Can anyone explain why the club is in financial difficulty?

[Stevie G]

Man Friday, we took non-league and non-Prem proteges and made them stars, hence we invested in them, and they were good enough to make 8th in their first season at that level, with some truly breath-taking performances throughout the Champ 106 season and into the first Prem season. Those type of performances were re-attempted under McDermott only that team then didn't have the same strength in depth.

[Ian Royal]

I am absolutley staggered at the suggestion wages were less than £14m given that would be the lowest for a decade and a reduction from £44m the previous year.

I find it hard to believe that the players had 75% wage reduction clauses on relegation.

My best guess is those are the wages left over that TSI didn't pay when they bailed rather than our total bill.

It's not hard to see how we've had such problems when we lost £12m in our last champ season followed by £2m in the PL and have been stuck with what must be a huge wage bill since.

[Royalblueredandwhite]

I have been following this forum for a long time, This particular thread has raised a question which I hope is not just answered with the standard "Anton" or "TSI" because I am sure JM had a say.

It seemed JM was very pro FFP and knew what to expect, so why does it seem we are struggling more then others to adjust to these new rules? Was it we were promoted and relegated at an incredibly unlucky time? If so has the benefit of promotion to the premier league without remaining at that level a year of "better football" followed by an uphill struggle in the championship of balancing books?

I guess technically that is three questions.

[Ian Royal]

We're struggling to stay within the rules because Anton promised and spent money he never had on big wages which we couldn't quite afford in the PL and certainly can't in the champ.

Unfortunately several of our highest earners can't be moved on. Pog, Guthrie, Drenthe.

[Lower West]

It seemed JM was very pro FFP and knew what to expect, so why does it seem we are struggling more then others to adjust to these new rules?

Other clubs are struggling equally as much financially.

Swindon are cutting their entire wage bill to £1.25 million a year. Have a manager that's been plucked from obscurity. Rely on loan players to a huge extent.

Arguably Reading are ahead of the curve. There's a decision to invest in the academy. Rather than spend lavishly on players that may make the grade. If it means a bumpy ride. So what. That's football as I remember it. Not clubs dominating the basis of financial fire power alone.

[SCIAG]

I have been following this forum for a long time, This particular thread has raised a question which I hope is not just answered with the standard "Anton" or "TSI" because I am sure JM had a say.

It seemed JM was very pro FFP and knew what to expect, so why does it seem we are struggling more then others to adjust to these new rules? Was it we were promoted and relegated at an incredibly unlucky time? If so has the benefit of promotion to the premier league without remaining at that level a year of "better football" followed by an uphill struggle in the championship of balancing books?

I guess technically that is three questions.

We're not struggling more than others. Blackburn, Bolton and Forest have transfer embargoes, Leicester and QPR will have big fines when they are relegated.

The reason we are not one of the very most comfortable clubs is because we paid big wages to Roberts and Pogrebnyak in particular. If the owner had been prepared to unwrite them and take the FFP hit then no issue. It turned out he wasn't, so we had to pay them ourselves plus interest on our loan.

[Forbury Lion]

Another spin on Anton / TSI...... Sir John sold his shares without doing enough through due diligence, possibly because his hands were tied somewhat due to a pressing need to release some cash from his investment and a lack of alternative buyers.

I don't blame Sir John, but he did keep on about due diligence for so long in the build up to selling to Anton. Maybe the delays were due to Anton/TSI doing due diligence on Sir John?

[Ian Royal]

Another spin on Anton / TSI...... Sir John sold his shares without doing enough through due diligence, possibly because his hands were tied somewhat due to a pressing need to release some cash from his investment and a lack of alternative buyers.

I don't blame Sir John, but he did keep on about due diligence for so long in the build up to selling to Anton. Maybe the delays were due to Anton/TSI doing due diligence on Sir John?

I'm not sure how you expect due dilligence to find out that Anton's mates back out and his dad refuses to continue picking up the tab when anton dramaticly over commits financially with poor player signings and an underperforming squad that gets relegated.

