LEICESTER POSTS £67M PRE-TAX LOSS

[Muzzy_Larsson]

41 minutes ago, Winsum said:

We have players valued at over £450 million on the books. The loss of £67 million is a loss produced from one of the most

difficult times endured by the sport

The club is backed by a wealthy parent and Cashflow at the moment is not an issue.

The opportunity next season of Champions League football and the financial benefits from on and off the field

activities is hopefully just around the corner

The wage bill is a concern but the depressed level of turnover exaggerates the position at the moment.

if the club is to progress then a bigger stadium is required which hopefully is the next piece in the financial

jigsaw, any money spent here will be capitalised and not greatly impact the profit and loss account.

The club is beginning to cement itself in the top six and then to maintain this more investment will

be needed on the playing side.

In my opinion the club has never been in s better position to transform to the next level and the

next five years will be pivotal

Out of curiosity what's the demand like for an increased capacity? Is there a season ticket waiting list?

[moore_94]

6 minutes ago, Muzzy_Larsson said:

Out of curiosity what's the demand like for an increased capacity? Is there a season ticket waiting list?

32,000 capacity with 23,000 season tickets

 

There isn’t a waiting list as such, but you have to be a part of the foxes membership scheme (which lets you get tickets before they go on general sale)

 

I am on the membership scheme and games would very rarely ever get to general sale, most games would sell out so I think there is definitely enough demand to fill the current stadium with just season ticket holders

 

Away fans get minimum 3,000 tickets, after a 10k expansion and if the vast majority of current members got season tickets, looking at about 7000 tickets going to new members and general sale, I imagine there will probably be schemes introduced for families and kids to get even more in the ground as well

[Spiritwalker]

38 minutes ago, Muzzy_Larsson said:

Out of curiosity what's the demand like for an increased capacity? Is there a season ticket waiting list?

Sort of. The club capped ST’s at 23k, when ST’s become available members have to enter a ballot to get one.

[turlo]

 

Reports out of Italy that UEFA are going to replace FFP with a new system that will allow more freedom of spending. It was discussed on talk sport earlier but not had chance to listen to it yet

 

Thoughts on how this could impact Leicester FFP was relaxed? Could this result in an increase in investment from King Power?

 

 

https://twitter.com/KieranMaguire/status/1374674796886233092?s=20

[Fox in the North]

Loss to be covered by Kieran Maguire in Price of Football podcast tomorrow (in general it’s a pretty good podcast for people interested about this sort of stuff)

 

 

[jonthefox]

8 hours ago, moore_94 said:

32,000 capacity with 23,000 season tickets

 

There isn’t a waiting list as such, but you have to be a part of the foxes membership scheme (which lets you get tickets before they go on general sale)

 

I am on the membership scheme and games would very rarely ever get to general sale, most games would sell out so I think there is definitely enough demand to fill the current stadium with just season ticket holders

 

Away fans get minimum 3,000 tickets, after a 10k expansion and if the vast majority of current members got season tickets, looking at about 7000 tickets going to new members and general sale, I imagine there will probably be schemes introduced for families and kids to get even more in the ground as well

I think that given the cost of this project , the extra tickets will be sold as hospitality.I don't like it personally but it's just the way it seems to going these days. 

[coolhandfox]

32 minutes ago, jonthefox said:

I think that given the cost of this project , the extra tickets will be sold as hospitality.I don't like it personally but it's just the way it seems to going these days. 

I'm sure it will be a bit of both. 

[Babylon]

17 hours ago, turlo said:

 

Reports out of Italy that UEFA are going to replace FFP with a new system that will allow more freedom of spending. It was discussed on talk sport earlier but not had chance to listen to it yet

 

Thoughts on how this could impact Leicester FFP was relaxed? Could this result in an increase in investment from King Power?

 

 

https://twitter.com/KieranMaguire/status/1374674796886233092?s=20

If Kingpower wanted to invest then we'd have seen it already outside of loans for infrastructure etc. Look at Everton and all their dodgy naming rights deals etc, their owners wanted to invest so they found a way of pumping money in. 

[Ric Flair]

39 minutes ago, Babylon said:

If Kingpower wanted to invest then we'd have seen it already outside of loans for infrastructure etc. Look at Everton and all their dodgy naming rights deals etc, their owners wanted to invest so they found a way of pumping money in. 

You are probably right but don't forget that the club have been very mindful that they didn't want to give the authorities any further reason to investigate/punish them since that FFP business in the 2013/14 season. 

[happy85]

 

[Ric Flair]

1 minute ago, happy85 said:

 

Money for old rope

[Bert]

22 hours ago, Muzzy_Larsson said:

Out of curiosity what's the demand like for an increased capacity? Is there a season ticket waiting list?

Yep. 10,000 on it. Basically if you’re a member you’re on the waiting list. 

