Football Finances?

[ta-fc]

Morning all,

Just posing a quick question about us being reported as being 5m down? How has this happened, i thought when Milan came the intention was to turn us into a solvent, competitive club? Totally accept that going down the season before would have some impact but to be 5 MILLION DOWN really doesn't make sense to me.

Attendencies were not a million miles away from what they were in the Championship, we had to service the debt from the Walkers the season before and the squad size was roughly the same (we haven't made too many big money signing's either other than Wellens for 1m who's worth every penny).

Ok i admit we miss the Champions league revnue but surely some of that would have been offset with the money from the decent run we put together in the Johnsons Pain Trophy !!!!

All joking aside i'm a bit concerned about this, i understand Milan is looking for investors and i don't blame him for any of this (if i had my way the statue of ghandi would be replaced by one of Heskey, Lineker and Milan all hugging entitled 'Leicester City Saviours') now were talking about a new training facility, surely not if were not self sustainable already?

I'm not an accountant but can someone explain to me in English where were 5m further in the red?

Ash

[Unit]

Whilst it is really bad news that we've made a loss, we're not on our own. As pointed out in other threads it's the big clubs with their massive debts (man utd - £700m wasn't it?) that should be really worrying for football.

[davieG]

Morning all,

Just posing a quick question about us being reported as being 5m down? How has this happened, i thought when Milan came the intention was to turn us into a solvent, competitive club? Totally accept that going down the season before would have some impact but to be 5 MILLION DOWN really doesn't make sense to me.

Attendencies were not a million miles away from what they were in the Championship, we had to service the debt from the Walkers the season before and the squad size was roughly the same (we haven't made too many big money signing's either other than Wellens for 1m who's worth every penny).

Ok i admit we miss the Champions league revnue but surely some of that would have been offset with the money from the decent run we put together in the Johnsons Pain Trophy !!!!

All joking aside i'm a bit concerned about this, i understand Milan is looking for investors and i don't blame him for any of this (if i had my way the statue of ghandi would be replaced by one of Heskey, Lineker and Milan all hugging entitled 'Leicester City Saviours') now were talking about a new training facility, surely not if were not self sustainable already?

I'm not an accountant but can someone explain to me in English where were 5m further in the red?

Ash

We have a massive debt on the stadium where the repayments are so big we don't earn enough to repay them unless we're in the Premier League irrespective of our crowds or cup success..

As for the training ground it's on potential good house building land and and worth a decent amount of money certainly more than we'd have to pay for some out of town plot there's also the suggestion that we'll end up hiring out facilities at Loughboro' Uni.

[FoxyPV]

We have a massive debt on the stadium where the repayments are so big we don't earn enough to repay them unless we're in the Premier League irrespective of our crowds or cup success..

What is the total still owed on the stadium? Is it the PL tv money that makes the difference as we seem to be packing them in all season.

[ta-fc]

We have a massive debt on the stadium where the repayments are so big we don't earn enough to repay them unless we're in the Premier League irrespective of our crowds or cup success..

As for the training ground it's on potential good house building land and and worth a decent amount of money certainly more than we'd have to pay for some out of town plot there's also the suggestion that we'll end up hiring out facilities at Loughboro' Uni.

Shite is that the truth about us not paying the stadium back unless were in the prem???? The Walkers seems to be an albatros around our necks, maybe we should sell that too knock it down and re-build filbert street, i've still got my bit that i swiped from the Kop and am willing to return it if it helps!!!!

Seriously though does that mean were making a loss EVERY season were out the prem?

[Babylon]

where were 5m further in the red?

Simple, we pay more in wages and stadium rent/mortgage than we actually make. If we want to save money we need to get rid of players who don't feature.

Clemence, DJ, Dickov (until recently) are/were all claiming big wages for nothing. Add to that players like Porter, Astrit, Verma who are never going to feature but are still a drain. Tunchev I fear is going to be another crock like Clemence draining resources. Whilst someone like Howard who is now only a bit part is going to be hanging around on big wages for another year.

