£100m

[Animis]

4 minutes ago, room0035 said:

We have to give this season forecast result to the fa, unless DC has found away to give a charitable donations to the club of £20m+ FFP has been smashed we will be under a transfer embargo next season.

 

We have two choice ignore the fa and continue on am a Blackburn QPR or We sell our player assets and try and off load the over paid dross Fletcher, Abdi, Matias, Jones, etc.

 

 

 

I think the Leicester-style sponsorship needs to be looked at to see if there's any merit to replicating it - I had assumed D-Taxis/Elev8 was akin to this, and maybe we'll see how much these are bringing in when the 2017/18 accounts are released next March. We may suddenly see a £5-6m additional boost in this revenue?

[adelphi1867]

1 hour ago, room0035 said:

Every where I look at the moment people talk about how much money DC has put into the club be it £100-150m. 

 

I like others have reviewed the accounts and I cannot honestly see these figures anywhere.

 

DC bought the club for £32m + a new scoreboard. This is the price he paid for a club in the Championship with very little debt. This is not investment so cannot be classed as money into the club. This is the price of the goods he bought not The investment into it.

 

The fans pay for merchandise and tickets each year and the turnover figure for the last 3 years has been £20m for each year, again this is not DC putting money in this is us the fans putting money in.

 

Money put in by DC for the last 2 years about £1m a season for advertising and loan notes/long term creditors of £38m. 

 

So in 3 years the fans have put in £60m + the chairman has put in £40m+, should we reach the premier league will the split of the riches be the same 60% to the fans the balance to DC or will it be different. That's for you to decide. If someone has a differ view please share but also back it up with where is this £100-150 m in the club's statutory accounts as if it exists it should be in them.

Doesn't matter what he spent the money on, he has spent that money.

How do you think the club paid for FF, Hooper, Bannan Van Aken, Reech etc.

I am sure that some where in the Dark magic of Accountancy there will be a get out clause.

Edited March 4, 2018 by adelphi1867

[BARMYARMY2010]

8 minutes ago, room0035 said:

I am a qualified accountant and have been for 10 years 

But you got the turnover "as fans money only" pretty basic mistake for a qualified accountant wouldn't ya think ?

[cognacbarnowl]

I'm not going to take up half a page "quoting" your post , Neil. But thanks ; very interesting reading. Where'dya find it ?

[@owlstalk]

1 hour ago, @owlstalk said:

Sheffield Wednesday: Play to win

 

Sheffield Wednesday announced their results for 2016/17, which revealed that they made a loss of nearly £21 million in the season, as the club invested heavily in a promotion push, which faltered in the playoffs against Huddersfield.

 

Since then there’s been a debate on social media in relation to the present level of financial distress experienced by the club, with some suggesting that administration is feasible, so we’ve taken a look.

 

 

Income

 

 

Not all clubs have announced their results for 2016/17 yet. In the previous season the average for a Championship club was £22.9 million, we expect this to be higher in 2017/18.

 

Like all clubs Wednesday earn their income from three sources, matchday, broadcasting and commercial/sponsorship.

 

 

 

 

 

 

The good news for Wednesday is that matchday income rose by 10% in 2017. Attendances averaged 26,831, an increase of over 4,000 in the previous season, when the club made the playoff finals.

 

This means that Wednesday are at the top end of clubs in the division for this income source, slightly behind Villa and Brighton, but more than double the amounts earned by smaller clubs in the division.

 

Despite an indifferent season on the pitch for 2017/18, the club is still averaging over 26,000 in 2017/18.

 

 

 

 

The bad news is that matchday income is dwarfed by parachute payments given to clubs who have been recently demoted from the Premier League. Whilst it brought in over 40% of Wednesday’s income, Norwich, Newcastle and Villa each earned over £40 million in parachute payments, which gave them an advantage in the transfer/player markets.

 

 

 

 

Broadcast income was down 7%. This was partly due to Wednesday only getting as far as the playoff semi-final, compared to the previous season when they made it to Wembley, which was worth a couple of million to the club.

 

The decrease was cushioned partially by a new Premier League (PL) TV deal that came into existence in 2016/17, and under the terms of a deal with the Football League (EFL) the money given to EFL clubs is a guaranteed percentage of PL TV revenues.

 

She 

 

 

Wednesday’s commercial income rose 17% to £6.6 million. This has provoked some bitching from fans of other clubs, who have queried the nature of some of the commercial deals, as some were struck with the club owners’ the Chansiri family.

 

 

 

The value of these transactions, at £1.2 million, does not seem particularly excessive, especially when compared to the likes of Leicester City, who in 2013/14 mysteriously tripled their commercial income after the involvement (ironically) of former Sheffield Wednesday Chairman Sir Dave Richards in obtaining some new sponsorship deals in the Far East.

