For others, here is the document sent out to the press this morning: please log in to view this image
That figure for last season looks quite good too. Loss of 2.4M to get out of the Championship is pretty good going.
I like the bit where he says nonbroadcasting income is up as the club (aka Nicola Cortese) believes that football clubs should be profitable without broadcasting income. Long term aim I know. Revolutionary thinking as most clubs rely heavily on that income. I know last season Nicola said that he wouldn't consider Saints well run if we needed parachute payments to survive upon relegation.
Alot of clubs do not disclose thier transfer dealings, if you had a small corner shop then you would go out of business with a 3% profit, and if you were Bill Gates then the board would sack you if you showed a 3% profit. Football is a different beast and I agree that any club that shows a profit is doing well
How do you go out of business if you're making a profit, exactly? Interestingly, our profit of £6.4m for the first 6 months of this season compares poorly with the newly promoted sides last season. Norwich (£16.3m) and Swansea (£17.4m) seemingly did better over the whole of last season. QPR of course made a £22.6m loss! I don't know how the income is spread over the season though, perhaps you get more towards the end?
That was my point really - A 3% profit margin for a business isn't great but it wouldn't put you out of business. I'm interested that Norwich and Swansea made so much more over a full season, perhaps with the prize money on where you finish in the league makes a difference as that would come at the end though I didn't think it was that high. Perhaps the TV money too is paid more at the end.
I wouldn't have thought so - most of that spend would be capitalised as an asset rather than expensed straight away.
I think that was in the previous year as well so it wouldn't appear in this year's accounts. The only part of that development from this year is the extra loan.
These accounts include our summer spending but not fully. With football club accounts you depreciate the values of the players based on their contracts, so for example if you buy a £10 mil player on a 5 year deal, you only count that as a £2 mil spend in that years accounts. As most of our summer signings are on 3/4 year deals, it means that about £8 mil will be included in these accounts out of the £30 mil, which is probably not that far off what we paid up front anyway
Doesn't it say it doesn't take player trading into account? I guess the idea is they are saleable assets so it's not a loss as such.
I think they meant that the accounts doesn't include any figure from player sales in the plus column.
Is this not the last 6 months? therefore meaning Sept - March, therefore not accounting for player exchanges, where we undoubtably made a loss. And I believe that you get given money by the Premier league at the end of the season, depending on position.
Large part of the expenditures are up-front, I'd imagine, in the form of player/agent bonuses and transfer fees, and the merit payments at the end of the year can have a substantial impact...Swansea received £7.5m for finishing 11th, Norwich received £6.8m for 12th.
I thought that might be the case too but as the full years figures for the previous year were also quite good, wherever the cost of purchasing players last summer is included we're still doing well.
Like saint magic explains the club made a healthy profit of 6.4m. The player amortization which is effectively player depreciation was 5.5m which leaves us with the reported 0.9m profit for the 6 months. So it's important not to confuse the balance sheet/cash flow with the clubs profits. The reported close to £30 million in transfers will be spread out at (without getting my calculator out) about 3% a month charge to the profit/loss. So in answer to the Swansea/Norwich comparison and the assumption that more broadcasting income is to come in then 6.4m is about on track if doubled. Our transfer spending is significantly higher than both those clubs which is the reason we only have 0.9m
What he is saying is pretty much on the ball in effect. If you were a small business like a corner shop or an ebay seller for example, you wouldn't have enough turnover for a 3% margin to earn you anywhere near minimum wage. Therefore you would have to close the business and find work. Effectively that 3% margin has put you out of business. For example my e-commerce turnover is only in the 30k region per annum BUT my margin is circa 70% so I can trundle along quite easily 3% would mean I was earning £900 a year!!! However for a football business 3% is very very good considering virtually all of the biggest clubs like Man U, Liverpool, Barcelona, Real Madrid have huge debt behind them and aren't likely to recover that debt without a decade of prudent spending and accepting they will have to do an Arsenal and not be able to compete realistically for that period.
Is it just me who understands profit as income minus outgoings then? Wages are paid before profit. Profit is what you have left over. If you have any profit at all you won't go out of business.
