Best guess on finances (1 Viewer)

[Mary_Mungo_Midge]

I've been pondering the current financial situation, and where it may lead us. The last set of accounts, signed by Fisher, are to May 2011; and show £10.2m turnover in Limited - this being at a time when we were in the Championship with gates averaging 16.4K.

Last year's figures - due to unsubmitted accounts - are anyone's guess; but I'd have thought turnover in the region of £6.5m would be sensible.

And now, this year. On current gates; could we be below the £2m level?

Importance being that without promotion this season; our FFP at that turnover will be minuscule. I know that Yeovil went up with a wage structure budget as that, but that's very much the exception and not the norm.

Such low turnover would also be a deterrent to anyone purchasing the club from SISU also, surely; as they'd be hamstrung on investments to reach the Championship.

If the figures are somewhere near accurate too; it would suggest that the move from The Ricoh to Sixfields cost us some £4.5m+ in turnover; much of which will be ticket sales and therefore primarily profit.

With ACL - at least in the short term - supported by the £14m loan, and with Fisher being in receipt of clear feedback on attendance from the forums; can anyone tell me in what way Fisher - in his capacity at the club - is acting in the best interests of his own stakeholders?

 

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[Sky Blue Pete]

I doubt even knowl on gmk could answer that one

 

[skybluesam66]

sponsorship/corporates and advertising will have also taken a massive hit
not even counting the lack of shirt sales
we sold 10000+ the season before last

 

[Godiva]

I've been pondering the current financial situation, and where it may lead us. The last set of accounts, signed by Fisher, are to May 2011; and show £10.2m turnover in Limited - this being at a time when we were in the Championship with gates averaging 16.4K.

Last year's figures - due to unsubmitted accounts - are anyone's guess; but I'd have thought turnover in the region of £6.5m would be sensible.

And now, this year. On current gates; could we be below the £2m level?

Importance being that without promotion this season; our FFP at that turnover will be minuscule. I know that Yeovil went up with a wage structure budget as that, but that's very much the exception and not the norm.

Such low turnover would also be a deterrent to anyone purchasing the club from SISU also, surely; as they'd be hamstrung on investments to reach the Championship.

If the figures are somewhere near accurate too; it would suggest that the move from The Ricoh to Sixfields cost us some £4.5m+ in turnover; much of which will be ticket sales and therefore primarily profit.

With ACL - at least in the short term - supported by the £14m loan, and with Fisher being in receipt of clear feedback on attendance from the forums; can anyone tell me in what way Fisher - in his capacity at the club - is acting in the best interests of his own stakeholders?

I think you will find Fisher is acting on clear orders from the owners.

Apart from that - FFP regulation allow you to include money injected as equity. This means that the necessary funding of losses can be put in as equity as opposed to what we are used to with sisu - loans.
So there is a way to offset the drop in revenues.

 

[Sky Blue Pete]

Are you certain that's correct Godiva??

 

[Godiva]

Are you certain that's correct Godiva??

No, I take that back!

I was relying on the explanation from this site: http://www.financialfairplay.co.uk/
But I see the site has been updated on July, 10th and now clearly says that any club in league 1 is restricted to 60% of turnover.
I don't know if this is because the rules have been updated or it's just the explanation that's been made clearer.

 

[fernandopartridge]

No, I take that back!

I was relying on the explanation from this site: http://www.financialfairplay.co.uk/
But I see the site has been updated on July, 10th and now clearly says that any club in league 1 is restricted to 60% of turnover.
I don't know if this is because the rules have been updated or it's just the explanation that's been made clearer.

But isn't it what constitutes turnover is what's in question anyway?

 

[Mary_Mungo_Midge]

I think you will find Fisher is acting on clear orders from the owners.

Apart from that - FFP regulation allow you to include money injected as equity. This means that the necessary funding of losses can be put in as equity as opposed to what we are used to with sisu - loans.
So there is a way to offset the drop in revenues.

Equity investments are possible in League One?

 

[Mary_Mungo_Midge]

No, I take that back!

I was relying on the explanation from this site: http://www.financialfairplay.co.uk/
But I see the site has been updated on July, 10th and now clearly says that any club in league 1 is restricted to 60% of turnover.
I don't know if this is because the rules have been updated or it's just the explanation that's been made clearer.

Forget the above. I now see what you've coming from. So, we're buggered, huh?

 

[BigadamL]

im lead to believe that last year 65% of a clubs turn over could be spent on players wages and then this year it is on 60% this has only come in over the last two years due to the state of all the clubs around the world.

this is where i can actually see SISU being our shirt sponsor, they can sponsor us and bump up our income the in the long run taking it back out of the club if we got promoted.

