few thoughts and other stuff (1 Viewer)

[skybluetony176]

This bit perhaps?



Think might be some time before there are any profits for it to be a charge against myself.

Does anybody know when the club actually made a profit last?

Cheers for that.

Seems strange that sisu are intent on keeping us at sixfields where the chances of us making a profit are lower than they probably have ever been in the clubs history. It's almost like they have no intention of ever putting the club in a position where it's capable of paying it off.

 

---

[Godiva]

I should image the SISU PR machine is feeling a little frustrated ...

The what???

 

[Godiva]

7) Combined figures Got to thinking what if the figures for SBS&L and ACL groups had been one New Group for 2012 and 2013. All this is conjecture and very rudimentary Exclude say £2m rent and intercompany trading, say that the ACL directors costs removed, New Group run by CCFC directors, that a deal to write off all ACL debt done so no interest on that part of the finance.

Figures would have included in round figures
......................... 2012...........................2013
Turnover 16.6m ........................... 19.0m
cost of sales - 2.9m ........................... - 5.6m
staff costs -11.3m............................- 7.9m
other costs -6.9m ......................... -11.2m

operating loss - 4.5m ......................... -5.7m

player sales 2.8m ............................ 1.6m
other sales etc 1.4m .......................... 0.48m

Interest -1.3m ....................... -1.8m

overall loss -1.6m ........................ - 5.4m (disclosed losses SBS&L 2012 4m 2013 7.1m ACL disclosed profits 2012 1.1m and 0.775m 2013)

to me on that basis without cost savings, increased turnover, better margins and player sales then such a group is unviable in normal business terms. It would still require owner or third party funding and greater and greater debt. Promotion brings extra income but greater player cost. Reduction of player costs makes promotion harder to achieve. Catch 22 situation really for the club but just reinforces what the real financial target is in my opinion

Just some thoughts - sure others will see it differently

I am sure you will agree 2013 wasn't exactly a 'normal' year, but anyway - the interest you include is to ARVO I guess. Remove that and you are close to a business making break-even. Get us promoted and there should be room for profit.

 

[oldskyblue58]

what is a normal year ? apart from saying CCFC will make a loss in a year nothing ever seems "normal"

ARVO & the SISU funds are charging interest though and in order to pay down the ACL loan there is likely to have to be some owner capital provided (ie more debt) so not sure you are right to say ignore the interest and we nearly break even. Interest payment is a key payment for both groups and wont just disappear

As for breaking even then I think the player sales and other salers need to be taken in to account - the other sales are the disposal of Prozone (2012) and the benefit of reorganisation of the loan for ACL in 2013 - those are simply not going to happen every year. Player sales - are we going to get those kinds of sums in each year ? with the exception of Wilson for example who else in our squad would have a market value close to £1m let alone more.

I might take at face value the ACL claims regarding the turnovers being achieved but I know others don't, in which case doesn't that make things worse if the turnover levels are not achieved?

Like I said those the figures are only a rudimentary illustration of what might have been if the two groups had been combined 2012 and 2013. The actual combination might well be different. But I think you have to stand back and look at the whole picture as to how it changes/benefits CCFC not focus on individual figures.

- There wont be Olympics every year but even a combined Turnover of 19m doesn't produce positive results without major changes to costs and other incomes elsewhere
- The club without major player sales falls well short of breakeven. Are there major sales to be made each year?
- Is there room for major overhead reduction?
- The amount of interest paid on debt is a major issue? We can assume none for ACL and/or none for CCFC but is that likely or realistic?
- The group will not be able to sell other assets each year- there are none to sell (except perhaps land deals :thinking about
- Given the Group looks to be running at losses then that means further debt is being incurred doesn't it? and that debt increase would seem to relate to CCFC
- If SMCP is 60% then relevant player budget would be 12.4m based on £19m turnover plus player sales £1.6m (2013) but the group couldn't spend it because it wouldn't have the cashflow to do it. Would new monies be put in or would the club need to operate at a much lower cost level to balance the books (ie not have the quantity or quality of players some here expect by joining the two groups) Isn't that more debt?
- Getting promotion to the Championship does not necessarily solve this. Apparently worth approx. £6m to the club (TF said when we got relegated) but to stay there I suspect that would all need to be spent on players and is not going to go that far. Promotion to Premiership is different but for the foreseeable future pie in the sky looking as things stand today.

