Football Ventures - Accounts 21-22

[BWFC_Insane]

https://www.bwfc.co.uk/news/2023/april/ ... published/

https://www.theboltonnews.co.uk/sport/2 ... june-2022/

Accounts for last year are out and seem respectable. Football loss of £5.7M offset across wider group (hotel etc) to £3.7M losses.

Football side wages are at 95% turnover which is obviously insane but that again is somewhat offset by wider business.

£12.5M of loans converted to equity which is clearly good news. Ongoing financial support from ownership group is also clear in the accounts statement.

I guess the negative is we are probably financially at our ceiling or close to it. Lost £3.7M - which will be covered by ownership but still....whilst there might be room for some slightly raised gate income and small increases on non football side hard to see us covering that loss significantly though player sales might help we've also spent money...

So all in all good solid stuff. Not seeing us likely being able to invest more on the playing side than we have so its a case of make sure we sign the right ones within budget - can't make mistakes.

[officer_dibble]

I saw something in coverage (probs that maguire fella) about a £100k loan to a current shareholder.

[boltonboris]

That will be to cover Evatt's court fees, presumably and hence him being classed as a B Share director

[officer_dibble]

Yep - surely keeps him here for the foreseeable.

[Dave Sutton's barnet]

Awaiting Worthy’s analysis. I would say the figure that leaps out is 95% wages to turnover. That’s not the worst I’ve seen (several Champo clubs run at 100%+) but it’s damned unhealthy.

You may remember around the time of the pandemic, the EFL introduced “hard” salary caps (£2.5m in this division, £1.5m in the one below) which were eventually scrapped. Before that they had Salary Cost Management Protocol which had a wage-to-turnover ceiling - of 60%.

It’s difficult for me to check on holiday and on intermittent WiFi via a little phone, but I think SCMP was reintroduced to replace the “hard” cap - can anyone confirm? Some of the recent reporting around Crawley seems to suggest so…

[boltonboris]

Charlton are 109% of turnover on player wages

When you factor in the stadium improvements (which will show on the 23 accounts also, with the Fanzone, licks of paint etc) and improved playing squad, it's actually a pretty solid result.

The next accounts will probably be similar, but with increased Season Ticket sales and match day revenues being swallowed by the cash outlay on players this season

How many Millions is promotion to the Championship worth? - Edit - £6m increase in solidarity payments and estimated £2m in TV revenue for games selected for live coverage.. If we get promoted, then that is the start of a sustainable model, should we go up stay up

[BWFC_Insane]

Awaiting Worthy’s analysis. I would say the figure that leaps out is 95% wages to turnover. That’s not the worst I’ve seen (several Champo clubs run at 100%+) but it’s damned unhealthy.

You may remember around the time of the pandemic, the EFL introduced “hard” salary caps (£2.5m in this division, £1.5m in the one below) which were eventually scrapped. Before that they had Salary Cost Management Protocol which had a wage-to-turnover ceiling - of 60%.

It’s difficult for me to check on holiday and on intermittent WiFi via a little phone, but I think SCMP was reintroduced to replace the “hard” cap - can anyone confirm? Some of the recent reporting around Crawley seems to suggest so…

I guess it’s important to note that the 95% ratio is when the non football stuff is excluded. And given the model is clearly to use the non football business to try and offset losses in the football business it’s worth noting that.

But yes I want worthy’s view.

[Dave Sutton's barnet]

I guess it’s important to note that the 95% ratio is when the non football stuff is excluded. And given the model is clearly to use the non football business to try and offset losses in the football business it’s worth noting that.

OK, fair enough.

Charlton are 109% of turnover on player wages

When you factor in the stadium improvements (which will show on the 23 accounts also, with the Fanzone, licks of paint etc) and improved playing squad, it's actually a pretty solid result.

The next accounts will probably be similar, but with increased Season Ticket sales and match day revenues being swallowed by the cash outlay on players this season

How many Millions is promotion to the Championship worth? - Edit - £6m increase in solidarity payments and estimated £2m in TV revenue for games selected for live coverage.. If we get promoted, then that is the start of a sustainable model, should we go up stay up

Not sure “a bit better than renowned basket case Charlton” is making me rest easier…

I get that Champo clubs make more money but they also spend it, and more - so I’d counter your income question with the opposite: what’s the difference in average payroll between the divisions? I hope I’m wrong but it feels to me like the Champo is not so much the start of sustainability as the end of it…

[BWFC_Insane]

I guess it’s important to note that the 95% ratio is when the non football stuff is excluded. And given the model is clearly to use the non football business to try and offset losses in the football business it’s worth noting that.

OK, fair enough.

