FAQ 2 - Money Talks (4 Viewers)

[oldskyblue58]

They have significance in so far as they seperate out the trading performance of each but in particular the football playing side.

both companies form part of the SBSL group and it is those accounts that give the overall picture of trading and net worth (or otherwise). SBSL is the holding company and produces accounts that included a consolidation or adding together of all results for the various companies in the group. In doing that exercise there are debts and liabilities that exist between the group companies that are contraed out. For example the individual accounts could show that CCFC Ltd owes £20m to CCFC holdings limited and £25m to SBSL. In the accounts of CCFC Holdings there will be a debt owed to it by CCFC Ltd and in the accounts of SBSL show that company owed £25m. When the group accounts are consolidated those amounts owing and owed will be matched and contraed out so the effect is £nil. What the Group accounts do is show the trade and liabilities with entities outside of the group which is the true overall position

The net liabilities of CCFC Ltd will include the amount owed to other group companies (ccfc holdings and SBSL).

 

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[crowsnest]

Other Loans The club and group has taken out other loans notably against the Ryton facility and ticket sales. This is not unusual but not desirable either. The alternative is however, given SISU will not put in further major funds, that the club fails to meet its debts and goes into administration. Might not be what we want to see but it keeps the club going. Hopefully these facilities will be only short term. However as the loans are secured on assets (eg Ryton) it puts these assets at risk if the loans are not repaid. Plus such loans incur interest and make the losses bigger

The mortgage on Ryton was taken out in 2010 on the day we signed Jukey. Everton had originally agreed to loan him to us but changed their minds and only offered a full transfer.
This mortgage has now been paid off.

 

[oldskyblue58]

You may well be right about the original charge and why it was taken out crowsnest

A new charge however was taken out on 01/04/11 which according to Company House is still outstanding as no declaration of satisfaction filed for charge number 20.

 

[crowsnest]

The new charge is against the loans from sisu. Probably taken out due to the hostle takeover and the need for the club to be put into admin for any chance for this to happen.

 

[Godiva]

You may well be right about the original charge and why it was taken out crowsnest

A new charge however was taken out on 01/04/11 which according to Company House is still outstanding as no declaration of satisfaction filed for charge number 20.

What date format is that? 4th of jan or first of apr?

The new charge is against the loans from sisu. Probably taken out due to the hostle takeover and the need for the club to be put into admin for any chance for this to happen.

I think the hostile takeover was after the new charge, so can't be the reason.
If the charge was taken out in january then it was most probably to get urgent cash.

 

[oldskyblue58]

The charge is in favour of SBS&L and is over all assets of CCFC Holdings Ltd. But like you say was probably done to safeguard against the bid or Administration. It also means that to get hands on the club any bidder I would think has to bid for SBS&L which in turn means they would have to settle out the SISU funds loans

 

[oldskyblue58]

What date format is that? 4th of jan or first of apr?



I think the hostile takeover was after the new charge, so can't be the reason.
If the charge was taken out in january then it was most probably to get urgent cash.

Its 1st April Godiva

I reckon SISU knew before this that there might be a bid but in any case it would be a sensible thing to do given the state of the finances. Dont think it raised any finance at all merely secured what was already owing to SBSL by CCFC H and any future amounts paid from SBSL to CCFC H

It stops anyone else putting first charge on Ryton so that perhaps tells us that they are not looking for outside finance raised against the training ground. Is that further evidence that finances are improving ?

 

[shmmeee]

OSB/Godiva: Nonleagueherewecome asked a great question in another thread, that's deceptively simple but I'm sure there's not an easy answer:

Why is the club losing so much money compared to other teams?

It surely can't all be down to the Ricoh, so where is the hole in our finances compared to clubs of similar stature?

Understandable if it's too much hassle to answer, but if you have a rough idea of any other clubs finances perhaps you could hazard a guess?

 

[oldskyblue58]

without going through the other clubs accounts I cant say shmmee ... to be honest I cant even say if i agree with nonleaagueherewecome's statement..... just dont know. Each club will be different, some will have owners funding the shortfall by lending their club money others will have owners prepared to write off the loans others wont have such big wage bills as we used to have, etc etc There could be all sorts of reasons and there will be clubs who on present trading are trading far less profitably (???) than us and quite possibly digging a bigger hole. If he has gone through the accounts he would know.... other than that it is a guess that may well be right but could be wrong

 

[shmmeee]

Who would be a fair club to compare us to?

In terms of gates, success, etc.

I'll see if I can dig up the accounts.

 

[oldskyblue58]

in terms of similar crowds what about Reading ?- 2009/10 season very similar

 

[SkyBluesAndy]

Great stuff OSB, can I ask how you are so clued up on how our finances work? It can all get very confusing so I guess you must have some sort of degree / experience that enables you to work it all out? I like to think I am fairly intelligent but I'm not going to pretend I understand football finances which is probably why I haven't joined in with the whole SISU out thing because I don't understand the facts of it all - and I can't just chant against something I don't understand and I won't be a sheep and do it just because everyone else is doing it. All I know about is what I see in front of me which is the football being played and I just get behind the team.