 

 

 

Leicester have just agreed to pay a £3.1 million fine in relation to their 2013/14 accounts, which had the EFL’s W-T-F-Ometer clicking in the red zone for the past few years.

 

Costs

The main costs at a football club are player related, wages and transfer fee amortisation. Wednesday invested significantly in both of these in 2017/18.

 

 

 

Wages increased by 52% in 2016/17, to £29.1 million. This was due to signing some Premier League players on loan, such as Jordan Rhodes and Callum McManaman the free transfer acquisition of Steven Fletcher, on an alleged £30,000 a week, and new a new contract for top scorer Forestieri.

 

Amortisation is how clubs deal with transfer fees in the profit and loss account. When a player signs his contract cost is spread over the life of the contract. Therefore, when Adam Reach signed from Middlesbrough for about £5 million on a three year deal, this works out at about £1.67 million as an amortisation cost each year.

 

Wednesday spent over £24 million on players in 2015/16 and 2016/17, so the amortisation charge jumped accordingly.

 

 

 

 

Putting these two costs together highlights how much Wednesday ‘went for it’ in 2016/17, as for every £100 of income generated, there was a £152 cost in terms of wages and amortisation.

 

The problem that this gives Wednesday is that many of the players involved will be on multi-year contracts, and therefore it will be a challenge to reduce such costs.

 

Losses

Losses are income less costs. Last season this was £20.7 million, up from £9.7 million the previous season. This leads to two key questions (a) are such losses sustainable, and (b) what are the Financial Fair Play (FFP) consequences.

 

The owner of Wednesday, Dejphon Chansiri family, is estimated to be worth at least £700 million, so the money is there, assuming he wants to keep spending it.

 

In terms of FFP, the present incarnation (called Profitability and Sustainability) limits clubs to a loss of £39 million over three seasons.

 

 

 

 

Looking at Wednesday’s recent accounts, the club has lost money every year, but the total for the last three years comes to £34.3 million. Some costs, such as infrastructure, academy and community schemes, are excluded from the FFP calculations. A conservative estimate of these would be about £8 million, so Wednesday’s FFP losses are probably about £26 million over the last three years.

 

If this is the case, whilst Wednesday don’t have a huge amount of wiggle room for 2017/18, the club should satisfy FFP this season. The manager will however be unable to spend a huge amount in the transfer market in summer 2018.

 

 

Player trading

Wednesday, as already mentioned, have spent significant sums by their standards in the last two seasons.

 

 

 

There’s no doubt Chansiri has backed managers in the transfer market, and that has contributed towards two appearances in the playoffs. The lack of success in the current season is of greater concern, and there will be less opportunity to sign players in the forthcoming transfer window unless they are funded by player disposals.

 

It looks as if player contracts contain substantial bonuses should the club be promoted, with player bonuses of £7.5 million and payments to former owners of over £1 million. Compared to the £100 million of TV money, this is relatively insignificant.

 

 

 

 

Debt

Chansiri has put substantial sums into the club, and at the end of the financial year was owed about £38 million in loans on top of £45 million invested in shares. His benevolence appears at present to be unconditional, so Wednesday fans should not worry about the owner wanting to sell up or stop supporting the club financially.

 

 

Summary

Wednesday are in a slightly awkward position, having spent heavily in the last couple of seasons on player recruitment and not being rewarded by promotion.

 

At the same time, rumours of their impending financial implosion appear to be vastly overstated.

 

Data Set

 

 

 

This wasn't my work btw - but from another site that breaks down into plain english what a club's finances look like

[modboy]

3 minutes ago, @owlstalk said:

 

 

This wasn't my work btw - but from another site that breaks down into plain english what a club's finances look like

 

do you have a link?

[Guest]

34 minutes ago, room0035 said:

I am a qualified accountant and have been for 10 years 

 

Don't think you will be getting a great deal of additional business based on your expert analysis of these accounts.

[SiJ]

2 minutes ago, hirstyboywonder said:

 

Don't think you will be getting a great deal of additional business based on your expert analysis of these accounts.

Ha. 

 

What I suspect has happened here is he's gone in with his mind already made up (Chansiri is not telling the truth on the 100 to 150 million) and has then looked at the accounts and found figures to suit that particular line of argument. 

[Inspector Lestrade]

£40 million is a fair old whack by anyone's standard, I would have thought.  

[Hawkowl]

1 hour ago, @owlstalk said:

 

Eh?

 

 

My thoughts exactly.

 

 

FFS.

[Roscoe P. Coltrane]

37 minutes ago, Animis said:

 

I think the Leicester-style sponsorship needs to be looked at to see if there's any merit to replicating it - I had assumed D-Taxis/Elev8 was akin to this, and maybe we'll see how much these are bringing in when the 2017/18 accounts are released next March. We may suddenly see a £5-6m additional boost in this revenue?

