Financial Mumbo-Jumbo

[Snowman]

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result get McCabe to pay for the fucker"

Too complex for me. I leave that stuff to clever people.

 

[GRUMPY BLADE]

Yes I'm fine
We should increase ticket prices

Some can't afford it at current prices.

 

[wesleysnipesmen]

I thought the club sold the food/drink concessions on and therefore none of the employees were there's. Same with stewarding.

Not sure, can't say I've seen the club advertising for staff for bar staff or stewards so could well be the case. I know the 3 quid yer match programmes bloke also does it at the sty so doubt he's a club employee.

 

[Flatulent_Bob]

Some can't afford it at current prices.

Fans who find themselves in this position should PM Topplayersleave he might be able to subsidise. Genuine suggestion if he’s lucky enough and happy enough to spend more to help the club.

 

[Topplayersleave]

Get some money spent, tight feckers, help McCabe and The Prince run the club

 

[Houston_Blade]

Its not that we're losing £10,000,000 per year
The question should be "How" ?

£20 million comes in
£19 million spent on wages

What is it that costs another £11 million ?

Ah so now it’s changed from having a go at how little we give players away for to having a go at how much it costs to run a football club?

Good change of tactic.

 

[Killamarshblades]

Its not that we're losing £10,000,000 per year
The question should be "How" ?

£20 million comes in
£19 million spent on wages

What is it that costs another £11 million ?

Without reading the financials, there’s allyhe other costs related to running a business. Wages of non football playing staff, maintenance of ground and training ground, cost of opening BL for matches, all materials needed for operating the business (IT infrastructure, telecommunications, software, electricity, gas, water, insurance, directors wages (potentially)) the list goes on and on.

 

[bornablade]

I think they should do a Club1889.

 

[Topplayersleave]

Without reading the financials, there’s allyhe other costs related to running a business. Wages of non football playing staff, maintenance of ground and training ground, cost of opening BL for matches, all materials needed for operating the business (IT infrastructure, telecommunications, software, electricity, gas, water, insurance, directors wages (potentially)) the list goes on and on.

Non playing staff are on the same payroll as the players if they are employed by the club, they just don't earn as much, we've seen that it is £19 million in total and is by far our biggest outgoing, as it as at other clubs. I'd say the cost of running Bramall lane on match days is actually profitable rather than loss making, it's the other days when it's not.

I have been assured that the shortfall is £10.3 million and that's fair enough because I haven't seen the figures, but it still seems a staggering amount for a relatively small company in the whole scheme of things. Almost a million pounds a month ?????

 

[Topplayersleave]

Ah so now it’s changed from having a go at how little we give players away for to having a go at how much it costs to run a football club?

Good change of tactic.

No change of tactics at all.
If someone wants to start a thread about how little we give players away for I'll probably comment on it
If someone starts a thread about our losses I'll comment on it
The two things are completely different subjects

 

[Working Class Hero]

Non playing staff are on the same payroll as the players if they are employed by the club, they just don't earn as much, we've seen that it is £19 million in total and is by far our biggest outgoing, as it as at other clubs. I'd say the cost of running Bramall lane on match days is actually profitable rather than loss making, it's the other days when it's not.

I have been assured that the shortfall is £10.3 million and that's fair enough because I haven't seen the figures, but it still seems a staggering amount for a relatively small company in the whole scheme of things. Almost a million pounds a month ?????

It seems staggering because no "relatively small company" would have a wage bill of £19m in any normal industry. In Championship football terms, it's bang in the middle and not staggering at all (which shows how ridiculous things have got).

 

[Houston_Blade]

No change of tactics at all.
If someone wants to start a thread about how little we give players away for I'll probably comment on it
If someone starts a thread about our losses I'll comment on it
The two things are completely different subjects

The fact that we take offers for players that are below your pie in the sky valuations is because we need to sell players to fund losses. It's amazing that these things are linked I know but they are. Shame the ideal world that you live in doesn't exist really!

 

[Houston_Blade]

Without reading the financials, there’s allyhe other costs related to running a business. Wages of non football playing staff, maintenance of ground and training ground, cost of opening BL for matches, all materials needed for operating the business (IT infrastructure, telecommunications, software, electricity, gas, water, insurance, directors wages (potentially)) the list goes on and on.

Apparently of the total wages of 19m around 13.1m are players wages. This is on the twitter comments, I assume that Wilder and Knill must be a good chunk of the non-playing staff wages.

 

[wesleysnipesmen]

Non playing staff are on the same payroll as the players if they are employed by the club, they just don't earn as much, we've seen that it is £19 million in total and is by far our biggest outgoing, as it as at other clubs. I'd say the cost of running Bramall lane on match days is actually profitable rather than loss making, it's the other days when it's not.