[coolhandfox]

24 minutes ago, happy85 said:

 

Although its not as lucrative as the CL, it demonstrates that the Europa League provides a nice extra income stream.

 

Which against the back drop of COVID is important right now. 

 

But also show how useful a season in the CL would be massive for us.

[Fox in the North]

1 hour ago, coolhandfox said:

Although its not as lucrative as the CL, it demonstrates that the Europa League provides a nice extra income stream.

 

Which against the back drop of COVID is important right now. 

 

But also show how useful a season in the CL would be massive for us.

Also just shows financial pressure Spurs and Arsenal will continue to be under of they continue to not qualify for the Champions League.

[leicesterseddon]

1 hour ago, coolhandfox said:

Although its not as lucrative as the CL, it demonstrates that the Europa League provides a nice extra income stream.

 

Which against the back drop of COVID is important right now. 

 

But also show how useful a season in the CL would be massive for us.

Also, €17m for being in the EL this season works out at around £14.6m.

 

Which is almost exactly the same as a full season’s matchday revenue (£14.7m) in our 2018/19 accounts. 

 

So you’re right, it’s not to be sniffed at, especially this year. 

Edited 25 March 2021 by leicesterseddon

[WigstonWanderer]

On 24/03/2021 at 17:04, Chocolate Teapot said:

Excluding covid the accounts would actually look okay which when you consider weve just spent 100m on a training ground and land for stadium expansion, improved the playing squad and secured the long term future of the manager (protecting us if he does jump ship) is pretty remarkable.

Is that 100m included in full? I’d have thought as a capital item it would be depreciated over a suitable period, say 10 years, so maybe 10m for last year.

[Ian Nacho]

On 25/03/2021 at 08:21, happy85 said:

 

Puts into perspective how much of an effect our collapse had last season, and why it would be brilliant to finish in the top 4 this year.

[Ric Flair]

3 hours ago, Ian Nacho said:

Puts into perspective how much of an effect our collapse had last season, and why it would be brilliant to finish in the top 4 this year.

If we'd gone out of the group stages in the CL like Man Utd we'd probably only have earnt about £10-15m more than we got for qualifying for the last 32 in the EL.

[Golden Fox]

I'm think there may be more to this than first apparent. These accounts have not yet been filed at Companies House, compared to last year's which were filed at the start of March (not actually overdue yet) but the club seems keen for the story on this to be done with limited information rather than with the actual accounts available.

 

The article linked to is rather confusing around profit and cashflow as the training ground costs will all be capitalised, so wont be part of this £67m loss.

 

Seems to be a deliberate ploy from the club to get the story done with their narrative, so it will have blown over when they quietly file the actual accounts.

[Ric Flair]

14 minutes ago, Golden Fox said:

I'm think there may be more to this than first apparent. These accounts have not yet been filed at Companies House, compared to last year's which were filed at the start of March (not actually overdue yet) but the club seems keen for the story on this to be done with limited information rather than with the actual accounts available.

 

The article linked to is rather confusing around profit and cashflow as the training ground costs will all be capitalised, so wont be part of this £67m loss.

 

Seems to be a deliberate ploy from the club to get the story done with their narrative, so it will have blown over when they quietly file the actual accounts.

It'll get picked apart if so. These things don't tend to be let slide.

[Fox in the North]

Right at the bottom of this release the link for the full accounts are there 

 

https://www.lcfc.com/news/2071687/lcfc-financial-results-201920/

[coolhandfox]

20 minutes ago, Golden Fox said:

I'm think there may be more to this than first apparent. These accounts have not yet been filed at Companies House, compared to last year's which were filed at the start of March (not actually overdue yet) but the club seems keen for the story on this to be done with limited information rather than with the actual accounts available.

 

The article linked to is rather confusing around profit and cashflow as the training ground costs will all be capitalised, so wont be part of this £67m loss.

 

Seems to be a deliberate ploy from the club to get the story done with their narrative, so it will have blown over when they quietly file the actual accounts.

And your evidence to suggest this is just because the accounts are yet to be filed? 

 

 

[Golden Fox]

1 minute ago, Fox in the North said:

Right at the bottom of this release the link for the full accounts are there 

 

https://www.lcfc.com/news/2071687/lcfc-financial-results-201920/

OK - I'll take my comments back! 

 

Likely just slow admin in getting them filed.

 

Will have a good read through them later! 

[Golden Fox]

On 27/03/2021 at 10:35, Golden Fox said:

OK - I'll take my comments back! 

 

Likely just slow admin in getting them filed.

 

Will have a good read through them later! 

You can't beat a bit of quoting yourself!

 

Its quite frightening reading through these accounts... That £67m loss is after accounting for £63m profit on player transfers (mainly Harry Maguire), so its £130m loss before transfers. That compares to a £78m loss before transfers in 2019: Over £200m lost in 2 years excluding player transfers.

