05 Feb 2020 17:54:01
Been looking at the accounts after all the discussion re the financial situation. Before I go further I will admit that I do this for a living (invest in companies) so come with this with a little bias in what I am looking for in accounts, so Eds please accept my apologies if this doesn't make sense from a purely footballing point of view.

For me there are a few aspects to the loss that are noteworthy. The first is the make up of the turnover. Gate receipts and other commercial activity income are actually down, so whilst income stayed roughly the same the club relied mainly on TV revenue and sponsorships to remain where they are. I may be wrong, but both of those things are reliant on on-field performance I think? We all know about that now don't we.

As far as costs are concerned. operating costs and salaries alone give the club an operating loss of more than £22m. Player cost is depreciated over a number of years (presumably the length of the contract? ) , which results in, and we have made big losses in the transfer market itself. The majority of the headline loss of £100+m is because of player amortisation (£95m) , so it's tempting to say it's the cost of buying players that is putting a bad light on things.

BUT, take a look at the operating costs. that is a massive loss right there - £29m on turnover of £188m. Bugger.

We all know that there are a lot of players on the books, and it's been said that around £5m will be saved from not having a few players on the books after the summer. I am sorry, that does not begin to cover the actual cost of running the club.

So here's my point - at long last I know - costs have to be trimmed and income has to be increased. Would you as fans accept an increase in admission price? Who or what would you accept cut from the running of the club?

Don't forget there is a LOT of cash to be found very shortly to pay for the new stadium. On current financial performance any loans are going to be viewed as very risky so will be very expensive - high interest payments.

Eds, do you know if the club are in a position to do a debt for equity swap? if not how on earth is the new stadium going to be financed?

{Ed002's Note - I am not sure what accounts you have been looking at but you as an investor in clubs need to look at the FFP accounts and not the annual return - which I assume you know but have chosen not to. I have explained the club is living beyong its means and I appreciate you have figured that out. There is no equity swap that is viable as you should also have noticed that the club has been used to guarantee borrowings from a third party - currently to the level of £150M.}

1.) 05 Feb 2020
05 Feb 2020 23:24:35
Ed002, is that third party anything to do with Usmanov or is it other outside influences?

{Ed002's Note - It is a separate company.}

2.) 06 Feb 2020
06 Feb 2020 13:10:27
What you have fallen into Sussexblue is looking at the released figures from the last financial year 2018/ 2019 (13 months)
Not taking into account this years dealings (which you or we don't know yet) and then factoring in a 5 million or so saving which will be in the next financial year.