 

[Godiva]

im lead to believe that last year 65% of a clubs turn over could be spent on players wages and then this year it is on 60% this has only come in over the last two years due to the state of all the clubs around the world.

this is where i can actually see SISU being our shirt sponsor, they can sponsor us and bump up our income the in the long run taking it back out of the club if we got promoted.

Yes, sponsorships are possible.

If they print 'SISU OUT' on the shirts they will surely be able to sign 11 premiership quality players.

 

[singers_pore]

It's easy to make an equity injection look like turnover. And with CCFC's auditors having previously signed off on accounts that are (as TF admits) a "mess" I wouldn't expect them to have any objection to such accounting manipulation.

 

[Godiva]

It's easy to make an equity injection look like turnover. And with CCFC's auditors having previously signed off on accounts that are (as TF admits) a "mess" I wouldn't expect them to have any objection to such accounting manipulation.

Not really. Buying and selling of shares is not accounted as revenue.

 

[Cheshire Sky Blue]

I've been pondering the current financial situation, and where it may lead us. The last set of accounts, signed by Fisher, are to May 2011; and show £10.2m turnover in Limited - this being at a time when we were in the Championship with gates averaging 16.4K.

Last year's figures - due to unsubmitted accounts - are anyone's guess; but I'd have thought turnover in the region of £6.5m would be sensible.

And now, this year. On current gates; could we be below the £2m level?

Importance being that without promotion this season; our FFP at that turnover will be minuscule. I know that Yeovil went up with a wage structure budget as that, but that's very much the exception and not the norm.

Such low turnover would also be a deterrent to anyone purchasing the club from SISU also, surely; as they'd be hamstrung on investments to reach the Championship.

If the figures are somewhere near accurate too; it would suggest that the move from The Ricoh to Sixfields cost us some £4.5m+ in turnover; much of which will be ticket sales and therefore primarily profit.

With ACL - at least in the short term - supported by the £14m loan, and with Fisher being in receipt of clear feedback on attendance from the forums; can anyone tell me in what way Fisher - in his capacity at the club - is acting in the best interests of his own stakeholders?

The sales value of any business is constructed by a number of factors, Turnover is of interest but not the key determinant. What potential investors will be really focused on is potential future revenue streams. The fact that the current owners are screwing up matters only a little in the sense that it only provides the reason to sell.
Depending on how attractive the potential, the purchaser may agree to buy debt and pay a value calculated on multiples of revenue often 8 – 10 x annual revenue.
So on one level SISU are screwing themselves but on another if the can gain the RICOH they would be quids in. Maybe then they would go away

 

[BigadamL]

Yes, sponsorships are possible.

If they print 'SISU OUT' on the shirts they will surely be able to sign 11 premiership quality players.

would you really put it passed them?

 

[RoboCCFC90]

Yes, sponsorships are possible.

If they print 'SISU OUT' on the shirts they will surely be able to sign 11 premiership quality players.

As funny as it would be to see 'SISU OUT' printed on the front of the home shirt that actually hasn't arrived yet, what do we think the chances of them sponsoring us are 40% or more??

 

[BigadamL]

i think about 75% it will be a SISU related company, maybe

sneakycaymanislandgroup.com

 

[thaiskyblue]

im lead to believe that last year 65% of a clubs turn over could be spent on players wages and then this year it is on 60% this has only come in over the last two years due to the state of all the clubs around the world.

this is where i can actually see SISU being our shirt sponsor, they can sponsor us and bump up our income the in the long run taking it back out of the club if we got promoted.

if it's a scam i'm sure shitsu will be onto it.

 

[Astute]

As funny as it would be to see 'SISU OUT' printed on the front of the home shirt that actually hasn't arrived yet, what do we think the chances of them sponsoring us are 40% or more??

SISU would never have their name on our shirts. They like to stay out of the spotlight.

Saying that, if they put SISU OUT on our shirts they would have record sales. This would make them a few quid.

 

[oldskyblue58]

The reply I had from the Football League on 25/07/13 said this

The Relevant Turnover figure used in the SCMP calculation includes cash invested into the club in the form of equity or donation but does not include money injected into the club through loans.

However for Otium to invest significant funds via equity then there must be the authorised share capital to begin with and I dont think that is more than 1000 which has all been issued and no increase filed at company house. So have SISU improved the FFP by investing more via equity - not on the face of it

 

[BigadamL]

Record sales on city new home shirt!!!!!!!!!!!!

 

[jimmyhillsfanclub]

...Maybe they'll just hope & pray we continue to produce great academy graduates like the current crop appear to be......as their wages are not included in the 60% figure....

so in theory, we could have 3 or 4 (relatively) high earning "stars" included in a small squad if the remainder of it was made up of academy player & young academy graduates....

