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MoorfOwl

On Tuesday, The Times reports on Wednesday

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The Times has a little article by Paul Joyce today in its downloadable edition, reporting on The Owls' financial concerns. 

 

There's very little that will come as news to Owlstalk readers; in fact, the accompanying illustration shows a stock photo including blue and white striped shirts and black shorts. The article notes the £21m loss for the operating year to May 2017, compares it with the 3 year maximum of £39 million and concludes the club face having to offload some high earners. It mentions Forestieri, Fletcher, Rhodes and Boyd, but only as examples of high earners, not as being for sale. 

 

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4 minutes ago, londonowl said:

Obviously I haven't actually read it but anyone quoting our loss of £21m as a means to conclude anything is not really dealing with the facts.

 

That £21m loss in 16/17 equates to a little over £14m once allowable deductions are made. Add that to around £6.6m the year before and you come to around £21m over the 2 seasons. Assuming because of player amortisation, we won't be able to reduce the 16/17 figure for 17/18, even an FFP loss of £18m would still put us within permitted losses.

 

 We lost £14m in 16/17 and let's say a similar amount in 17/18, we will need to show the EFL how we will reduce the losses for 18/19 as they will need to be around the £10/11m mark to stay within the £39m allowable losses at the end of 18/19 season.

 

Leaves us needing to free up around £3m a season. Take Rhodes as easiest example to do this. Let's say we paid £6m for him on a 4-year, £30k a week contract. For accounts, that £6m is amortised over the 4 year contract length at £1.5m a season, £30k a week is another £1.5m a season. If we can get 60-65% of what we paid back for him, that's a £3m accounting loss off the books for FFP.

 

I think there is still going to be room to do some deals, we are not going to be buying £10m players but we've definitely got some wiggle room. Obviously we've already lost a couple of players at the end of last season and doubtless a few fringe players will move on, add this to decreased amortisation from any new, longer contracts plus other allowable deductions for FFP that I haven't accounted for and whilst we are going to be there or thereabouts for FFP, I don't think there's any danger of a mass exodus.

what we need is an accountant to analyse the data...looks like you are the guy for this...

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We need that Big TV money and there’s only one way to get that. Just need to ensure we don’t do a Villa trying.

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26 minutes ago, londonowl said:

Obviously I haven't actually read it but anyone quoting our loss of £21m as a means to conclude anything is not really dealing with the facts.

 

That £21m loss in 16/17 equates to a little over £14m once allowable deductions are made. Add that to around £6.6m the year before and you come to around £21m over the 2 seasons. Assuming because of player amortisation, we won't be able to reduce the 16/17 figure for 17/18, even an FFP loss of £18m would still put us within permitted losses.

 

 We lost £14m in 16/17 and let's say a similar amount in 17/18, we will need to show the EFL how we will reduce the losses for 18/19 as they will need to be around the £10/11m mark to stay within the £39m allowable losses at the end of 18/19 season.

 

Leaves us needing to free up around £3m a season. Take Rhodes as easiest example to do this. Let's say we paid £6m for him on a 4-year, £30k a week contract. For accounts, that £6m is amortised over the 4 year contract length at £1.5m a season, £30k a week is another £1.5m a season. If we can get 60-65% of what we paid back for him, that's a £3m accounting loss off the books for FFP.

 

I think there is still going to be room to do some deals, we are not going to be buying £10m players but we've definitely got some wiggle room. Obviously we've already lost a couple of players at the end of last season and doubtless a few fringe players will move on, add this to decreased amortisation from any new, longer contracts plus other allowable deductions for FFP that I haven't accounted for and whilst we are going to be there or thereabouts for FFP, I don't think there's any danger of a mass exodus.

£7m allowable losses in 16/17 but only £3m in 15/16 any reason why?

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29 minutes ago, londonowl said:

Obviously I haven't actually read it but anyone quoting our loss of £21m as a means to conclude anything is not really dealing with the facts.

