I'm no accountant.......

[Matt Richards]

As it happens I am an accountant an am happy to explain why we made a loss again last year (as will be shown in the accounts to 30 June 2013 when they are published any day now).

Whilst not a conspiracy the loss we made in 2013 is slightly different to that we made in 2012. Here goes.............

In 2012 we had revenue of £22.2m and incurred expenses of £31.6m. Of these expenses some of the larger components were as follows.

Wages - £14.6m
Amortisation of player contracts - £2.1m
Depreciation - £0.9m

The last two components are quite interesting because these are due to the way accounting works as opposed to cash flowing in and out of the business in that year. Players transfer fees are put into the books when a player signs but only affect the profit over the period of their contract as opposed to all at once. In the year to 30 June 2012 for example the accounts show we spent £4.5m on transfers but only £2.1m of that hit the profit and loss account.

The biggest factor is the depreciation number. Again what happens here is that the asset is recorded in the books but only affects the profit and loss account over the life of the asset. Interestingly in 2012 there was no depreciation recorded in relation to the stadium which per the books cost £101m. This was because there was still work being done on it so it was not yet finished.

So the differences to 2013 are likely to be that revenue will increase by about 20% (due to their being higher attendances as the extra seats were put in), wages will go up slightly (probably not as much as the 20%) but the profit will be much more affected by the depreciation being charged on the stadium. If the life of the stadium is deemed to be 50 years then that will be a £2m hit to the profit every year. If the life is shorter then the depreciation will be higher.

In short from a cash flow perspective 2103 will almost certainly be better than 2012 (as revenue rose by more than expenses) but the loss remains the same as there was an additional amount for depreciation (somewhere between £2m and £4m) that was not there in 2012.

Not a conspiracy but a quirk of accounting!

 

[AZ Gull]

As it happens I am an accountant an am happy to explain why we made a loss again last year (as will be shown in the accounts to 30 June 2013 when they are published any day now).

Whilst not a conspiracy the loss we made in 2013 is slightly different to that we made in 2012. Here goes.............

In 2012 we had revenue of £22.2m and incurred expenses of £31.6m. Of these expenses some of the larger components were as follows.

Wages - £14.6m
Amortisation of player contracts - £2.1m
Depreciation - £0.9m

The last two components are quite interesting because these are due to the way accounting works as opposed to cash flowing in and out of the business in that year. Players transfer fees are put into the books when a player signs but only affect the profit over the period of their contract as opposed to all at once. In the year to 30 June 2012 for example the accounts show we spent £4.5m on transfers but only £2.1m of that hit the profit and loss account.

The biggest factor is the depreciation number. Again what happens here is that the asset is recorded in the books but only affects the profit and loss account over the life of the asset. Interestingly in 2012 there was no depreciation recorded in relation to the stadium which per the books cost £101m. This was because there was still work being done on it so it was not yet finished.

So the differences to 2013 are likely to be that revenue will increase by about 20% (due to their being higher attendances as the extra seats were put in), wages will go up slightly (probably not as much as the 20%) but the profit will be much more affected by the depreciation being charged on the stadium. If the life of the stadium is deemed to be 50 years then that will be a £2m hit to the profit every year. If the life is shorter then the depreciation will be higher.

In short from a cash flow perspective 2103 will almost certainly be better than 2012 (as revenue rose by more than expenses) but the loss remains the same as there was an additional amount for depreciation (somewhere between £2m and £4m) that was not there in 2012.

Not a conspiracy but a quirk of accounting!

I think I am right in saying that the stadium depreciation charge is excluded for the purposes of FFP.

Quoting from the Football League website:-

The Fair Play Result is based on the club's profit or loss before tax with the exception of:

• Investment in Youth Development (as defined in the Elite Player Performance Plan)
• The profit affecting element of the purchase, sale and depreciation of fixed assets excluding players (e.g. a club's stadium)
• Investment in a club's Community Scheme
• Promotion related bonus payments

 

[Napper]

So in summary , how f c ked are we then on a scale of 1 - 10 ?

 

[Return of the Rev]

as it happens i am an accountant an am happy to explain why we made a loss again last year (as will be shown in the accounts to 30 june 2013 when they are published any day now).

Whilst not a conspiracy the loss we made in 2013 is slightly different to that we made in 2012. Here goes.............

In 2012 we had revenue of £22.2m and incurred expenses of £31.6m. Of these expenses some of the larger components were as follows.

Wages - £14.6m
amortisation of player contracts - £2.1m
depreciation - £0.9m

the last two components are quite interesting because these are due to the way accounting works as opposed to cash flowing in and out of the business in that year. Players transfer fees are put into the books when a player signs but only affect the profit over the period of their contract as opposed to all at once. In the year to 30 june 2012 for example the accounts show we spent £4.5m on transfers but only £2.1m of that hit the profit and loss account.

The biggest factor is the depreciation number. Again what happens here is that the asset is recorded in the books but only affects the profit and loss account over the life of the asset. Interestingly in 2012 there was no depreciation recorded in relation to the stadium which per the books cost £101m. This was because there was still work being done on it so it was not yet finished.

So the differences to 2013 are likely to be that revenue will increase by about 20% (due to their being higher attendances as the extra seats were put in), wages will go up slightly (probably not as much as the 20%) but the profit will be much more affected by the depreciation being charged on the stadium. If the life of the stadium is deemed to be 50 years then that will be a £2m hit to the profit every year. If the life is shorter then the depreciation will be higher.

In short from a cash flow perspective 2103 will almost certainly be better than 2012 (as revenue rose by more than expenses) but the loss remains the same as there was an additional amount for depreciation (somewhere between £2m and £4m) that was not there in 2012.

