Madejski Sold out and failed again

[winchester_royal]

From a business as usual point of view it just wwouldn't make sense though. They would just build up the accumulated losses as most other clubs do.

Much as it pains me to say it it does whiff of someone trying to get hold of quick cash. I desperately hope I am wrong!

How do you keep paying the players though? Most clubs accumulate losses through loans from owners, but as we know Sir John is skint and the Zinga's aren't putting any money in.

[winchester_royal]

Thought I'd have a little look around the other clubs to see how they're doing.

Brighton have a net worth of -£58m http://companycheck.co.uk/company/00081077

Forest around the same as us http://companycheck.co.uk/company/01630402

Ipswich -£69m http://companycheck.co.uk/company/00315421

QPR are again at around our level http://companycheck.co.uk/company/00060094
Though their holdings company is at -£180m...

Southampton: -£56m http://companycheck.co.uk/company/00053301

Aston Villa: -£140m (no wonder Lerner wants rid..) http://companycheck.co.uk/company/03375789

Maybe things aren't so bad..

Seriously though...who'd buy a football club? Mental business.

[MmmMonsterMunch]

True. £12 million parachute money won't go that far.

I fail to see how signing Guthrie, Pog, Drenthe, Williams, Gunter and McCleary has sent us into armageddon either though. Certainly not enough to have to borrow all of the parachute money upfront but then we dont know how nuch has been borrowed. No oxf*rd way woukd we need £30 m to cover the list above.

[winchester_royal]

True. £12 million parachute money won't go that far.

I fail to see how signing Guthrie, Pog, Drenthe, Williams, Gunner and McCleary has sent us into armageddon either though. Certainly not enough to have to borrow all of the parachute money upfront but then we dont know how nuch has been borrowed. No oxf*rd way woukd we need £30 m to cover the list above.

Oh I agree, I'm working on the assumption that parachute payments aren't paid till the end of the year (as has been muted elsewhere) so we needed to bring forward that first £12m (and that's what the mortgage is). Obviously if it turns out that it was all 4 years that we've borrowed against then I'd change my tune somewhat.

[MmmMonsterMunch]

Yep exactly. That is what concerns me.

[Ian Royal]

True. £12 million parachute money won't go that far.

I fail to see how signing Guthrie, Pog, Drenthe, Williams, Gunter and McCleary has sent us into armageddon either though. Certainly not enough to have to borrow all of the parachute money upfront but then we dont know how nuch has been borrowed. No oxf*rd way woukd we need £30 m to cover the list above.

Our wage budget was >£40m in the PL. It was £26m when we got promoted.

There will have been wage reduction clauses, but we lost very few players and then made high profile signings who would almost certainly be on top end Champ wages if not more.

I can't possibly see how we could have reduced the wage budget below £30m with the squad we kept and the signings we made. Were they worth it? Hell no! But we were paying them ridiculo wages already. And that was with the second smallest PL wage budget if memory serves!

Personally I doubt rather strongly we've borrowed on all 4 season's worth of parachute payments to pay this season's wages. We have other income and we're clearly not afraid to make a loss and try to balance it in future years by taking more drastic action. It seems very likely we've borrowed on this season's though. Maybe a portion on next as well but I hope not. If we've borrowed on it all (and needed to) someone should be lynched.

[Snowball]

Thought I'd have a little look around the other clubs to see how they're doing.

Brighton have a net worth of -£58m http://companycheck.co.uk/company/00081077

Forest around the same as us http://companycheck.co.uk/company/01630402

Ipswich -£69m http://companycheck.co.uk/company/00315421

QPR are again at around our level http://companycheck.co.uk/company/00060094
Though their holdings company is at -£180m...

Southampton: -£56m http://companycheck.co.uk/company/00053301

Aston Villa: -£140m (no wonder Lerner wants rid..) http://companycheck.co.uk/company/03375789

Maybe things aren't so bad..

Seriously though...who'd buy a football club? Mental business.

Nice. Is there a league table of net-worths? Be good to see.

[Snowball]

From Deloitte's

Championship clubs’ revenues were £476m (up 13%) in 2011/12, mainly driven by more clubs being in receipt of parachute payments from the Premier League and the change in club mix within the division following the previous season’s promotions and relegations.

• In 2011/12, the average revenue of the seven Championship clubs in receipt of parachute payments was £29m (with only West Ham United from this group gaining promotion at the end of the season), and the average revenue for the other 17 Championship clubs was £16m. In the first three seasons since 2009/10 when parachute payments increased in value and duration, only two of the nine relegated clubs have won promotion back to the Premier League, and two have fallen below the Championship.

• Championship clubs’ revenue for 2012/13 is estimated at £460m, down 3% primarily as a result of lower distributions in the first season of the Football League’s new broadcast deal. Then, aggregate revenue for 2013/14 is projected to increase to over £500m, including eight clubs in receipt of parachute payments. There will also be a club with a parachute payment in each of League 1 and League 2.


