Club Finances - new charge registered against club (Macquaire Bank Limited)

[Chocolate Teapot]

Pretty sure the club took the loan for the training ground off king power - they'd surely do the same for the stadium expansion?

 

More likely this is cash flow related as without the incoming matchday revenue they'll need to wait until the next tv payment.

[los dedos]

19 hours ago, Babylon said:

Southampton just made a £62m loss because of COVID. And that’s not even including the losses from this season. 
 

I think people need to prepare themselves for the fact we are going to have huge losses over our next two sets of accounts and we have bills to pay.

Surely losses from Covid would be from lack of match day revenue only . Would this really amount to £60m  ? Remembering to factor what they profit from it not the turnover numbers . Or am i missing something ?

[Chocolate Teapot]

19 hours ago, Babylon said:

Southampton just made a £62m loss because of COVID. And that’s not even including the losses from this season. 
 

I think people need to prepare themselves for the fact we are going to have huge losses over our next two sets of accounts and we have bills to pay.

Also worth pointing out they managed to make a 43m loss the year before.

[Foxin_Mad]

They must be borrowing a fair bit if its secured against the 22/23 seasons payment, you would think its for more than keeping the club running. Matchday revenue is small fry in comparison to tv money, they will have lost hospitality and a few other things but most if our turnover must be tv money. 

[Babylon]

39 minutes ago, Abrasive fox said:

Also worth pointing out they managed to make a 43m loss the year before.

Indeed but the worrying thing is that was just from last season, where we had crowds from a lot of it. 

[Chocolate Teapot]

Just now, Babylon said:

Indeed but the worrying thing is that was just from last season, where we had crowds from a lot of it. 

Yeah - so it was only £20m worse than the year before.

 

Certainly we'll have losses but the accounts reported in Europe from places like Barca are because they're horrifically run.

[Babylon]

1 hour ago, los dedos said:

Surely losses from Covid would be from lack of match day revenue only . Would this really amount to £60m  ? Remembering to factor what they profit from it not the turnover numbers . Or am i missing something ?

No they won't just be from Covid, they had a £23m drop in revenue which will be directly from that. Also note what their MD says...

 

"BC: Toby, let's start with the headline figures which is that turnover is down £23m and loss is up to a net of £62m from £34m. Do we put all that down to the impact of COVID-19 during the early months of are there other factors?

TS: I think we put the vast majority of it down to COVID. On the pitch, league position was higher year on year and we were on live TV more which means we got more from the broadcasters. Our sponsorship revenue was up so commercial income was increasing."

 

 

You have all sorts, don't forget sponsorships and rebates:

 

Match day tickets

Merchandising / Low kit sales

Corporate

Conferencing Facilities

Sponsorships (mag, screens, match day, boards etc etc)

Match Day Magazines

Loss of all forms of advertising / sponsorships that the club can't hold people to when they aren't getting what they paid for, potentially even rebates to sponsors. 

Then you have rebates to the TV broadcasters at home and abroad (£300m+ spread across the league).

Rebating food concessions etc. 

 

 

Edited 13 January 2021 by Babylon

[Babylon]

12 minutes ago, Abrasive fox said:

Yeah - so it was only £20m worse than the year before.

 

Certainly we'll have losses but the accounts reported in Europe from places like Barca are because they're horrifically run.

Nearer £30m and that doesn't include all the losses from this season, the rebates we've got to pay broadcasters. Could easily be £50-60m PLUS losses over the two seasons. 

[shen]

18 hours ago, Corky said:

Plus, should it unfortunately come to it, we do have good assets to sell to raise money.

 

Given the lack of matchday revenue we're going to need a boost in the short term that hopefully we'll start to recover next season. And again, a top four finish would boost us hugely.

Yes, but who's to say anyone can afford our players if the entire football market is struggling? We'd most likely have to sell players below their expected value if it came to that.

[SilverFox]

Never really understand the backward logic of a selling club borrowing for the transfer monies they are expecting.

 

The buying club should raise the loan and pay the interest.  After all they want the player.  All we are doing is diminishing our return.  If we needed the money so bad we should’ve said that’s the price, pay it or borrow the money yourself.

 

Imagine buying a car and asking Mercedes to borrow the money on a massive rate of interest on the expectation that I’ll pay them later.  I wonder what they would say.

 

We have it the wrong way round, and if it is industry practice, the industry has it the long way around.  Seems unfathomable to me that I would sell something then take out a loan with massive interest until the buyer gets around to paying me.  

[Mehrez]

Southampton also had a massive cock up with their shirt sponsor which wouldn’t have helped 

 

https://www.google.co.uk/amp/s/www.bbc.com/sport/amp/football/53918262

 

Edit: actually looks like this will just affect this seasons accounts 

Edited 14 January 2021 by Mehrez

[ozleicester]

10 hours ago, Steve Earle said:

Where have you been @jeffschlupp? Have missed your posts!

Collecting balls after shooting practice?

[mozartfox]

Sheffield United and West Brom must be bricking it. Losing their places in EPL and the COVID loss of income will surely kill them?   8pts to go and we are safe.

[Babylon]

Just now, mozartfox said:

Sheffield United and West Brom must be bricking it. Losing their places in EPL and the COVID loss of income will surely kill them?   8pts to go and we are safe.

Have West Brom spent much? Their overheads will be low compared to most prem teams, as will Sheff Us's. So chuck in the huge parachute payments and they are probably fine, so long as all their signings have wage reductions built in. 

