MattGamble92 Posted 4 March 2014 Posted 4 March 2014 Shoudn't a rule like FFP allow for purchases like the Stadium? Purchases that actually cement the club's future rather than buying players?If that £34m includes the stadium then it would be ridiculous to think we could face sanctions because we have tied to secure our future, makes a bit of a mockery of the rule
Dan Posted 4 March 2014 Posted 4 March 2014 Shoudn't a rule like FFP allow for purchases like the Stadium? Purchases that actually cement the club's future rather than buying players? If that £34m includes the stadium then it would be ridiculous to think we could face sanctions because we have tied to secure our future, makes a bit of a mockery of the rule It does.
Trav Le Bleu Posted 4 March 2014 Posted 4 March 2014 I don't understand the revaluation of the squad under FFP, but it could be that the club has decided to "impair" the value of the squad this year as it is not an FFP-relevant year (at least so far as sanctions are concerned), giving the squad value a lower base cost as at the start of 2013-14 The way I read this bit is that the squad's value was reduced because, with FFP looming, the bottom dropped out of the market and clubs were less likely to pay silly money for players. Also, I reckon or current crop of players have greater value than last year. Great work with that post though.
MooseBreath Posted 4 March 2014 Posted 4 March 2014 How does the value of players have any impact though? I could see how artificially inflating a players value could increase the value of your assets which might help in some way to make things look better on paper, but how do you benefit from artificially decreasing their value without actually paying less?
Master Fox Posted 4 March 2014 Posted 4 March 2014 How much revenue does a club receive in the championship for having a game televised? Just considering six of our remaining games will be broadcast. That's some extra income. The wage bill is the only disturbing reading from those figures. Absolutely horrendous. Im shocked it got so bad. Sven is an idiot.
Jon the Hat Posted 4 March 2014 Posted 4 March 2014 How does the value of players have any impact though? I could see how artificially inflating a players value could increase the value of your assets which might help in some way to make things look better on paper, but how do you benefit from artificially decreasing their value without actually paying less? If you pay say £10m for a player on a 5 year contract you capitalise the £10m and expense/ amortise it over the 5 years at £2m a year. If after 2 years you consider the remaining £6M is not a true reflection of the players value, you might decide to take an revaluation impairment of say £3M in additon to the £2M you already took as expense in the year, leaving £3M or £1M a year of expense for the remaining length of the contract. If you do this in a pre FFP year, then you are reducing your costs next year by taking them this year. You would need a robust basis to do this, and no doubt might expect some push back from auditors, but it seems an effective method of taking more cost now rather than next season.
Jace Posted 4 March 2014 Posted 4 March 2014 No wonder why that idiot Stringer was sacked off The Apprentice so early on the bloke can't even understand which financial year these accounts relates to. I agree fully with ttfns post I won't repeat and go over again what he has said but in my opinion the club has never been as financially secure as it is at the moment in the time that I have supported the club. If we are due to come in within FFP for 13-14 then there shouldn't be any big concern even if were to not be promoted this season.
MGLCFC Posted 4 March 2014 Posted 4 March 2014 How much revenue does a club receive in the championship for having a game televised? Just considering six of our remaining games will be broadcast. That's some extra income. The wage bill is the only disturbing reading from those figures. Absolutely horrendous. Im shocked it got so bad. Sven is an idiot. Sven is not the idiot, it's the person (Andrew Neville) who agreed to underwrite these contracts. Sven wanted players in that would cost the earth in wages, Neville could have said it wasn't affordable or sustainable.
Guest ttfn Posted 4 March 2014 Posted 4 March 2014 Shoudn't a rule like FFP allow for purchases like the Stadium? Purchases that actually cement the club's future rather than buying players? If that £34m includes the stadium then it would be ridiculous to think we could face sanctions because we have tied to secure our future, makes a bit of a mockery of the rule I thought all three of them had gone by the time of the 12/13 tax year? The point is that if you are comparing the loss to the 2011/12 season, when they were there, that their absence in 2012/13 would explain some difference on a comparative basis. Shoudn't a rule like FFP allow for purchases like the Stadium? Purchases that actually cement the club's future rather than buying players? If that £34m includes the stadium then it would be ridiculous to think we could face sanctions because we have tied to secure our future, makes a bit of a mockery of the rule The stadium isn't included in the loss because it doesn't appear in the Profit and Loss Account. It sits on the Balance Sheet. When you buy something tangible, the cash spent isn't considered to be a loss, so it's not even an FFP specific rule, it's just how the accounting works.
Jace Posted 4 March 2014 Posted 4 March 2014 Sooooo after all we are in debt still ? No the debt was cleared in December 2013
JamesWelshFox Posted 4 March 2014 Posted 4 March 2014 Can someone who knows a bit more tell me if this is something we should be a little bit worried about ?
Socks Posted 4 March 2014 Posted 4 March 2014 No the debt was cleared in December 2013 Then we have nothing to worry about, especially if we go up!
Jace Posted 4 March 2014 Posted 4 March 2014 Then we have nothing to worry about, especially if we go up! Apparently so even if we fall apart and fail to achieve promotion this season we will still come within the FFP regulations for 13-14, these losses recently announced are for 12-13 which doesn't have any impact on FFP, from what I remember this time last season the club were even settling players contracts at the end of 12-13 to make sure they were not accounted for in 13-14.
