Deal done this week....

[Real Sharapova]

I think we are in really deep shite, and I would put our debts in at between £8 to £10 million and that is why M.M
has been stalling driving a very hard bargain down as much as he can, to facilitate more money being given to the club to get it out of the mire its in, plus getting a couple of decent loans in to stave off relegation

Presumably you are not including the money owed to Teacher's?

 

[Jeff]

FT stated that cutbacks have no where near covered the loss of the parachute payment et al. The Connolly sale was a bonus. The parachute payment will account for most of the losses this season.

Let's have a look at the figures more closely then.

You said we will be £10 million worse off, due to the loss of the parachute money and the Connolly money.


We would have only received around £2 million for Connolly in that time, but we spent most of that on players. So really it's 'just' the £7 million parachute money we need to find.

If we're looking at it based on the financial year, in the last financial year (which finished on 31/5/06) we actually made a profit of £1.6 million. So to break even this year we'd have to find another £5.4 million.


Some of those cutbacks will have come as a result of a reduction in the wage bill. Players like Dublin, Wilcox, and even Ian Walker were on the wage bill during the previous financial year. Joey Gudjonsson would have been one of our higher paid players during that time too.
So maybe the wage bill has been reduced by in the region of £1.5 million (just a guess, could be more or less than that). We also had to pay off CL in the last financial year, an expense we don't have this year.
In the current financial year we'd also have received the extra £1 million from the Connolly sale - although obviously that's a one off so it won't apply next year.

Which leaves a projected loss this year of around £3 million (if all my guesses are accurate) - unless the club have been able to make savings elsewhere or they've had some extra expenses/losses we don't know about.

 

[drew]

Were last years figure operating profits. If so its quite possible that there could of been debts last year despite making a profit.

Jeff are you saying that the current board running up a £3 million debt is ok and good for the long term future of the club, because next year the debt will rise again and again until we have no decent players left to sell and are in division 4.

 

[Durham Fox]

Let's have a look at the figures more closely then.

You said we will be £10 million worse off, due to the loss of the parachute money and the Connolly money.


We would have only received around £2 million for Connolly in that time, but we spent most of that on players. So really it's 'just' the £7 million parachute money we need to find.

If we're looking at it based on the financial year, in the last financial year (which finished on 31/5/06) we actually made a profit of £1.6 million. So to break even this year we'd have to find another £5.4 million.


Some of those cutbacks will have come as a result of a reduction in the wage bill. Players like Dublin, Wilcox, and even Ian Walker were on the wage bill during the previous financial year. Joey Gudjonsson would have been one of our higher paid players during that time too.
So maybe the wage bill has been reduced by in the region of £1.5 million (just a guess, could be more or less than that). We also had to pay off CL in the last financial year, an expense we don't have this year.
In the current financial year we'd also have received the extra £1 million from the Connolly sale - although obviously that's a one off so it won't apply next year.

Which leaves a projected loss this year of around £3 million (if all my guesses are accurate) - unless the club have been able to make savings elsewhere or they've had some extra expenses/losses we don't know about.

Did they not have quite a heavy cull of admin staff?

 

[Real Sharapova]

Were last years figure operating profits. If so its quite possible that there could of been debts last year despite making a profit.

It was the excess of income over expenditure, so the overall excess of assets over liabilities would have increased by £1.6 million.

 

[Real Sharapova]

Did they not have quite a heavy cull of admin staff?

Yes, they did a Bernard Matthews.

 

[Mike - True Blue Tinter]

If we are losing £30 000 a week we need about an extra 3000 walk-up fans each match to stop that loss, and with only a third of the season left, about an extra 9000 to reverse the losses so far!
If we started playing well and banging in lots of goals and winning, I could see us pushing back up towards gates of 25 000 but no way this season can I see gates approaching 30 000 for ordinary league games.

 

[alex]

If we are losing £30 000 a week we need about an extra 3000 walk-up fans each match to stop that loss, and with only a third of the season left, about an extra 9000 to reverse the losses so far!
If we started playing well and banging in lots of goals and winning, I could see us pushing back up towards gates of 25 000 but no way this season can I see gates approaching 30 000 for ordinary league games.

Totally agree - but then I would, I'm former Houghton too, we know....

 

[Jeff]

Were last years figure operating profits. If so its quite possible that there could of been debts last year despite making a profit.

Of course, I was just comparing the income / expenses year on year, just to see what we would need to do to be in the same financial position we were a year ago.

Jeff are you saying that the current board running up a £3 million debt is ok and good for the long term future of the club

No.


For my thoughts on what the current board should have done see this post:
http://www.talkingballs.co.uk/showpost.php?p=383282&postcount=598
Although I'm sure a lot of poeple will disagree, and if it had happened the board would have been accused of lacking ambition.