I think the broad picture raises questions and concerns even if the two groups were combined based on 2012& 2013 figures. Real progress on the pitch is going to require further and significant investment by the owners in the team not just covering losses - is that likely? I don't know not sure I have seen that kind of commitment so far. To me this all just reinforces the notion that CCFC remains a tool in a different game being played but that's just an opinion

 

[lordsummerisle]

what is a normal year ? apart from saying CCFC will make a loss in a year nothing ever seems "normal"

ARVO & the SISU funds are charging interest though and in order to pay down the ACL loan there is likely to have to be some owner capital provided (ie more debt) so not sure you are right to say ignore the interest and we nearly break even. Interest payment is a key payment for both groups and wont just disappear

As for breaking even then I think the player sales and other salers need to be taken in to account - the other sales are the disposal of Prozone (2012) and the benefit of reorganisation of the loan for ACL in 2013 - those are simply not going to happen every year. Player sales - are we going to get those kinds of sums in each year ? with the exception of Wilson for example who else in our squad would have a market value close to £1m let alone more.

I might take at face value the ACL claims regarding the turnovers being achieved but I know others don't, in which case doesn't that make things worse if the turnover levels are not achieved?

Like I said those the figures are only a rudimentary illustration of what might have been if the two groups had been combined 2012 and 2013. The actual combination might well be different. But I think you have to stand back and look at the whole picture as to how it changes/benefits CCFC not focus on individual figures.

- There wont be Olympics every year but even a combined Turnover of 19m doesn't produce positive results without major changes to costs and other incomes elsewhere
- The club without major player sales falls well short of breakeven. Are there major sales to be made each year?
- Is there room for major overhead reduction?
- The amount of interest paid on debt is a major issue? We can assume none for ACL and/or none for CCFC but is that likely or realistic?
- The group will not be able to sell other assets each year- there are none to sell (except perhaps land deals :thinking about
- Given the Group looks to be running at losses then that means further debt is being incurred doesn't it? and that debt increase would seem to relate to CCFC
- If SMCP is 60% then relevant player budget would be 11.4m but the group couldn't spend it because it wouldn't have the cashflow to do it. Would new monies be put in or would the club need to operate at a much lower cost level to balance the books (ie not have the quantity or quality of players some here expect by joining the two groups)
- Getting promotion to the Championship does not necessarily solve this. Apparently worth approx. £6m to the club (TF said when we got relegated) but to stay there I suspect that would all need to be spent on players and is not going to go that far. Promotion to Premiership is different but for the foreseeable future pie in the sky looking as things stand today.

I think the broad picture raises questions and concerns even if the two groups were combined based on 2012& 2013 figures. Real progress on the pitch is going to require further and significant investment by the owners in the team not just covering losses - is that likely? I don't know not sure I have seen that kind of commitment so far. To me this all just reinforces the notion that CCFC remains a tool in a different game being played but that's just an opinion

To boil it down then, no matter where we play, if we rent at the Ricoh, own the Ricoh, stay at Sixfields, or build our own ground, we're fucked?

 

[Jack Griffin]

To boil it down then, no matter where we play, if we rent at the Ricoh, own the Ricoh, stay at Sixfields, or build our own ground, we're fucked?

I think it means both businesses have to make economies for their fusion to make sense.

I believe both are implementing strategies to do this, so maybe they can find a way ahead one day.

 

[duffer]

To boil it down then, no matter where we play, if we rent at the Ricoh, own the Ricoh, stay at Sixfields, or build our own ground, we're fucked?

It's a bit like having a job at the sewage works - we're always in the sh*t, it's just the level that varies.

 

[oldskyblue58]

pretty much LS unless there is a major change in expectation and business operation, which is going to involve the CCFC "loans/equity" being written off or made interest fee. Fans expectations need to managed, we are L1 and, with the level of investment, likely to remain so without major change and a lot of luck.

It goes back to what I said before - need to rebuild the club from the basics, but that is unlikely to fit with investors expecting a return such as interest. The growing debt burden is simply unsustainable for where the club is now (would be a problem even in the premiership). The owners solution seems to be to cut back and cut back, which is going in the football industry to be self fulfilling, but at the same time incur an increasing interest burden. Don't get me wrong no reason why a lender should not get a return but in this case the lender appears to be closely associated with SISU and the club can't even make the interest payments let alone the capital ones.

Is there the desire, the passion, the commitment to say "ok stop this, we all swallow our pride and we start from basics - it wont be great but long term for the good of the club it needs to be done" (btw "all" refers to all sides) Preaching to the converted when I say it is all about the club being in Coventry at the Ricoh on any reasonable basis available ( that does not have to be owning the site) - because by doing so the fans come first and without them there is no team, club, Coventry pride or enhancement, and no investment to value, own or sell. That's not all about the current owners the other stakeholders need to play their part too but the owners are the ones that control what goes on at CCFC no one else. But currently it is all about investment & value not fans and worth

 

[oldskyblue58]

I think it means both businesses have to make economies for their fusion to make sense.

