[Archived] Club Accounts Jul 2016-June 2017

[awhom111]

Here are my thoughts after looking through the club accounts.  As always, I tend to look at things from an operational perspective since that's my role as an accountant, where I would be one helping prepare accounts like these.  People with experience in other areas of accounting and finance will tend to look at the same accounts from a different angle and it is always best to get multiple opinions on some of these items.
 

Page number references are to the page in the accounts themselves and not to their page number of the electronic file.
 

Please save yourself some angst and skip past pages 2 and 3.
 

Pages 4 and 5 offer the basic overview.  Turnover from operations dropped 7 million, which we will soon see is media related.  The wage bill did drop from the previous season, but not much.  Operating expenses dropped, but apparently in part due to one time items.  That meant that the operating loss narrowed slightly from recent seasons.  As expected, the major sales and fewer purchases meant a 10 million or so profit on transfers.  A note on page 5 says that there were minimal new payoffs.
 

Here is a chart of operating expenses over time:

 

 

Cash (page 13):
 

This is where we get some of the useful information.  Cash received from transfers dropped by more than 10 million.  Payments for transfers also dropped down to 625,000.  Payments for past payoff agreements dropped from 3.26 million to 1.85 million.
 

Here is a chart of cash flow for those categories over time:


 

Turnover (page 19):
 

The big impact on revenues was obviously the decrease in media income due to the loss of parachute payments.  Everything else was more or less typical for our time in the Championship.  Also of note on this page was a continued reduction in staffing over the year, which was pretty much all from senior players and management.
 

Here is a quick chart of our sources of revenue over time:


 

Transfer Activity (page 21):
 

Transfers in were about 1.3 million, which should include Williams from that season as well as Dack and Gladwin whose transfers were before the cutoff.  Page 26 notes that we could owe up to 1.4 million in add-ons from past transfers.  Page 27 notes that net transfer activity in July and August was negligible.
 

Debtors and Creditors (page 23 and 24):
 

The amount still owed on past transfers continued to decrease with only 465,000 for this season and 290,000 for the upcoming fiscal year.  Most of the cash from sales has already been received with only 1.175 million being received this season and .375 million still expected next fiscal year.
 

The future:
 

Looking at the finances for this period is probably a good idea of what our finances would look like with promotion.  This season is a little bit difficult to tell as presumably media income fell further as well as a likely hit to other areas of revenue as well.  The hope would be that we have finally reduced our payroll to a level that only includes contributing players and that some of the waste that accumulated over time in the Championship is gone.  Relying on sales to generate cash is not a viable strategy compared to the past given how little value we have left compared to some of the sales we made in our last two years in the Championship.

[chaddyrovers]

Thanks for going through the accounts for us. 

Thanks again

[philipl]

Thank you. Very handy at a glance analysis.

[mhead]

Great Summary Awhom111. It was mentioned at the Rovers Trust Board last night.

If you do not know....praise from PhilipL is praise indeed. Thanks again.

[Dreams of 1995]

It's remarkable there hasn't been a bigger difference in wages. Most players should have a fair percentage reduced in the event of relegation. Is it fair to assume that isn't the case here otherwise we'd be likely to see at least a 15%+ drop in payroll, surely?

Interesting what that little section of "other" is in our revenue charts.

[Mattyblue]

I presume you'll see that in next years accounts?

[tomphil]

Constantly paying people off doesn't help the wages and maybe they agreed to up a few again after any drop clauses in order to keep them, fair play if so.

For me though the wages going out have long been one of the areas i'd most like to see scrutinised in my belief that a certain amount of money passes through the pipes annually.

V's never seem too concerned about this side it.

[chaddyrovers]

http://www.lancashiretelegraph.co.uk/news/16127411.Finance_Director_Mike_Cheston_on_Rovers__accounts_as_club_posts_loss_of_almost___4million/

[CrouchingNunhiddenCucumber]

"They (the owners) have provided the necessary investment to get the team to where they are now." 

 

Finally a bit of truth from that weasel Cheston in that article - albeit unwittingly. How that man holds his head up high doing the job he has staggers me. I want to see him blubbing on camera in front of the whole world like Steve Smith to be honest, he has been part of a far worse act than cheating, presiding over down fall of Blackburn Rovers.  

[TBTF]

11 hours ago, chaddyrovers said:

http://www.lancashiretelegraph.co.uk/news/16127411.Finance_Director_Mike_Cheston_on_Rovers__accounts_as_club_posts_loss_of_almost___4million/

This year wont be pretty and will likely be a whole lot worse than this. Even with a reduction in players wages , this year sees media income drop to less than £2 million and we don't have the benefit of player transfers to subsidises the losses. There will probably also be a reduction in income from match days this year too so you would think losses are going to go back up to around £15million for the current season.

