Deeper in debt

[Nottingham Fox]

From www.thebluearmy.co.uk

City's £5m losses will get worse

by Ian Griffin

Leicester City will make a multi-million pound loss this season, the club revealed today.


The deficit is likely to be larger than the £5.43 million racked up last year after major investment in the squad by chairman Milan Mandaric.

City, who unveiled last year's financial accounts yesterday, blamed the loss on the ending of their £6.5m parachute payments from the Premier League.

Chief executive Paul Aldridge, below, said the loss for this financial year - which ends on May 31 - would rise because outgoings had increased while turnover was around the same as last year's £14.7m.

He said: "I would expect the losses to increase this season.

"We have clearly made investments in the squad, while our income has remained fairly stable.

"We would ultimately like to see the club making a profit instead of generating losses, but there's always going to be a trade-off between investing in the squad and your profit and loss account."

Aldridge would not say when he hoped the club would be profitable again.

City are able to cope with the losses because of millionaire owner Milan Mandaric, who vowed to get the club into the Premier League within three years.

Mandaric claims to have pumped £11m into City in his first 12 months as owner. This has enabled numerous players to be brought in, including DJ Campbell (£2.3m), Steve Howard (£1.5m), Stephen Clemence (£750,000) and Matt Oakley (£500,000). Match receipts for last season were £5.3m, up from £4.8m in 2005/06, when the club made a £1.7m profit.

Income from sponsorship, executive suites and advertising increased to £3.1m from £2.7m. However, income from retailing and conference and banqueting was slightly down at £3.18m.

Staff wages fell by just under £1m to £10.7m, but made up 72.8 per cent of turnover, compared to 57.2 per cent the previous year.

Aldridge would not say how much this season's loss would be. City's biggest loss was £6.2m, in the 1998/99 season when they were listed on the stock market.

In a statement issued with the accounts, Mandaric said: "I have undertaken a full strategic review of all aspects of the club, including its finances and operations, with a view to continually improving the way the club is run at all levels.

"I believe working together as a team, including the players, management, staff and supporters, we can reinvigorate the club and restore it to the Premier League where it belongs."

 

[homer]

God help us if we go down

Seriously in shit

 

[alex]

God help us if we go down

Seriously in shit

Only if MM walked away.

 

[highland fox]

Only if MM walked away.

You mean you haven't heard Alex ?

 

[homer]

Only if MM walked away.

Which I suspect he could do relatively unscathed by placing us into administration - or winding us up altogether

 

[consty]

Note how the journalist writes 'Mandaric Mandaric Mandaric claims to have pumped £11m into City" - note his use of the word 'claims'. Perhaps there is some scepticism there about how much MM has actually parted with. Many a journalist & editor would have put the figure in as a reported fact.
Agree with Homer above though. Without MM's backing the squad would have been sold off and the club would have bought the equivalents of Josh Low in. Admittedly most of the signings that cost money have not set the club alight (noteably clemence), but it's looking like Hendry has made a difference and could save the club from the drop. Without MM's backing there is no way the club would have taken him on I'd imagine. Oakley & Howard are also big money/big wage deals that without MM would not be here.

 

[Nottingham Fox]

IMO this is only the start of it. There will be a massive clearout in the summer, but new additions will follow and a real push for the play offs is a must for MM next season which won't be cheap.

 

[Dour]

Note how the journalist writes 'Mandaric Mandaric Mandaric claims to have pumped £11m into City" - note his use of the word 'claims'. Perhaps there is some scepticism there about how much MM has actually parted with. Many a journalist & editor would have put the figure in as a reported fact.

Well, MM has probably 'pumped' £3.5 million into the club, as in invested in it, and may have lent the club another £7.5 million. I'll call up a copy of the accounts soon and see what's in them.

 

[consty]

IMO this is only the start of it. There will be a massive clearout in the summer, but new additions will follow and a real push for the play offs is a must for MM next season which won't be cheap.

Yes, MM is faced with 2 strategic choices. If he want's to get into the premier league - which is his only reason for being here - he will have to chase success with more money/investment and increase the debts of the club. If he decides that it would cost too much to reach promotion - given he will have to compete with 6 relegated clubs with parachute payments (this years' and last years' relegated crop) + the likes of QPR who have big money to spend, MM may decide it simply would cost too much and throw in the towel. After this years experience he may feel that he would be throwing good money after bad.

