CCFC Ltd Accounts (3 Viewers)

[skyblue dan]

So anyone wanting to take over the club, would take on £52.2m debts... then pay Construction costs of £113 million for the Ricoh Arena, then have to put in say £10m for a good large squad of players to go up? £175 millon... Bargain :laugh:

 

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[wingy]

The admin expenses being cited in the CCFCH accounts would thus imply money coming from the holding company to the club. Such an astronomical increase does raise a few big questions.

When it represents pretty much the unpaid written off figure OSB states ,What does it represent through the club ,Godiva refers to it as not "Real Money",But what caused an increase in the Sisu loan of £7.5m. year on year?

 

[wingy]

Answer to myself ?? The Lack of a Dann + Fox transaction!!!

 

[oldskyblue58]

simply didnt have a business that generated enough cash to pay out the bills wingy..... we have to rely on player sales to even get close because we dont get enough fans through the gate and dont get all the income fans generate.

 

[grego_gee]

Maybe there is some sense in leaving the long-standing debts of the club in the accounts..
Our tax liability is zero as a result of this.
If you look at administrations of other clubs I believe some have been caused by demands from HMRC...
If SISU had shown old debts as written off - they would then start making a profit earlier and become liable for tax.
Its understandable just so long as they don't overpay themselves interest somewhere down the line. (and perhaps they don't?)

At the end of the day we can't get too concerned about the accounts, its up to SISU how they run the "business" and present the accounts, and its their money! (although tickets contribute something)

However I am getting concerned about one particular aspect...... the playing budget.
This is supposedly newly limited by FFP to 65% of the turnover.
I believe this can only be on what's in the accounts for the previous year.
We should be in a position to take advantage this year as our last championship year should have been a bigger budget than other clubs in DIV 1.
However SISU dont appear to be using this advantage - the CCFC accounts show £10m turnover so our playing budget limited by FFP could be £6m. (OK maybe less if not all the turnover is eligible in FFP, but since the CCFC accounts are just the playing operations arguably it is all eligible)
However Waggot said the other day the playing budget was closer to £4m than £1.5m, so between £2.75 & 4m. That's way below what it could be at £6m

Of course SISU have to actually find the money and 65% is only a maximum limitation but if SISU don't maximise the budget this year they will be more constrained next year because it will be limited to 60% of a smaller DIV 1 turnover - and then we'll be competing with the next season of fall-outs from the championships who will be working on 60% of their much bigger turnovers from their last championship season.

To me, the best chance is now, if they don't use the max this year we will be stuck in the mire !....
imp:

 

[Sky Blues]

If the estimates that our fall from the Championship will cost us about £4m are correct, and assuming in 2011/12 our turnover remained about £10m, then wouldn't that mean that this year (2012/13) turnover will probably be more like £6m. Therefore, under FFP next year we will sure have something like £3.6m for the playing budget - which sounds about where the club is pitching it this year... So are they just bringing in stricter FFP on themselves a year early? This might mean we don't have to rip the squad apart again next summer if we stay in League 1. That might provide some long over due stability on the playing front... (although I suspect Sisu's motivation will be to stem the losses, not to benefit the squad).

 

[Brighton Sky Blue]

It's just hideously complicated. Why the club has to be a sub subsidiary in the first place makes little sense.

 

[oldskyblue58]

Here are the two roots of the problem

...................... Turnover..............wages.............loss before any other costs
2011 ........... 10,267,708........ 10,374,688.......... 106,980
2010 ........... 9,291,108........ 10,314,188..........1,023,080
2009 ........... 8,895,301........ 10,502,957..........1,607,656
2008............ 9,193,964........ 11,082,926..........1,888,962
2007............ 7,699,064........ 8,200,277.............501,213

How does anyone expect a solvent business based on that? You cannot rely on people throwing money at it and building up debts

 

[grego_gee]

If the estimates that our fall from the Championship will cost us about £4m are correct, and assuming in 2011/12 our turnover remained about £10m, then wouldn't that mean that this year (2012/13) turnover will probably be more like £6m. Therefore, under FFP next year we will sure have something like £3.6m for the playing budget - which sounds about where the club is pitching it this year... So are they just bringing in stricter FFP on themselves a year early? This might mean we don't have to rip the squad apart again next summer if we stay in League 1. That might provide some long over due stability on the playing front... (although I suspect Sisu's motivation will be to stem the losses, not to benefit the squad).

