Albion report £891,000 losses and face £347,000 tax bill from sale of Goldstone

[BensGrandad]

This is all very confusing because I know that when Raymond Bloye was chairman of Crystal Palace the football club owned n othing even the players were employed by his company Matthews Butchers who in turn rented them out on a match by match basis at a cost to cover the excess income received from each match after all expenses, this way they never ever had a tax liability. At the time I was heavily involved with Surrey FA and I know that the FA upon receipt of their trading firgures which basically said income £1m expenses £999999.99 profit 1p tax nil always scrutinised them well ibn the hope of finding a mistake but never did. Isn't this what you pay an accountant for?

 

[Granny Goodchild]

This is all very confusing because I know that when Raymond Bloye was chairman of Crystal Palace the football club owned n othing even the players were employed by his company Matthews Butchers who in turn rented them out on a match by match basis at a cost to cover the excess income received from each match after all expenses, this way they never ever had a tax liability. At the time I was heavily involved with Surrey FA and I know that the FA upon receipt of their trading firgures which basically said income £1m expenses £999999.99 profit 1p tax nil always scrutinised them well ibn the hope of finding a mistake but never did. Isn't this what you pay an accountant for?

You're confusing Operating Results with Capital Gains.


Clearly a bit of creative accounting back in 1996/7 could have largely avoided the tax ,but the fact is, that A, B & S couldn't give a toss about future liabilities of the club and once the accounts were filed it became difficult to change.

Re Fixed Assets... the only assets currently on the balance sheet are Player Registration Fees, capitalised and written off over the period of the player's contract, in accordance with FRS 10, and the net value of the Withdean development costs.

 

[BensGrandad]

GG

I appreciate your comments and my confusion between trading profit and CGT.

Is there no redress whatsoever on those three as they were obviously aware of what they were doing?

 

[The Large One]

Take this £891,000 loss. No, please take this loss and shove it up Bellotti's...

Sorry, what I meant was, in terms of revenue £891,000 represents 40,500 match tickets (at £22 a go). Divide this by 23 home matches per season and you get 1,761. So, in theory (yes, yes, yes, I know that this is a horrible over-simplification), an extra 1,761 on the attendance per match would wipe out this trading loss.

I appreciate that there are obviously cost implications for more people attending each match, but there are also revenue benefits which can counter-balance these costs.

Bloody hell, it's a thin line between...

 

[Gritt23]

Accountants - Does the CGT provision mean that the actual Trading loss would 'only' have been £544,000?

No. As I read it, the provision is over and above the 'Normal Trading Loss' figure given.

To be honest, I see the Provision as slightly academic. Yes, they are right to make such a provision in the accounts, because there would appear a reasonable chance it may crystalise, but the reality is that we will only incur the CGT liability if we do not get approval for Falmer. If that happens, we are quite simply going out of business, with or without that additional tax bill.

Essentially we 'avoid' incurring the tax liability provided we re-invest the proceeds of the sale into a 'replacement asset'. Therefore, the money we got from the Goldstone gets spent on Falmer and the tax man leaves us alone. However, the intervening period does not last forever, and lose Falmer and we will run out of time to find a 'replacement asset' for that money. At that point we have to pay the taxman.

 

[Gritt23]

Clearly a bit of creative accounting back in 1996/7 could have largely avoided the tax ,but the fact is, that A, B & S couldn't give a toss about future liabilities of the club and once the accounts were filed it became difficult to change.

Re Fixed Assets... the only assets currently on the balance sheet are Player Registration Fees, capitalised and written off over the period of the player's contract, in accordance with FRS 10, and the net value of the Withdean development costs. [/B][/QUOTE]

It shouldn't need much creative accounting, just a planning system that can deliver a replacement in the required time. It would be impossible to get a new ground for anything less than the proceeds, so the CGT liability would never materialise unless we failed to get a new ground. Agreed, the former regime didn't care one way or the other, but survival has always been dependant on getting a new ground. Without it we get the CGT liability, but are dead anyway. Survival without a ground was never an option.

Fixed Assets. So that means that we do NOT have players (I'm thinking Bobby Zamora) valued on the books at an estimated resale value? That's good news if that's the case as I feared we may have had him on there at in excess of the £1.5m we received, thus giving us a loss on disposals in the current year. Is this definitely the case?

 

[Reading Posh]

Fixed Assets. So that means that we do NOT have players (I'm thinking Bobby Zamora) valued on the books at an estimated resale value? That's good news if that's the case as I feared we may have had him on there at in excess of the £1.5m we received, thus giving us a loss on disposals in the current year. Is this definitely the case?

Definitely, clubs had to conform with FRS10 about 4(?) years ago.

Original value is the transfer price paid for the player then written off over the contract length.