 

That £21m loss in 16/17 equates to a little over £14m once allowable deductions are made. Add that to around £6.6m the year before and you come to around £21m over the 2 seasons. Assuming because of player amortisation, we won't be able to reduce the 16/17 figure for 17/18, even an FFP loss of £18m would still put us within permitted losses.

 

 We lost £14m in 16/17 and let's say a similar amount in 17/18, we will need to show the EFL how we will reduce the losses for 18/19 as they will need to be around the £10/11m mark to stay within the £39m allowable losses at the end of 18/19 season.

 

Leaves us needing to free up around £3m a season. Take Rhodes as easiest example to do this. Let's say we paid £6m for him on a 4-year, £30k a week contract. For accounts, that £6m is amortised over the 4 year contract length at £1.5m a season, £30k a week is another £1.5m a season. If we can get 60-65% of what we paid back for him, that's a £3m accounting loss off the books for FFP.

 

I think there is still going to be room to do some deals, we are not going to be buying £10m players but we've definitely got some wiggle room. Obviously we've already lost a couple of players at the end of last season and doubtless a few fringe players will move on, add this to decreased amortisation from any new, longer contracts plus other allowable deductions for FFP that I haven't accounted for and whilst we are going to be there or thereabouts for FFP, I don't think there's any danger of a mass exodus.

 

 

wow.......that is really well explained, even I understood it.lol

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4 minutes ago, Weshallovercome said:

 

 

wow.......that is really well explained, even I understood it.lol

 

Explain it to me then :) 

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6 minutes ago, just visiting said:

£7m allowable losses in 16/17 but only £3m in 15/16 any reason why?

Because we spent more on the training facilities and youth development. 

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17 minutes ago, flo said:

Because we spent more on the training facilities and youth development. 

Doesn’t really have anything to do with that. I allowed a couple of hundred thousand per season for that in my figures.

 

In 16/17, we had more ‘assets’ that we could write down the value of the in 15/16. Essentially accounting losses but allowed under FFP so clubs can still prepare correct and tax efficient accounts without falling foul of FFP.

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1 hour ago, Watson said:

 

Explain it to me then :) 

 

 

I lied, but just wanted to compliment londonowl really.lol

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As I said in another thread I don't personally think any of our top stars will leave unless they want to. even just sending a few out on loan with all the wages paid would help us.

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Quite possibly the piece is a filler that's been waiting for space for some time, though I'm grateful to londonowl for a very clear explanation of the problem. 

 

As a traditionalist, I actually thought the photograph of Wednesday playing in blue and white stripes with black shorts was the best bit. 

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5 hours ago, londonowl said:

Obviously I haven't actually read it but anyone quoting our loss of £21m as a means to conclude anything is not really dealing with the facts.

 

That £21m loss in 16/17 equates to a little over £14m once allowable deductions are made. Add that to around £6.6m the year before and you come to around £21m over the 2 seasons. Assuming because of player amortisation, we won't be able to reduce the 16/17 figure for 17/18, even an FFP loss of £18m would still put us within permitted losses.

 

 We lost £14m in 16/17 and let's say a similar amount in 17/18, we will need to show the EFL how we will reduce the losses for 18/19 as they will need to be around the £10/11m mark to stay within the £39m allowable losses at the end of 18/19 season.

 

Leaves us needing to free up around £3m a season. Take Rhodes as easiest example to do this. Let's say we paid £6m for him on a 4-year, £30k a week contract. For accounts, that £6m is amortised over the 4 year contract length at £1.5m a season, £30k a week is another £1.5m a season. If we can get 60-65% of what we paid back for him, that's a £3m accounting loss off the books for FFP.

 

I think there is still going to be room to do some deals, we are not going to be buying £10m players but we've definitely got some wiggle room. Obviously we've already lost a couple of players at the end of last season and doubtless a few fringe players will move on, add this to decreased amortisation from any new, longer contracts plus other allowable deductions for FFP that I haven't accounted for and whilst we are going to be there or thereabouts for FFP, I don't think there's any danger of a mass exodus.

