with the Championship now....but ran out of time and energy!
Agreed - doesn't make us any less dependent on our rich owner (god bless you Matthew Benham!) but while our debt has jumped up, there is no doubt our club is worth a lot more than it was a couple of years ago (I'm pretty sure Andre Gray was sold for more than Benham bought the club for 4 years ago...)
 

HertsWolf

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Agreed - doesn't make us any less dependent on our rich owner (god bless you Matthew Benham!) but while our debt has jumped up, there is no doubt our club is worth a lot more than it was a couple of years ago (I'm pretty sure Andre Gray was sold for more than Benham bought the club for 4 years ago...)
Well yes and no. You are still at your old ground and you have both bought and sold players. I am not sure why 'no doubt' your club is worth more? Debt is debt. Losses are losses. Arguably it becomes more and more difficult in the Championship than in L1. Evidence suggests that clubs have to spend big to survive. If it was easy to do it, everyone would be doing it. Benham and Crown are extremely talented businessmen, but Brentford's income is in the bottom three of the division (by Crown's admission, before any accounts are available). The meteoric rise of both Brentford and Bournemouth are recognised by everyone - even if there's a lot of jealousy about clubs that suddenly get a rich daddy. But keeping all those plates spinning is tough.
If I had to hazard a wild guess, I would suspect that you are probably about the same as you were with maybe slightly higher debt but lower seasonal losses. Just a guess.
 

Madejski

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Will be interesting to see how our finances have improved since then. No one really knows.

At the point of these figures we had only just escaped the possibility of administration, and have made a lot of money from player sales since without spending much, FA Cup run etc. And most importantly new owners.
 

MertzRunz

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Good to see our finances are okay, not surprised about our much lower wage bill. If we do go down at least we'll still be alright off financially.
 

Walkley_Owl

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Sadly mate those figures relate to your promotion season, last season may make grim reading.
 

HertsWolf

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Funny how optimistic everyone is about the next financial year. :bg:

Evidence from most clubs over most years is that success on the field usually adds more debt and more losses. Poor performance usually means good management or shit management, but usually shit management.

The financial figures here are 90% irrelevant. If daddy still has shitloads of money and the fans are chanting his name and he is not wanted by law enforcement anywhere, then the loans will keep coming in. That's good as long as it lasts. It's not good practice but it keeps many happy.

If your support is whining about lack of ambition, mediocrity and lack of signings, then your finances are probably looking up, and your club has a sustainable future.

It's kind of a pain in the arse. It's like betting against your club: you're gutted you lost but happy you just won £150 as a result.
 

MertzRunz

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Sadly mate those figures relate to your promotion season, last season may make grim reading.
Woops misread the years, cheers mate. Don't think we'll be looking too bad financially compared to other teams anyway, we didn't make many cash signings and didn't go over our wage budget.
 

toshj

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#15
The overall debt levels at the club are probably quite a bit higher now than they were then, certainly higher than the £19m quoted above, however most of that is linked to the Training Ground and New Stadium, which both should be good investments in the long run.
I could be mistaken, but I'm pretty sure our ~£20m debt is in fact loans made by Benham to finance our academy, with these loans being guaranteed by future sales of academy developed players.

The other finance he puts in to the club for running costs are written off each year in the form of equity.
 

Madejski

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#16
£20m loans to finance an academy? that sounds very dodgy if true - especially as academy costs don't count towards FFP.
 

Tom_ITFC

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Funny how optimistic everyone is about the next financial year. :bg:

Evidence from most clubs over most years is that success on the field usually adds more debt and more losses. Poor performance usually means good management or shit management, but usually shit management.

The financial figures here are 90% irrelevant. If daddy still has shitloads of money and the fans are chanting his name and he is not wanted by law enforcement anywhere, then the loans will keep coming in. That's good as long as it lasts. It's not good practice but it keeps many happy.

If your support is whining about lack of ambition, mediocrity and lack of signings, then your finances are probably looking up, and your club has a sustainable future.

It's kind of a pain in the arse. It's like betting against your club: you're gutted you lost but happy you just won £150 as a result.
Ironically though, our finances are improving despite years in the championship and in turn we've seen better results on the pitch!

