Financial Fair Play

[Hendo]

Liam Moore probably couldn`t believe his luck when Gormless gave him his new extended contract at the start of the season. he must be on a huge wedge.

I think the Moore contract was seen as a bit of safeguarding for the club,, probably with a buyout clause, rather than RG just throwing contracts around. If Moore had continued to attract the same interest as he did in the summer, the club could demand a set fee and the a buying club would have to meet it. It also placated a key player who had handed in a transfer request.

Also extended contact doesn't always mean a hefty pay rise, it might've resulted in, say a 5% increase and if Moore was on £15k/week for example, 5% is only an extra £750/week, even 25% would only take him up to £18,750/week, which for your #1 defender probably isn't that eye watering.

[Hound]

One important thing to be aware of is that these accounts are upto end June 2018 so we have had 8 further months where the attendances have continually fallen so this years situation could be even worse !!!

Though would think wages would be less after binning Aluko, Edwards and co

We also pulled in a decent amount from the sales of Ilori and Bacuna (not sure how much Baldock cost, really hope it was appearance related). And Gourlay's hefty wage is no longer on the books.

[Royals and Racers]

One important thing to be aware of is that these accounts are upto end June 2018 so we have had 8 further months where the attendances have continually fallen so this years situation could be even worse !!!

Though would think wages would be less after binning Aluko, Edwards and co

We also pulled in a decent amount from the sales of Ilori and Bacuna (not sure how much Baldock cost, really hope it was appearance related). And Gourlay's hefty wage is no longer on the books.

Gourlay might have gone with a hefty pay-off.

[Nameless]

One important thing to be aware of is that these accounts are upto end June 2018 so we have had 8 further months where the attendances have continually fallen so this years situation could be even worse !!!

Though would think wages would be less after binning Aluko, Edwards and co

We also pulled in a decent amount from the sales of Ilori and Bacuna (not sure how much Baldock cost, really hope it was appearance related). And Gourlay's hefty wage is no longer on the books.

Gourlay might have gone with a hefty pay-off.

Or they might have sat him down with the accounts, pointed out the issues and suggested he could pack his bags and go quietly or be sacked and his reputation ruined. I'd guess when this seasons accounts come out we'll see what happened.

[JR]

THE player / coach numbers are presumably the total number who worked for the club at some point during the year. We didn’t necessarily have that number at the same time.
So if you change managers during the period and say 5 people leave and 5 new ones join then that is 10 employed during the year.
Likewise if you buy 5 players in each window and sell 5 then that is 20 players who have been employed at various points.
It will,also include lots of part time coaches who work with the Academy but possibly not the Community coaches as I think the Community set up,is a seperate organisation (but may be wrong)

Nope, they will be calculated as an average across the financial year rather than a total.

[Nameless]

THE player / coach numbers are presumably the total number who worked for the club at some point during the year. We didn’t necessarily have that number at the same time.
So if you change managers during the period and say 5 people leave and 5 new ones join then that is 10 employed during the year.
Likewise if you buy 5 players in each window and sell 5 then that is 20 players who have been employed at various points.
It will,also include lots of part time coaches who work with the Academy but possibly not the Community coaches as I think the Community set up,is a seperate organisation (but may be wrong)

Nope, they will be calculated as an average across the financial year rather than a total.

I guess you are an accountant so know how these things work but it seems a bit weird ! The number reported isn’t the actual number we have employed , just an ‘average’ ? It has no relation to actual people ?

[Stranded]

So essentially, the accounts show we are fcuked and reliant on the owners. Isn't that true of probably 80% of football clubs these days?

The only difference being the general level of fcukedness.

[muirinho]

THE player / coach numbers are presumably the total number who worked for the club at some point during the year. We didn’t necessarily have that number at the same time.
So if you change managers during the period and say 5 people leave and 5 new ones join then that is 10 employed during the year.
Likewise if you buy 5 players in each window and sell 5 then that is 20 players who have been employed at various points.
It will,also include lots of part time coaches who work with the Academy but possibly not the Community coaches as I think the Community set up,is a seperate organisation (but may be wrong)

Nope, they will be calculated as an average across the financial year rather than a total.

I guess you are an accountant so know how these things work but it seems a bit weird ! The number reported isn’t the actual number we have employed , just an ‘average’ ? It has no relation to actual people ?

yeah, that's the way headcount is done. Think of a coffee shop run by a rotten manager so has a high turnover of staff. So you have the manager plus 30 people who each managed to work two months before walking out in disgust . That is the equivalent of 6 employees over 12 months. (30 * 2 is 60 "man-months" which is 5 "man-years")
Salaries are going to reflect the equivalent of 6 full time people, not 31.

[Dick Habbin's hairdo]

So essentially, the accounts show we are fcuked and reliant on the owners. Isn't that true of probably 80% of football clubs these days?