And yes CNC , they have got the team to where they are now and that's why everyone is effing fuming . Cheston is just a moron...keeping the lights on is not the kind of investment that's really needed nor what we all want to see and nowhere in his statement to the LT does he go beyond the usual platitudes. Bluntly, he doesn't have  a clue what they are going to do next because its highly likely they don't even know themselves. Cheston is merely a puppet, fulfilling a function..........badly.

Still, his comments  will no doubt please Meadows who thinks this conveyor belt of funding is for the rest of eternity. 

[Leonard Venkhater]

2 minutes ago, TBTF said:

This year wont be pretty and will likely be a whole lot worse than this. Even with a reduction in players wages , this year sees media income drop to less than £2 million and we don't have the benefit of player transfers to subsidises the losses. There will probably also be a reduction in income from match days this year too so you would think losses are going to go back up to around £15million for the current season.

And yes CNC , they have got the team to where they are now and that's why everyone is effing fuming . Cheston is just a moron...keeping the lights on is not the kind of investment that's really needed nor what we all want to see and nowhere in his statement to the LT does he go beyond the usual platitudes. Bluntly, he doesn't have  a clue what they are going to do next because its highly likely they don't even know themselves. Cheston is merely a puppet, fulfilling a function..........badly.

Still, his comments  will no doubt please Meadows who thinks this conveyor belt of funding is for the rest of eternity. 

I think we are likely to get a windfall, if/when Cairney leaves Fulham...

 

[TBTF]

Just now, Leonard Venkhater said:

I think we are likely to get a windfall, if/when Cairney leaves Fulham...

 

Well it s funny you should say that Len and that's what I imagined too. However, if you remember Cairney was sold pretty much behind everyone's back by Mrs D including Bowyers and I was put in my place by somebody ITK who says there is no sell on clause because V's messed up and just took the money.

Only telling you what I was told when I got excited about West Ham offering fortunes for Cairney in January.

[Leonard Venkhater]

51 minutes ago, TBTF said:

Well it s funny you should say that Len and that's what I imagined too. However, if you remember Cairney was sold pretty much behind everyone's back by Mrs D including Bowyers and I was put in my place by somebody ITK who says there is no sell on clause because V's messed up and just took the money.

Only telling you what I was told when I got excited about West Ham offering fortunes for Cairney in January.

I know someone who met Waggott, who referred to this potential sell on windfall.....but in the Venky-world, he might be misinformed, I guess....and I am not being sarcastic either.

[sympatheticclaret]

To be fair, Companies House Searches reveal that c. £14.9m has been pumped into Rovers by Venkys in the way of newly issued shares since 29th September 2017, presumably just to keep the bills paid...

You really need this promotion !!

[JBiz]

7 hours ago, sympatheticclaret said:

To be fair, Companies House Searches reveal that c. £14.9m has been pumped into Rovers by Venkys in the way of newly issued shares since 29th September 2017, presumably just to keep the bills paid...

You really need this promotion !!

As a fan, I feel we need this promotion but thing is, do we? (In the same suggested hypothetical Burnley fans “wet dream”)

I mean - one thing you can say the Rao family have done is pay all bills on time and keep facilities up to date, I mean how long is till Gawthorpe is category 1 like our academy? 

They've operated the club like charlatans, allowing criminal negligence - yet they’ve never shirked a bill and they’ve never done a “Hearts” or “Pompey”.. which is obviously what most Burnley fans want, above even the success of their own club. Even qualifying for Europe for the first time in generations is second to the hope we stay in league one.

Ive been very critical and will be of this ownership, but there is certainly one thing they do have, money. Perhaps getting the structure underneath with Waggott et al might direct that support in a better direction.

I can’t speak for all Rovers fans, but I truly hope Burnley aren’t sold to some foreign ownership and end up on a similar cycle.

[philipl]

Decent chance of Fulham winning the play-offs so Cairney would be staying with them.

Plus, Rovers were trying to sell off their transfer deal sell on and performance clauses at the end of 15/16 season if the other clubs were willing to pay something.

And of course this promotion is life or death in terms of Rovers' foreseeable future. League 2 beckons if we don't get out of this league the right way this summer. 

[RoverCanada]

As an FYI, Swiss Ramble did his first finances twitter thread on a Championship club (QPR) that included Rovers' released totals for 16-17: https://twitter.com/SwissRamble/status/981078018494992385

Gives some context to the mountain faced by non-parachute payment clubs, potentially including us next year (and highlights how badly we wasted the opportunity of parachute payments... although they're relatively higher for the likes of Aston Villa now)

One interesting tidbit: our 2012/13 wage was the 11th highest wage bill ever in the Championship (though that number will gradually fall down the list)

Will keep an eye out if he does a thread on Rovers' results.