Accounts

northstandmark said:
The summer's sales bought the club breathing space, both in terms of fees in and also wages off the book. We said as much at the time and it's still holds true. Al may not like people relying on that for comfort, and we can't forever, because you can't sell the same player twice. But fact is a sell-off was always going to be part of the club's ability to recover cash in the event of relegation.

The more troubling bit for me is - I imagine the working assumption from Max was that any failure to get promoted this year, could be followed by a similar round of sales to get another round of fees in and wages down, to further recover the situation.

Then you think about the assets (as Max will see them) we have to facilitate that, and suddenly it's not as obvious that we'll manage it.

Lewis Cook - perhaps our most saleable player on good form - injured long term.
David Brooks - had a shocking season
Jeff Lerma - hit and miss
Lloyd Kelly - hit and miss
Diego Rico - more miss than hit

Danjuma is probably the most likely.

Covid will obviously hit the fees we can command from buying clubs also.

Potential failure to get promoted followed by a failure to secure the kind of fees we'd have hoped from a second round of sales, would compound the situation and mean that debt isn't coming down any. Then chunks of money Max thought were tied up in the club via saleable assets then evaporate before his eyes.

What is his view/attitude to that issue? Will be the question.

Max (Blake/Hughes) is playing with his own money, and for as long as 100% or near enough of all debt is owing to Max, then whatever that amount is, at least we know where we stand. I said it the other day - whether that amount is £16m or £160m, it near as makes no difference to AFCB's ability to pay it back organically. It all comes back to Max's attitude towards the club.

That's my 2 pennies worth. Long story short none of us really know :)
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Spot on.

His big risk, as you point out here, is that maybe the value of his "assets" has declined significantly this season, for the reasons you mentioned. That will leave him with a bigger hole to fill than he was perhaps expecting. That could result in a major retightening of the purse strings following the summer and I think we should brace ourselves for that. It doesn't mean that he is cashing in or pulling out, merely that he is attempting to run the club at a level he can afford. He'll still be putting in his own money, perhaps just not as much as he has done before.

I think most of us realised that relegation would mean at least two rounds of cost-cutting if we failed to go straight back up. If we don't return the the PL Max has to get the club running at a loss per annum which he can accommodate, that is all. Of course that will have consequences but it's not inconceivable that with the right players and manager we could be competitive on a tighter budget. For this we will however need to have the right people in place. And that could prove to be the tricky part.
 
Kudos said:
I've said this before but it's interesting we can talk about tactics, formation, team selection, or a player's contract for over ten pages without a "well we can't change it" post but post anything on the board and it's on page 1.
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But we are supporters of the club, who pay money to watch the team play football. All of those issues are directly related to the reason we are here as football supporters.

People don't follow AFCB because they are supporters of company finance do they? As if we're all on tenterhooks to see whether they are going to make a new signing in the board room and change tactics.

In my view only one thing matters in relation to the finances and that's whether the club is on secure financial footing, which it has never really been since I've supported them. The current situation is 100% down to the whims of one bloke as it has been since he took over. If he loses interest we're going bust in a big way. It's always been this way, covid has made it worse and there's nothing any of us can do about it unless we've got enough to buy the club off him.
 
160mm owed to the owner, unless training grounds and stadiums pay for themselves I think we can assume that Demin is quite within his rights to not put his hand in his pocket to fund something like that at the moment.
 
SlowDownDerek said:
How does building a training facility help him recover his money? It would add more to the debt but I'm not sure how it helps repay it.
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Only way Max gets his money back is to sell the club whilst it’s in the Prem. Tbh a training ground probably doesn’t make a huge difference but I’d imagine at least some physical infrastructure owned by the club would help.
 
I read this in Facebook. Makes interesting reading and also makes it sound less of a big issue.

From Will Barnett

I'm a qualified accountant who can put people at ease here amongst the histrionics over a £60m loss.
This 'loss' does not include £80m player sales registered after June. It also includes significant amortisation of player purchases with PL cash (transfer fees which are spread over lifetime of contract). PL clubs generally pay for more than they receive in transfer fees.
The 'true' measure for a football club (along with cash flow) is EBITDA which is only at a £3m loss. That is great considering loss in revenue with pandemic. We have the player sale cash installments to come to help with cash flow over the next season or two.

