The financial challenges of the Championship: Bristol City lose £14.4m

[Bozza]

Annual Accounts

"City's annual accounts are now available online, showing a loss of £14,406,061 on the year ended May 31st 2012.

This is compared to a loss of £11,454,525 for the previous financial year.

During the last financial year the turnover dropped slightly from £11.9m to £11.8m, but staff costs rose from £15.9m to £18.6m."

This strikes me as quite a remarkable figure - no obviously high wage earners and a decent bedrock of support, despite poor league performance. It illustrates that the Championship is ridiculously expensive to be competitive in, and just how important the Albion's auxiliary income streams are.

 

[deletebeepbeepbeep]

Some of it might be down to the Stadium project?

 

[Finch]

I'm obviously missing something. 11.8m TURNOVER ... not profit, and you let your STAFF costs rise nearly 3 mil to 18.6m. Is there a sugar daddy behind the scenes? How can they think that's sustainable? What new contracts were they signing thinking .. you know what we're only paying ourselves 150% of what we turnover, lets give people a rise.

What is it I've overlooked?

 

[clippedgull]

20% rise in staff costs when they are losing millions. I wonder how that arose?

 

[Biscuit]

I'd take Fontaine off them in Jan then! And I've always liked Bulldock, or perhaps 6ft 3' Stead 'could do a job'.

 

[deletebeepbeepbeep]

20% rise in staff costs when they are losing millions. I wonder how that arose?

Staying on the Stadium theme, architects, lawyers, barristers, constractors, consultants. They had their Public Inquiry last year (which Martin spoke at), that would have cost an absolute fortune.

 

[saafend_seagull]

I'd take Fontaine off them in Jan then! And I've always liked Bulldock, or perhaps 6ft 3' Stead 'could do a job'.

Fontaine is the worst player to play at the amex this season, no thanks.

 

[StonehamPark]

 

[tinycowboy]

Ahh - a thread for us accountants! The penultimate para of the "Going concern" section of note 1 to the accounts sounds a tiny bit hopeful. It's basically up to Stephen Lansdown to keep this club going. He can choose to claim it back or opt (I think) to convert it into share capital, which would not be repayable. Haven't looked at BHA accounts - possibly the same claim could be levelled at us, although we do have a realistic chance of growing revenues, through increased seating and also through stuff other than matchday and season ticket revenue. Interesting that they're not recognising any deferred tax asset - this means that they do not expect/cannot reasonably show any prospect of future profitability. Staff costs are up possibly because they've taken on nine more office, management and ground staff. They've got three more players, but it's also possible that the players have taken a payrise and driven staff costs up. HMRC are owed just under £1m. Their net current liabilities figure looks scary. Cash flow is terrible - overdraft has increased and additional loans taken on, but, as has been said above, if you're paying wages and salaries far in excess of revenue, your business model is broken and you can expect things to be very bad....

 

[Withdean Wanderer]

If Bristol have lost that much then I dread to think what our figures are going to look like

 

[JOLovegrove]

This can't be right. Have we got a thread on this very board about another Championship team, that isn't Palace? Surely we must ban the op for that.

 

[deletebeepbeepbeep]

If Bristol have lost that much then I dread to think what our figures are going to look like

I'm doubtful they'll be in the positive (We will have to judge Barber on this in future years but perhaps not the last accounting period, or the next one (this year)) but they certainly wont he as much as a 12m loss.

 

[somerset]

If Bristol have lost that much then I dread to think what our figures are going to look like

Apart from our startup/building costs, why do you think ours will be something to dread? We had 19k season ticket holders, they have about 9k, our crowds averaged 20k theirs something in the region of 12k.

 

[Westdene Seagull]

If Bristol have lost that much then I dread to think what our figures are going to look like

And yet, for some bizarre reason, you want the club to throw a load of money away by sacking Poyet !

 

[Withdean Wanderer]

Apart from our startup/building costs, why do you think ours will be something to dread? We had 19k season ticket holders, they have about 9k, our crowds averaged 20k theirs something in the region of 12k.

Our startup costs are going to be HUGE.
19,000 x 500 = £9.5 million

The staff recruitment and training process will have cost us a small fortune, think of all the tweaks that have been made to resolve small problems, the additional building works, the fees to suppliers and partners e.g. Southern rail etc etc. Throw in about £5 million in transfer fees and regardless of how many pies are sold, I think it would be ambitious to expect anything less than a substantial loss.

The biggest clue that this is the case is probably the board restructure last season. Ken Brown left of the blue to be replaced by Barber, but there was also a new Finance Director appointed.

 

[tinycowboy]

Our startup costs are going to be HUGE.
19,000 x 500 = £9.5 million

The staff recruitment and training process will have cost us a small fortune, think of all the tweaks that have been made to resolve small problems, the additional building works, the fees to suppliers and partners e.g. Southern rail etc etc. Throw in about £5 million in transfer fees and regardless of how many pies are sold, I think it would be ambitious to expect anything less than a substantial loss.

The biggest clue that this is the case is probably the board restructure last season. Ken Brown left of the blue to be replaced by Barber, but there was also a new Finance Director appointed.

We'll have to see how much of the "one-off" costs and projects have been/can be capitalised, and over how many years they will be amortised or depreciated - we could be looking at a substantial drain on the club's profit for a number of years, although this will be an accounting issue - it's the actual cash flow that will be important for us in the short and medium term, unless we want to be going cap in hand to TB and/or the banks.....

 

[somerset]

Our startup costs are going to be HUGE.
19,000 x 500 = £9.5 million

The staff recruitment and training process will have cost us a small fortune, think of all the tweaks that have been made to resolve small problems, the additional building works, the fees to suppliers and partners e.g. Southern rail etc etc. Throw in about £5 million in transfer fees and regardless of how many pies are sold, I think it would be ambitious to expect anything less than a substantial loss.

The biggest clue that this is the case is probably the board restructure last season. Ken Brown left of the blue to be replaced by Barber, but there was also a new Finance Director appointed.

I have no doubt that the startup costs are a heavy weight to carry, but not a surprise to anyone, so will have been factored in. Dont forget that the club originally budgeted on a first season break even crowd average of 12k I believe, so we have exceeded by some margin in that area. We had TV income, live broadcast income, advertising revenue, corporate investment via the 1901, boxes and restaurant activities, plus 20k every week buying food, drink, programmes, merchandise from the shop, hattrick cards. 30k replica shirts was one figure published for last season, whats the margin on those at £40 a pop?.... the turnover vs staff costs will be the key figure, I dont think it will be too bad myself, but what do I know?

When are the figures going to be viewable?

 

[Withdean Wanderer]

I have no doubt that the startup costs are a heavy weight to carry, but not a surprise to anyone, so will have been factored in. Dont forget that the club originally budgeted on a first season break even crowd average of 12k I believe, so we have exceeded by some margin in that area. We had TV income, live broadcast income, advertising revenue, corporate investment via the 1901, boxes and restaurant activities, plus 20k every week buying food, drink, programmes, merchandise from the shop, hattrick cards. 30k replica shirts was one figure published for last season, whats the margin on those at £40 a pop?.... the turnover vs staff costs will be the key figure, I dont think it will be too bad myself, but what do I know?

When are the figures going to be viewable?

Haven't heard that 12k figure since the Dick Knight era. Budgets would have been long sinced revised - the 12,000th season ticket was sold long before the Amex building work was complete.

 

[deletebeepbeepbeep]

The figures for the first year at the Amex will be published sometime late in the summer / August time I think.

 

[GreersElbow]

Ahh - a thread for us accountants! .

There's something quite relaxing about reading year-end accounts..