Charlton are 109% of turnover on player wages

When you factor in the stadium improvements (which will show on the 23 accounts also, with the Fanzone, licks of paint etc) and improved playing squad, it's actually a pretty solid result.

The next accounts will probably be similar, but with increased Season Ticket sales and match day revenues being swallowed by the cash outlay on players this season

How many Millions is promotion to the Championship worth? - Edit - £6m increase in solidarity payments and estimated £2m in TV revenue for games selected for live coverage.. If we get promoted, then that is the start of a sustainable model, should we go up stay up

Not sure “a bit better than renowned basket case Charlton” is making me rest easier…

I get that Champo clubs make more money but they also spend it, and more - so I’d counter your income question with the opposite: what’s the difference in average payroll between the divisions? I hope I’m wrong but it feels to me like the Champo is not so much the start of sustainability as the end of it…

Charlton posted losses of over £7M. Our losses across the whole group were £3.7M. Again as we are obviously using the hotel to offset football losses.

I’d say that’s quite a lot better not just a bit.

[Dave Sutton's barnet]

Those figures are, aye. But they’re not what I was comparing. Without entering the realms of “28 until he’s 29”, I’d say 95% wage-to-turnover isn’t punch-the-air, problem-solved better than 109%.

Is it sustainable? How many years can FV convert £12.5m of loans to equity? To quote Les McQueen (and mug at all to berate FV), “it’s a shit business…”

[BWFC_Insane]

Those figures are, aye. But they’re not what I was comparing. Without entering the realms of “28 until he’s 29”, I’d say 95% wage-to-turnover isn’t punch-the-air, problem-solved better than 109%.

Is it sustainable? How many years can FV convert £12.5m of loans to equity? To quote Les McQueen (and mug at all to berate FV), “it’s a shit business…”

Well that’s the big question. We’re probably going to be as close to sustainable as is possible whilst remaining competitive. Which is a bit scary tbh. On the other hand though the historic debt appears to have been dealt with or converted to equity and losses were absorbed by the ownership group. And their commitment up to end of season 2024 (at least) is confirmed.

And I guess if we keep costs and expenditure down it’s theoretically possible to get close to or even break even if we grow income a little and then profit from transfers. Charlton sold £3.3M worth which if we could do that would more or less cover our loss. And you have to think revenue might expand slightly.

[Worthy4England]

Those figures are, aye. But they’re not what I was comparing. Without entering the realms of “28 until he’s 29”, I’d say 95% wage-to-turnover isn’t punch-the-air, problem-solved better than 109%.

Is it sustainable? How many years can FV convert £12.5m of loans to equity? To quote Les McQueen (and mug at all to berate FV), “it’s a shit business…”

Well that’s the big question. We’re probably going to be as close to sustainable as is possible whilst remaining competitive. Which is a bit scary tbh. On the other hand though the historic debt appears to have been dealt with or converted to equity and losses were absorbed by the ownership group. And their commitment up to end of season 2024 (at least) is confirmed.

And I guess if we keep costs and expenditure down it’s theoretically possible to get close to or even break even if we grow income a little and then profit from transfers. Charlton sold £3.3M worth which if we could do that would more or less cover our loss. And you have to think revenue might expand slightly.

I think to a large extent, the comparisons with elsewhere are pretty meaningless. The reason I'd proffer for that, is that this is following the model that pretty much all football clubs do, of owners putting money in. It's also quite difficult comparing with 2021 as we were stuck in the shed for most of it.

I think you're right that we've dealt with historic debt, for the most part - and a note with that, that EDT let us off with another £2.75m - 2023 and it's still costing them. Brett Warburton took some land in exchange for his charges, PBP redid the loan repayments.

It's really quite difficult to test whether the representation in the accounts is one-off or trend as we've had historic debt to deal with and / or COVID.

When we look at the wages etc. I'd note that the budget was significantly lower than the likes of Ipswich/Sheff Weds over the same period, this might be worth further exploration if I get time - So we're probably punching - no Kyle, not you. It's also probably worth mentioning that Parky in promotion year had a staff budget of ~£12m (we're ~66% of that)

So I think my main take-away is we're living at the behest of those with money, which isn't a problem when they're putting it in, it's the position we end-up in, when they stop. We're good for now.

I also tend to peek at statement of going concern, there are no issues for the next 12 months (they only give a 12 month view) - reads a lot different than Sheff Weds who reported material concern requiring outside funding...etc.

[BWFC_Insane]

Those figures are, aye. But they’re not what I was comparing. Without entering the realms of “28 until he’s 29”, I’d say 95% wage-to-turnover isn’t punch-the-air, problem-solved better than 109%.