He adds

P&Ls in football clubs accounts are skewed with the non cash amortisation of player transfer fees. At least there is no external debt and the money lent by the owner can only really be recouped by promotion or excessive player sales, he may choose to curb his spending and pouring more funds in but he won’t have any success calling on his own loans without sabotaging his own investment in the club.

and

it is self-defeating for him (Max) to do so (call in the loan) as it'll significantly decrease his investment value. I don't think he's particularly high net worth as far as football club owners go either.
We also released 12+ players over the summer plus called relegation clauses too. The wages are flat YOY in these accounts and they certainly won't be now either.
 
Neil Dawson said:
Highest paid director nearly 1.4m. That’s good work for a business that’s made a 60m loss and only has 170m turnover of which 100m comes from one source you haven’t influenced.

There would be a lot of FTSE 250 CEO’s who would jump at that cash, have experience of running a business and wouldn’t have made two lazy appointments to the key role in their organisation.

I will leave it to the few happy clappers left to tell me that it’s a justifiable salary for that performance.
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I think it's too much.

I tried looking up Prem CEO salaries but without too much success, although it does feel that our entire wage structure is too high given the clubs turnover.

But Max got us there, so I'll hope he can make the right decisions in the future.
 
Audenshaw Cherry said:
I read this in Facebook. Makes interesting reading and also makes it sound less of a big issue.

From Will Barnett

I'm a qualified accountant who can put people at ease here amongst the histrionics over a £60m loss.
This 'loss' does not include £80m player sales registered after June. It also includes significant amortisation of player purchases with PL cash (transfer fees which are spread over lifetime of contract). PL clubs generally pay for more than they receive in transfer fees.
The 'true' measure for a football club (along with cash flow) is EBITDA which is only at a £3m loss. That is great considering loss in revenue with pandemic. We have the player sale cash installments to come to help with cash flow over the next season or two.

He adds

P&Ls in football clubs accounts are skewed with the non cash amortisation of player transfer fees. At least there is no external debt and the money lent by the owner can only really be recouped by promotion or excessive player sales, he may choose to curb his spending and pouring more funds in but he won’t have any success calling on his own loans without sabotaging his own investment in the club.

and

it is self-defeating for him (Max) to do so (call in the loan) as it'll significantly decrease his investment value. I don't think he's particularly high net worth as far as football club owners go either.
We also released 12+ players over the summer plus called relegation clauses too. The wages are flat YOY in these accounts and they certainly won't be now either.
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A qualified accountant? No thanks. I prefer to get my financial analysis from a French Farmer.
 
Spot the difference:

Shortly after the year end, the club sold three players for a profit of £22.6million. Clearly, if these sales had been made before 30th June 2019, this would have removed a large portion of the loss for the year.

After the year end, the club sold three players for a profit of £50.8 million. Clearly, if these sales had been made before 30 June 2020, this would have removed a large portion of the loss for the year, and in an ordinary year such sales would have been possible prior to the year end.

So in reality our losses for the last two years amount to £20m. Blakenomics.
 
Its only Money at the end of the day.....we won't die from it.
The conversations will veer this way and that after the result v Middlesboro' and increasingly so with each subsequent result...some fans will stress and be upset but it can't change anything I guess...we just follow it all and pledge our support for as long as we wish to.
 
I noticed that the ‘AFCB Training Centre’ sign has gone from the new site in Magna Road ..... expect that to be sold off for new houses in the next few years then.

(Photo courtesy of red_house)

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£48m of the £60m loss was down to player registration amortisation and as such is a non-cash cost.

One issue for me is the £13m owed elsewhere and that could possibly be related to the charges on the company. It's possible that the club have sold the rights to future ticket sales which would be a concern.

As others have said, it could be worse and the club is fine until Max falls out of love with the club or decides to turn the taps off.

Max isn't dumb so he must see something in Blake that we don't. The next few months will prove whether he is worth the money or not.
 
Notice that the club got paid by insurance company to cover lost gate money. Really you have to.note the markdown on player values, that is half the losses, and a paper loss. Tv money down 35 million. The losses can be carried forward and used on profits in future seasons...no...don't laugh!! Think Danjuma will go for a good fee. Others will be dependant on their contracts..
 
AlGard said:
As I said, no comment from me.
You can all dress it up how you like.

Those who follow me on Twitter will have found out 2 weeks ago the debt to Max was £160M.

Carry on everyone, and put some garnish on the dish to make it look better.

I bid you all a good day.

Happy 60th to me.
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Al's morphed into cherrybright/shminto.
 
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