[philM]

I don't blame Sir John, but he did keep on about due diligence for so long in the build up to selling to Anton. Maybe the delays were due to Anton/TSI doing due diligence on Sir John?

Due Diligence usually refers to what the Purchaser undertakes, ie checking that what they are buying doesn't have any hidden or dodgy looking aspects to it. Usually teams of accountants and lawyers pore over the accounts, staff contracts, debtors, expenditures, comittments etc.

The accounts of the Purchaser aren't normally opened up to the same level of scrutiny. It's usually the Purchase Contract that covers any problems regarding the Purchaser's ability to complete the deal eg penalty clauses etc.

Allowing Anton the level of input/control that he had, eg hiring players on excessive wages prior to fully completing the deal, does seem with hindsight to have been foolish.

My guess is that the Purchase Contract wasn't as tough as it should have been. Maybe rather than paying him off, which it appears we did, he should have forfeited a decent slice of what he had paid us.

[Royals and Racers]

The club is not in financial difficulties. Those figures, as the article clearly explains, aren't for the club but for the holding company, some six months ago. They were the result of the holding company taking back the club and its debts from TSI and include money owed to directors (including JM) and Vibrac.

the Football club (not Holdings) accounts were published on the 8th December-(upto as usual 30th June). Has anyone seen these ,and are able to give a summary of what they show ?

[multisync1830]

TAWEESUK JACK SRISUMRID 919119429 Registered Address: Madejski Stadium Junction 11 M4, Reading, Berkshire, United Kingdom, RG2 0F

Taweesuk Srisumrid holds 6 appointments at 6 active companies, has resigned from 1 companies and held 0 appointments at 0 dissolved companies. Taweesuk began their first appointment at the age of 42. Their longest current appointment spans 0 years and 3 months at RFC BEARWOOD LIMITED. The combined cash at bank value for all businesses where Taweesuk holds a current appointment equals £700,227, with a combined total current assets value of £5,572,591 and total current liabilities of £59,377,984. Roles associated with Taweesuk Srisumrid within the recorded businesses include: Director

Read more at: http://companycheck.co.uk/director/919119429

IE RFC in all it's guises is around 53m in the hole. The debt hasn't been wiped out just transferred and underwritten by others.

the real reason for the purchase and their only chance to recoup that debt?

http://companycheck.co.uk/company/09315 ... -structure

this is very interesting unless it hasn't been updated properly or they bought/inherited TSI as part of the deal?

Ultimate parent company Ultimate Parent Name Company Number THAMES SPORTS INVESTMENTS LTD #0077598

RFC-PLOT-1-LIMITED
Subsidiary companies
Subsidiary Name Company Number
RFC PLOT 2 LIMITED 09316837
RFC PLOT 3 LIMITED 09316855

http://companycheck.co.uk/director/919119429


Credit Safe:
RFC-PLOT-1-LIMITED
Holding Company THE READING FOOTBALL CLUB LIMITED
Ownership Status Wholly Owned
Ultimate Holding Company THAMES SPORTS INVESTMENTS LTD

Group structure Full
Company Name
THAMES SPORTS INVESTMENT...
THE READING FOOTBALL C...
READING WOMEN'S FOOT...
RFC PLOT 1 LIMITED
RFC PLOT 2 LIMITED
RFC PLOT 3 LIMITED

[3points]

I will have a look at the accounts later and post the highlights

[DaddyKuhl]

with a combined total current assets value of £5,572,591 and total current liabilities of £59,377,984. Roles associated with Taweesuk Srisumrid within the recorded businesses include: Director

Read more at: http://companycheck.co.uk/director/919119429

IE RFC in all it's guises is around 53m in the hole. The debt hasn't been wiped out just transferred and underwritten by others.