Surely it is unrealistic to expect our 17/18 losses to be at a similar level to 16/17?

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Getting boring now this..we are either minted or skint..and I would opt for skint if I had to choose

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5 minutes ago, HirstWhoScoredIt said:

Surely it is unrealistic to expect our 17/18 losses to be at a similar level to 16/17?

Why? Rhodes transfer fell into 16/17 so it will depend if amortisation was calculated monthly or on an accounting year basis as to how much effect that will have. Only players we paid a fee for in the year were Van Aken and Pelepussy. A couple came in on loan and a couple were released one way or another at the end of the season.

 

Matchday and football revenue will likely have fallen but following 2 successive play-off seasons, our commercial rights would have been more valuable so DC will have had to up his £1.2m contribution to sponsor the ground and shirts. Add to that revenue from D Taxis and the fee elev8 would have had to pay for the shirts.

 

Basic prize money would be £2.33m, up from £2.048.

Solidarity Payment would be £4.55m, up from £4.3m.

 

As matchday income is only in the region of £11m, even a 15% drop in these revenues should be covered by increased payments from EFL and sponsorship. Player sales income was negligible previously anyway so no great loss of income there.

 

Even with the amortisation of existing player registrations, the net effect of player trading in 17/18 should have very little impact on the overall figures when taken in comparison to 16/17.

 

I may be completely wrong but my reading of the figures is that without making any changes at all, we would be around the £40m in losses mark over the last 3 seasons but in March 2019, EFL will be expecting forecasts for 18/19 and it looks like as things stand, we would be a few million the wrong side of things, a not insignificant amount but not something which requires a 'fire sale'.

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So basically, we need stripes back for massive shirt sales, smash the league for higher gate receipts, carabao and FA Cup runs to the finals for TV rights money, and we should be oreyt. 

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5 hours ago, londonowl said:

Doesn’t really have anything to do with that. I allowed a couple of hundred thousand per season for that in my figures.

 

In 16/17, we had more ‘assets’ that we could write down the value of the in 15/16. Essentially accounting losses but allowed under FFP so clubs can still prepare correct and tax efficient accounts without falling foul of FFP.

London what are the allowable expenditure that reduces the losses as any expenditure on say the pitch or development on the training would be capitalised, not put through as expenses the only expense would be amortisation. So I would be interested to know what they are to reduce the accounts by £7m in 2015/16 and £3m in 2016/17 as i cannot see that much being spent on development, I know their accountants and they would capitalise everything that they were allowed to.

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8 minutes ago, daztheowl said:

So basically, we need stripes back for massive shirt sales, smash the league for higher gate receipts, carabao and FA Cup runs to the finals for TV rights money, and we should be oreyt. 

Summat like that, though Brighton got just under £6m in sponsorship 2016/17 and we got less than £2m so there's room for more money to be put in of we really need it whilst still staying within the 'true value' test where the sponsorship is from a related party.

 

Or else we could do what Leicester did and get some 'management' company to put £13m in.

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56 minutes ago, room0035 said:

London what are the allowable expenditure that reduces the losses as any expenditure on say the pitch or development on the training would be capitalised, not put through as expenses the only expense would be amortisation. So I would be interested to know what they are to reduce the accounts by £7m in 2015/16 and £3m in 2016/17 as i cannot see that much being spent on development, I know their accountants and they would capitalise everything that they were allowed to.

I don't have all of the figures but for 16/17, £1m amortisation (not including players, £2.3m equity investment (unconditional, football fortune income, not debt reducing but allowing higher losses so was easier to show it reducing the loss), £1.1m youth costs (including salaries and costs for staff 'only' involved in youth structure). £14.4m was the final figure from £20.7m. I don't know if we had applied for any exceptional expenditure, there's nothing in the accounts that would lead you to believe that we had any significant bad debts or similar and I don't think we had any career ending injuries but I think when it comes to FFP, clubs look for a reason to exclude anything they can! 

 

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Mate you can't bring facts and sense on here, what are you doing?

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