I was just about to post this...a terrific analysis...??

I asked Alan Myers on Twitter - said he was a good lad who lost his way at Everton

I suspect FFP rules in the Championship would kybosh anything other than a modest spend TBH.

@PLJPB it’s a great point which I missed, so my bad...flicking from VLL to BRFC, newco to oldco, March y/e to June y/e is the only excuse I can offer for overlooking it...well that & stupidity ?. Having done a quick “compare & contrast” to VLL, we can definitively say they invested £128.5m in VLL to March 2017 - the BRFC a/cs to June 2017 indicate increased parent borrowing, decreased bank borrowing subsequently, so I would argue that V’s “investment” is therefore of the order of c.£130m. [You are welcome to come on a podcast when next year’s a/cs are out to keep me & PhilipL on our toes. ?] ??

It’s a fair cop...?

In summary...we took a lot of money in when we were in the Premier League...but still made a loss. V’s made some “interesting” deals which cost money; managers, agents, players...we lost a lot more money. We went down twice. V’s cut the cloth accordingly. We lost money. I would not be surprised to see a bigger loss in June 18’s a/cs given League One income levels. That said...it’s been managed relatively prudently in the last 2 years. Had a new owner bought us at the beginning of 2016/7 season and turned in those numbers on falling t/o I would have been impressed with their acumen. Of course, the massive difference here is that it is V’s that got us into this mess initially...

Here’s some stuff that got posted in another thread a couple of weeks back....

Corporate law doesn’t require disclosure at a level of invoice by invoice, just by categories. The June 2017 BRFC a/cs show a headline expenses figure of £27.9m. Wages & on-costs accounts for £22m of that expense in the year to June 2017.

The point re VLL is spot on, but it’s still Venky’s money. The “£250m” was quoted as V’s approximate investment ie the shares plus the interest free debt that you reference above.

The share capital in BRFC a/cs is £147m. They are also have lent £95m interest free as at June 2017.

For absolute clarity - the debt in BRFC a/cs is c.£115m not £250m.

I’ll try to clarify - all refs to the June 2017 BRFC a/cs Venky’s “investment” is £147m in shares plus £95m lent from the parent - this is the “£250m” figure often referenced. T/O to June 17 was £14.9m, wages were £19.4m. I presume your figures are from VLL ? When you say that they can sell the shares, technically you are correct, but who is buying ? Of the total debt of £115m - £95m is borrowed from Venky’s - IMO that’s better than borrowing from the bank because V’s lend interest free unlike the bank.

It’s a lot more than that - as at June 17 a/cs nearer £250m.

Not so...the latest accounts as linked elsewhere in this & other threads show increased share capital and a move from borrowing from bank to borrowing from parent company.

Good point, well made...?

Yes they have. It’s in the a/cs. The parachute money is paid to BRFC. Transfer fees are paid to BRFC. The TV money is paid to BRFC. At its simplest, our outgoings have outstripped our income for the whole of their ownership. (Outgoings would include transfer fees, wages, agents fees, advisor fees...etc). On that basis an owner either borrows money to keep trading or injects more of their own cash. If neither of those happens, the company is insolvent & soon ceases trading. Venkys have done both. This isn’t opinion, it’s maths. I’m not a Venky apologist but I do understand company accounts.

As I said “an expensive hobby”?‍♂️

They had no choice but to put money in else we would have been insolvent & players might not be keen to play if they’re not getting wages. The interesting thing for me is how they fund it. Share capital implies permanence, bank lending less so, parent loans more so (but not as good as shares).

...& that will have contributed to a loss in the P&L which V’s will have to have funded either by increased share capital or loans. Any agent fee had a similar impact on the P&L of BRFC. So not Myles away...?

