Financial Fair Play

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Wallsy
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Re: Financial Fair Play

by Wallsy » 18 May 2019 21:29

I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.

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Re: Financial Fair Play

by Nameless » 18 May 2019 21:53

Wallsy I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.


The same people own the stadium who owned it last year, we’ve not owned it in a long time. Lots of clubs play at stadia they don’t own. What benefit would owning the car park have ? The sale of the car park put a decent amount of money into the club, likewise the transfer of the stadium.
Most football clubs are in some form of financial peril. We’ve been reliant on benevolent owners underwriting our finances for years and years. As long as the owners have lots of money, are prepared to put money into the club and stay interested we’ll be ok. Much bigger clubs than us are much closer to that time bomb going off....

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Re: Financial Fair Play

by Hendo » 18 May 2019 23:31

Wallsy I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.


Ticking time bomb? Calm down to a panic m9.

Also, seeing as the Chinese are paying for a brand new training complex, I wouldn’t worry about Hogwood.

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Re: Financial Fair Play

by Wallsy » 19 May 2019 13:00

Hendo
Wallsy I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.


Ticking time bomb? Calm down to a panic m9.

Also, seeing as the Chinese are paying for a brand new training complex, I wouldn’t worry about Hogwood.


I ask about Hogwood because if we own it, we make some money from the sale of the land; however I seem to recall SJM owning it prior to the Thai’s coming in.

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Re: Financial Fair Play

by Green » 20 May 2019 13:46

The game as a whole is unsustainable. I guess you have to accept that these days you are at the behest of a billionaire playing real life fantasy football with your club.

That said, I think we can take some comfort in being a pretty attractive club to foreign investment (championship side, near enough to London) - if and when the current billionaires get bored there'll be another chump along shortly after.


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Re: Financial Fair Play

by Wallsy » 20 May 2019 14:04

Excellent article on the tilehurst end today by @maffff explaining RFC’s position with FFP.

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Re: Financial Fair Play

by Sutekh » 20 May 2019 14:12

Wallsy Excellent article on the tilehurst end today by @maffff explaining RFC’s position with FFP.


https://thetilehurstend.sbnation.com/20 ... reading-fc

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Re: Financial Fair Play

by Hound » 20 May 2019 15:12

yep, good read that. Thanks Maffff

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Re: Financial Fair Play

by Greatwesternline » 20 May 2019 15:24

Nameless
Wallsy I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.


The same people own the stadium who owned it last year, we’ve not owned it in a long time. Lots of clubs play at stadia they don’t own. What benefit would owning the car park have ? The sale of the car park put a decent amount of money into the club, likewise the transfer of the stadium.
Most football clubs are in some form of financial peril. We’ve been reliant on benevolent owners underwriting our finances for years and years. As long as the owners have lots of money, are prepared to put money into the club and stay interested we’ll be ok. Much bigger clubs than us are much closer to that time bomb going off....


I do agree with your second paragraph. Its just we all know the finances are unsustainable, so you go through the standard steps as an owner to realise some of the money, sale and leaseback the stadium, sell the land, sell the training ground maybe, but once those are gone they are gone.

The only normal thing reading have left is naming the stadium / naming the stands.

It is somewhat strange to think an entire industry like top 2 tier professional football only works because there is relatively steady supply of people willing to lose money on it.


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Re: Financial Fair Play

by Nameless » 20 May 2019 15:44

Greatwesternline
Nameless
Wallsy I do feel the Chinese have good intentions here, but I can’t but fear we are so close to doing a Bolton, Portsmouth... We no longer own our stadium, land around the stadium, the hotel. Do we own Hogwood? Just feel like we’re a ticking time bomb.


The same people own the stadium who owned it last year, we’ve not owned it in a long time. Lots of clubs play at stadia they don’t own. What benefit would owning the car park have ? The sale of the car park put a decent amount of money into the club, likewise the transfer of the stadium.
Most football clubs are in some form of financial peril. We’ve been reliant on benevolent owners underwriting our finances for years and years. As long as the owners have lots of money, are prepared to put money into the club and stay interested we’ll be ok. Much bigger clubs than us are much closer to that time bomb going off....


I do agree with your second paragraph. Its just we all know the finances are unsustainable, so you go through the standard steps as an owner to realise some of the money, sale and leaseback the stadium, sell the land, sell the training ground maybe, but once those are gone they are gone.

The only normal thing reading have left is naming the stadium / naming the stands.

It is somewhat strange to think an entire industry like top 2 tier professional football only works because there is relatively steady supply of people willing to lose money on it.


We have other options. Obviously what the Chinese are doing now in terms of managing costs makes a huge amount of sense. We also have the Academy which has earned us a reasonable amount but probably should be generating more. If you look at what Southampton have made from selling home grown players you can see what we could aim for. Ideally we'd get a couple of years out of Loader, Rinmahota etc in the first team and then sell them for £10-20 million and replace them with another one off the production line.
We've also not really 'sold' the stadium. It's just been moved between parts of the Yongge empire and could easily be moved back. It's not like Coventry selling to a complete third party or West Ham doing likewise. Potentially the sale improves our finances. As well as generating income it may move running costs off the books of the club, move pitch replacement costs etc etc. Without knowing the terms of the sale and subsequent lease it's hard to know.
I agree sustainability is the key but we seem to recognise that.

