With it being the first day of the new financial year I notice clubs account Are now in, I can see Bolton and Derby have made losses but I can't find anything on Fulham???? I wouldn't mind seeing if we did actually pay £11 million upfront for McCormack plus our general situation.
Companies' House don't always process accounts that quickly! Not a good sign if our accounts are overdue though. Hopefully its just a processing delay.
I doubt it was £11m all at once, it can't be! He's a decent player but can't get into the Scotland team and isn't actually a striker, all things we knew (or should have known) at the time. I've nothing against Ross, just think it was a bad signing regardless of price as he needs to be built around and it should be have been very clear then that we do better working out a team as Roy did then relying on individuals, as Jol did.
Think the accounts due are June to June, covering season 2013/14. So details of McCormack's transfer won't be included. Mind, given our wage bill during that period, doubt if they will make pretty reading.
No idea how Khan has structured things Cookie (Al Fayed had 5 subsiduary companies under a 'holding' one). However pretty sure that the Fulham FC financial year end is 30th June.
Fulham, as with a number of clubs, have a June year end. Accounts are due 9 months after the end of your accounting period (6 if you're listed, which we are not but my employers are).
Thanks Surly. That means the accounts should have been sent by 31st March. You said earlier about Companies House not always being speedy in making them available - presumably electronically - but if it is because ours are late, is someone in the USofA belatedly trying to put a good spin on the story they tell? Surly - are there penalties for being late?
There are fines, yes, although they are not particularly large (a few hundred pounds per company). That said, its pretty unprofessional to miss the deadline. Of interest for Cookie is that these accounts will state the financials as at 30 June 2014 - they won't include McCormack, unless he is included as a post balance sheet event (although he probably will be, sans price).
The accounts are now showing up on Companies' House, although it is too early to actually access them.
The Accounts are now available and I'd been trying to put together something of an overview. However Mike G.. has produced a blog which quite simply can't be bettered. In it he not only brings out the salient points from these 2013/14 Accounts but also projects forward, giving an insight to what this year's will look like and (perhaps) why critical decisions were made. Even a bit on McCormack, Cookie! I've taken the liberty of reproducing it in full here (over 2 posts because of it's size) : "Following on from my article about Fulham's finances leading up to the summer of 2013 I promised to report on the 2013-14 year once the accounts were published, one which of course saw the start of Khan's reign as chairman in the summer of 2013, and then relegation at the end of his first season in charge. We begin this part with the purchase of the club by Shahid Khan in July 2013 for a total in the region of GBP 187m from Mohamed Al-Fayed. The actual debt to MAF from Fulham at the end of June 2013 was GBP 198M. I say it was GBP 187M because in January 2014 that was the loan figure from Fulham's parent company that was converted to equity and in doing so clearing the debt which was a carryover from MAF era. Let's remind ourselves how we had fared in the previous two seasons from July 2011 to end of June 2013 on the financial side. In the table below you can see the figures that football clubs use as a main indicator on how it has performed during the season. please log in to view this image At the end of 2013 we had reached a point of saturation. Our wages were too high to turnover 90%, when the recognised best figure is 60% or less. Our Match day and commercial income was very steady, but with very little room for improvement. Match this with an ageing squad and no 'investment' in the right type of player (I do not include the youth programme in that comment) that could turn a profit in years to come but also add to the strength of the squad, we found ourselves in what turned out to be the season everything caught up with us. Back to the accounts and I'll clear up one issue first, they were not filed late as was suggested. The companies stamp on the accounts show 26th March 2015. Anyway how did we do? Using the same indicators as above and trying to guess what our figures are for this past season here firstly are the accounts for 2013-14 added: please log in to view this image Match day Match day income held steady. We had a very small downturn in total attendances and given the season that's not surprising. One figure I would like to highlight and is of course very relevant this week are season ticket renewals. Each year in the accounts there is the figure of 'Season ticket sales in advance' Here is a breakdown for last 6 years including last summer's figure please log in to view this image A 38% drop in season ticket sales at the start of this season. Currently our average attendance at home is showing a 27% drop year on year. Even with 4 extra home games we will have lost about 60K paying fans through the gates this year. At a rough estimate and taking into account the reduced ST cost and match tickets I think our income from match days this year will be in the region of GBP 7M- 9M One thing to note on our attendances, we were 17thin the PL table. As I said in the last article we are at bursting point for crowds at Craven Cottage in the PL. The new