Money from player sales is seen in the P&L as “Profit on disposal” e.g. £10m in the 2017 a/cs. That money is recycled in the business. So the £10m accounting profit meant the value of the business rose by £10m more than it would have. (This is a very simplistic argument and any accountants reading will be going “but...but...whatabout...” etc, but I’m trying to keep it high level for illustration.) It’s important to acknowledge that this is accounting profit...so in other words, buy Player A for £1m sell him for £5m does not necessarily lead to an accounting profit of £4m - I could go on here...but I won’t ? I can easily get carried away with explanations of depreciation and net asset value....I think Philip made this point on the pod just in case people did the calculations for Gestede, Rhodes etc based on newspaper headlines of their sale fees.

Don’t forget that BRFC is just one of the Venky group companies. It’s relatively easy (albeit at a high level) to see where the money has come & gone for BRFC. But the V Group is a multi-national operation subject to lots of different legal frameworks, tax regimes, reporting regimes & so on....so short answer, it’s not easy to answer unless you are the Venky group auditors.

They really have spent £250m - that’s a public (& audited) fact. As for the second part - I don’t want to have to spend any money on libel lawyers ?

Ah right...Philip was referencing total investment - so Shares plus Loans - that’s the £250m, so that clears that up ?? Share capital is (kind of) permanent, loans are temporary. Under UK company law, it VERY difficult for a business owner to take money out of a business that’s been invested as share capital. It’s not impossible but the law prescribes specific circumstances so as to protect all shareholders in a business & creditors. Essentially we can be reassured by increasing share capital. We are of course almost wholly reliant on them to keep funding the business - whether through loans or shares. Shares is best, but interest free loans is pretty good 2nd best. Either way, believe it or not, the bald facts are that their dalliance into English football has cost them £250m - that’s why I said on the pod that it was an expensive hobby. Does that clarify ?

Well that’s not borne out by the 2017 a/cs - the 2018 may well be worse but I doubt by that much. Some people may have equated accumulated losses of £225m with debt perhaps ? V’s total “investment” in BRFC equates to £147m of share capital plus the £95m loans - maybe that’s what has confused some ? I dunno, but debt (as at June 2017) is nowhere near £250m.

There was a reference earlier in this thread to our Pod (Episode 93) that covered this in some detail but I’ll try & summarise briefly & with no jargon... All references to June 2017 a/cs of course... In a nutshell:- TRADING Turnover is down by a third as parachute payments ended. Costs have been significantly reduced but not quite in line with t/o. Losses have been reduced by positive impact of player sales. Interest costs have reduced by two-thirds as much of the debt has effectively moved from the bank (who charge interest of course) to the parent company (which does not). All in all - loss of £3.7m recorded for 2017 - up from £1.5m in 2016. ASSETS & LIABILITIES Total creditors (money owed) stood at £114m up slightly from £112m BUT less of it owed to the bank, extra £7m owed to Venky parent - on balance this is a good thing, better to be in hock to the parent than the bank I would say. Of the £114m - £95m owed to V’s So what ? V’s are undertaking good housekeeping to manage a difficult position (I know they got themselves into it...this isn’t an opinion piece BTW ?) 2017/18 will probably reveal decreased t/o given the relegation - less TV money, sponsorships, corporates, ticket sales etc. Promotion opens up increased possibility for s/t income, TV, sponsorship, commercial etc FFP rules are frankly impenetrable...made even more complex if you move between Championship & League 1...which we’ve just done twice - as the rules are different in each. V’s can still cover part of any losses with share capital (rather than loans) in the Championship, but it’s not as easy as in League 1. What is not up for debate is that Championship clubs FFP is based more around turnover and profitability....and so to that extent, increased spend by fans in Ewood in whatever form can only help the FFP calculation and give the club less of a headache. Finally, whilst we will earn more TV money etc, I suspect large parts of that increased income will be swallowed up with improved player contracts etc. If we expect them to take a hit after a relegation, chances are their agents will expect the reverse after a promotion...? Hope that helps....but listen to the pod, read this & then pose whatever questions you might have & I’ll have a stab....but Not FFP...I cant make head nor tail of the EFL site ?