Blanesta Posted 4 March 2014 Posted 4 March 2014 I think this could be the "Biggest loss in our history"
sylofox Posted 4 March 2014 Posted 4 March 2014 The way I read this bit is that the squad's value was reduced because, with FFP looming, the bottom dropped out of the market and clubs were less likely to pay silly money for players. Also, I reckon or current crop of players have greater value than last year. Great work with that post though. Just one reason that FFP don't work. Clubs have bought players invested money for them to now be worth less. Clubs like Crewe survived on selling now can't. How long before the clubs say this ain't working or you have made us worse off? A little like poll tax (for them old enough) great idea but in reality a total fvck up.
A fox for life Posted 4 March 2014 Posted 4 March 2014 I think this could be the "Biggest loss in our history" Seriously! I can understand why people get frustrated when another identical thread is so obvious
Jace Posted 4 March 2014 Posted 4 March 2014 I think this could be the "Biggest loss in our history" If only there was a thread that could answer all these questions
Lobsterboyuk Posted 4 March 2014 Posted 4 March 2014 The point is that if you are comparing the loss to the 2011/12 season, when they were there, that their absence in 2012/13 would explain some difference on a comparative basis. The stadium isn't included in the loss because it doesn't appear in the Profit and Loss Account. It sits on the Balance Sheet. When you buy something tangible, the cash spent isn't considered to be a loss, so it's not even an FFP specific rule, it's just how the accounting works. My understanding is the stadium isn't owned by the club so isn't an asset and won't be on LCFC LTD's balance sheet. I'm not an accountant or tax expert but my understanding is that when you want to secure an expensive asset but want to provide maximum tax efficiency for FFP you create a holding company to purchase the asset and then lease back to the core business reducing the corporation tax bill with the leasing costs of LCFC LTD rather than paying CT on a percentage of the asset?
Guest ttfn Posted 4 March 2014 Posted 4 March 2014 My understanding is the stadium isn't owned by the club so isn't an asset and won't be on LCFC LTD's balance sheet. I'm not an accountant or tax expert but my understanding is that when you want to secure an expensive asset but want to provide maximum tax efficiency for FFP you create a holding company to purchase the asset and then lease back to the core business reducing the corporation tax bill with the leasing costs of LCFC LTD rather than paying CT on a percentage of the asset? I'd need to see the accounts but the Mercury article referred explicitly to there being a loan in the accounts to fund the purchase of the stadium. You may well be right - I'm not a tax expert but surely if you own the stadium then there are no (or virtually no) leasing costs anyway?
hackneyfox Posted 4 March 2014 Posted 4 March 2014 When we were given the figures by The Mercury about the debt being paid off they included the purchase of the ground, as that isn't the case it means we've managed to lose another 16m somewhere doesn't it? So has the debt on the ground has just been moved, we still don't own it?
Alf Bentley Posted 4 March 2014 Posted 4 March 2014 If you pay say £10m for a player on a 5 year contract you capitalise the £10m and expense/ amortise it over the 5 years at £2m a year. If after 2 years you consider the remaining £6M is not a true reflection of the players value, you might decide to take an revaluation impairment of say £3M in additon to the £2M you already took as expense in the year, leaving £3M or £1M a year of expense for the remaining length of the contract. If you do this in a pre FFP year, then you are reducing your costs next year by taking them this year. You would need a robust basis to do this, and no doubt might expect some push back from auditors, but it seems an effective method of taking more cost now rather than next season. As someone who knows a small amount, but not very much about accounting, that seems like a very good explanation, Jon (twice in one day?!). I'm particularly influenced by the fact that you've written 5 lines, instead of your habitual 2. That suggests to me that you know what you're talking about here. Are you an accountant? There seem to be a lot of accountants or aspiring accountants on this forum. I still prefer your Dad, though (I'm a big fan of Paul Theroux, the travel writer, Louis' Dad...less sure about his novels).
Babylon Posted 5 March 2014 Posted 5 March 2014 When we were given the figures by The Mercury about the debt being paid off they included the purchase of the ground, as that isn't the case it means we've managed to lose another 16m somewhere doesn't it? So has the debt on the ground has just been moved, we still don't own it? More likely the Merc guessing it included the ground, presuming they did say that. They wouldn't have known without seeing accounts.
Babylon Posted 5 March 2014 Posted 5 March 2014 £34m Loss Take off the £7.2m loan (we won't be paying interest this year as loans no longer exist) Take off £5.2m squad revaluing one off cost Take off the £8m we are allowed to lose under FFP Take off costs for youth team and other one offs that don't count under FFP (Club seem to think that's £5m form press the merc report) Club say revenues will be back up this year, so lets say we go back to what we were the year before. Take off another £1.8m =£6.8m cuts needed or £6.8m profit to be found elsewhere. Just to add to that something the Foxes Trust put on TB. "There has been some "re-phasing" of costs relating to players who signed contracts prior to the FFP rules being announced, meaning costs are transferred into the 2012/13 figures (non penalty trigger season) from later years (where penalties do apply), that is why as more clubs publish results you will see that their financial results got worse for last season. Clubs are making vague comments about exceptional costs (see Brighton statement), as I doubt the clubs or the Football League really want to reveal the amount of accounting "phasing adjustments" that are being allowed. So NP did make a much greater level of savings, but this has been offset in the published figures"
Recommended Posts
Archived
This topic is now archived and is closed to further replies.