I have been assured that the shortfall is £10.3 million and that's fair enough because I haven't seen the figures, but it still seems a staggering amount for a relatively small company in the whole scheme of things. Almost a million pounds a month ?????

I'm not sure you're getting the point, you initially said.

£20 million comes in
£19 million spent on wages

What is it that costs another £11 million ?

I pointed out £3m of non cash items, and as others have also said the other £8m will be made up of all sorts of costs that any company of our size would incur.

The main cause of the shortfall is the £19m wages rather than all the other costs. The shop, bars, conferencing will all be profitable in their own right, but the operations side (the football) is not, because that's life outside of the premier league. You've got a load of players on £500k a year more or less, but nowhere near the same amounts coming in.

 

[Hamburg Blade]

Non playing staff are on the same payroll as the players if they are employed by the club, they just don't earn as much, we've seen that it is £19 million in total and is by far our biggest outgoing, as it as at other clubs. I'd say the cost of running Bramall lane on match days is actually profitable rather than loss making, it's the other days when it's not.

I have been assured that the shortfall is £10.3 million and that's fair enough because I haven't seen the figures, but it still seems a staggering amount for a relatively small company in the whole scheme of things. Almost a million pounds a month ?????

You say the cost of running Bramall Lane on match days must be profitable, but by saying that you are doubling up on the takings for the day because the income from the day is already included in the £20m income in the accounts.
People are making the same mistake with things like club shop sales. Yes, the shop may be profitable, each item may be being sold at a profit, but that profit is already accounted for in the income, an income that is being used almost entirely to pay for wages. That leaves the costs of buying goods, operating the shop, operating the Lane on match day, etc, to fall into the overall costs.
I'm not an accountant and would also love to see a breakdown of costs, but not because I think there's something dodgy about it.
We've been quoted the cost for policing on another thread, I can't remember it, plus there must be various other fixed costs to running a football club that I can't think of. For example, is the stewarding outsourced? If it is, the stewards won't be part of the wage bill, the company's invoices will be part of the costs.
etc. etc.

 

[Hamburg Blade]

Any reason why lots of people - including The Star - are reporting £10m losses? That's before player sales. Which, to be honest, are a pretty normal part of being a football club.

It takes away from the great job Wilder is doing as manager when it comes to helping to balance the books. We really lost £1.9 million last year, compared to £5.8 million the year before.

I don't know, this is only my opinion, but players will be treated as assets. If a club goes bust, the administrator will see players as an asset to be realised, to clear debts and get the club on an even footing, rather than salaried staff who are a cost. So the difference is operating loss - £10m - which can be offset by sales of assets.

 

[nopigfansintown]

More or less what I was expecting. Our three year FFP calculation is very low. Still, it's crazy how much it costs to run a Championship football cllub, eh?

 

[ChemEngBlade]

Makes you think whether player wage caps are a good idea or not with stats like that

 

[wizadry]

Until you know what the £10.3M losses are in total then you’ll always get questions asked, especially when it’s not answered.

 

[Killamarshblades]

We'll never have the answers, and to be fair, unless we are shareholders we dont have any right to know the answers. Ultimately we are customers in the eyes of the business (i know we are all emotionally involved too..) and they dont have to explain to us what they do with the money the club has / doesnt have

 

[wizadry]

We'll never have the answers, and to be fair, unless we are shareholders we dont have any right to know the answers. Ultimately we are customers in the eyes of the business (i know we are all emotionally involved too..) and they dont have to explain to us what they do with the money the club has / doesnt have

Do you reckon this club would last with zero fans turning up?

If the answer is no as I think it will be then us as fans who pay a relatively large amount of money to follow our side should know why we’re spunking £10.3M on something no one knows nothing about.

 

[BushBlade]

Until you know what the £10.3M losses are in total then you’ll always get questions asked, especially when it’s not answered.

The complication is the way transfers are dealt with. The value is written off over several years, rather than shown as an upfront payment. If you’re self employed (or an accountant) then it’s a concept you’re familiar with.

But, in simple terms, if our wages are close to our income, every player we buy adds to the loss. But for accounting purposes it’s written off over the length of the contract.

Once you realise this, and add the costs of running our facilities, marketing, stock for the shop and all the other things involved in running a club, it makes much more sense.

Most importantly, is that it doesn’t seem anomalous when you look at other clubs’ accounts. There isn’t anything that jumps out.

Ultimately though, it is what it is. The accounts are audited and if we were actually making a profit and not declaring it, it’s tax fraud.

 

[BushBlade]

Do you reckon this club would last with zero fans turning up?

If the answer is no as I think it will be then us as fans who pay a relatively large amount of money to follow our side should know why we’re spunking £10.3M on something no one knows nothing about.

I watch us on Sky too. Am I entitled to question their spending?

 

[wizadry]

The complication is the way transfers are dealt with. The value is written off over several years, rather than shown as an upfront payment. If you’re self employed (or an accountant) then it’s a concept you’re familiar with.