Our debt looks horrific and without defending it too much, our debt has been built up of a much shorter period than ours. We went into administration on relegation from the prem due to the collapse of ITV Digital and so had no parachute payments to fall back on. Teams like Boro, Bolton, Cardiff, QPR and Blackburn have all had recent parachute payments of which were much higher than what we would have received. We are a perfect example of how mid table mediocrity can cripple a club financially. Coventry are another example and I am thankful we have not gone the same way as them.

One thing that always frustrates me is that we have had around the 7-10th highest average attendances for a long time whilst also charging (for a long time) the most in the league, yet our turnover is often only around 12th best in the league when you exclude parachute payments.

Looking at next season though (14/15 accounts), I expect our turnover to rocket. Sale of Cresswell for 4m plus add ons up to extra 3m, increased attendances by 2000 (should be worth 1.5m), on tele 600% (12 times up from 2) more times than previous seasons (not sure how much thats worth), two full attendances in FA Cup tie and replay with Southampton and also the gate receipts/tv income from the play offs which should add another 1m. This is all without the 8m this season 15/16 from the Mings deal!

We've been told wages went up 9% in 14/15 from 13.9m in 13/14. So not too much. Whilst, there will be very little costs for purchasing players as we've not being paying huge fees for a long time now. I reckon an accounts that has broken even will be shown for 14/15.

I'm not sure how much wages have gone up this season, but we've only spent £359k of the £8m fee for Mings on transfer fees. But I doubt the wages will have gone up too much as there will be a point where we won't have a player who will earn us that much from a sale.

Also, I have seen a report by SwissRamble that shows different figures, one is that Brighton's debt is 131million. Link below
http://swissramble.blogspot.ch/2015/05/queens-park-rangers-do-you-believe-in.html?m=1
 

Walkley_Owl

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#19
How the fuck can you still owe that on a 28m build 18 years ago? Logic says you repay on it on the PL return in 2007, that said football owners never cease to amaze me.
 

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#20
How the fuck can you still owe that on a 28m build 18 years ago? Logic says you repay on it on the PL return in 2007, that said football owners never cease to amaze me.
No idea, but we do. I think it's all due to be paid off in full in 2 or 3 years time too.
 

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#21
Ironically though, our finances are improving despite years in the championship and in turn we've seen better results on the pitch!

Our debt looks horrific and without defending it too much, our debt has been built up of a much shorter period than ours. We went into administration on relegation from the prem due to the collapse of ITV Digital and so had no parachute payments to fall back on. Teams like Boro, Bolton, Cardiff, QPR and Blackburn have all had recent parachute payments of which were much higher than what we would have received. We are a perfect example of how mid table mediocrity can cripple a club financially. Coventry are another example and I am thankful we have not gone the same way as them.

One thing that always frustrates me is that we have had around the 7-10th highest average attendances for a long time whilst also charging (for a long time) the most in the league, yet our turnover is often only around 12th best in the league when you exclude parachute payments.

Looking at next season though (14/15 accounts), I expect our turnover to rocket. Sale of Cresswell for 4m plus add ons up to extra 3m, increased attendances by 2000 (should be worth 1.5m), on tele 600% (12 times up from 2) more times than previous seasons (not sure how much thats worth), two full attendances in FA Cup tie and replay with Southampton and also the gate receipts/tv income from the play offs which should add another 1m. This is all without the 8m this season 15/16 from the Mings deal!

We've been told wages went up 9% in 14/15 from 13.9m in 13/14. So not too much. Whilst, there will be very little costs for purchasing players as we've not being paying huge fees for a long time now. I reckon an accounts that has broken even will be shown for 14/15.

I'm not sure how much wages have gone up this season, but we've only spent £359k of the £8m fee for Mings on transfer fees. But I doubt the wages will have gone up too much as there will be a point where we won't have a player who will earn us that much from a sale.

Also, I have seen a report by SwissRamble that shows different figures, one is that Brighton's debt is 131million. Link below
http://swissramble.blogspot.ch/2015/05/queens-park-rangers-do-you-believe-in.html?m=1

Your paragraph about debt is bollocks mate, we were and remain one of only three clubs to be screwed by both the parachute payments and ITV digital deal, use, Watford and Wimbledon got a poor relegation package, compared to you two years later and then we got done by ITV digital yet never went into admin, you have no excuses.
 