I believe both are implementing strategies to do this, so maybe they can find a way ahead one day.

Agreed Jack. I get the feel of different strategies though.

CCFC - cut back as much as possible to reduce losses where they can. Yes I know they have put some money in but covering losses is not really investment it is called providing working capital. There is for me the impression of a lack of direction for the business to go. Muddled thought contradictory statements etc

ACL - have been almost forced in to a strategy of needing to expand their business. They need new business they need to grow and find new opportunities away from football. Were too comfortable and needed a commercial sharpness. Difficult to tell how well they are doing or not because nothing much is said

The two strategies differ and produce different attitudes I think

 

[chiefdave]

To boil it down then, no matter where we play, if we rent at the Ricoh, own the Ricoh, stay at Sixfields, or build our own ground, we're fucked?

This is the problem isn't it, as a club we can't operate in isolation from everyone else and it seems pretty much every other club are losing money by overspending on players. Even if the debt was written off and the Ricoh given to us for free how would we ever get above, at best, championship level while breaking even?

Until the governing bodies get together and put further reaching FFP into action with severe, preferably points, penalties it seems its near impossible to run a club in a business like fashion and have anything resembling success on the pitch.

I'm sure at first people would settle for business stability but if Pompey this season is anything to go by a few months into the season the complaining about lack of signings and playing budget will start.

 

[lordsummerisle]

This is the problem isn't it, as a club we can't operate in isolation from everyone else and it seems pretty much every other club are losing money by overspending on players. Even if the debt was written off and the Ricoh given to us for free how would we ever get above, at best, championship level while breaking even?

Until the governing bodies get together and put further reaching FFP into action with severe, preferably points, penalties it seems its near impossible to run a club in a business like fashion and have anything resembling success on the pitch.

I'm sure at first people would settle for business stability but if Pompey this season is anything to go by a few months into the season the complaining about lack of signings and playing budget will start.

Fans complaining about "lack of investment", "speculate to accumulate" etc.(and I've done it myself in the past) are part of the problem in this.

Plenty complaining the season that we went down that we weren't spending enough money, but still spent over 100% of turnover on player wages, sure that it has been even worse than that in the past.

As you say though, not just a problem with us, but pretty much all teams unless got a sugar daddy willing to lose hundreds od millions in some cases.

Football in it's current model is business suicide, until it changes completely(which to be fair UEFA are trying to do at the top level) then nothing will change.

 

[Astute]

To boil it down then, no matter where we play, if we rent at the Ricoh, own the Ricoh, stay at Sixfields, or build our own ground, we're fucked?

Not exactly.

There are two things that could help. We could get the attendances up to near where they were when SISU took over. But this would take a Championship side playing better than we are used to. We would be OK as long as the wage bill wasn't astronomical like last time. Or SISU could get their hands on some real estate and raise funds from it. For this they would need a freehold to make it easier.

 

[Grendel]

Not exactly.

There are two things that could help. We could get the attendances up to near where they were when SISU took over. But this would take a Championship side playing better than we are used to. We would be OK as long as the wage bill wasn't astronomical like last time. Or SISU could get their hands on some real estate and raise funds from it. For this they would need a freehold to make it easier.

The wage bill was competitive - not astronical and we were losing over half a million every month with a squad that wasn't capable of achieving anything resembling promotion form.

Since then the competitiveness has increased in the championship due to sky parachute payments escalating.

 

[dongonzalos]

pretty much LS unless there is a major change in expectation and business operation, which is going to involve the CCFC "loans/equity" being written off or made interest fee. Fans expectations need to managed, we are L1 and, with the level of investment, likely to remain so without major change and a lot of luck.

It goes back to what I said before - need to rebuild the club from the basics, but that is unlikely to fit with investors expecting a return such as interest. The growing debt burden is simply unsustainable for where the club is now (would be a problem even in the premiership). The owners solution seems to be to cut back and cut back, which is going in the football industry to be self fulfilling, but at the same time incur an increasing interest burden. Don't get me wrong no reason why a lender should not get a return but in this case the lender appears to be closely associated with SISU and the club can't even make the interest payments let alone the capital ones.