 

[Granny Goodchild]

Fixed Assets. So that means that we do NOT have players (I'm thinking Bobby Zamora) valued on the books at an estimated resale value? That's good news if that's the case as I feared we may have had him on there at in excess of the £1.5m we received, thus giving us a loss on disposals in the current year. Is this definitely the case?

Yes… definitely.

Financial Statements, year ending 30 June 2002 (just prior to BZ sale):

Accounting Policies – note (h)

“Transfer fees
In accordance with FRS 10 player registrations are capitalised and written off over the period of the player’s contract”

Net Book value at 30 June 2002 (Intangible Fixed Assets) was only - £96,487.

Player valuations are not allowable.

 

[Pavilionaire]

The 2002/03 accounts are not currently showing on the Companies House website, meaning they were either lodged right on the deadline or submitted late. In my experience the time lag between submission and appearing on the Companies House website is normally less than one week.

I hope they were not submitted after the 30th April 2004 deadline, or the club will be due for a fine.

Also, I agree that the bleak picture painted by these accounts does support the idea that as long as we stay in Withdean we're stuffed.

Surely one of the strongest Pro-Falmer arguments is that Withdean is not financially viable, so why weren't the accounts produced a lot sooner to support this point? The club is lucky that a NO decision hasn't been taken in the meantime.

 

[Reading Posh]

Also, I agree that the bleak picture painted by these accounts does support the idea that as long as we stay in Withdean we're stuffed.

Surely one of the strongest Pro-Falmer arguments is that Withdean is not financially viable, so why weren't the accounts produced a lot sooner to support this point? The club is lucky that a NO decision hasn't been taken in the meantime.

Hang on, a club could survive at Withdean - I think what I'm hearing is that no one wants to survive at Withdean.

The "not financially viable" point doesn't meet current planning regulations, I think.

 

[Publius Ovidius]

it could, but these figures back up what is being said that it is financially unviable.

Would it cost 40 million to redevelop withdean and enlarge the bridge/tunnell as some are suggesting (FG?) possibly not, but I would suggest that the development loans/grants etc would not be given based on the current scenario

 

[34064 Fighter Command]

A non-league, non-professional club, with greatly reduced costs, COULD survive at Withdean.

In fact, remove all the temporary stands, the turnstiles, the PA, the stewarding, the catering, hospitality suites etc etc & costs would be greatly reduced.

However, capacity would then be restricted to about 1,500 in the North Stand only. On that basis, we'd be thrown out of the league anyway.

Yeah, I suppose Withdean 2000 could survive at Withdean. But not a professional football league club.

 

[Reading Posh]

And there was me thinking you could cut the wage bill

 

[balloonboy]

Surely one of the strongest Pro-Falmer arguments is that Withdean is not financially viable, so why weren't the accounts produced a lot sooner to support this point? The club is lucky that a NO decision hasn't been taken in the meantime.

I would be amazed if the full details were not supplied as part of the information given to the ODPM by 9 April (or possibly well before then). Let's give the club some credit for being able to get that right!

 

[The Large One]

Details were submitted to the Inquiry about Withdean lack of appropriateness. The year ending June 2001's accounts (the current ones at the time) probably would or could have been one of the sources of evidence.

 

[The Large One]

And there was me thinking you could cut the wage bill

Well, we do have a TAD more ambition than considering the idea of keeping ourselves out of Division 3 a total success.

 

[34064 Fighter Command]

And there was me thinking you could cut the wage bill

That's what Belloti and Archer did - it nearly put us in the Conference ( fortunately Steve Gritt thought differently ).

Like I said, a NON-PROFESSIONAL club could survive at Withdean. I think that would include cutting the wage bill !

 

[Incredigull]

Bouncy

 

[London Irish]

Yes… definitely.

Financial Statements, year ending 30 June 2002 (just prior to BZ sale):

Accounting Policies – note (h)

“Transfer fees
In accordance with FRS 10 player registrations are capitalised and written off over the period of the player’s contract”

Net Book value at 30 June 2002 (Intangible Fixed Assets) was only - £96,487.

Player valuations are not allowable.

A small point, but I thought player valuations do appear on the balance sheet, the valuation set by the transfer fee you paid, I forget what that was for Zamora, £100K?, and then that amount is written off with depreciation every year in the profit and loss account over the lifetime of the contract.

It's all accountancy ruses really, eg. Beckham wouldn't have appeared on ManU's balance sheet because no transfer fee was paid for him but that useless heap of shite Veron would have because of the amount they lashed out on him.

I imagine the £96k in intangible fixed assets is made up of the bits of the transfer fees for the likes of Cullip and co. that haven't yet been fully depreciated, or in accountancy jargon, amortised.

 

[perseus]

This roll-over relief. Just how long does it last?

Seriously, cannot the tax bill be offset against the the new seats for Withdean