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toshj

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#22
£20m loans to finance an academy? that sounds very dodgy if true - especially as academy costs don't count towards FFP.
I'm pretty sure that's the reason for the loan. It's a sign of Benham's commitment to youth football, we've gone from nothing to category 2 academy in a few years, hired some of the top youth coaches around and built an indoor facility.
 

AFCB_Mark

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#23
Have read through the read with interest, some crazy research work by Mr Herts here (my cap is doffed in your general direction) and interesting discussion since.

Regarding how Bournemouth compare... well back when the club was run/staffed by supporters who only got paid half the time, info leaked out quite freely. These days it's all carefully stage managed, I only get to hear very small bits now and can mostly only present the official accounts.

So 2011-2012, the club announced a profit of £1.1m, funded largely by a good crop of player sales, which was always the business model since the dawn of time. Then things changed obviously when a Russian chap living locally, and some of his mates who've run clubs in Europe previously, all jump on board.

My fag packet maths, which I've run past someone I trust and had rough agreement on, put the Russians' input at roughly £30m over the last 4-5 years. We are very lucky that 'only' half that has been loans, half of that has been share creation. That's been spent on everything from the new training ground, stadium revamp, setting up a new youth system, totally ripping out and replacing basically all non playing staff (lots of dedicated supporters on low wages replaced by corporate robots with more experience) and of course player recruitment.

Figures I give below are a mixture of factual data from accounts, and some context / info that I know of.

12/13 the season we were promoted from L1 to Championship, our budget was around £5-6m, ranked "roughly top 6" in L1, to quote. We came 2nd.

13/14 Accounts state that budget initially increased 50% for our first season in the Championship, so probably looking around £10m, ranked "lower midtable" We came 10th, but the budget increased as that season went on to fend off interest from other clubs, I would guess taking the budget into the low teens. Those players we managed to keep are now worth triple, so that turned out to be a wise move. Then a windfall of almost £10m came in the form of Lewis Grabban and Adam Lallana to give us a significant boost for 14/15.

The most recent accounts put our turnover at £10m, total staff costs of £17m, an overall loss of £10m for that year, and total debt on the books is at £21.5m. 6m loan/debt to the owner was paid off this August using the first tranche of PL money. So says Companies house. Hopefully we can continue to pay down that debt now.

But that picture is out of date, we'll get full details on 2015 and the full picture of last season's promotion in the spring next year.

And what happens upon promotion to the PL I have no idea. The numbers both incoming and outgoing start getting ridiculous and it hurts my head to think about it. I would imagine the numbers I'm giving you here are now rather meaningless compared with what's going on this season. Our attendances are obviously dire for the level we're at, but gate money is now easily eclipsed by sponsorship money, which are both smashed out the park by Sky money. I with my yearly season ticket and bits of tat from the shop, matter not one single jot to the club I love anymore.
 

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Have read through the read with interest, some crazy research work by Mr Herts here (my cap is doffed in your general direction) and interesting discussion since.

Regarding how Bournemouth compare... well back when the club was run/staffed by supporters who only got paid half the time, info leaked out quite freely. These days it's all carefully stage managed, I only get to hear very small bits now and can mostly only present the official accounts.

So 2011-2012, the club announced a profit of £1.1m, funded largely by a good crop of player sales, which was always the business model since the dawn of time. Then things changed obviously when a Russian chap living locally, and some of his mates who've run clubs in Europe previously, all jump on board.

My fag packet maths, which I've run past someone I trust and had rough agreement on, put the Russians' input at roughly £30m over the last 4-5 years. We are very lucky that 'only' half that has been loans, half of that has been share creation. That's been spent on everything from the new training ground, stadium revamp, setting up a new youth system, totally ripping out and replacing basically all non playing staff (lots of dedicated supporters on low wages replaced by corporate robots with more experience) and of course player recruitment.

Figures I give below are a mixture of factual data from accounts, and some context / info that I know of.

12/13 the season we were promoted from L1 to Championship, our budget was around £5-6m, ranked "roughly top 6" in L1, to quote. We came 2nd.