Not a conspiracy but a quirk of accounting!

your all in it together

 

[El Presidente]

I think I am right in saying that the stadium depreciation charge is excluded for the purposes of FFP.

Yup.

 

[El Presidente]

As it happens I am an accountant an am happy to explain why we made a loss again last year (as will be shown in the accounts to 30 June 2013 when they are published any day now).

Whilst not a conspiracy the loss we made in 2013 is slightly different to that we made in 2012. Here goes.............

In 2012 we had revenue of £22.2m and incurred expenses of £31.6m. Of these expenses some of the larger components were as follows.

Wages - £14.6m
Amortisation of player contracts - £2.1m
Depreciation - £0.9m

The last two components are quite interesting because these are due to the way accounting works as opposed to cash flowing in and out of the business in that year. Players transfer fees are put into the books when a player signs but only affect the profit over the period of their contract as opposed to all at once. In the year to 30 June 2012 for example the accounts show we spent £4.5m on transfers but only £2.1m of that hit the profit and loss account.

The biggest factor is the depreciation number. Again what happens here is that the asset is recorded in the books but only affects the profit and loss account over the life of the asset. Interestingly in 2012 there was no depreciation recorded in relation to the stadium which per the books cost £101m. This was because there was still work being done on it so it was not yet finished.

So the differences to 2013 are likely to be that revenue will increase by about 20% (due to their being higher attendances as the extra seats were put in), wages will go up slightly (probably not as much as the 20%) but the profit will be much more affected by the depreciation being charged on the stadium. If the life of the stadium is deemed to be 50 years then that will be a £2m hit to the profit every year. If the life is shorter then the depreciation will be higher.

In short from a cash flow perspective 2103 will almost certainly be better than 2012 (as revenue rose by more than expenses) but the loss remains the same as there was an additional amount for depreciation (somewhere between £2m and £4m) that was not there in 2012.

Not a conspiracy but a quirk of accounting!

But if you take a look at the club accounts, (as opposed to those of the group), then the stadium and facilities are excluded, as the land and buildings belong to The Community Stadium Company Limited, and not Brighton and Hove Albion Limited.

Therefore the club will not report any depreciation.

 

[Tom Hark Preston Park]

We have a subsidised travel service that no other club has.

They could scrap that overnight.

 

[Thunder Bolt]

They could scrap that overnight.

They are cutting back with the loss of the Specials.

 

[Tom Hark Preston Park]

They are cutting back with the loss of the Specials.

Seems to me the travel subsidy should be more finely tuned, with maybe an opt-out clause. Not sure how the funding works, but if its a blanket subsidy within the designated area, then very many people are already covered by rail season tickets. For example, I've got a Brighton - London Zones 4-6 monthly. If the club are having to pay the rail companies to transport me nominally from Haywards Heath to Brighton then they're paying for something that's already paid for. And in turn they're passing that unnecessary expense on to me. Dunno, travel subsidy suits some, but not others. Maybe we could be offered the option of STs with or without travel subsidy at a suitable price differential. That would seem fairest.

 

[Barrel of Fun]

They are cutting back with the loss of the Specials.

For a minute, I thought you were talking about the Seagulls Specials (FC) and was about to launch in to a tirade about that.

 

[drew]

Seems to me the travel subsidy should be more finely tuned, with maybe an opt-out clause. Not sure how the funding works, but if its a blanket subsidy within the designated area, then very many people are already covered by rail season tickets. For example, I've got a Brighton - London Zones 4-6 monthly. If the club are having to pay the rail companies to transport me nominally from Haywards Heath to Brighton then they're paying for something that's already paid for. And in turn they're passing that unnecessary expense on to me. Dunno, travel subsidy suits some, but not others. Maybe we could be offered the option of STs with or without travel subsidy at a suitable price differential. That would seem fairest.

Can't believe with all the data available that the club pay a subsidy equivalent to every fan travelling in from the outer reaches of the travel zone. Firstly, they have a good idea how many use the P & R. Secondly, I would assume they use the location of sth as a guide to from where they might travel from. PB has already stated that the vast majority of the fans come from the city area so that must be taken into account when agreeing subsidies with the bus and rail companies. Of course what they don't know is whether someone in Burgess Hill like myself travels by train or uses the P & R!

 

[Petunia]

Seems to me the travel subsidy should be more finely tuned, with maybe an opt-out clause. Not sure how the funding works, but if its a blanket subsidy within the designated area, then very many people are already covered by rail season tickets. For example, I've got a Brighton - London Zones 4-6 monthly. If the club are having to pay the rail companies to transport me nominally from Haywards Heath to Brighton then they're paying for something that's already paid for. And in turn they're passing that unnecessary expense on to me. Dunno, travel subsidy suits some, but not others. Maybe we could be offered the option of STs with or without travel subsidy at a suitable price differential. That would seem fairest.

Wouldn't fancy the queues while all the tickets were checked

 

[El Presidente]

They are cutting back with the loss of the Specials.

Ghost Town is still my favourite number one of all time.

 

[seagullsovergrimsby]

When are the accounts due to be published ?

 

[halbpro]

Seems to me the travel subsidy should be more finely tuned, with maybe an opt-out clause. Not sure how the funding works, but if its a blanket subsidy within the designated area, then very many people are already covered by rail season tickets. For example, I've got a Brighton - London Zones 4-6 monthly. If the club are having to pay the rail companies to transport me nominally from Haywards Heath to Brighton then they're paying for something that's already paid for. And in turn they're passing that unnecessary expense on to me. Dunno, travel subsidy suits some, but not others. Maybe we could be offered the option of STs with or without travel subsidy at a suitable price differential. That would seem fairest.

That was the old system with travel vouchers wasn't it? It was simply impractical to enforce.