[Albion] Question re money next year

[KZNSeagull]

Quite correct, this latest tranche of shares were issued in Sept 2012 so in the current financial year, possibly because club liabilities exceeded asset value.
Historically, the vast majority of TB's shareholding (currently 91% of the total issued) was acquired by conversion of debt, starting with the £16m or so when he became the majority shareholder and chairman. Under the FFP rules, the maximum share conversion limit for 2013/14 is £5m; however, I think this relates to covering "revenue" losses so he would be able to continue with this approach with debt from the stadium/training ground builds as these are excluded from FFP.

Yup that is correct, but there is an acceptable deviation as well of 3m for 2013/14, making 8m in total. This reduces to 3m with an acceptable deviation of 2m from 2015/16 onwards (Total 5m). For the season just finished, the total is 10m.

In response to the OP, investment in club community schemes and youth development (as defined by the Elite Player Performance Plan) are not included in FFP. http://www.football-league.co.uk/page/FLExplainedDetail/0,,10794~2748246,00.html

I am not an accountant, but it says that FFP does not include the "profit affecting element of the purchase, sale and depreciation of fixed assets excluding players (ie the club's stadium)". How this effects TB I am not sure, but my interpretation is that as he has paid for the stadium already, he can continue to convert that loan into shares outside of FFP as he has already invested that money in the club. Depreciation on the stadium would not affect FFP, so clubs cannot depreciate their stadium by vast amounts one season because they have grossly overspent on wages etc (again that is how I interpret it, so maybe wrong!)

 

[nwgull]

Max losses (or share conversion) are 5m + 3m deviation. Anyone know why they don't just say max loss of 8m?

 

[Captain Sensible]

We aren't going to make a loss of 8million this last season. Record crowds, higher prices all around. 6000 more season tickets. Streamlining day to day running.

 

[Garage_Doors]

Surely the idea is that the 'staff' take a paycut, and the ridiculous pay that footballers receive (Should Mackail-Smith really be able to afford an Audi R8?) finally starts to recede...

That's like saying if you earn £250 a week, should you be a able to afford a £1000 car.
Besides how do you know he's not just renting it (lease hire)
It's not an expensive car for what he earns.

 

[KZNSeagull]

We aren't going to make a loss of 8million this last season. Record crowds, higher prices all around. 6000 more season tickets. Streamlining day to day running.

That's not what the club said earlier in the season. Losses were forecast to be very similar.

 

[nwgull]

That's not what the club said earlier in the season. Losses were forecast to be very similar.

The cynic in me says that that is to make price rises a bit more palatable.

 

[Springal]

Surely the idea is that the 'staff' take a paycut, and the ridiculous pay that footballers receive (Should Mackail-Smith really be able to afford an Audi R8?) finally starts to recede...

£1500 a month on a lease isn't that much really. £18k a year. About 5 times more than I pay for my car, and he obviously benefits from some tax breaks there I imagine, so if hes on about 4-5 times me, its not that unrealistic surely.

 

[Alex Alex Dawson oo! oo!]

We aren't going to make a loss of 8million this last season. Record crowds, higher prices all around. 6000 more season tickets. Streamlining day to day running.

4,199 as of 29/11/2012, when last years accounts were signed off, which may generate around £1.3m after deduction of VAT and the transport element. I'd be astounded if the staff costs (£14.7m in 2011/12) haven't increased significantly and then there's player purchases, amortisation etc to consider. Paul Barber said on the Albion Roar in early April that the budgeted loss for this season was approx £8m, albeit lower than the £9.1m that was posted last year.