13/14 Accounts state that budget initially increased 50% for our first season in the Championship, so probably looking around £10m, ranked "lower midtable" We came 10th, but the budget increased as that season went on to fend off interest from other clubs, I would guess taking the budget into the low teens. Those players we managed to keep are now worth triple, so that turned out to be a wise move. Then a windfall of almost £10m came in the form of Lewis Grabban and Adam Lallana to give us a significant boost for 14/15.

The most recent accounts put our turnover at £10m, total staff costs of £17m, an overall loss of £10m for that year, and total debt on the books is at £21.5m. 6m loan/debt to the owner was paid off this August using the first tranche of PL money. So says Companies house. Hopefully we can continue to pay down that debt now.

But that picture is out of date, we'll get full details on 2015 and the full picture of last season's promotion in the spring next year.

And what happens upon promotion to the PL I have no idea. The numbers both incoming and outgoing start getting ridiculous and it hurts my head to think about it. I would imagine the numbers I'm giving you here are now rather meaningless compared with what's going on this season. Our attendances are obviously dire for the level we're at, but gate money is now easily eclipsed by sponsorship money, which are both smashed out the park by Sky money. I with my yearly season ticket and bits of tat from the shop, matter not one single jot to the club I love anymore.
I have now added AFC Bournemouth to the original table (I will probably add others in due course). The figures were out there, I am just too lazy to go and find them. The 'budget' stuff is all complete tosh. The club don't have to reveal what they spend on players, nor will they. But the amount spent on wages is required in company accounts and for that Bournemouth can be compared to everyone else. Your 2013/14 wages were stated as being £17.0m for 2013/14 and were £11.9m for your last season in League 1. Your wages were mid-table for Championship and you came 10th that season. Derby spent £2.5m less and ended up seven places above you, Brighton spent £1m more and were four places above you. More worrying (if I was a Cherries fan) was that at 0.59 you had the worst turnover-to-wages ratio of any club in the division except our favourite little spend-bunnies, QPR. Your loss slid to £15.3m (from £10.5m in your last L1 season) and your net debt ended up at £21.5m.
Those losses are middling for a minor Russian corporate tycoon and the net debt is also manageable.

However, I believe you fall into the 'optimism trap' that everyone does (myself included) for the three same reasons:
Firstly, the "I'm a Believer" Reason.
You kind of justify the situation by repeating sound-bites the club's PR people put out about all the reasons for this and that, player sales yada yada, net this, net that blah blah blah, good debt, bad debt..... The reality is that the figures are the figures are the figures. They cut through all the bullshit.
Secondly, the "It's all a lot better now because we are better managed now" Reason.
Reality is that most clubs are probably pretty much in the same position as before. There is a propensity for football clubs to be managed poorly, way beyond their means. Your wages budget was very high for L1 (as was ours) and that pattern appeared to continue into the Championship too.
Thirdly, the "We're in the Premier League Now and Kerching, Kerching, Kerching" Reason.
Everyone believes the PL stands for Promised Land and in that division there are huge TV funds, huge parachute payments, huge egos, fountains of asses milk, harps playing, St Peter handing out match-day programmes, and Santa Claus renting out the reindeer for rides through King's Park. Have a look at how QPR, Fulham, Wolves, Hull, Bolton, Blackburn, Birmingham, Wigan all came down from the Premier League. Yeh, I know, I know. Bournemouth are **different**. Of course you are. :bg:

Bournemouth got into the PL by playing attractive football with players it couldn't really afford, with smaller revenue than desirable, more debt and a smiling,wealthy benefactor. Because that's how pretty much (not quite) all clubs do it.
 

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Have a look at how QPR, Fulham, Wolves, Hull, Bolton, Blackburn, Birmingham, Wigan all came down from the Premier League. Yeh, I know, I know. Bournemouth are **different**. Of course you are. :bg:
You're overlooking clubs that are well run; Burnley, Norwich, Swansea, West Brom, Crystal Palace, Stoke, etc. are all teams who've come up from the Championship and used their Premiership money wisely. Both Burnley and Norwich got relegated, but they've been financially prudent, with Norwich returning to the top division immediately and Burnley in good nick to challenge for promotion this season.
 

