Leicester to reveal estimated annual losses of £119.5MILLION - the highest in the Premier League

[Terraloon]

6 hours ago, UHDrive said:

Thanks for this. Sorry if I am asking a stupid question but does this include season and match day tickets? 

 

The extra 8K in tickets will make a big difference.

I wouldn’t  get too excited in term of huge sums being generated.

 

Increasing by 8k is around 25% more. It’s impossible to determine how that will be filled be it by increasing the number of ST, hospitality or match day. It gets even more complicated when by increasing capacity you have probably have to allocate more to away fans who pay a reduced sum. 

 

Of course more people turning up will by more beer, burgers , programme’s etc but ST holders spend far less on such things compared to those attending on a match to match basis.

 

The current match day income is circa £17 million so let’s be generous and say on an annual basis it’s will bring in £4.5 million from that you will have to factor in more business rate, higher insurance , security costs, utility bills my guess is that at most it will bring in at most £4 million more be it in match-day or commercial.

 

But that’s before you factor in the cost of the build and any interest needed to service what almost certainly will be  borrowed money . I am no builder so can’t even guess how much the project will cost and when you add in the hotel build and running costs I start to wonder at what point the financial viability of the project tips from being sensible to being a massive gamble
 

 

Edited 8 September 2022 by Terraloon

[18to18]

7 hours ago, Terraloon said:

The last set of accounts reported there were some 77 players and 435 other employees with on average an additional 295 employed on match days.

Wages were £158.8 million, an additional £9.4 million paid by way of benefits in kind( company cars etc but also sums paid outside players contracts for such things as agents fees) £23.2 million was paid in respect of NIC and finally £0.6 million in respect of pension contributions 

There's a post somewhere by SwissRamble about the last set and I thought the number was 192million?

[Terraloon]

8 hours ago, 18to18 said:

There's a post somewhere by SwissRamble about the last set and I thought the number was 192million?

The numbers I quoted are the numbers that are added together to reach the wage costs as reflected in the accounts. 
In other words the £192.08 million wage costs aren’t just the weekly sum paid to the first team squad

Edited 9 September 2022 by Terraloon

[TheLittleBigMan]

On 04/09/2022 at 20:23, Babylon said:

Ground expansion

Training Ground

Interest on loans

Wages

£60m on players

Player fees get amortised across the length of their contract. Which essentially means money we paid for someone 5 years ago on a 5 year contract shows on the books.

Energy Bills (£16m last accounts).

Loans could have been called in or rearranged 

 

When some of the expenses are listed out like this it isn't so complicated to see where the potential losses come from. There's no conspiracy theory's to be found here. I just don't get how the hell no-one didn't at least see how serious a risk this was versus the reward. Its not like the global economy was brimming with confidence prior to covid or there was any chance of the elite clubs continuing to get it wrong and allowing clubs like ours to get a foot hold in the top six on a budget. 

[sacreblueits442]

On 05/09/2022 at 11:00, Terraloon said:

This is very much the point.

 

People need to ignore did the owners, could the owners have put in money this is all about revenue against expenditure.

 

You cant look at the supposed big six when it comes to what they spend because they generate significantly more indeed Chelsea , Man City and Utd are paid more for shirt sleeve sponsorship than most clubs in the PL receive for all their sponsorship deals. 
 

The 21/22 accounts were always going to be showing a significant loss the simple fact was no real player trading profit hurts the bottom line far more than other clubs who don’t have the % wage spend nor was their FA cup prise money and of course the PL finishing position will have reduced TV money .

The 22/23 numbers will be helped by WF fee although the numbers once you factor in the % due to others and the balance still to be amortised will not be far north of £35 million but when you realise that there isn’t EL monies then unless there is a fee or two generated I. January then my guess is at best it’s going to be another loss in excess of £50 million

...money to St. Etienne would be £7m, possibly writing down the fee over 3 years (£35m ÷3= £12m approx.)!!!

  With no additional funds coming in to us, surely the accounts will be on the right side being (£70m -£7m - £12m = £51m) from a fee which I believe was a cash deal.

Edited 10 September 2022 by sacreblueits442
Spelling error.