PS I have nothing against fans who want SISU out I just can't join in unless I know what I'm shouting for.

 

[shmmeee]

I'm not paying companies house right now, but I found this post from a Reading fan who seems to have good knowledge, from last month:

Firstly- RFC Holdings includes both the hotel and the results of the football club. Reading Football Club is just the club. The hotel was initially loss making and seperately loaned money from SJM. It has now profitable and has paid this back and could now potentially subsidise the club.

NOTE: Sounds similar to the Ricoh, side business that hasn't been too successful but looks like it could contribute in the future

Secondly, SJM takes no salary, no dividends and no money out of the club other than interest on his loans of £20m. This is at a rate BELOW base rate, so is currently NIL. If anybody feels like abusing the man please ensure you would be prepared to work without any pay or reward whilst being abused in the same fashion.

NOTE: Effectively the same as SISU, except if the base rate changes they'll get charged interest

Thirdly, over the last 6 years, almost every penny of our TV income from the premierleague, parachute payments and ticket revenue has been spent on players. RFC earnt approximately £60m from tv, £32m from parachutes and £40m from ticket revenues over this period and spent £130m on playing staff wages alone. Therefore all running costs of the club, stadium, training facilities and of course incoming transfer obligations are currently being met by player sales.

NOTE: Again, very similar to our situation, I believe player wages are over 100% of turnover, please correct me if I'm wrong. Obviously Reading earn more money through parachutes, etc. but conversely they spend more on players than us

Fourthly transfer income is obviously paid over a number of years and dependant on numerous clauses. Therefore I think SJM makes it clear that its not as simple as spending £11m on new players, or indeed £4m. We probably can rely on an extra £2.5m a year over the next 4 or 5 years and so it is this figure that will be built into our new budgets. As we have probably budgeted to a £3m or so loss then this will result only in break even for 2011-2012, so to actually pay lots of cash for any new players right now would lead to borrowing.

NOTE: First point is valid for us, but also our losses are double that of Reading, so questions remain unanswered

Fifthly, of course this is different from most clubs, who spent either next years season ticket money (leeds, cardiff), dead peoples money that is in dispute (Soton), money borrowed against a new stadium (Brighton), Imaginary money gained by fraud (leicester) etc etc. Reading could gently pledge future cash to fund a new team but the currently strategy has given us more success than the above clubs so why change?

An interesting take on other clubs finances: Leeds and Cardiff also loaning against future income

Sixthly, we pay our players high wages so that we attract top players and they no doubt get bonuses for all our recent success, cup runs etc, but most importantly they get high wages so they tie themselves down and can be sold for lots. An alternative would be paying lesser wages, having worse players, not need to sell them and playing in league 1. The wagebill is still big as Long and Mills will still be on it, much as Harper was the year before and Hunt and Doyle before that. Comments above the £20m is ridiculous are wide of the mark as a) rough calculations based on football manager £xK a week do not include the 12.8% extra employees NI on all wages and the fact that bonuses are likely to have the tax paid by the company (not exactly normal but very common) which leads to a 66.67% tax rate, all of which is included in salary costs. and b) the average championship wagebill is over £20m.

NOTE: Another difference from our current strategy, but again they were recently a Premiership team and have only just come off the teat of parachute payments. You could argue they're us 7 or 8 years ago.

 

[oldskyblue58]

Great stuff OSB, can I ask how you are so clued up on how our finances work? It can all get very confusing so I guess you must have some sort of degree / experience that enables you to work it all out? I like to think I am fairly intelligent but I'm not going to pretend I understand football finances which is probably why I haven't joined in with the whole SISU out thing because I don't understand the facts of it all - and I can't just chant against something I don't understand and I won't be a sheep and do it just because everyone else is doing it. All I know about is what I see in front of me which is the football being played and I just get behind the team.

PS I have nothing against fans who want SISU out I just can't join in unless I know what I'm shouting for.

Accounts is how I make my living SBA

 

[bo.mod]

this is my opinion and i am entitiled to it in this democratic country and sisu cant not remove this banner!
we are not losing as much as they say.
they are purely asset stripping con men.
where has the so called 30 million been invested?
igwe is a clown and another puppett of this shady organisation!
how can a chairman be in touch with his working class 'income' from his sunny portugese hole!?
have they actually answered a sraight question with a staight answer? no. politics is calling for this lot!
and if by some small chance they are reading this... you can't sue me coz i'm skint becuase of watching the so called 'investment' they have made! and i'm have no assets much like the club we all love and will continue to long after this shower has run into the sunset clutching their wedge!

 

[Tankie]

I'm extremely impressed..OSB

Give Harry Rednapp a call!
I believe He's on the look out, for a "New Accountant."

 

[Jack Griffin]

These are from http://www.duedil.com/

This is the most useful bit of that report

Here is the one for the holding company

And the other company