To be honest with you, if I was a millionaire touching 70 who is not from Leicester and has never been a fan before, given the amount of time and hassle LCFC have cost and the poor return and the anticipated cost for next year - I would definately be looking to cut my losses. I would be gone. No question.

 

[consty]

Well, MM has probably 'pumped' £3.5 million into the club, as in invested in it, and may have lent the club another £7.5 million. I'll call up a copy of the accounts soon and see what's in them.

Good work if you do, it will be interesting to see the results of what you uncover.

(Perhaps Tim Davies was calling for more cash and that was why he was 'asked' to leave? I'm sure there's a story somewhere it that suprise and very hasty exit...)

 

[Polar Bear]

You sign sixteen players
And whaddya get?
Another season over
And deeper in debt
League One don't call me
Cos I can't go
I owe my soul to the City Megastore

 

[Redditch Fox]

(Perhaps Tim Davies was calling for more cash and that was why he was 'asked' to leave? I'm sure there's a story somewhere it that suprise and very hasty exit...)

Alternatively.... and those of us who have worked in organisations making big losses, know that it is always someone elses fault than the big boss when it comes to taking the blame.

These are very poor figures on income generation and someone has to carry the can .

 

[Hazzman]

Only £1.1 million of it went on agent fees and even more on paying off Allen, Mackay....

 

[homer]

Note how the journalist writes 'Mandaric Mandaric Mandaric claims to have pumped £11m into City" - note his use of the word 'claims'. Perhaps there is some scepticism there about how much MM has actually parted with. Many a journalist & editor would have put the figure in as a reported fact.

Makes a change from the complete lack of genuine journalism that is applied to LCFC by both the sycophantic Merc and the truly appalling Radio Leicester

Any half-decent journo would have had a field day with our club over the past twelve months, and asked some searching questions. Fact is the club (and Mandaric) have escaped any sort of challenge whatsoever

To be honest, I'm surprised the article doesn't talk about the investment of £25 million :icon_roll

 

[Hazzman]

Any half-decent journo would have had a field day with our club over the past twelve months, and asked some searching questions. Fact is the club (and Mandaric) have escaped any sort of challenge whatsoever

Some things I have heard yesterday suggest Panorama-esque stuff.

 

[TommyK]

IMO this is only the start of it. There will be a massive clearout in the summer, but new additions will follow and a real push for the play offs is a must for MM next season which won't be cheap.

I'm not so sure there will be 'big' clearout in the summer and definitely not as many in as last year. Mainly because a lot of it has already happened in the transfer window. Quality not quantity please. Two quality wingers and a keeper are priority.

 

[consty]

Assuming MM stays (which is open to question as I've said), I agree with Tommy K. I think IH said signing 14 players in the summer was "madness". I feel he'll want to buy a keeper, a winger and a centre forward only. However, he'll be looking for the backing to spend what is necessary. Any additional purchases will only be to replace any of our better players who might leave in the summer (namely Kinsboro', Stearman and Mattock)

 

[spionfox]

*****
Chief executive Paul Aldridge, below, said the loss for this financial year - which ends on May 31 - would rise because outgoings had increased while turnover was around the same as last year's £14.7m.

Staff wages fell by just under £1m to £10.7m, but made up 72.8 per cent of turnover, compared to 57.2 per cent the previous year.
*****

Someone help me here.

The first paragraph above states that turnover is about the same as last year. The second paragraph states that staff wages are down yet still managed to be a significantly higher percentage of turnover.

If turnover is the same and wages are down, how can wages form a higher percentage of turnover?

I know it's a few years since I studied maths, but something doesn't add up here.

 

[Disco Bob]

IMO this is only the start of it. There will be a massive clearout in the summer, but new additions will follow and a real push for the play offs is a must for MM next season which won't be cheap.

Don't hold your breath.

 

[Mouse]

This has enabled numerous players to be brought in, including DJ Campbell (£2.3m), Steve Howard (£1.5m), Stephen Clemence (£750,000)

*cries*

Four and a half million pounds those three cost.

I don't think you can be expecting to make profits when you're paying ridiculous amounts of money for shit players.

AND on top of that the wages that they're on, and I bet Clemence and Howard in particular are on astronomical wages.