stand has to be built for us to get back and build from there. A 30K stadium would possibly get us back to 11/12thin the crowd table. INCOME DOWN FOR 2014-15 GBP 3-5M Broadcasting The Holy Grail for football clubs...the Sky Money. GBP 66.6M in total from Broadcasting and PL prize money. More than the champions received the year before, and with another new deal in place these figures will just grow and grow. This season in the championship we receive the first of four parachute payments following relegation. That amount for the first year is GBP 24M, followed this coming season by GBP 19M. On top of that figure the TV money the championship pays out is...drum roll......GBP 1.9M. Yes that's it, no more than one cheap player. Income this season from Broadcasting income then will be about GBP 26M maybe a little bit more because TV companies like to have us on to up the goal ratio in games. From GBP 66.6M to GBP 26m. A GBP 40M pound loss before we even kicked a ball, the cost of relegation. So when you wonder why we didn't sign Steve Sidwell again on 40K a week for a two year contract, take that into account. It's why we had to cut our losses during the summer and remove a large number of the squad. Be it Magath or whoever it had to be done, just to make sure the club was on a steady footing let alone keep within FFP. I'll explain a little later why teams like Norwich have not had the cull we had in players, but note that Wigan kept their team pretty much together till January this season and then removed a lot of high wages. We would have done the same next season if we had gambled on keeping a high wage squad. INCOME DOWN FOR 2014-15 GBP 40M Commercial and Sponsorship The club had a very good year with the commercial and sponsorship side of things. We saw marathon bet become main sponsor and the decline the year before saw us reach a new high in this area. But there is bad news again for this season. When a club gets relegated its income stream in this area usually drops between 15-40% and just like the Season Tickets its shown in the accounts as a deferred figure for advanced sales. please log in to view this image Straight away you can see what a Europa final and follow-up season does to advance commercial activity and then also what relegation brings. I'm sure the main part of that reduction is the shirt sponsorship; I'd be surprised if there is no relegation clause in the contract. And with this figure we have a 68% reduction year on year. I'm going to say we have not lost that much and keep it at around 40% figure. Income from Commercial and sponsorship activity GBP 7.5M INCOME DOWN FOR 2014-15 GBP 4.6M Extra income Is the odds and sods a company brings in, I'll say that will be about GBP 750K INCOME DOWN FOR 2014-15 GBP 350K
Turnover Overall turnover increased by GBP 17.9M which can be accounted for by the increase in TV money of GBP 17.4M. A large sum which would put us in the bottom 4 or 5 in the PL on large year's figures. For example Norwich reported a GBP 94M turnover, Southampton GBP 106M, Stoke GBP 98M and of course Man Utd GBP 433M. The difference for every position higher in the PL is dependent on how many games you have on TV, but it's roughly between GBP 1m to 4M. With these kinds of turnover figures clubs have finally started to show a profit. Norwich (and I will use them as an example throughout this article) were relegated along with us but had an operating profit of GBP 7.8M (while we lost GBP 200K). Crystal Palace also showed a pre tax profit of GBP 23m and a turnover of GBP 90.4M. Now the season before when they got promoted their turnover was GBP 14.5M. Simple to see why it's so important to get to the riches of the TV deals. In conclusion our turnover was a little higher than I expected, but the only way it would have increased was more TV money by staying even just two positions higher. The total income I expect us to have lost this season (2014-15) with relegation is around GBP 48M-50M Giving us a turnover of let's say GBP 42M. The average turnover for a championship club is GBP 15M. Looking ahead to 2015-16 season, I have already showed we will be GBP 5M down on parachute payments. Season ticket prices are going down on average by 15%. This is all reducing the income, but would still give us probably a top 4 or 5 turnover in the league. Staff Costs Wages and the percentage to turnover were always the worry for me. With relegation and despite some high wage purchases and loans we held steady with GBP 68.5M. But take note that Fulham have a bonus structure and failure to stay in the PL means that part would not have been paid. I had always expected wages to be in the mid 70M's and I didn't really take that into account. So yes they pretty much stayed the same, but for one reason, relegation. Compared to other clubs we still were paying mid table wages. Norwich, Swansea, Southampton, Palace and Stoke all is paying less than ourselves. Now the real questions are how much did we cut off the wage bill for this season? Did we have to sell or release all of those players? How comes Norwich kept most of their squad together? Well Norwich has the advantage of being in and out the PL on a regular basis. They are used to the fluctuations of income and expenditure. It's said that all their contracts have a 40% relegation reduction clause. I do not know the figure Fulham contracts have but the CEO did give an answer that Fulham players did have a relegation clause in them. Given that I have shown our turnover reduction could be as much as GBP 50M this year, just to make the wages reduce by the same there would have to be cutbacks in wages of 53%. Now