Is it sustainable? How many years can FV convert £12.5m of loans to equity? To quote Les McQueen (and mug at all to berate FV), “it’s a shit business…”

Well that’s the big question. We’re probably going to be as close to sustainable as is possible whilst remaining competitive. Which is a bit scary tbh. On the other hand though the historic debt appears to have been dealt with or converted to equity and losses were absorbed by the ownership group. And their commitment up to end of season 2024 (at least) is confirmed.

And I guess if we keep costs and expenditure down it’s theoretically possible to get close to or even break even if we grow income a little and then profit from transfers. Charlton sold £3.3M worth which if we could do that would more or less cover our loss. And you have to think revenue might expand slightly.

I think to a large extent, the comparisons with elsewhere are pretty meaningless. The reason I'd proffer for that, is that this is following the model that pretty much all football clubs do, of owners putting money in. It's also quite difficult comparing with 2021 as we were stuck in the shed for most of it.

I think you're right that we've dealt with historic debt, for the most part - and a note with that, that EDT let us off with another £2.75m - 2023 and it's still costing them. Brett Warburton took some land in exchange for his charges, PBP redid the loan repayments.

It's really quite difficult to test whether the representation in the accounts is one-off or trend as we've had historic debt to deal with and / or COVID.

When we look at the wages etc. I'd note that the budget was significantly lower than the likes of Ipswich/Sheff Weds over the same period, this might be worth further exploration if I get time - So we're probably punching - no Kyle, not you. It's also probably worth mentioning that Parky in promotion year had a staff budget of ~£12m (we're ~66% of that)

So I think my main take-away is we're living at the behest of those with money, which isn't a problem when they're putting it in, it's the position we end-up in, when they stop. We're good for now.

I also tend to peek at statement of going concern, there are no issues for the next 12 months (they only give a 12 month view) - reads a lot different than Sheff Weds who reported material concern requiring outside funding...etc.

Yeah thanks for the analysis. I agree. The losses are relatively modest by comparison to some others really my point was that these accounts include no outward player trading which obviously would be required to get us towards a break even point.

I think there is a separate discussion here about the points you make re our budget and competitiveness of it and it’s pretty stark. We are probably at a ceiling here of remaining competitive but not letting things run away from themselves. We are as you say running a considerably lower wage bill than Sheffield Wednesday and Ipswich and you have to expect whatever happens next season there will be three or four in a similar position with more resources than we have available. I do think that raises a considerable concern that we become ‘stuck’ in this division as many with more resources than we have available have also done. And without the ability to raise significant extra income down here one can only really see revenue dipping eventually were that to happen. Which is probably for me the big concern. You can say we need to over perform to go up, which I think is the case, but realistically how many times does that happen and without a truly exceptional Allardyce like manager I wonder if it happens too often.

Plymouth last season finished up 7th and had a wage bill of just over £6M.

I don’t know what that total will be this season but if we guess then it’s probably gone up a bit given some of their signings. But I suspect is in line with ours.

There isn’t any headroom here, which is troubling but not surprising.

[BWFC_Insane]

Worth noting in here…we’ve already sold more season tickets for next season than we did for this season in its entirety including the half season tickets sold in December and January.

[Prufrock]

I'm not sure you can assume there will necessarily always be teams that massively outspend us down here. Worst case for us is probably Plymouth Barnsley and Peterborough go up. Best case (other than us going up) is Weds, Ipswich and Derby.

But looking at the teams near the bottom of the Champo I doubt any of them will outspend us to that degree. Some might spend more, sure, but not at Weds/Ipswich levels. You'd think at least one and 50/50 both of those will be gone next year.

No guarantees of course, I can see a world where we don't replace Traf and Bradley well and slip back, but I think we're doing pretty well and be looking at top two next year.

[officer_dibble]

Brett’s land has a value BTW so he’s done OK out of that one for me…

[Worthy4England]

Brett’s land has a value BTW so he’s done OK out of that one for me…

Why would you rip up the IOU, unless you were being compensated some other way! Think we owed him £2.5(?)m?

[officer_dibble]

Brett’s land has a value BTW so he’s done OK out of that one for me…

Why would you rip up the IOU, unless you were being compensated some other way! Think we owed him £2.5(?)m?

Yep! Wasn’t a dig - just making the point he’s not got a crappy bit of green belt he won’t make money on, if it’s the bit I think it is.

[Worthy4England]

Brett’s land has a value BTW so he’s done OK out of that one for me…

Why would you rip up the IOU, unless you were being compensated some other way! Think we owed him £2.5(?)m?

Yep! Wasn’t a dig - just making the point he’s not got a crappy bit of green belt he won’t make money on, if it’s the bit I think it is.

Aye, not like councils round here are hell bent on building on green belt or owt. They'd build on your back garden if they could get away with it!