 

[Mary_Mungo_Midge]

The sales value of any business is constructed by a number of factors, Turnover is of interest but not the key determinant. What potential investors will be really focused on is potential future revenue streams. The fact that the current owners are screwing up matters only a little in the sense that it only provides the reason to sell.
Depending on how attractive the potential, the purchaser may agree to buy debt and pay a value calculated on multiples of revenue often 8 – 10 x annual revenue.
So on one level SISU are screwing themselves but on another if the can gain the RICOH they would be quids in. Maybe then they would go away

I agree with some of what you offer; but not all. The restricted turnover for this year - unless we go up and can step slightly away from the strict FFP equation and rely on investment - will crucify us in seasons to come. So, let's say we stay in this division and SISU 'sell up'; the new owner is less liable to be able to reach the Championship (the most obvious way to achieve the revenues you elude to) as the playing budget will be too compromised. And God forbid we continue this charade in Northampton for longer, and let's be frank, the agreement with the FL could make it as long as five years; then lost supporters again compromise the attractiveness in the eyes of new investors, as there's potentially a lost generation of Coventry kids, who's never been able to watch a game in their own City, and who all-too-easily start to don the shirts of Manchester United or City, Liverpool et al instead.

How accurately would you think my estimate of £4.5m lost turnover would be; much of this being high-margin ticket sales? And how sits this logic against turning down the latest rent offer at the Ricoh?

Unless SISU's ambition is to distress ACL into getting the Ricoh for less than market value - which many see as the only factor in this - then what can the logic in this move to Northampton be?

 

[Mary_Mungo_Midge]

The reply I had from the Football League on 25/07/13 said this

The Relevant Turnover figure used in the SCMP calculation includes cash invested into the club in the form of equity or donation but does not include money injected into the club through loans.

However for Otium to invest significant funds via equity then there must be the authorised share capital to begin with and I dont think that is more than 1000 which has all been issued and no increase filed at company house. So have SISU improved the FFP by investing more via equity - not on the face of it

Are you sure this applies in League One, OSB58?

 

[RoboCCFC90]

SISU would never have their name on our shirts. They like to stay out of the spotlight.

Saying that, if they put SISU OUT on our shirts they would have record sales. This would make them a few quid.

And increase FFP Championship here we come!!

 

[BurbageSkyBlues]

...Maybe they'll just hope & pray we continue to produce great academy graduates like the current crop appear to be......as their wages are not included in the 60% figure....

so in theory, we could have 3 or 4 (relatively) high earning "stars" included in a small squad if the remainder of it was made up of academy player & young academy graduates....

Wonder if this is why there has been 'reconciliation' regarding the academy back at the Higgs centre?

 

[Cheshire Sky Blue]

I agree with some of what you offer; but not all. The restricted turnover for this year - unless we go up and can step slightly away from the strict FFP equation and rely on investment - will crucify us in seasons to come. ..How accurately would you think my estimate of £4.5m lost turnover would be; much of this being high-margin ticket sales? And how sits this logic against turning down the latest rent offer at the Ricoh?


For sure SISU have made things complicated for potential investors. My initial response was only focussed on the eventuality of SISU wanting to sell. (Not FFP) Any potential investor enters on an at risk basis, as with all investments, If the sales revenue was say £2 million then the potential value of the club may be between 10 – 20 Million depending on the level of risk you want to take, Increase that figure to the May 2011 figure you quote in your original post and the value increases to in excess 100 million. Where I agree 100% with you is that as we stand today the potential is significantly damaged, but this is what SISU are fighting to retrieve. I can see why they may be prepared to fund loses for more than 2-3 seasons.

 

[Hobo]

Lets go with the official club statement from Fisher, "The accounts are a bit of a mess." Surely that is the best guess on finances?

 

[RoboCCFC90]

Lets go with the official club statement from Fisher, "The accounts are a bit of a mess." Surely that is the best guess on finances?

I was watching TV last night and Fisher's line at the fans forum sprang in to my mind when Top Gear mentioned TVR..

 

[Mary_Mungo_Midge]

For sure SISU have made things complicated for potential investors. My initial response was only focussed on the eventuality of SISU wanting to sell. (Not FFP) Any potential investor enters on an at risk basis, as with all investments, If the sales revenue was say £2 million then the potential value of the club may be between 10 – 20 Million depending on the level of risk you want to take, Increase that figure to the May 2011 figure you quote in your original post and the value increases to in excess 100 million. Where I agree 100% with you is that as we stand today the potential is significantly damaged, but this is what SISU are fighting to retrieve. I can see why they may be prepared to fund loses for more than 2-3 seasons.