Is there the desire, the passion, the commitment to say "ok stop this, we all swallow our pride and we start from basics - it wont be great but long term for the good of the club it needs to be done" (btw "all" refers to all sides) Preaching to the converted when I say it is all about the club being in Coventry at the Ricoh on any reasonable basis available ( that does not have to be owning the site) - because by doing so the fans come first and without them there is no team, club, Coventry pride or enhancement, and no investment to value, own or sell. That's not all about the current owners the other stakeholders need to play their part too but the owners are the ones that control what goes on at CCFC no one else. But currently it is all about investment & value not fans and worth

Unfortunately what you describe there is a decision that is made in the interests of the Club.

Attempting to force the freehold or ACL for next to nothing is a decision which may pay dividends for SISU. However I think it is a lost cause and trying to get there via this path causes catastrophic damage to the club.

This is where my issue is with the view backing SISU's tactics will be better for the club long term.

This route will just do major damage to the club. SISU are going for it as it is the one that gives them the chance to recover the most money. Major damage happens to the club in the meantime.

 

[Astute]

The wage bill was competitive - not astronical and we were losing over half a million every month with a squad that wasn't capable of achieving anything resembling promotion form.

Since then the competitiveness has increased in the championship due to sky parachute payments escalating.

We paid big wages for poor players. Or you could say a competitive wage bill for an uncompetitive squad.

And we had good attendance figures when SISU took over. Our average attendances were over 20,000. Yet it is said we were losing about 500k a month. That to me is astronomical.

 

[shmmeee]

Fans complaining about "lack of investment", "speculate to accumulate" etc.(and I've done it myself in the past) are part of the problem in this.

Plenty complaining the season that we went down that we weren't spending enough money, but still spent over 100% of turnover on player wages, sure that it has been even worse than that in the past.

As you say though, not just a problem with us, but pretty much all teams unless got a sugar daddy willing to lose hundreds od millions in some cases.

Football in it's current model is business suicide, until it changes completely(which to be fair UEFA are trying to do at the top level) then nothing will change.

While a nice idea it's impractical to suggest fans shouldn't want to be as competitive as possible in whatever competition were in. Though I think the last few years has in our case made people temper their expectations (I never see people suggesting we spend millions any more).

The game is what it is. It needs fixing but until that happens anyone going into football should do so with open eyes.

The debt burden Sisu have run up makes our case particularly bad though. Without a significant write off any new owner, be it fans, Byng, PHIV, the Internet, will have to put in significant cash year on year.

We'd be better off going bust, taking the hit and rebuilding from basics as OSB suggests. Short term pain for long term gain.

I can't see any good way out of this.

 

[Warwickhunt]

The only source to funds is via the Fans and they need to work on getting them back to a stadium that is capable of holding them! however i think the period of time away from the Ricoh is a bridge to far and i believe CCFC will never get tham back again

 

[Warwickhunt]

The wage bill was competitive - not astronical and we were losing over half a million every month with a squad that wasn't capable of achieving anything resembling promotion form.

Since then the competitiveness has increased in the championship due to sky parachute payments escalating.

The problem being is that the clubs who do not come backup whilst they receive the parachute payments fall into decilne and FFP will bite their asses eventually and there is then no way back unless the whole of the FL is turned into a level playing field.

 

[lordsummerisle]

The problem being is that the clubs who do not come backup whilst they receive the parachute payments fall into decilne and FFP will bite their asses eventually and there is then no way back unless the whole of the FL is turned into a level playing field.

QPR will be a bit fucked if they don't get back up through the play-offs.

 

[shmmeee]

Need to realign prize money so it's a graduated decline through the leagues

The difference between coming bottom of one league and top of the next one down should be the same as the difference between two positions in te same league.

Also TV money needs a serious rethink and no parachute payments.

 

[lamtara2006]

I don't think they will show such big losses to be honest

They have had monies in from Cup games, sale of Leon Clarke, add on's for former player sales and the rates rebate (am assuming paid to them). There will also be monies due for prize money & TVetc. Costs at Sixfields are very low and the club shop was shut from March to December. The wage bill will have been very low although still the biggest expense. The next biggest expense will be the interest charges to ARVO and SISU investors I would guess. The academy costs were paired right back too. Turnover from matches and shop will be down and there is a liability to pay ACL of £590k. Advertising income will be poor and there is little sponsorship money

They have been operating on a shoe string. Pure guess but 2m to 3m loss ?

Surely the drop in ticket sales will be massive: average attendances down by around 8,000 per game and I guess a lower average ticket price as there have been lots of discounts and freebies. Good FA Cup run this season but last year there was a bumper crowd for JPT. The Rates Rebate would have gone into the Administration I believe as it was shown as an asset of CCFC Ltd. No rent paid on Ricoh in year to May 2013, the Club have been paying rent on Sixfields this season.
All of which makes me think the losses for May 2014 could actually be worse than May 2013.