But, in simple terms, if our wages are close to our income, every player we buy adds to the loss. But for accounting purposes it’s written off over the length of the contract.

Once you realise this, and add the costs of running our facilities, marketing, stock for the shop and all the other things involved in running a club, it makes much more sense.

Most importantly, is that it doesn’t seem anomolous when you look at other clubs’ accounts. There isn’t anything that jumps out.

Ultimately though, it is what it is. The accounts are audited and if we were actually making a profit and not declaring it, it’s tax fraud.

Great explanation, BB.

In other words, it could be something or it could be something else? It’s all clear now.

Joking apart, it’s basically jiggling things about in a roundabout way?

If that’s the case then it makes it a very complex thing to follow.

 

[wizadry]

I watch us on Sky too. Am I entitled to question their spending?

Yes.

 

[Hamburg Blade]

The complication is the way transfers are dealt with. The value is written off over several years, rather than shown as an upfront payment. If you’re self employed (or an accountant) then it’s a concept you’re familiar with.

But, in simple terms, if our wages are close to our income, every player we buy adds to the loss. But for accounting purposes it’s written off over the length of the contract.

Once you realise this, and add the costs of running our facilities, marketing, stock for the shop and all the other things involved in running a club, it makes much more sense.

Most importantly, is that it doesn’t seem anomalous when you look at other clubs’ accounts. There isn’t anything that jumps out.

Ultimately though, it is what it is. The accounts are audited and if we were actually making a profit and not declaring it, it’s tax fraud.

Again, I'm not an accountant and maybe someone who knows better can confirm/correct this, but as I understand it, the writing down of a player's value over the length of his contract is not something taken into account in the incomings/outgoings of the finances, but rather that is in the company assets valuation. A decrease in his value is not an outgoing, nor a cost. In the same way that the computers that the ticketing office use are bought - and counted as a cost - decrease in value but are not counted as a cost again the following year just because they've decreased, and are then either sold off when they are replaced, in which case their sale price is added to the income, or binned and their asset value to the company written off to zero.

 

[Sean Thornton]

The complication is the way transfers are dealt with. The value is written off over several years, rather than shown as an upfront payment. If you’re self employed (or an accountant) then it’s a concept you’re familiar with.

But, in simple terms, if our wages are close to our income, every player we buy adds to the loss. But for accounting purposes it’s written off over the length of the contract.

Once you realise this, and add the costs of running our facilities, marketing, stock for the shop and all the other things involved in running a club, it makes much more sense.

Most importantly, is that it doesn’t seem anomalous when you look at other clubs’ accounts. There isn’t anything that jumps out.

Ultimately though, it is what it is. The accounts are audited and if we were actually making a profit and not declaring it, it’s tax fraud.

The fact that the owners have pumped millions in, IN CASH, does rather give the game away as to whether the losses are genuine.

The historical tax losses are carried forward not set off in some sort of "barrack room accountant" tax fiddle to get tax back elsewhere either.

Anyone who looks at the Lane and Academy, sees the set up, number of employees and rather obvious associated costs and can't see where £6m quid goes every year is pretty dim to be frank.

 

[MobileBlade]

Do you reckon this club would last with zero fans turning up?

If the answer is no as I think it will be then us as fans who pay a relatively large amount of money to follow our side should know why we’re spunking £10.3M on something no one knows nothing about.

Take it you not read the accounts then. If you go to Companies House you can have a look for yourself. But here's a quick link for you:
https://beta.companieshouse.gov.uk/company/00061564/filing-history

Would recommend looking at pages 2, 12, 22 and 24 which will go someway to answering your questions. £6.4m is the actual admin costs of running the business (will include things such as business rate, bank charges, box office costs excl wages which will have increased due to promotion etc) . Cost of sales are about £2m. First team wages at £13.6 million are the extra-ordinary cost,

You will see that £2.6m of your £10.3m is due to player amortisation - that is the players we would and the cost of the fees over the periods of their contracts.

 

[BushBlade]

Great explanation, BB.

In other words, it could be something or it could be something else? It’s all clear now.

Joking apart, it’s basically jiggling things about in a roundabout way?

If that’s the case then it makes it a very complex thing to follow.

Other than curiosity though, what does it matter? It won’t stop me supporting the Blades if I find out they’re using Yorkshire Gold when they could be buying Happy Shopper teabags.

I know the wagebill and our income and just basic maths is enough to understand that we also buy players and pay signing on fees. I’m not really interested in things like what business rates we pay for the Lane and Shirecliffe.

It’s pretty obvious KM was taking a yearly hit or he wouldn’t have brought Prince Andrex in.

 

[Working Class Hero]

Am I missing something here? The whole point of the OP is that we are spunking all our money on wages (just like everyone else) and therefore losing a fortune. Why are people still questioning why we're losing money?