In the 2023/24 season, only a small number of EFL Championship clubs were profitable, with four clubs (Southampton, Watford, Coventry City, and Blackburn Rovers) reporting profits that year, primarily due to profit from player sales. For the fourth consecutive year, the Championship as a whole recorded operating losses, with total losses reaching £318 million. Details on EFL Championship Profitability (2023/24): Profitable Clubs: Southampton, Watford, Coventry City, and Blackburn Rovers were the only clubs in the Championship to report a profit. Source of Profit: These profits were largely a result of selling players, rather than core operating activities. Overall Losses: Despite revenue exceeding wage costs for the first time in six years, the Championship as a division recorded significant overall operating losses. Owner Investment: To offset these losses, owners provided substantial equity injections, with £554 million invested by owners in the 2023/24 season alone, according to Deloitte's analysis.
It's starting to annoying me how this point is so difficult for people to understand. It's a smoke and mirrors trick to get people back onside, and it's working a treat with some of the Facebook fans who are now going into bat for him as if he has just transfered 15 mil from his offshore account!
I get that, and you're right that most clubs run at a loss unless they either have a very successful transfer policy or somehow have very little expense but decent income. The trend for debt growth is worrying across British football - Scottish lower league clubs are in real danger of going under unless there's a dramatic shift in income, which might see the SPL becoming more isolated at the top than it ever has been before. However, it is worth asking, how many of the 72 EFL clubs are in more than £45m worth of debt?
Right, so effectively bugger all then. Which was my point, nothing has actually changed apart from the fact that we've gone from being proper ****ed to pretty ****ed and had he not done this, I'm not sure what tangible difference it would have made.
Okay, let's do that. "By converting a portion of the outstanding loan into equity, the Club has reduced its overall debt levels, improved its balance sheet, and enhanced its financial flexibility to support future on and off-field success." My ADHD meds have worn off, but I'm not quite sure how these two things are connected in terms of a positive financial outlook. If we were in £60m worth of debt, and that number is now £45m, where exactly is the financial flexibility? It's made the amount of debt go down, which yeah obviously "improves" the balance sheet, but how does it improve the financial situation? Why is £60m not good but £45m alright in the club's view?
It wouldn't have made any difference, it's fooling only a few fools. As people have said, the only reason it would make a difference is if someone was buying and only willing to pay £40mil and he was reducing the debt so they got a clean slate. The efl don't so much care about the debt they care about the operating budget and how well we can afford to pay ongoing costs. Hence the monitoring of transfers and wages. If we had a half decent journo covering the club the question of why and the subsequent calling him out would have been done by now. It's like he knows he won't be challenged and just keeps wanting to make the sheep follow him.
Without going through every clubs accounts I have no idea. But taking the summary I posted above 20 championship clubs lost 318 million last season that's an average of 15 million each. Then owners paid in 554 million one way or another to make up the shortfall. We hull city may be in the ****, but so is everyone else. The whole game needs a reset, it's completely unsustainable.
Bingo. Unless it's a cash injection reducing the debt doesn't help financial flexibility. There is one way it could, if we had loan repayments on the debt. So, are we saying that acun was paying himself back out of club funds, to the point where it was leaving us short to pay other clubs and suppliers, and he has now reduced the debt, and the repayments, and that will help financial flexibility each month? Oh, so that **** Jim the Tiger was correct then when he said staff were unable to pay bills because the Turks were taking the money the minute it landed in the account? Who'd have thunk it.
It's the mention of the word "equity" that prompted me to think about sales. See, I'm not a business person but I've bought and sold houses and that's the only time I tend to see that word used in a financial sense - property has equity, it's the difference between the value of the house and the amount of the loan you have left. So to me, that reads as he's taken the debt down to improve the potential value of the club in order to sell it for a better cost. Is that wide of the mark or does that make some sense? I'm struggling to read words until this stuff kicks in again .
Yeah as I said it could be to make it more attractive to sell but my last post is more likely. He has been bleeding the club dry, got found out by the EFL investigation and had to reduce that to make things work. I guess the two are not mutually exclusive and one could lead to another. Hopefully.
I'm sure I read in the Deloitte article that most of the ownership funding was by Birmingham and Coventry's owners (think there were a couple of others). Yeah, I'm not really sure how this ends without something daft like the EFL changing the rules so that bigger clubs can part own smaller ones to help with investment. Or allow players to buy clubs. Or, completely ban transfer fees for one or two seasons and do a draft system that has a cash limit. Because where else is so much money going to come from to balance all this out? All that will happen is that smaller,local clubs like Newport County, Mansfield, Accrington and Doncaster are just going to fold unless they get significant income from player sales or an outside source. Similarly in Scotland's third and fourth tiers, clubs like Spartans, Cove Rangers and Stenhousemuir are just going to evaporate because they barely produce any talent and don't get much in the way of attendance. Stenhousemuir vs East Fife earlier this season had an attendance of 535. For context, 1,488 fans watched Hednesford Town beat Illkeston Town 2-1 at home last week in the Northern Premier League (Step 7), while Beverley Town have an average attendance this season of 350.
Because the fact people continue to repeat the 500k a week losses enough times to convince themselves it's true is a really frustrating one and not just you who does it. Calling it out is always worthwhile. I think I've been on record saying that I'm concerned at the level of payments owing to other clubs if it's true we've already received all Greaves/Philogene money. Outside of that I haven't seen all that much to be concerned about our cash flow other than one moderately late salary payment for players, and amateur management of Barry/Burns payments. I also do feel the need to emphasise again as this is another huge misconception that losses don't equate to cash out the door. Expenses are both cash and paper costs - i.e. amortisation of player contracts, depreciation, interest (that may or may not have an actual cash repayment component associated), etc. If you want to focus on cash we 'lost' 433k of cash. For the year.
Well that's not quite true either. It's not a 'trick' it's a real benefit to the club insofar as we now owe 14.5m less in our outstanding obligations. That's never a bad thing. People trying to dismiss it as meaningless are no better than those saying it proves we're flush.
He can reverse it any time he likes. It's meaningless to the situation we find ourselves in right now which is hemorrhaging cash at an alarming rate and not paying bills on time. It's helped nothing other than him to fool a few people that he actually cares. If he cared he would not be striping the cash out of the business and refusing to let the staff pay smal local suppliers.
-> "... he has been bleeding the club dry .... " Please explain to me exactly how that works. -> " ....are no better than those saying it proves we're flush ....". Syd, I'm agreeing with a lot you are saying (no, really) ... but ..... please show me a post where anybody has said "we're flush". -> Last season, the total debt in the Championship was £1.5b, an average of £62.5m per club. Corrected. So now our debt is now well below the average. But, but, but. Loads more comments being posted by some that make no sense. The madness on here has to stop at some point ... surely?
He's not a god and he's not satan either. Just a fairly standard championship club owner, running a club in debt that is losing money, who got caught out not paying the important bill on time. Man utd stopped giving free lunches to non-footballing staff last season... Perhaps Jim Radcliffe is skint.
Can he reverse it any time he likes? Who is he going to sell that share he's issued to in order to do that? I think it'd be a lot more complicated to reverse and reasonably pointless.
He doesn’t need to, he just increases the debt to his media company again, back to same debt levels until last month
We likely will continue to increase debt, but that means that if he does we WILL have more cash in the club, i.e. we will be able to meet obligations and not risk triggering that third window punishment. No one is under any illusions nor thinks that the debt will begin to decrease year on year, it's still a positive to write off a chunk of debt. No matter how you want to look at it we have 14.5m less debt than we otherwise would.