 

[Biffa Bacon]

Of course, I was just comparing the income / expenses year on year, just to see what we would need to do to be in the same financial position we were a year ago.




No.


For my thoughts on what the current board should have done see this post:
http://www.talkingballs.co.uk/showpost.php?p=383282&postcount=598
Although I'm sure a lot of poeple will disagree, and if it had happened the board would have been accused of lacking ambition.

You are not taking into account the lost ticket revenues from this year, we are taking significantly less at the gate than last season, the only matches where we have had decent gates are the ones where ticket shave been given away free, the Connolly money covered some of the ticket sales loses.

 

[Jeff]

You are not taking into account the lost ticket revenues from this year, we are taking significantly less at the gate than last season, the only matches where we have had decent gates are the ones where ticket shave been given away free, the Connolly money covered some of the ticket sales loses.

I've also not taken into account the approx £400,000 we've received this season by selling players.

 

[Biffa Bacon]

I've also not taken into account the approx £400,000 we've received this season by selling players.

City budgetted £5m+ for season ticket sales and got approx. £4m so player sales needed to be much higher (the wage bill is also over budget this year).

 

[Jeff]

City budgetted £5m+ for season ticket sales and got approx. £4m so player sales needed to be much higher (the wage bill is also over budget this year).

Our average attendance this year is higher than it was last year. OK some of those people have been getting in free/cheap, but only a small minority, so I can't imagine ticket income has gone down that much from last season.

But I agree that the wage bill is over budget - hence my point in the post I linked to a few posts ago about the board taking too long to adjust to the reality of being in this division.

 

[drew]

Ok, i see where you are coming from in that post. But you mention about MM saddling us with debts, haven't the current board already done that?

Hindsight is a wonderful thing, ideally most fans would want a rich Leicester fan to come in. There isn't one yet willing to do so.

We are left with the current board who have royally messed up and have no track record or we have a guy who is willing to invest and try and get us back to the premiership.

 

[Biffa Bacon]

Our average attendance this year is higher than it was last year. OK some of those people have been getting in free/cheap, but only a small minority, so I can't imagine ticket income has gone down that much from last season.

But I agree that the wage bill is over budget - hence my point in the post I linked to a few posts ago about the board taking too long to adjust to the reality of being in this division.

It has, that's why the panic to sort the finances.

 

[Real Sharapova]

Ok, i see where you are coming from in that post. But you mention about MM saddling us with debts, haven't the current board already done that?

The major debt is to Teacher's, IMO any other debts are pretty inconsequential - I doubt the bank would have advanced us much since the last accounts, at the moment the trading losses are being covered by last year's profits and the sum originally ploughed in when we came out of admin. That of course is not sustainable in the long term without player sales which is why Andrew Taylor was brought in to try to get more investment.

 

[Jeff]

Ok, i see where you are coming from in that post. But you mention about MM saddling us with debts, haven't the current board already done that?

We are left with the current board who have royally messed up and have no track record or we have a guy who is willing to invest and try and get us back to the premiership.

MM would put us in a lot more debt than we're in at the moment. That's what he did at Portsmouth, he's not just going to donate money to the club, he's going to lend it to us (or borrow from elsewhere), money which will need to be paid back.

What concerns me is what happens if after 3-4 years we're still where we are. What will MM do then? Will he walk out leaving us £30 million in debt? Or will he make a commitment not to leave us in the shit?
If he's just using us as a potentially very profitable but risky gamble I'd be worried about the possible consequences, which is why I'd like some sort of guarantee from him about the form of any investment he makes and what his exit strategy would be if we're not successful.

If he comes in and we're immediately successful I'll be as happy as everyone else, but being a natural worrier I also look at the possible downside.

 

[drew]

Ok then why is the board being held to ransom by MM? We clearly don't need him given your figures.

 

[1966]

Craig Levein, for all his faults, did a great deal to reduce the club's outgoings. A figure I have heard bandied about is that we are losing £30,000 per week - not fantastic, but manageable at the moment. Nobody is arguing that we need new investment, that was why Andrew Taylor was brought in, I'm just a bit cynical about what MM wants to do with our club and how he proposes to finance it. If it works I will be the first to applaud him, I can assure you.

My understanding is similar, although not quite as high.

Which of course is close to the combined weekly outlay on RD and MDV.

 

[drew]

If he comes in and we're immediately successful I'll be as happy as everyone else, but being a natural worrier I also look at the possible downside.

As far as i am concerned all i have to do is look where Portsmouth are and compare our position to theirs.

Money with the right manager can get you success, look at Birmingham and Derby as examples.

I think Dowie can get us promoted.