• The aggregate operating losses of Championship clubs worsened to £147m in 2011/12; a long slide from an aggregate operating loss of £35m back in 2003/04. Only three Championship clubs made an operating profit.


• Championship clubs’ net losses (after player trading and finance costs) for 2011/12 improved to £158m (2010/11: £189m), an average of £6.6m per club. Only five Championship clubs made a net profit.


• This loss-making behaviour is, in part, due to the lure of the Premier League promotion prize of at least £120m. Each of the promoted clubs can expect a revenue increase of more than £60m in 2013/14 and, even if a club is relegated after one season, it will be entitled to parachute payments over the following four seasons of around £60m.


• In 2011/12 the average revenue of a League 1 club was £5m (down 8%) and in League 2 it was £3.3m (up 10%). The change in the mix of clubs in each division mainly explains these changes. The wider economic landscape has made operating a lower division club more challenging over recent years.

• The net losses of both League 1 and League 2 clubs in 2011/12 were at a similar level to the previous season. The average net loss for a League 1 club was £2.4m and in League 2 it was £0.3m.

• English football continues to make an extraordinary contribution to life in the UK in terms of its diversity, popularity, social contribution, economic impact, investment in facilities and community activities, and unique global reach.

[Pseud O'Nym]

Here's the Premier League 2013 debt table



Not quite net worth must relate to it.

[East Grinstead Royal]

£958million! Fcuk me sideways. Eye-watering. FFP, eh?

[Sutekh]

Know it will never happen but wouldn't it be brilliant to see Chelsea relegated carrying a debt that size.

[Royal Rother]

£958million! Fcuk me sideways. Eye-watering. FFP, eh?

Those sort of figures are exactly why FFP was brought in.

[Extended-Phenotype]

How do we have a debt of 38m again?

[Ian Royal]

How do we have a debt of 38m again?

Madejski and Zingaravich loans cover ,ost of it given we've consistently spent more than we earned across approximately 15 of the last 20 seasons, if not more.

[loyalroyaldaz]

Wont be long until we are on ebay !

http://www.telegraph.co.uk/news/celebri ... ggage.html

[multisync1830]

£958million! Fcuk me sideways. Eye-watering. FFP, eh?

Those sort of figures are exactly why FFP was brought in.

Chelsea complied with all the FFP criteria and sailed through the audit. They are sitting on £800m of finest Chelsea real estate land which once they can get hold of the pitch of Stamford Bridge a move to a new ground c/w higher income that brings will wipe out most of the outstanding

Because they are the poster boys for "rich owner we haven't got" bitching syndrome they get the most scrutiny but Man city debt level is all smoke and mirrors which is why they didn't comply and got fined heavily.(manC match day income is lower than Newcastles for example)

That aside the sheer debt levels must eventually lead to a 'correction' in the market and God help the poor sod who is left holding the parcel when the music stops..

[Nameless]

£958million! Fcuk me sideways. Eye-watering. FFP, eh?

Those sort of figures are exactly why FFP was brought in.

Chelsea complied with all the FFP criteria and sailed through the audit. They are sitting on £800m of finest Chelsea real estate land which once they can get hold of the pitch of Stamford Bridge a move to a new ground c/w higher income that brings will wipe out most of the outstanding

Because they are the poster boys for "rich owner we haven't got" bitching syndrome they get the most scrutiny but Man city debt level is all smoke and mirrors which is why they didn't comply and got fined heavily.(manC match day income is lower than Newcastles for example)

That aside the sheer debt levels must eventually lead to a 'correction' in the market and God help the poor sod who is left holding the parcel when the music stops..

Surely City had to construct bizarre financial arrangements purely because of the way FFP has been set up. Instead of an unspeakably rich bloke covering the cost of running his club it had to be made to look like 'earnings'. Chelsea had the massive advantage that most of that debt is old, and IIRC is ignored for FFP purposes.

[Royal Rother]

Indeed, and the value of real estate is completely irrelevant.

[multisync1830]

Indeed, and the value of real estate is completely irrelevant.

Not for FFP purpose but it is a huge asset as yet unrealised (unrealisable until the pitch owners are negated) RFC have pretty much nothing.

The point was that Chelsea may have a very large debt but with a fair wind they could get most of it down and at the moment don't seem to be worried and in fact made a profit last year apparently. RFC cannot trade out of the level debt currently on the books as they simply don't make a profit. So without either promotion or a new buyer willing to finance, the debt must be refinanced or carried forward but you can only keep doing that for a relatively short time.

Anyhoo back to topic

[Royal Rother]

RFC could make a massive profit this year if they manage to sell / offload the expensive / valuable players and replace them with kids on much lower wages.

That could raise £20m in transfer fees, reduce the wages by £10m and pocket the £16m....

That should do it.

If only life / business were that simple of course, but it's not impossible.