That's fine if you are only aiming to stay in League one. Teams with the biggest budget will be most likely to be most competitive for promotion. This year FFP allows us to use a bigger budget and be more competitive but SISU apparently aren't planning to use it all. Being good and playing by the rules early won't give us any advantage - in fact I suspect we will be playing against other teams that will be doing their level best to stretch the budget beyond what the FFP rules dictate.
imp:

 

[oldskyblue58]

BUT CCFC are apparently going to have to work within a budget that balances the books ...... not only that but monies from season tickets has already been borrowed against and will have to be repaid. They will have to reduce all costs as much as possible So if turnover is £6m then £2m goes to repay ST loan..... it just doesn't add up. Points to player sales coming up.

 

[skyblueman]

Spot on OSB there isn't any other option

 

[Sterling Archer]

Have we really got any players we can sell apart from Keogh? If we don't have 11 players, I'm sure the fines wont help either!

 

[skyblueinBaku]

I'm even more depressed now!

 

[Sky Blues]

Looking at those figures OSB has posted the wage splurge we went on after the Sisu takeover looks totally reckless. A quick punt on 'instant success' and a big payback by selling the club in the Premier League that fell short?
If they had been open with the fans I'm sure the majority would have accepted that we have to live within our means. Follow that through and it would probably have meant last year we would still have been able to run a budget that in theory should have kept us in Championship. Instead we had splurge (I can't call it boom) and swingeing cut (teetering, it appears, on bust).

 

[thegameaintstraight]

These accounts are for 2010-11, and notwithstanding a reduced wage bill, it will be a surprise if 2011-12 is any better.
Seems to me the £50m+(increasing) debt is the fundamental problem.
SISU wont go until they get a good chunk back and given the state we're in no one will pay.
We seem to be on a downward financial spiral with no end in sight.
Meanwhile SISU fiddle while Rome burns. (pun intended).
Apologies for the despair, but I live in hope.

 

[PVA]

The squad was worth much more than £1.9m this time last year.

 

[grego_gee]

The squad was worth much more than £1.9m this time last year.

in accounts parlance the squad are apparantly reffered to as intangable assets! At least the player registrations are. They get amortized apparently at 33%pa (god help them!) . So any players that have been here 3 years are worth zero in the accounts and so on.... imp:

 

[Nonleagueherewecome]

So 52.2m of the 57.2m is money that they owe to themselves? Figures.

 

[Nonleagueherewecome]

simply didnt have a business that generated enough cash to pay out the bills wingy..... we have to rely on player sales to even get close because we dont get enough fans through the gate and dont get all the income fans generate.

But if you don't sign the calves, you can't sell them later as a fattened cow.

 

[shmmeee]

Who has gone since this?

King, Westwood, Gunnarsson, Turner, Clingan, Eastwood, Platt, Jutkiewicz, O'Halloran, Doyle, Osborne, McIndoe, plus any kids.

And we've signed:

McDonald, Murphy, Dunn, McSheffrey, O'Donovan, Keogh

(am I using the right seasons here?)

That's got to be a massive reduction in wages. How likely is it we were close to break even before relegation?

 

[Jack Griffin]

Some time ago I came to the conclusion the only escape is for the club to fold and be restarted afresh.
Any other approach equals years of misery.

I can see why they accept relegation, that really cuts the impossible wages bill. The root source of the problem.

Football has got itself to blame, full of reckless gamblers.

 

[WillieStanley]

Who has gone since this?

King, Westwood, Gunnarsson, Turner, Clingan, Eastwood, Platt, Jutkiewicz, O'Halloran, Doyle, Osborne, McIndoe, plus any kids.

And we've signed:

McDonald, Murphy, Dunn, McSheffrey, O'Donovan, Keogh

(am I using the right seasons here?)