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Re: Financial Fair Play

by Greatwesternline » 20 May 2019 15:48

Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

The profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0

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Re: Financial Fair Play

by Nameless » 20 May 2019 16:05

Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

The profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


But we're only adding the equivalent of a player if we aren't at the same time getting rid of other costs by not technically owning the ground !
A new pitch every 2 or 3 years costs 500k so if that becomes a landlord cost we're ahead. Maintaining the stadium must be a huge cost which again may now be down to the landlord.
I don't know how it has been structured but assuming the owners are taking steps to ensure the business is structured to gain maximum benefit vs FFP rather than to maximise what they can extract from it you have to also assume that everything that is done has a net benefit (until that is proved to be hopelessly naïve !)

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Re: Financial Fair Play

by Greatwesternline » 20 May 2019 16:43

Nameless
Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

The profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


But we're only adding the equivalent of a player if we aren't at the same time getting rid of other costs by not technically owning the ground !
A new pitch every 2 or 3 years costs 500k so if that becomes a landlord cost we're ahead. Maintaining the stadium must be a huge cost which again may now be down to the landlord.
I don't know how it has been structured but assuming the owners are taking steps to ensure the business is structured to gain maximum benefit vs FFP rather than to maximise what they can extract from it you have to also assume that everything that is done has a net benefit (until that is proved to be hopelessly naïve !)


That is true. If you can shove all the maintenance costs off the club its smart. Probably runs against the spririt of FFP but ho hum! So does Man City sponsoring themselves with connected companies. We should really get sponsored by a sister company of Renhe to really take the piss.


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Re: Financial Fair Play

by Zip » 20 May 2019 17:49

Good stuff from Maffff. It reinforces what a disaster 2017 was. We have though significantly reduced the squad either by sale, loan or release so far this year. We need to move on six or seven preferably through sales to bring in four or five either on permanents or as loan signings.

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Re: Financial Fair Play

by maffff » 20 May 2019 18:47

Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


No complaints here - I wrote it in 30 minutes of spare time I had, that was meant to be illustrative. I think it was Derby sold theirs for 40.

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Re: Financial Fair Play

by Nameless » 20 May 2019 19:01

Greatwesternline
Nameless
Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

The profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


But we're only adding the equivalent of a player if we aren't at the same time getting rid of other costs by not technically owning the ground !
A new pitch every 2 or 3 years costs 500k so if that becomes a landlord cost we're ahead. Maintaining the stadium must be a huge cost which again may now be down to the landlord.
I don't know how it has been structured but assuming the owners are taking steps to ensure the business is structured to gain maximum benefit vs FFP rather than to maximise what they can extract from it you have to also assume that everything that is done has a net benefit (until that is proved to be hopelessly naïve !)


That is true. If you can shove all the maintenance costs off the club its smart. Probably runs against the spririt of FFP but ho hum! So does Man City sponsoring themselves with connected companies. We should really get sponsored by a sister company of Renhe to really take the piss.


It’s a lesser example of what West Ham have done. Flogged off their old ground for millions, got a cheap deal on a ground they don’t own and pay hardly any of the costs on. I believe their rent even covers the cost of stewarding. It’s all about the detail - do we still get non match day revenue from the ground ? Where does the London Irish rental go ? Who gets the money from the Compass contract ? Does our rental cover unlimited games or do we pay more if we have a long cup run, for U23 games etc ?

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Re: Financial Fair Play

by Greatwesternline » 20 May 2019 19:31

maffff
Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


No complaints here - I wrote it in 30 minutes of spare time I had, that was meant to be illustrative. I think it was Derby sold theirs for 40.



No worries. I looked at derby’s accounts. They sold their stadium for 81 m cash, selling a stadium with a net book value of 40m, hence their 40m profit.

Would be interesting to know why owners choose the particular values of stadium sale. I guess depends on the owner willingness to put cash in, and how much they can realistically get passed ffp auditors.

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Re: Financial Fair Play

by Hound » 20 May 2019 20:31

maffff
Greatwesternline Only thing about the Maff piece which i agree is a useful read is the sale of the stadium.

The profit on the sale is not the proceeds, which was £26.5m (page 12 of annual accounts)

profit from the stadium sale is the proceeds of £26.5 m less the net book value of the stadium, which was £20m. (Page 23 of accounts) so £6.5m

You calculate this by subtracting the £16.3m in the depreciation disposals line from the £36m in the cost line. This gives you net book value.

To prove the circle you can see gain on page 31, under "gain on disposal of tangible fixed assets."

So while the club got a cash injection of £26.5m, its not cash we are short of from our owners, it is allowable losses from the FFP rules. The sale of the stadium only netted us £6.5m in profit, or the equivalent of selling a £6m rated player. The only problem is we now have to pay rent of £450k a year or whatever it is, so thats the equivalent of another new player's wages added to our annual loss.

Club accounts are here btwhttps://beta.companieshouse.gov.uk/company/00053703/filing-history/MzIyODU4OTI2MmFkaXF6a2N4/document?format=pdf&download=0


No complaints here - I wrote it in 30 minutes of spare time I had, that was meant to be illustrative. I think it was Derby sold theirs for 40.


30 mins spare time from trolling other clubs fan on twitter?

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Re: Financial Fair Play

by maffff » 21 May 2019 09:29

Hound
30 mins spare time from trolling other clubs fan on twitter?


From 15 hour working days where I'm helping keep the country safe and saving lives, with occasional twitter for light relief.

Sorry, what do you do again?

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Re: Financial Fair Play

by Hound » 21 May 2019 09:44

maffff
Hound
30 mins spare time from trolling other clubs fan on twitter?


From 15 hour working days where I'm helping keep the country safe and saving lives, with occasional twitter for light relief.

Sorry, what do you do again?


Full time job managing over 80 people’s careers, 2 hours commute, volunteer to coach 3 different kids sports 1 of which I run from top to bottom, train for my own sports career in which I (occasionally) represent the country plus full time parent to 2 kids and support their own potential sports careers

Why is this a competition?

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