I think we're pretty much singing from a similar hymn-sheet; but wouldn't any value from any potential bidder place more heed to bottom-line than revenues? A value of 5 to 10 times turnover seems a very generous offer made?!? Unless you're valuing the playing squad, and therefore only tangible asset I can think of, quite highly

 

[Ashdown1]

I agree with some of what you offer; but not all. The restricted turnover for this year - unless we go up and can step slightly away from the strict FFP equation and rely on investment - will crucify us in seasons to come. So, let's say we stay in this division and SISU 'sell up'; the new owner is less liable to be able to reach the Championship (the most obvious way to achieve the revenues you elude to) as the playing budget will be too compromised. And God forbid we continue this charade in Northampton for longer, and let's be frank, the agreement with the FL could make it as long as five years; then lost supporters again compromise the attractiveness in the eyes of new investors, as there's potentially a lost generation of Coventry kids, who's never been able to watch a game in their own City, and who all-too-easily start to don the shirts of Manchester United or City, Liverpool et al instead.

How accurately would you think my estimate of £4.5m lost turnover would be; much of this being high-margin ticket sales? And how sits this logic against turning down the latest rent offer at the Ricoh?

Unless SISU's ambition is to distress ACL into getting the Ricoh for less than market value - which many see as the only factor in this - then what can the logic in this move to Northampton be?

I think most accept this, not sure why it is being repeated again. Even the fervent hedge fund sympathisers have accepted this can be their only reason for taking the club to Sixfields!?

 

[Danceswithhorses]

Wonder if this is why there has been 'reconciliation' regarding the academy back at the Higgs centre?

SISU certainly aren't softening.
The 'reconciliation' has been forced on them....the purpose built Higgs Centre has the only 3g surface in the area, and CCFC need that to keep their academy status.

 

[Mary_Mungo_Midge]

I think most accept this, not sure why it is being repeated again. Even the fervent hedge fund sympathisers have accepted this can be their only reason for taking the club to Sixfields!?

I guess I'm trying to understand the-pain-of-change, and to an extent reinforce it in pounds, shillings and pence terms.

ACL are often portrayed as evil due to the high rents levied - and yes, again it was too high - but this is small beer compared to the losses to the club that the move to Sixfields is bringing to the table. And that's only in cash terms, without factoring in a disenfranchised fan base (as a percentage will never return), or the influence on player expenditure via FFP.

It appears that lost revenues per season could be three times the total swollen ACL rent figure. If that's accurate, it's astonishing. And moreover, proves the futility of the move; bar the obvious sub-plot.

And if that argument is understood, all of this talk about getting back around the tale is a waste of time, and calling on ACL or CC to do so is futile. As the other party - and the maths proves it - just can't be interested as it wouldn't suit their ultimate ambition

 

[oldskyblue58]

Just a few thoughts on the finance (only best guesses)

costs
player wages est 40k pw = 2,080,000pa
other staff/directors etc estimate = 500,000
ground rental apparently 7500 per game = 172,500
Interest on borrowings (now increased) previously was approx 1,000,000
other operational costs (stewards, police shop, insurance , league fees, audit etc) say 1,000,000
Academy costs = 500,000 (net spend - gross spend is supposed to be £1m but get grant to offset)
Ryton training ground costs est = 100,000
depreciation charges = 200,000


total estimate = 5,452,500

Income
match income at current levels 2000 x £9 x 23 = 414,000
catering & hospitality estimate 8000 per game = 184,000
TV money say 3 matches at 100k each = 300,000
Advertising and sponsorship = 100,000 (no shirt sponsor yet)
League money say 200,000 (prize money etc)
shop and sundry sales say 300,000

Total income = 1,498,000

(FFP 60% = 898,800 - but players under 20 at start of season not included in calculation)

Loss 3,954,500

thats before any costs of the dispute with ACL - legals, insolvency advice etc.

If any where close I dont see how it all makes sense to TF............

 

[oldskyblue58]

Are you sure this applies in League One, OSB58?

Can only tell you what they told me MMM ...... but as we all know the FL make it up as they go along ...... SCMP relates to L1 and L2. I was asking them specifically about the SCMP not the Championship FFP rules

I subsequently got this reply too

The League has put together an FAQ document which can be found via the following link - http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html and our regulations here - http://www.football-league.co.uk/regulations/20130704/section-4-clubs_2293633_2125725#18 – stating that each division can introduce its own divisional rules. This document was put together to help answer questions fans may have in relation to FFP and SCMP.

The Divisional rules and guidance notes in relation to FFP are not publicly available and therefore I am unable to comment further in relation to specific detail. All clubs do have access to the rules if you want to contact a specific club for further information.