That's got to be a massive reduction in wages. How likely is it we were close to break even before relegation?

McSheffrey, ROD and Keogh came the season before.

 

[Brighton Sky Blue]

One of the first columns in the profit/loss sheet sums up the whole situation (discounting ProZone in the turnover since it was discontinued last year):

Turnover: £12m
Direct Operating Costs: £2.5m
Gross Profit: £9.5m

Staff Costs: £11.2m
Admin. Expenses: £13.3m

Operating Loss: £15m

This must surely be the ultimate take home message from these accounts. Huge player sales (and there's nobody who would fetch anything that could make a dent in that figure anymore) can only cover the cracks and goodwill payments serve the same purpose. With its current turnover the company is bust under such outgoings-even if both operating costs were halved, we'd still be making a loss! The sports analysis side of the business has been discontinued, leaving gate receipts and commercial activities as the only sources of revenue. Preserving the £12m turnover will be extremely unlikely given the big commercial losses arising from relegation and declining attendances causing a dent in both revenue streams. As such, turnover would be expected to sink below £10 million, which, without a heavily curbed wage bill, could cause the next loss to hit the £20 million figure.

This business simply cannot survive.

 

[Godiva]

One of the first columns in the profit/loss sheet sums up the whole situation (discounting ProZone in the turnover since it was discontinued last year):

Turnover: £12m
Direct Operating Costs: £2.5m
Gross Profit: £9.5m

Staff Costs: £11.2m
Admin. Expenses: £13.3m

Operating Loss: £15m

This must surely be the ultimate take home message from these accounts. Huge player sales (and there's nobody who would fetch anything that could make a dent in that figure anymore) can only cover the cracks and goodwill payments serve the same purpose. With its current turnover the company is bust under such outgoings-even if both operating costs were halved, we'd still be making a loss! The sports analysis side of the business has been discontinued, leaving gate receipts and commercial activities as the only sources of revenue. Preserving the £12m turnover will be extremely unlikely given the big commercial losses arising from relegation and declining attendances causing a dent in both revenue streams. As such, turnover would be expected to sink below £10 million, which, without a heavily curbed wage bill, could cause the next loss to hit the £20 million figure.

This business simply cannot survive.

I think not.
Out of the £15m, £9m is a one time 'non-cash' write-off.

The accounts shows finances more than a year old and is the status when sisu took control of the board and got rid of Ranson, Hoffman, Elliott who had run the club since the take-over.
Since then, a year with intensive cost savings has brought down the losses significantly.

The next set of accounts will still be from championship business and my guess - probably as good as anybodys - is a loss around £4m.
Still unsustainable, but getting closer.

 

[skyblueman]

Administration is still the best route for the club IMO ... 10 point deduction I know but it cleans up the balance sheet and the club - we can walk away from expensive wage contracts - the only real looser is SISU as most of the debt is with them.. as long as this debt is there it will stifle any chance of the club rebuilding .. as soon as the club turns a profit the interest rates on the loans will hike up and the debt will start getting paid back - with the gate receipts and other commercial activities the club will be profitable from day one and I think support would be huge for the club once again - most of the profits can be re-invested in the squad... time for a new beginning as it's long overdue

 

[MusicDating]

Administration is still the best route for the club IMO ... 10 point deduction I know but it cleans up the balance sheet and the club - we can walk away from expensive wage contracts - the only real looser is SISU as most of the debt is with them.. as long as this debt is there it will stifle any chance of the club rebuilding .. as soon as the club turns a profit the interest rates on the loans will hike up and the debt will start getting paid back - with the gate receipts and other commercial activities the club will be profitable from day one and I think support would be huge for the club once again - most of the profits can be re-invested in the squad... time for a new beginning as it's long overdue

Unfortunately as the 'football creditors' rule was found to be legal, we'd still be liable for 100% of ALL football debts (in Scotland it is different as the football creditors rule does not apply there).

So we could pay St John's Ambulance 2p in the £, but cannot just walk away from David Bell's 10 year contract...