Remember the latest accounts runs to the end of June (3 months before the takeover) and the fact that £59m of debt is 'current' would suggest that those debts are to be paid in the current financial year (which is what a current liability is). I guess when someone has had a look at the accounts and posted on here (3points) things will be a tad clearer and people won't need to be second guessing all of the time. Also, I would question the validity of the data on the website as it states the current assets being the same as the total assets for RFC (unless there are no non-current assets in the business, which is hard to believe)

[STAR Liaison]

Multi-sync wrote:
IE RFC in all it's guises is around 53m in the hole. The debt hasn't been wiped out just transferred and underwritten by others.

the real reason for the purchase and their only chance to recoup that debt?

http://companycheck.co.uk/company/09315 ... -structure

this is very interesting unless it hasn't been updated properly or they bought/inherited TSI as part of the deal?

STAR WRITES: Our belief is that this data quoted above hasn't been updated properly / yet. We believe TSI is out of the picture, that the debt has been transferred to the new owners and is not as large as £53M - but certainly not an amount we'd like to see on our Barclaycards.

[Vision]

I suspect any reference to TSI is simply outdated. The club a few months back confirmed the full make up of the football club ownership structure as

Reading Football Club ownership structure:
25% owned by GPT Football Investment Ltd and 25% owned by GPT UK Investment Ltd, which are both 100% owned by Narin Niruttinanon.
25% owned by RFC UK Investment Co Ltd, which is 100% owned by Sasima Srivikorn.
25% owned by Universal FICO Ltd, which is 100% owned by Sumrith Thanakarnjanasuth.

Reading FC Directors: Sir John Madejski, Sasima Srivikorn, Narin Niruttinanon, Sumrith Thanakarnjanasuth, Nigel Howe, Ian Wood-Smith, Taweesuk Srisumrid, Theekharoj Piamphongsarn

[3points]

I've posted a summary of the 2014 accounts in the Club Policies section. Any questions feel free to post and I'll try to answer them, based on the additional information included in the accounts

[3points]

These are summaries from the accounts. The highlights are as follows (this is all from the Football Club accounts and not the RFC Holdings accounts):

Turnover fell from £59m to £38m, of which £27m was from Media & Broadcating (ie mainly parachute payments).

Operating expenses fell from £62.5m to £49.3m. Of this wages fell from £46m in 2013 to £34.5m in 2014, though player numbers remained the same at 53, though management and coaching staff number increased from 81 to 102 in 2014.

The club made a £5m profit on selling players up to 30 June 2014 (presumably Mariappa, Kebe and Le Fondre). It also sold players for £5.5m after this date (Morrison, McCarty)

Interest payable increased to £1.4m from £0.6m

net loss for the year was £7.3m, compared to £2.3m the previous year. Without the player sales the loss would have been over £12m. I assume there are a fair number of academy costs included which, when removed, will have got the club under the £6m FFP limit for that year.

As at 30 June, RFC Holdings held all the shares and any debt that had previously been provided by TSI had also been transferred to RFC Holdings. As at 30 June all the debt had been assigned to a third party lender, though the accounts do not state who this was (Vibrac perhaps at that date, or maybe the Thais had already started to step up). Other loans in the accounts are now nearly £47m. However, this is largely a reallocation of previous debts from long term to short term liabilities as total creditors only increased from £55.8m to £59.6m. SJM put in another £1.6m in new loans.

The land at Bearwood has been acquired for £4.5m subject to planning permission being granted and the club potentially owes £2.5m on player transfer fees which are dependent upon certain performance criteria being reached.

[Snowball]

Turnover without parachute payments only 11 Million?

[3points]

Turnover without parachute payments only 11 Million?

Media & Broadcating - £27.5m
Matchday income - £5.7m
Commercial income - £3.8m
Rugby - £0.6m
Other - £0.4m

Think parachute was £23m, so the club got £4.5m from normal TV and radio rights. Therefore, about £15m in total without parachute.

Now we can see the size of the problem the club has with the wage bill (£36m), and how next summer we can expect a massive clear out or severely reduced terms if players re-sign.

[ZacNaloen]

That wage bill needs halving,

Tough times ahead.