How on earth can we be losing £8 million a year?

[Herr Tubthumper]

IF we're losing 8m a year it's almost certainly guaranteed to be due to aggressive expansion of the stadium. And if it isn't, then we might as well pack it in right now and go back to Withdean.

I am no expert but I thought stadium expansion is a capital expenditure and therefore not included in this 8m which is profit and loss on operating.

 

[PILTDOWN MAN]

Reading the last few pages, you would think it all come down to the pies.

If they sold headache tablets they would make money for sure because I appear to banging my head against the wall!

 

[Chicken Runner61]

And what are they.

Sorry but when a company ask another to supply it., it gives out it requirements, that company responds and only then if the first company is happy that its requirements can be fulfilled which would be cost and supply mainly then a deal is struck. The first company would not be interested in the other companies problems etc only that their service is as agreed. If it isn't its a breach and good bye.

Well isn't that exactly why the Albion won't be making the sort of money you think they are out of the deal?
The deal has to suit both parties or the contract is doomed!

 

[u'vebeenamexed]

No, I don't think they have. I read the programme yesterday in the hope of more detail, but there really wasn't any. I don't know whether TB comments refer to last calendar year, last season or last financial year (although last seemed least likely from way he seemed to be talking exclusively about Amex).

One of the most disappointing things about yesterdays programme was that it made no effort to explain how the loss was made. 3 seperate articles asking us to spend more at the Club and why we need to, yet nothing about a breakdown of losses.

 

[Chicken Runner61]

Reading the last few pages, you would think it all come down to the pies.

Yeah some people think selling 12000 pies makes £10m a year

 

[Chicken Runner61]

I think you are getting confused I'm afraid.

We are the sodding supermarket in this example so made £1 less our costs (A shelf to put it on!). The profit on the 12p is the winemakers problem. Think you need to read up a bit more on selling stuff.

Did your businesses go bust by any chance?

 

[seagullsovergrimsby]

So, we are losing 8m a year to fund a team to make it to the Premiership where we will almost certainly make even greater loses. Can someone tell me what the point of all this is.

Get into the Premier League and the losses turn into profit. Increased TV money from next season means a £100M payday. Providing you don't go crazy and buy expensive players , pay sensible wages and have relegation clauses in contracts (like Blackpool did) it doesn't matter if you get relegated after a season because of the 4 years generous parachute payments.

 

[PILTDOWN MAN]

Did your businesses go bust by any chance?

Sorry? Don't think so.

 

[Steve.S]

Would not an option be doing away with the catering and sticking units in their place. Charge huge ground rents like airports do and then they are not responsible for staffing etc. I can not see huge profits in beer and pies.

 

[seagullsovergrimsby]

Isn't the profit margin on the pies affected by wastage ? Do you have to allow a percentage of pies that will be thrown away because they fall on the floor , or get damaged , cannot be reheated after being unsold ?

 

[Lord Bracknell]

I've always assumed the scheme pays for itself, and I think it should. Our return ticket to HH instead of Falmer costs £3 less for me and my son and therefore more or less equates to the transport levvy.

If you started your journey at Haywards Heath, the return fare to Falmer (bought online) would be £5.80. There are plenty of folk getting a cheaper journey thanks to the Club's Travel Scheme. The question is: How much (if anything) do the Club pay Southern to achieve this discounted fare?

The Brighton - Falmer return rail fare is £2.95, if bought on-line, btw.

 

[Chicken Runner61]

Isn't the profit margin on the pies affected by wastage ? Do you have to allow a percentage of pies that will be thrown away because they fall on the floor , or get damaged , cannot be reheated after being unsold ?

No the club make £12 on each £3.50 pie and if they don't the supplier gets to eat any wastage

 

[Mutts Nuts]

I'm finding this very hard to beieve. We have average home League attendance of 25.5k and 22k ST holders (both highest in FL i think). Our ticket prices put us about midway in the Championship scale. Gus says our playing budget puts us no higher than 12th in Championship (think he may have said as low as 18th recently). Our net spending on transfers last season was about £2.8 million on reported figures (harder to know this year but appears much less). We have no debt that I know of (and therefore no debt interest payments). TB loaned the club about £80 million to build the stadium, which is an interest free loan not due for repayment until 2023.

So, how on earth can we be making an "operating" loss of £8 million a year?

Wages, the squad will be seriously trimmed down next season so don`t expect promotion anytime soon

 

[PILTDOWN MAN]

Right Mr Chicken I'll make easy for you to understand.