[st albans fox]

I’m not sure how we’ve managed to lose a sum this big and still make the purchases that we did last summer  (and not sell a big player)

 

none of these costs are a surprise 

 

the only unknowns were our finishing position in the prem (8th was a reasonable return) and our Europa league performance 

 

Had we finished 6th and made the Europa league semis, our additional income would have been maybe £15m.  How would a £100m loss be acceptable?   Even if we’d managed 4th last season we’d still have lost three figures and how would we justify not making purchases this summer ?  the £40/50m income form next season would be welcome but still wouldn’t wipe out our losses for this current years accounts. 
 

If we wanted to bring in those three players last season then we  should have sold a big player last summer - no question. 
 

I can’t get my head around it all 

[Terraloon]

43 minutes ago, sacreblueits442 said:

...money to St. Etienne would be £7m, possibly writing down the fee over 3 years (£35m ÷3= £12m approx.)!!!

  With no additional funds coming in to us, surely the accounts will be on the right side being (£70m -£7m - £12m = £51m) from a fee which I believe was a cash deal.

When WF signed In October 20 he cost £35 ish million and signed a 5 year deal. That means his fee would be amortised over a 5 year period so £7 million a year.

When he signed his new 5 year deal in March 2022 his residue value would have been around £25 million . The clock starts ticking again so his annual amortised sum would be around £5 million a year so by my very rough calculations his amortised value on being sold would be between £20 million and £22 million 

Now this is where it gets very complicated. There would have been VAT on his fee so did the £70 million include VAT or was it paid on top ? There is a requirement that 4% of the fee would be paid to the FA then a sum would be payable to the clubs that played a part his development . The player would have to be paid the balance of any signing on fee and also there would be agents fees incurred when he first signed, potentially when he signed the new contract and of course arranging the transfer to Chelsea which would likewise be amortised 

Whilst the cash side of the deal will be crucial in terms  of the bank balance in accounting terms it doesn’t change the bottom line.

[st albans fox]

16 minutes ago, Terraloon said:

When WF signed In October 20 he cost £35 ish million and signed a 5 year deal. That means his fee would be amortised over a 5 year period so £7 million a year.

When he signed his new 5 year deal in March 2022 his residue value would have been around £25 million . The clock starts ticking again so his annual amortised sum would be around £5 million a year so by my very rough calculations his amortised value on being sold would be between £20 million and £22 million 

Now this is where it gets very complicated. There would have been VAT on his fee so did the £70 million include VAT or was it paid on top ? There is a requirement that 4% of the fee would be paid to the FA then a sum would be payable to the clubs that played a part his development . The player would have to be paid the balance of any signing on fee and also there would be agents fees incurred when he first signed, potentially when he signed the new contract and of course arranging the transfer to Chelsea which would likewise be amortised 

Whilst the cash side of the deal will be crucial in terms  of the bank balance in accounting terms it doesn’t change the bottom line.

 Vat is on top (but is irrelevant in a vat registered business)

 

if they paid most of the fee upfront then we don’t have to take out a loan against the payments - that will save us at least £5m in interest over the next few years 

[Terraloon]

19 minutes ago, st albans fox said:

 Vat is on top (but is irrelevant in a vat registered business)

 

if they paid most of the fee upfront then we don’t have to take out a loan against the payments - that will save us at least £5m in interest over the next few years 

 

Yes VAT is paid on top of any fee but my point was the £70 million payment could include vat  ,not it  did include. In other words was it say £70 million plus VAT or £70 including VAT?

What does get confusing is that VAT will have to be paid over to HMRC for the whole fee even though some of the invoiced sum won’t be paid for a while. That is unless Leicester operate on cash accounting when it comes to VAT which I very much doubt they do or indeed could 

 

From whatever sum Chelsea paid up front any payable sums due to whoever by Leicester has  to be settled . Chelsea will pay interest on any sum still owing .

 

Leicesters finances are a basket case we have no idea what state cash balances are nor do we know if sums  made available by the owners have been drawn down will they be repaid or whatever nor will we know about such matters for probably another 18 ish months

 

 

Edited 10 September 2022 by Terraloon