 

[Jack Griffin]

I thought losses would be about the same.

1) CCFC are still paying up some contracts for players that were discarded, they may have got new contracts but I'm sure they didn't vote themselves a pay cut over their original deals, so I reckon at the very least CCFC makes up any shortfall on what they get now.

2) The money from cup run & £40/ticket Arsenal game must far exceed that from that £5/ticket JPT game..

3) Salaries & agents fees lower as dealing in cheaper market.

4) Sponsorship monies have collapsed.

5) Sales on executive boxes & catering must be virtually nil.

6) Shop sales must be rather poor, every time I've looked in the shop it has been empty, much fewer customers than the old shop used to have.

7) Ticket sales have been cut , I estimate to ~ 15% of the former amount.

8) There is a bit of pie & parking money, but probably not a lot.

9) Transfers possibly less, club got money for Bigi & Keogh last year didn't they? Clarke fee will possibly be 1/3 of monies for those 2.

10) The academy still requires full funding to supplement the FA grant.. I wonder how this is audited?

 

[speedie87]

i would say current losses are equal to value of the equity they are having to create through the issue of new shares.

As the only way around the financial rules are to cover losses with equity

 

[oldskyblue58]

Yes the drop in matchday income is massive but so too have the decreases in wages and overhead. Not sure how they accounted the rates rebate but it is cash flow if not profit by same token on the other side is the payment due to ACL. There was something like £800k of rent and matchday expenses paid in the 2013 accounts. Losses in 2013 were £7.1m. In 2013/14 we have not been in embargo because of the SMCP as far as we know.

Yes a bigger loss is possible but I wonder if it is likely

Possible income
Matchday £330,000
Sponsorship & advertising £250,000 (inc one off deals in cup games)
sale of players £1,000,000
Cup run money share of gates £600,000
Prize money £250,000
TV money £200,000
Shop sales £150,000
Add ons re sales of players prev years £700,000
Other commercial income £250,000

Income say 3.6m against which they paid out £10.7m to trade from Sixfields with a small young squad to make more than £7.1m loss?

Costs possibly
Staff, directors & player wages say £3m (2013 £6.9m)....... got rid of a lot of players and staff. Young lads and journey men wont be on lots in L1. Loan players on the cheap. Shop not staffed for 6 months etc
Interest £1.8m (2013 1.8m)............. unlikely to be less even if we cant actually physically pay it over
administrative and other overheads £2m (2013 £4.1m) ....... Sixfields lot cheaper, less rent & maintenance costs, no shop for 6 months, office/commercial staff reduced etc
Direct costs 500k (2013 2.4m)........ no grounds maintenance, no cost of shop sales for 6 months, etc

They have been shaving costs wherever they can.

Maybe more than 2 or 3m but not more than 7m loss surely?

 

[oldskyblue58]

Just another couple of thoughts. The accounts to 31/05/13 indicate the club had drawn down a further 2.8m from ARVO. I would assume that covers a period up until the accounts were signed off 27/02/14 plus issued ARVO with shares £2.1m to date. Call it a round £5m extra funding. However part of that funding was probably to provide £1.5m to purchase CCFC off the administrator. There has been no real funding from SISU investors in the years 2012 and 2013, I do not think that will change. So does that indicate trading losses funded at around 3.5m?

 

[sky blue john]

Osb do you know the current situation with Ryton. Is it still on the clubs books with an Arvo charge over it. Or has it totally changed hands ?

 

[oldskyblue58]

As far as I know it is still owned by the group with an ARVO charge attached SBJ. Would have to do a land registry search to find out otherwise until the next accounts are published.

 

[fernandopartridge]

This is the problem isn't it, as a club we can't operate in isolation from everyone else and it seems pretty much every other club are losing money by overspending on players. Even if the debt was written off and the Ricoh given to us for free how would we ever get above, at best, championship level while breaking even?

Until the governing bodies get together and put further reaching FFP into action with severe, preferably points, penalties it seems its near impossible to run a club in a business like fashion and have anything resembling success on the pitch.

I'm sure at first people would settle for business stability but if Pompey this season is anything to go by a few months into the season the complaining about lack of signings and playing budget will start.

Identified a symptom and the incorrect remedy. The problem begins with the Premier League and Champions League TV deals.

 

[1940 oldfive]

I think pay is the operative word:sarcasm:

Do ACL not pay interest on their loan to CCC?

 

[shmmeee]

Identified a symptom and the incorrect remedy. The problem begins with the Premier League and Champions League TV deals.

Yep, and we can only blame ourselves for the first one as founding members. We were too quick to fuck over the little clubs, now we are one. Some might say karma.