The only difference being the general level of fcukedness.

I'm a words, pictures and fuzzy felt fella, but I believe that this absolutely nails it.

[Nameless]

Hasn’t it always been that way though ? Clubs used to rely on a local self made business man to throw money into the bottomless pit. Back in the 60’s Reading FC were propped up by fund raising by the Supporters Club.
With the Sky nightmare the whole thing went stupid so now it is foreign billionaires and oil rich countries that prop up clubs.
Badly run or unlucky clubs just now have debts with a couple of extra noughts on.

[Lower West]

Hasn’t it always been that way though ? Clubs used to rely on a local self made business man to throw money into the bottomless pit. Back in the 60’s Reading FC were propped up by fund raising by the Supporters Club.
With the Sky nightmare the whole thing went stupid so now it is foreign billionaires and oil rich countries that prop up clubs.
Badly run or unlucky clubs just now have debts with a couple of extra noughts on.

Resurgence of clubs owned by the community is a welcome development. Looks like Swindon BC are going to sell the County Ground to the club owners/supporters trust for £2.2 million. After a complete financial melt down folowing the Di Canio era. Seems to rebuilding slowly recovering.

[Hound]

So essentially, the accounts show we are fcuked and reliant on the owners. Isn't that true of probably 80% of football clubs these days?

The only difference being the general level of fcukedness.

Which is probably why there isn’t panic at the accounts, rather just annoyance at the utter incompetence of Gourlay

[Elm Park Kid]

The audit opinion has an emphasis of matter in respect of going concern - which is highlighting that a material uncertainty exists in respect of the ability for the club to continue to operate in the foreseeable future. This is due to the reliance on ongoing support from the Chinese owners - there is £60m owed to them which is technically repayable on demand - so we are reliant on them not wanting repayments until the club can afford them. I haven’t checked back, but assume this was the same position in the prior year accounts.

It’s pretty shocking looking at the key figures for 17/18 season:

- Revenue halved (most perplexing for me was how matchday revenue decreased about 60% when attendances only down a third)
- Salaries increased 25%
- £21m loss despite a profit of £6.5m being made on fixed assets sale

The amount the club owes the owners is a bit of an irrelevant figure. It's like Trotters Independent Trading owing Del Boy a load of money - the club and the owners are to all extent and purposes the same thing.

Constantly losing money is obviously a big concern; but unfortunately now the only thing that matters is how deep the owner's pockets are and how willing are they to continue reaching into them.

If the owners get fed up then clearly the extent that we are loss-making club will determine who buys us next and what level of investment they are willing to make. We could still get 'lucky' though and other billionaire with too much money on our hands could take over - it doesn't really mean much.

Yeah - this whole thread is about FFP and the constraints that puts on an owner to pile money it - but what we're seeing is that ultimately the authorities aren't willing to take meaningful action.

[Snowflake Royal]

Liam Moore probably couldn`t believe his luck when Gormless gave him his new extended contract at the start of the season. he must be on a huge wedge.

I think the Moore contract was seen as a bit of safeguarding for the club,, probably with a buyout clause, rather than RG just throwing contracts around. If Moore had continued to attract the same interest as he did in the summer, the club could demand a set fee and the a buying club would have to meet it. It also placated a key player who had handed in a transfer request.

Also extended contact doesn't always mean a hefty pay rise, it might've resulted in, say a 5% increase and if Moore was on £15k/week for example, 5% is only an extra £750/week, even 25% would only take him up to £18,750/week, which for your #1 defender probably isn't that eye watering.

I think you significantly under rate what Moore's likely to be on. He came from a PL side as a highly rated player looking for promotion. If he was on less than £20k a week before his new contract it wouldnt be by much.

The average championship wage wasnt far off £15k a week when Sidwell was here. Thats over 10 years ago with all the massive inflation since.

[Hendo]

Liam Moore probably couldn`t believe his luck when Gormless gave him his new extended contract at the start of the season. he must be on a huge wedge.

I think the Moore contract was seen as a bit of safeguarding for the club,, probably with a buyout clause, rather than RG just throwing contracts around. If Moore had continued to attract the same interest as he did in the summer, the club could demand a set fee and the a buying club would have to meet it. It also placated a key player who had handed in a transfer request.

Also extended contact doesn't always mean a hefty pay rise, it might've resulted in, say a 5% increase and if Moore was on £15k/week for example, 5% is only an extra £750/week, even 25% would only take him up to £18,750/week, which for your #1 defender probably isn't that eye watering.

I think you significantly under rate what Moore's likely to be on. He came from a PL side as a highly rated player looking for promotion. If he was on less than £20k a week before his new contract it wouldnt be by much.

The average championship wage wasnt far off £15k a week when Sidwell was here. Thats over 10 years ago with all the massive inflation since.