unfortunately we know the club has had to make non playing staff redundant at Motspur Park and throughout the company. But I don't believe even those would have a massive dent in the wages of the club given the high salaries the players earn. So how do you slash GBP 35M off the wages bill? One player earning 40K a week is on GBP 2.08M a year, even with a 25% reduction its a little bite into the overall figure. And remember this is to break even before any expenditure on players. Also with FFP this season a loss is permitted of GBP 8M, we have to be aware of that as well. You could play guess the wages of individual players but it's never accurate. But thats not stopping me having a go. A rough and ready calculation would suggest that 75 per cent of staff costs are accounted for by the first-team squad (say 25 players) and a further say five key coaching staff - on this basis it implies 30 key playing staff earns an average of GBP 32k per week based on last year's figures. Using that calculation we allowed somewhere between 14-20 players (not all 1st team) leave the club. If it was say 16 first teamers on a decent wage then that's about GBP 26M saved. Give everyone else a 25% cut that's another GBP 10M off the total wage bill leaving GBP 36M on the wages. Of course we have brought players in and they would add to this figure, but as it's all a rough guess I think the wage bill for 2014-15 will be in the GBP 25M-35M range, unless we had a much larger cut in relegation clauses. The players who came in would be mainly on the championship standard of GBP 5k-15K a week. What figure should we be aiming for, well a club in the championship has a wage bill of anywhere from GBP 10M-36M (unless you are QPR) Charlton GBP 11.5M, Blackburn GBP 34.5M, Derby GBP 13.5M, Leicester last season GBP 36M also Burnley GBP 15M. You can see that in the championship just paying high wages does not give you a guarantee of promotion. The conclusion on basic indicators for 2014-15 is that our Income will be about GBP 42M and Wages GBP 25m-GBP 35M. Showing a profit before player transactions, other expenditure and tax. Good or bad I'm not sure, but it should not be for a team in the bottom five of the championship. Part 2B - the rest of the accounts The facts and figures above are the main indicators for clubs, but then there is the profit and loss account where the full accounts can give a different picture. And they do on this occasion. So I'm going to just highlight key sections from the rest of the accounts. - The company as a whole lost GBP 33.3M. Ok pick yourself up off the floor it's not quite that bad. It's a player related loss with regards Amortisation and impairment of player registrations. In layman's terms having been relegated our player assets have been downgraded. Both the paper value of them and also having released so many players the book value of the squad reduced. For example if Roberts was on our books last year at a value of GBP 10M then this year it could beGBP 5M, because we are in the Championship and also his contract is a year less. This is done for all the players. - The GBP 33M figure comes mainly from Depreciation and Amortisation GBP 16.2M and Impairment GBP 16.9M which are the two standout figures. - A post accounts note was made in that the club are committed to pay GBP 11.7M in net player transactions over the next few years. This would be McCormack, Smith and other singings we made post June 3rd - The net liabilities and total shareholders debt (to Khan) is at the GBP 43M mark. That's a bit disappointing as we have gone from GBP 198M in debt, to being taken over and now already we have an owner with GBP 43M debt on the books, even if it's just a paper one. - A loan from our holding company (Khan) was made during his first season to a total of GBP 26M. This was to give more working capital to the club to help with running costs and transfers. This is an unsecured loan and has no fixed repayment date. - We also have an unrecognised deferred tax asset of about GBP 41.7M. We need to start making profits to start paying this off. - An example of how bad we have been in actually selling players prior to last summer can be seen in the Debtors and Creditors section. We were awaiting GBP 1.97M on player transfer fees while our expenditure due were GBP 10.7M in the last year and then GBP 5.2m after more than one year. This is before buying or selling anyone from July 2014. But gives a reason why our liabilities and cash flow has been an issue. - Also in the accounts is a line saying we have taken out a new 5 year lease with Fulham Stadium Limited. This might surprise people but it's a separate company set up to have the stadium and its assets and future expansion away from the main P&L accounts. In those accounts it shows we have already spent over GBP 3m on the new stand through mainly legal costs I would have assumed."
I don't think he understands what a deferred tax asset is, but the overall piece is interesting and pretty accurate.
It means (at a very high level) that we have losses/reliefs built up that will mitigate up to £41.7m of future corporation tax. It is not something that needs paying off. Anyways, I only care about this because it is my job - not sure anyone else needs to!
I went straight to the wages as that is a very important issue for relegated clubs, now 90% of our turnover on wages was ridiculous, that appears to have been cut to,75% which is much better, if the release of Hugo and Ruiz plus the sale of Stekelenberg and Mitroglu that figure will hopefully get down to the 70% mark which should be the maximum plus bring in a little profit in transfer funds