One slight problem here though

D-Taxis doesn't exist 

[morley]

Well what can I say about the OP?

 

If Chansiri paid £32m to buy the club and his loans to the club at the accounting date stood at £38m then the £60 million that he/she refers to is already £70m.

 

Those figures were as at May31st last year.

 

Assuming he has supported the club at a similar level this year ie. approx. £22m and has additionally supplied sponsorship (£1.2m last year) tand paid for the scoreboard then I would suggest that he is very close having put £100m of his own money in.

[morley]

Just to add that total player costs of 150% of total income = financial suicide.

 

Given that all the most expensive players are still under contract we had better pray that DC doesn't withdraw his support!

[SiJ]

1 minute ago, morley said:

Just to add that total player costs of 150% of total income = financial suicide.

 

Given that all the most expensive players are still under contract we had better pray that DC doesn't withdraw his support!

Indeed. 

 

As long as he's willing to put money in we should be ok. 

 

If he loses interest then it really is curtains. 

[@owlstalk]

10 minutes ago, morley said:

Just to add that total player costs of 150% of total income = financial suicide.

 

Given that all the most expensive players are still under contract we had better pray that DC doesn't withdraw his support!

How would/could he do that?

[prowl]

2 hours ago, room0035 said:

Every where I look at the moment people talk about how much money DC has put into the club be it £100-150m. 

 

I like others have reviewed the accounts and I cannot honestly see these figures anywhere.

 

DC bought the club for £32m + a new scoreboard. This is the price he paid for a club in the Championship with very little debt. This is not investment so cannot be classed as money into the club. This is the price of the goods he bought not The investment into it.

 

The fans pay for merchandise and tickets each year and the turnover figure for the last 3 years has been £20m for each year, again this is not DC putting money in this is us the fans putting money in.

 

Money put in by DC for the last 2 years about £1m a season for advertising and loan notes/long term creditors of £38m. 

 

So in 3 years the fans have put in £60m + the chairman has put in £40m+, should we reach the premier league will the split of the riches be the same 60% to the fans the balance to DC or will it be different. That's for you to decide. If someone has a differ view please share but also back it up with where is this £100-150 m in the club's statutory accounts as if it exists it should be in them.

If you buy a gold bar with an intention to sell it at some stage in the future it is an investment, same with stocks and shares, houses, pretty much anything you have an intention to sell at some stage including a football club. The £32m is an investment.

 

The £20m the fans 'put in' certainly came from the fans but like any business the club has a cost of selling those goods. For merchandise like shirts, food drink etc, the club needs to buy the goods, pay for the staff, provide the selling space. All these need to be deducted from the price the fans paid. Even the tickets have costs. to offer you something to watch the club needs to provide a pitch and stadium, players, stewards, police, pay the league fees etc.etc.etc..

 

All the costs of running the club, paying the players, stadium upkeep, rates, basically everything involved in being a football club is costing £10m t0 £20m more per year  than the club is receiving in income (we can argue the actual figures but it's a lot). In the real world (football is different) the owner is subsidising your hobby of watching the team by a stupid amount. If he was to charge what if actually costs prices would probably need to double. (don't worry it won't happen).

[room0035]

58 minutes ago, BARMYARMY2010 said:

But you got the turnover "as fans money only" pretty basic mistake for a qualified accountant wouldn't ya think ?

But you had it as all the chairman's money so you don't have a clue either. I didn't have the turnover breakdown but it's fans money and tv but still not the chairman's.

[BARMYARMY2010]

Just now, room0035 said:

But you had it as all the chairman's money so you don't have a clue either. I didn't have the turnover breakdown but it's fans money and tv but still not the chairman's.

Give it up fella.

[kobayashi]

He must be in for £100m by now. The purchase price was said to be around £20m, he has since put in £25m of new capital and until May 17 had injected loans of £38m (at a rate of £1.5m a month) and sponsorship of £2m. So there £85m, so add a another nine months of the loans plus at least another £1m of sponsorship and bingo £100m.

 

Pesumably the additional £50m to take it to £150m is what he knows is coming down the line over the remainder of 2018, 2019 and 2020 given the contracts he has already doled-out.

[The only way is S6]

The most significant sentence is 'his benevolence at present, is unconditional'

 

How anybody can question DC's commitment is beyond me. The sums spent are staggering and beyond criticism. He may be a bit green, naïve if you will, but the old phrase, put your money where your mouth is, can't be levelled at him.

 

No sane person would walk away with naff all to show for it now. The only way he can make any money on his investment is promotion. And for that reason, I'll be renewing the old ST.