Most of those will go at the end of this season, and some more the season after. If we spend wisely I don't see why our losses can't be brought down significantly in the coming seasons.

[davieG]

Shite is that the truth about us not paying the stadium back unless were in the prem???? The Walkers seems to be an albatros around our necks, maybe we should sell that too knock it down and re-build filbert street, i've still got my bit that i swiped from the Kop and am willing to return it if it helps!!!!

Seriously though does that mean were making a loss EVERY season were out the prem?

Yes, I guess a FL or FA Cup win would probably cover it.

[Babylon]

Shite is that the truth about us not paying the stadium back unless were in the prem???? The Walkers seems to be an albatros around our necks, maybe we should sell that too knock it down and re-build filbert street, i've still got my bit that i swiped from the Kop and am willing to return it if it helps!!!!

Seriously though does that mean were making a loss EVERY season were out the prem?

We owe £17.5m on the stadium I think. Whilst in this division we pay roughly a million a year, but the debt we owe doesn't go down. If we were in the premier we could pay more and bring down the amount we owe. Something like that.

[ta-fc]

We owe £17.5m on the stadium I think. Whilst in this division we pay roughly a million a year, but the debt we owe doesn't go down. If we were in the premier we could pay more and bring down the amount we owe. Something like that.

Ok i now consider myself educated after nievely assuming that once Milan took us over everything was rosy (which i suppose it is considering MM is covering the 5m). Only worry now is that if there was a big money offer for Matty/King/Weale we may have to take it!!!

[step]

Last season, MM paid out about £11 million to keep us afloat. so he is doing a good job.

[Narborough Bod]

so going a bit leftfield here, if we do get promoted to the 'promised land', what you want us to do :

Go for broke and try to stay up there for a few seasons....chase the dream.

or

Accept a one year stint and use that year's money and the parachute payments to pay off the debts. Accept relegation from the off, don't overstretch financially and clear debts once and for all.

[Babylon]

so going a bit leftfield here, if we do get promoted to the 'promised land', what you want us to do :

Go for broke and try to stay up there for a few seasons....chase the dream.

or

Accept a one year stint and use that year's money and the parachute payments to pay off the debts. Accept relegation from the off, don't overstretch financially and clear debts once and for all.

Somewhere in the middle!!!

[Narborough Bod]

Somewhere in the middle!!!

I like the idea but that would probably assume some sort of common sense and there doesn't seem to be much of that in football at the moment.

[Paulmot]

If we get promoted we will loan players again (better class) as then no transfer fees to add to the debt. May fund the odd player in perm by selling and trimming dead wood.

PS

Watch the headlines!! Premier League Club for Sale One careful owner. If we have to have a new owner, then one like Randy Lerner, not got his face in the paper all the while, funds available for the odd big signing.

[shen]

If we get promoted we will loan players again (better class) as then no transfer fees to add to the debt. May fund the odd player in perm by selling and trimming dead wood.

PS

Watch the headlines!! Premier League Club for Sale One careful owner. If we have to have a new owner, then one like Randy Lerner, not got his face in the paper all the while, funds available for the odd big signing.

We could do like Burnley this year and hope for the best with a weak, but financially viable squad...

[TheStig]

We could do like Burnley this year and hope for the best with a weak, but financially viable squad...

When we went into administration I was under the impression that the reason for this was the mortgage and the building costs of the Walkers! The "new" company must then have written of the debts and basically started from 0 again or?

[Jay]

When we went into administration I was under the impression that the reason for this was the mortgage and the building costs of the Walkers! The "new" company must then have written of the debts and basically started from 0 again or?

Nope as I understand it the debt on the stadium remains pretty much similar to before administration and if I remember correctly as part of the CVA while we are out of the Premier League we only pay the interest on the loan and nothing off the actual loan itself, when it the premiership we actually pay off the loan.