 

[skyblueman]

I appreciate the players remain a liability for the CVA (although I do think this rule will be changed before long - HMRC will not walk from this) - the player liabilities are already down on what they were and will fade in relatively short time-scale - it's not a £50Million liability - but there are plenty of other contracts which will not be covered under this rule - besides the huge SISU debts will be gone - as will SISU which I think would delight the fan base - certainly it would me - without all that debt a new buyer would come forward and we would have an excellent chance once again

 

[crowsnest]

We are still paying Eastwood, Clingan, Platt, Ireland as they are under contract until Saturday.

 

[skyblueman]

Clock is always ticking on Players contracts and they will all expire in short time... we can manage that.. it's the bloody internal debt milestone that's the problem - as long as this is there no-one else will ever come forward.. it's just too big and makes the whole operation financially laughable... if SISU can stem the losses and in turn make an operating profit they will sit tight on us for years and years to get as much of their money back from us poor fans.. don't expect investment along the way as it's just not going to happen

 

[SkyBlueJohnso]

i don't want to sound too positive here and get shot down by most on here, however - we know the accounts ending May 2011 are pretty desperate and shocking, we also know a lot of cost cutting has gone on since then. We also know if SISU had put us into administration it would of been no surprise to anyone and would of wiped off a lot of bad debt. We also know the transfer embargo has been lifted, part of this being based on submission of accounts, and i understand prove of sustaning a team for the coming season.

Taking all this into consideration, would SISU really carry on and stick around if the club was losing money month on month. Would they only stay if there was signs that in the near future, if not happpening already, the club was close to break even and maybe even starting to make a small profit?

forgive my optimism, but i have said for the last 2 years, if SISU were going to go, they'd of gone by now when things were at their lowest/worst. Yes if a takeover came in and they could make some money from it then they would probably walk away, but that ain't gonna happen!!! The only way SISU are ever going to see anything back is to turn things around and get the club making money, and as i've said in previous posts, they have to invest in the team to bring back the fans to increase season ticket revenue, as well as purchase part or all of the stadium to gain revenue and sales from that side of things. At the end of the day they are a business, business and other football clubs have gone into administration having not been in as bad a situation as us.

 

[skyblueman]

I don't think for a minute they don't have a plan and I'm sure for now it is to hit an operating break-even point as fast as possible .. it just must now be miles different from what the original one was but that's business as well as football.. they had a punt and it didn't work.. my biggest worry is that we will be stuck with huge debts for years and years - little team investment slowly paying back the loans - that's a crappy situation for any club to be in - sure we might with luck uncover some gems in the youth but guess what's going to happen to them... as a supporter it's a tough deal because we all need to believe it's going to be better... where's that belief going to come from for the foreseeable future?

 

[Brighton Sky Blue]

i don't want to sound too positive here and get shot down by most on here, however - we know the accounts ending May 2011 are pretty desperate and shocking, we also know a lot of cost cutting has gone on since then. We also know if SISU had put us into administration it would of been no surprise to anyone and would of wiped off a lot of bad debt. We also know the transfer embargo has been lifted, part of this being based on submission of accounts, and i understand prove of sustaning a team for the coming season.

Taking all this into consideration, would SISU really carry on and stick around if the club was losing money month on month. Would they only stay if there was signs that in the near future, if not happpening already, the club was close to break even and maybe even starting to make a small profit?

forgive my optimism, but i have said for the last 2 years, if SISU were going to go, they'd of gone by now when things were at their lowest/worst. Yes if a takeover came in and they could make some money from it then they would probably walk away, but that ain't gonna happen!!! The only way SISU are ever going to see anything back is to turn things around and get the club making money, and as i've said in previous posts, they have to invest in the team to bring back the fans to increase season ticket revenue, as well as purchase part or all of the stadium to gain revenue and sales from that side of things. At the end of the day they are a business, business and other football clubs have gone into administration having not been in as bad a situation as us.

If SISU leave they stand a very real chance of losing every penny they loaned to the club-by keeping the business on life support they retain a shred of hope of getting something back eventually. Things can always get worse in football.