I have a business I want to sell beer and pies.

I go to suppliers and the best deal I get for the quality product I've got to sell is as follows

Pie £2.00 per pie- delivered and ready to re-heat.
Beer harveys £1.00 per pint delivered

I invest in an oven and some plastic glasses and a person to serve.

I sell the pie for £4
I sell the beer for £2

I sell 100 of each in one hour.

gross takings are £600
net taking are £300
costs are £100
Profit £200 yipee

 

[The Large One]

Isn't the profit margin on the pies affected by wastage ? Do you have to allow a percentage of pies that will be thrown away because they fall on the floor , or get damaged , cannot be reheated after being unsold ?

The pies are bought from the suppliers by the catering company, not the club.

If there's any wastage, it's theirs to deal with.

 

[Herr Tubthumper]

Get into the Premier League and the losses turn into profit. Increased TV money from next season means a £100M payday. Providing you don't go crazy and buy expensive players , pay sensible wages and have relegation clauses in contracts (like Blackpool did) it doesn't matter if you get relegated after a season because of the 4 years generous parachute payments.

Okay. That annual Touche Prem footy finance report is doom and gloom though. Which Prem clubs made a profit last season/year?

 

[Chicken Runner61]

Right Mr Chicken I'll make easy for you to understand.

I have a business I want to sell beer and pies.

I go to suppliers and the best deal I get for the quality product I've got to sell is as follows

Pie £2.00 per pie- delivered and ready to re-heat.
Beer harveys £1.00 per pint delivered

I invest in an oven and some plastic glasses and a person to serve.

I sell the pie for £4
I sell the beer for £2

I sell 100 of each in one hour.

gross takings are £600
net taking are £300
costs are £100
Profit £200 yipee

Right Mr Piltdown I will make it easy for you

The Albion don't sell the pies they sell a concession to sell the pies.

They don't have the problem of spoilt pies, or cancelled games - they do have to allow the concession some allowance for this and they may have to provide equipment and staff so that the concession can operate.
They might charge the concessions £10k a season to operate and may make nothing on the food sold. The price of the concession is normally based on the attendance expected over a season and speculation on how many pies will be sold.
I doubt very much the club count how many pies are produced and sold each game because the profit on each actual pie is minimal.

The bit the club are selling is the cost you left out of your simplistic calculation which is the venue and the footfall. If you allowed those overheads your £200 profit disappears

I should add that I have no idea how much a concession at the amex costs it might be £100k a season but my point is that the profit on a pie to the Albion is not much as people like you think it is. Its the sale of the concession that they concentrate on.

 

[timbha]

We don't sell pies, we rent out space to a company that does!!!!!!

 

[PILTDOWN MAN]

Right Mr Piltdown I will make it easy for you

The Albion don't sell the pies they sell a concession to sell the pies.

They don't have the problem of spoilt pies, or cancelled games - they do have to allow the concession some allowance for this and they may have to provide equipment and staff so that the concession can operate.
They might charge the concessions £10k a season to operate and may make nothing on the food sold. The price of the concession is normally based on the attendance expected over a season and speculation on how many pies will be sold.
I doubt very much the club count how many pies are produced and sold each game because the profit on each actual pie is minimal.

The bit the club are selling is the cost you left out of your simplistic calculation which is the venue and the footfall. If you allowed those overheads your £200 profit disappears

I should add that I have no idea how much a concession at the amex costs it might be £100k a season but my point is that the profit on a pie to the Albion is not much as people like you think it is. Its the sale of the concession that they concentrate on.

With that argument then it would be irrelevant to the club how many pies were sold all they would do is charge for the use of the premises and the staff.
So if the club charged £100 000. Removing the cost of staff and electricity plus the cost of leasing/buying the equipment the rest is profit. Brighton then couldn't give a shit what profit the pie makes. They make their money from providing the premises effectively leasing the outlet.

 

[Brovion]

Point is - the accounts haven't been lodged at Companies House yet.

When they have, people can slaver over them to their hearts' content. Until then, the quizzical head-scratching will only ever lead to... more head-scratching.

I'm going to wait until the figures are out, then charge El Presidente on here to translate them into plain English.

The thread should have ended here, everything else (especially the pie money) is just idle speculation.

I am slightly worried though with all the people saying "ok, we're making a loss now, but it's not a problem because when we get into the Premier League everything will be ok." That attitude sums up everything that's wrong with football. What do we do with all the accumulated losses if we don't get into the Prem and how long do we keep running at a loss for?