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?
I should image the SISU PR machine is feeling a little frustrated ...
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
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?
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.
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.
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.
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
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.
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.
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.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.
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 ?
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.
Do ACL not pay interest on their loan to CCC?
Identified a symptom and the incorrect remedy. The problem begins with the Premier League and Champions League TV deals.
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