[CosbehFox]

18 hours ago, Chocolate Teapot said:

Pretty sure the club took the loan for the training ground off king power - they'd surely do the same for the stadium expansion?

 

More likely this is cash flow related as without the incoming matchday revenue they'll need to wait until the next tv payment.

Originally the Maguire money was used for a loan on the training ground and this was further added to by a loan from King Power. A lot of it is cash flow related - TV payments are staged which isn't perfectly helpful with a monthly wage bill and (formerly) a month valuation on a construction project to pay 

 

 

2 minutes ago, mozartfox said:

Sheffield United and West Brom must be bricking it. Losing their places in EPL and the COVID loss of income will surely kill them?   8pts to go and we are safe.

The reasoning why WBA have spent jack shit is this. 

 

Does anyone know when the TV deal ends? Appears slightly risk to bank TV deal which is likely to reduce in the future

[davieG]

We need to make sure we're never relegated well certainly not in the early 20s with the loan covered by PL payments or the Parachute Payment. We'd be nearer to being killed off with all our overheads. 

[Babylon]

3 minutes ago, davieG said:

We need to make sure we're never relegated well certainly not in the early 20s with the loan covered by PL payments or the Parachute Payment. We'd be nearer to being killed off with all our overheads. 

I've not looked at the full details, but we had one of these before whereby it was just a loan facility to draw against if we needed it. Rather than them loaning a set amount, so you could spend nothing, 100 grand or millions. 

 

It could be like the other loan facility we had, whereby it was short term and then the longer term one was organised with Kingpower. 

[davieG]

30 minutes ago, Babylon said:

I've not looked at the full details, but we had one of these before whereby it was just a loan facility to draw against if we needed it. Rather than them loaning a set amount, so you could spend nothing, 100 grand or millions. 

 

It could be like the other loan facility we had, whereby it was short term and then the longer term one was organised with Kingpower. 

So depends on if we spend it, if we get relegated before it's repaid or if KP are prepared to bail us out with a loan. I guess that's a lot of 'IFS' 

[Babylon]

11 minutes ago, davieG said:

So depends on if we spend it, if we get relegated before it's repaid or if KP are prepared to bail us out with a loan. I guess that's a lot of 'IFS' 

Yeah, too many IFS to even worry about. 

 

My feeling is that the people in charge have shown nothing but care and good judgement. Yes, the large infrastructure projects and then Covid are something new for them to handle. But I can't believe they won't do so in a responsible manner, that won't put the club in jeopardy. 

 

It also comes back to our current MO, of buying and developing young talent. We have a large number of desirable assets on our books, you could cash in on one and sort most of your problems. Certainly not idea mind.

[davieG]

13 minutes ago, Babylon said:

Yeah, too many IFS to even worry about. 

 

My feeling is that the people in charge have shown nothing but care and good judgement. Yes, the large infrastructure projects and then Covid are something new for them to handle. But I can't believe they won't do so in a responsible manner, that won't put the club in jeopardy. 

 

It also comes back to our current MO, of buying and developing young talent. We have a large number of desirable assets on our books, you could cash in on one and sort most of your problems. Certainly not idea mind.

That's was my concern if we got relegated and the loan had to be repaid with the Parachute payment we'd risk needing to lose a lot of talent and then having to start again.

 

I guess I'm someone who just naturally looks to find the worst case scenarios which is why I'm never confident or expect to win a game.

[Babylon]

1 hour ago, davieG said:

That's was my concern if we got relegated and the loan had to be repaid with the Parachute payment we'd risk needing to lose a lot of talent and then having to start again.

 

I guess I'm someone who just naturally looks to find the worst case scenarios which is why I'm never confident or expect to win a game.

I'm guessing the idea is that Kingpower will hold any loans eventually. It's what we did with the training ground, if that happens (which makes sense) then they could easily give us a pass on any loan amount, or reduce the repayment if they need to. 

[sacreblueits442]

1 hour ago, davieG said:

That's was my concern if we got relegated and the loan had to be repaid with the Parachute payment we'd risk needing to lose a lot of talent and then having to start again.

 

I guess I'm someone who just naturally looks to find the worst case scenarios which is why I'm never confident or expect to win a game.

...we perhaps would not be using the parachute payment in order to finance the loan!!!

Loans can be re-negotiated and that would be the sensible thing to do as you need to give yourself the best chance in order to bounce straight back, to earn the money in order to meet the loan requirement.

[davieG]

2 minutes ago, sacreblueits442 said:

...we perhaps would not be using the parachute payment in order to finance the loan!!!

Loans can be re-negotiated and that would be the sensible thing to do as you need to give yourself the best chance in order to bounce straight back, to earn the money in order to meet the loan requirement.

Well of course but it did say/suggest in the loan that if we got relegated the repayment would come from the parachute payment.

[Lambert09]

Is it fair to assume this loan is for the stadium expansion? Or could we be freeing up cash for something else? 

[Chrysalis]

On 12/01/2021 at 21:00, Fox in the North said:

Back in the last program of the season, Top said  “we intend to resume consultation on stadium expansion by the end of 2020.” That says to me irrespective of the pandemic that the club intends to carry on.

 

It’s probably been delayed a little but I don’t think he’d have gone on record in the summer if the current situation was to significantly hinder the club’s plans.

Pandemic is best time to do it really, there is no fans in stadium anyway so the impact is lower.