Ok, well take £20k/week then. A 5% increase is only an extra £1k/week and 25% is still only and extra £5k/week, which I don't consider a huge wedge for one of our most important players.

[Maneki Neko]

Hasn’t it always been that way though ? Clubs used to rely on a local self made business man to throw money into the bottomless pit. Back in the 60’s Reading FC were propped up by fund raising by the Supporters Club.
With the Sky nightmare the whole thing went stupid so now it is foreign billionaires and oil rich countries that prop up clubs.
Badly run or unlucky clubs just now have debts with a couple of extra noughts on.

a local benefactor who cares is much less likely to pull out on a whim
and the downside of being in small scale debt is much lower than being tens/hundreds of millions in debt if they do.

[Snowflake Royal]

I think the Moore contract was seen as a bit of safeguarding for the club,, probably with a buyout clause, rather than RG just throwing contracts around. If Moore had continued to attract the same interest as he did in the summer, the club could demand a set fee and the a buying club would have to meet it. It also placated a key player who had handed in a transfer request.

Also extended contact doesn't always mean a hefty pay rise, it might've resulted in, say a 5% increase and if Moore was on £15k/week for example, 5% is only an extra £750/week, even 25% would only take him up to £18,750/week, which for your #1 defender probably isn't that eye watering.

I think you significantly under rate what Moore's likely to be on. He came from a PL side as a highly rated player looking for promotion. If he was on less than £20k a week before his new contract it wouldnt be by much.

The average championship wage wasnt far off £15k a week when Sidwell was here. Thats over 10 years ago with all the massive inflation since.

Ok, well take £20k/week then. A 5% increase is only an extra £1k/week and 25% is still only and extra £5k/week, which I don't consider a huge wedge for one of our most important players.

I certainly do, considering the cumulative effect, the lack of need, ourcurrent financial position and his rather lacklustre performance.

[Hendo]

I think you significantly under rate what Moore's likely to be on. He came from a PL side as a highly rated player looking for promotion. If he was on less than £20k a week before his new contract it wouldnt be by much.

The average championship wage wasnt far off £15k a week when Sidwell was here. Thats over 10 years ago with all the massive inflation since.

Ok, well take £20k/week then. A 5% increase is only an extra £1k/week and 25% is still only and extra £5k/week, which I don't consider a huge wedge for one of our most important players.

I certainly do, considering the cumulative effect, the lack of need, ourcurrent financial position and his rather lacklustre performance.

I hardly think he has been putting in lackluster performances. He has made a couple of mistakes which have led to goals, but thats the nature of where he plays, certainly puts his fair share of effort in. Additionally we didn't know he was going to put 'lackluster' performances once he has signed his contact (can only see that with hindsight). If he didn't sign the new contact and continued to attract Premier League clubs, there was the potential we could lose out on a decent amount of money for him in Jan/the coming summer.

I also wouldn't say there was a lack of need at CB, if anything it is an area we could do with strengthening in.

My argument started because the original poster made it seem like Moore was just given a contact for the sake of it, which clearly isn't the case.

[Snowflake Royal]

Lack of need for the contract. He was our player. We didnt have to renegotiate anything.

I dont think forseeing reduced performances after telling a player they have to stay at a struggling club the division below where he wants to be is particularly requiring of hindsight.

The whole Moore saga was handled typically badly by Gourlay and co.

[3points]

Just started to take a look through the accounts for both the football club and Renhe Sports Management (its formal UK parent company). Here are some key points coming out for me

1. While we lost £21m (which including a net spend on players of £6.8m), the club actually burnt through £27m in cash. This was basically funded by new shares of £15m plus £12m of loans from the parent company (Renhe Sports) to the RFC company
2. The stadium has been moved from RFC to Renhe Sports. Basically, the football club no longer owns its own ground. I assume that is in consideration for the £27m of cash thrown at the football operations.
3. As a consequence of 2) the club now has to pay rent to Renhe Sports of £750,000 per year until 2043.
4. The club bought players totaling £19m in the year to 30 June 2018
5. The club potentially owes a further £12m on player registrations (these will be the performance / appearance related type elements of the transfer fees)
6. The club received £10m of grant income. No idea what this relates to as the accounts are silent
7. £8m of the £21m loss relates to amortisation of players fees/contracts (more than double the previous year)
8. The women's team lost £841k last year
9. The club owes £61m to Renhe Sports, £3m more than last year
10. After 30 June 2018 we acquired players for a cost of £4.75m
11. Renhe Sports owns 25% of RFC Prop Co, which is the entity which owns the land around the Madejski Stadium and still has 4 Thais as directors, plus Nigel Howe
12. The training ground at Bearwood is owned in another company, RFC Bearwood. The value of that asset is now £13m. Most of the development costs have been through group funding so some of the money poured in by the Chinese owners (approx £10m) has gone onto the training ground