 

For a business to be spending £272m when turnover is only £150m is quite staggering: Covid deferring revenue of £28m doesn't make much impact on that. Non-wage costs are £113m, and the club is spending £159m on wages on top of that. Most companies would be battening down the hatches: not spending £100m (corrected from £300m - thanks Hackney) on a training centre and starting spend on a stadium development.

 

In terms of a balance sheet to support this position, I'm not sure I've ever looked at a set of accounts with Net current liabilities of £186m - which is greater than turnover. Usually this would be the sign that a business should have already stopped trading!

 

Looking at cashflow to see how the business survived, you can see net £117m of loans coming in, so basically using debt to finance this.

 

I had thought we were a prudently run club, doing this sustainably and spending within our means, but that is clearly nowhere near the truth.

 

However, you can't look at a subsidiary accounts without understanding the position of the wider group. The reason the accounts were signed off is that Leicester City "have received confirmation that " King Power "will provide further funding where necessary to meet the requirements of the Company". "Further King Power International has confirmed that existing liabilities will not be called in for the foreseeable future".

 

So basically, King Power are bankrolling the club.

 

So, its been said before, but we are very lucky to have the owners we do, and the money they are spending on us, (even if the source of this money is a monopoly that would be an illegal business model in the UK!) - but these accounts show that we are utterly dependent on them now & if they walked away or if King Power were to fail, we would be in administration and back in League One in a heartbeat. (and I haven't even tried to look at a set of King Power accounts). The continued investment in facilities and the banks continuing to loan money are proof that this isn't an imminent concern, but our accounts are so bad, not even Champions League football would return us to profit! 

 

(Also, I do stand by my concerns before looking at the accounts that I didn't trust the initial article that was linked to - it fails to address the key points with the opening statement of "The huge impact of the pandemic coupled with millions of pounds on players, a new training ground and progress on its stadium expansion plans saw Leicester City post pre-tax losses of £67 million last season." Looking at the accounts, the players were a massive profit, the training ground cost is in fixed assets and the Covid revenue is (only) £28m. Clearly, the club wants to spin a story and the writer of that article lapped it up.)

Edited 30 March 2021 by Golden Fox

[Foxxed]

14 minutes ago, Golden Fox said:

You can't beat a bit of quoting yourself!

 

Its quite frightening reading through these accounts... That £67m loss is after accounting for £63m profit on player transfers (mainly Harry Maguire), so its £130m loss before transfers. That compares to a £78m loss before transfers in 2019: Over £200m lost in 2 years excluding player transfers.

 

For a business to be spending £272m when turnover is only £150m is quite staggering: Covid deferring revenue of £28m doesn't make much impact on that. Non-wage costs are £113m, and the club is spending £159m on wages on top of that. Most companies would be battening down the hatches: not spending £300m on a training centre and starting spend on a stadium development.

 

In terms of a balance sheet to support this position, I'm not sure I've ever looked at a set of accounts with Net current liabilities of £186m - which is greater than turnover. Usually this would be the sign that a business should have already stopped trading!

 

Looking at cashflow to see how the business survived, you can see net £117m of loans coming in, so basically using debt to finance this.

 

I had thought we were a prudently run club, doing this sustainably and spending within our means, but that is clearly nowhere near the truth.

 

However, you can't look at a subsidiary accounts without understanding the position of the wider group. The reason the accounts were signed off is that Leicester City "have received confirmation that " King Power "will provide further funding where necessary to meet the requirements of the Company". "Further King Power International has confirmed that existing liabilities will not be called in for the foreseeable future".

 

So basically, King Power are bankrolling the club.

 

So, its been said before, but we are very lucky to have the owners we do, and the money they are spending on us, (even if the source of this money is a monopoly that would be an illegal business model in the UK!) - but these accounts show that we are utterly dependent on them now & if they walked away or if King Power were to fail, we would be in administration and back in League One in a heartbeat. (and I haven't even tried to look at a set of King Power accounts). The continued investment in facilities and the banks continuing to loan money are proof that this isn't an imminent concern, but our accounts are so bad, not even Champions League football would return us to profit! 

 

(Also, I do stand by my concerns before looking at the accounts that I didn't trust the initial article that was linked to - it fails to address the key points with the opening statement of "The huge impact of the pandemic coupled with millions of pounds on players, a new training ground and progress on its stadium expansion plans saw Leicester City post pre-tax losses of £67 million last season." Looking at the accounts, the players were a massive profit, the training ground cost is in fixed assets and the Covid revenue is (only) £28m. Clearly, the club wants to spin a story and the writer of that article lapped it up.)

Cheers mate. You seem to be the most knowledgeable here. The value of the squad must go a long way to reassuring creditors. Although you mentioned CL football won’t bring an immediate profit, it’s surely the best bet for long term profitability.