[Guest DavidJCW]

I think if we get to the Premiership, we should look to spend wisely on players, look to pay off some of the debt we have and still try and stay up. There's no reason to go into a season in the Premiership just accepting we'll go down... I mean if Hull can stay up, anyone can!

[FoxyPV]

I think if we get to the Premiership, we should look to spend wisely on players, look to pay off some of the debt we have and still try and stay up. There's no reason to go into a season in the Premiership just accepting we'll go down... I mean if Hull can stay up, anyone can!

Hull have stayed up but are in horrendous financial difficulties. Rather do a Burnley and still have a club even if we got relegated straight away.

[Guest DavidJCW]

Hull have stayed up but are in horrendous financial difficulties. Rather do a Burnley and still have a club even if we got relegated straight away.

I was merely suggesting that if Hull, who are utter shite, can manage to stay up with their crap squad, then there's no reason to go into a Premiership season with a resignation to relegation already in the mindset.

As for their finances, that's irrelevant to what I was trying to say.

[TheStig]

Hull have stayed up but are in horrendous financial difficulties. Rather do a Burnley and still have a club even if we got relegated straight away.

Most major football clubs all over Europe are in dire straits when it comes to finances. Only a "sugar daddy" is able to keep the biggest clubs afloat, and if football is to avoid massive liquidations (well at least for clubs below the absolute top levels) maybe a "wage capping" should be considered.

For instance a maximum of 4.000.0000 should be the maximum the total team would be allowed to receive in payments. This would put all clubs equal and you could decide whether to have a team of 5 major earners and 5 bread and butter players or a better balanced team structure. Also it would force the clubs to develop and bring up their own youngsters rather than bringing in overpaid and underperforming foreigners that are just here for the money.

Any comments on this?

[FoxyPV]

Most major football clubs all over Europe are in dire straits when it comes to finances. Only a "sugar daddy" is able to keep the biggest clubs afloat, and if football is to avoid massive liquidations (well at least for clubs below the absolute top levels) maybe a "wage capping" should be considered.

For instance a maximum of 4.000.0000 should be the maximum the total team would be allowed to receive in payments. This would put all clubs equal and you could decide whether to have a team of 5 major earners and 5 bread and butter players or a better balanced team structure. Also it would force the clubs to develop and bring up their own youngsters rather than bringing in overpaid and underperforming foreigners that are just here for the money.

Any comments on this?

I mentioned Hull because they are in a particularly bad way however I agree that most clubs are in financial difficulties and that a wage cap is needed but it will probably be based on a percentage of income rather than any universal set wage. It would probably be around 60% of net income so the big teams will be still dominate (unfortunately).

I don't think that a transfer cap will happen but agree that it should and that the focus should be put more on home grown talent but fans and clubs want instance success (even if it's not sustainable) and only complain about the money spent etc when it all goes wrong i.e Portmouth.

[TheStig]

I mentioned Hull because they are in a particularly bad way however I agree that most clubs are in financial difficulties and that a wage cap is needed but it will probably be based on a percentage of income rather than any universal set wage. It would probably be around 60% of net income so the big teams will be still dominate (unfortunately).

I don't think that a transfer cap will happen but agree that it should and that the focus should be put more on home grown talent but fans and clubs want instance success (even if it's not sustainable) and only complain about the money spent etc when it all goes wrong i.e Portmouth.

I think that a percentage of total income is at least a step in the right direction. How is total income defined in a football club? Turnstile income + sponsors + ????

[FoxyPV]

I think they add in merchandise as well and then whatever is left after tax is seen as their income.

not 100% though.

[TheStig]

I think they add in merchandise as well and then whatever is left after tax.

This would actually increase the focus on branding of the club, more spectators, better sales of merchandise etc.. I don`t know what and how the Tigers are doing but it beats me that there is no or very little cooperation between the 2 clubs in relation to stadium facilities, merchandise, overall staffing (administration, ticket sales, stewarding, merchandise sales etc.). The cost of maitaining 2 stadiums a short walk apart must be horrendous, and both parties would benefit from the merging and reduction of overhead costs. Just a thought!