HertsWolf

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You're overlooking clubs that are well run; Burnley, Norwich, Swansea, West Brom, Crystal Palace, Stoke, etc. are all teams who've come up from the Championship and used their Premiership money wisely. Both Burnley and Norwich got relegated, but they've been financially prudent, with Norwich returning to the top division immediately and Burnley in good nick to challenge for promotion this season.
I'm not overlooking them. Only one of them is in the Championship and has been covered. It is debatable whether all of the clubs you mention would be able to manage a drop in revenue any more than, say, Fulham. Norwich is certainly an exception, and perhaps coincidentally do not have a benefactor pumping money in every year.
If a club can get up and stay up then it can survive...Swansea, West Brom, Palace are all examples but if they drop down the change could be very damaging.
 

Madejski

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#27
Yep the sudden change in losing 75% of your revenue is the real killer. Clubs should be comfortably run financially if they stay in the PL.
 

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All very fair points Herts.

Firstly, the "I'm a Believer" Reason.
We know that accounts can be made to look different to reality, for better or worse. All clubs spread spending over multiple years, look at Derby justifying their summer spending. Accounts are important and they do provide a measure of oversight and governance, and also a basis for comparison. But there is always going to be context around them, each club does have a story to tell.

The fact that Bournemouth are currently dependent on wealthy people who have chosen to put their money in, over and above the club's natural turnover, is undeniable and doesn't need a forensic accountant to figure out. How that situation is managed is the important question. Which leads me nicely onto:

Secondly, the "It's all a lot better now because we are better managed now" Reason.
The management now is certainly a lot different to cottage industry Bournemouth run by a quasi volunteer workforce of supporters. Whether it's better or worse is a large matter of debate currently. From the average supporter point of view it's worse, because we're irrelevant. The club shop is crap, the ticketing is crap, because the money generated by those things is peanuts. The club may well regret that in years to come if and when the TV money and Sponsorship money goes elsewhere.

But it's a cold hard financial fact that the club is putting all it's energy into schmoozing sponsors and trying to stay in the money league now because it's those two factors that enable a club with a smaller active fanbase to compete with bigger clubs. And the longer we stay in the money, the more margin for error there is. We've never had wealthy owners before, we've never had owners with previous experience running clubs in Europe, we've never had owners so removed from the supporter base. Better managed? Certainly very different, I'd say.

Thirdly, the "We're in the Premier League Now and Kerching, Kerching, Kerching" Reason.
The one way in which Bournemouth are different to all the clubs you mention Herts, is because we shot up fast from bumbling average L1 to PL, we haven't had the time to run up the levels of debt most established Championship clubs have. With the money now sloshing around, and if we manage to stay up the exponential increase next season, the potential is there for things to go either way. We could use it to gloss over all the spending to date and have very healthy books. Or we could just keep spending away over extending ourselves and end up in all sorts of shit which we will feel the consequences of in time. Or we could do something down the middle of those two, which let's be honest is probably most likely.

Time will tell

I'm just looking forward to my reindeer ride around Kings Park with Santa in December. Although the club will monetise it and charge for ticketing, the organisation of which will be comical and useless.
 

toshj

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#29
I'm not overlooking them. Only one of them is in the Championship and has been covered. It is debatable whether all of the clubs you mention would be able to manage a drop in revenue any more than, say, Fulham. Norwich is certainly an exception, and perhaps coincidentally do not have a benefactor pumping money in every year.
If a club can get up and stay up then it can survive...Swansea, West Brom, Palace are all examples but if they drop down the change could be very damaging.
But Bournemouth haven't been relegated, so it seems a little redundant to compare them to those teams which have struggled after relegation to the Championship but not compare them to those whom have established themselves in the top flight after promotion.
 

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But Bournemouth haven't been relegated, so it seems a little redundant to compare them to those teams which have struggled after relegation to the Championship but not compare them to those whom have established themselves in the top flight after promotion.
They were compared simply because of a discussion with someone and because the accounts relate to a previous season when they were in the Championship. More clubs have performed poorly, financially, after promotion to the PL than have performed well. It is somewhat speculative to consider what might happen to some of these PL clubs if they were relegated. Some will probably do better than Burnley and Wolves, some may not.
 

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