Boro 2023 Accounts

indeedido said:
The latest Accounts do not reflect the welcome conversion of debt to equity by Parent. This was a massive formal action.

The Accounts for Year to June 30th 2023

A Nett Loss of £4.5m is a £10.9m improvement on the £15.3m loss for the previous year. This is obviously very good.
The biggest factor was the £22.5m Profit from Sales of Registrations (the most volatile measure in the P&L).
Spence and Tavernier's reported fees were all accounted for as pure profit (as I said they would Rob). When the payments are made is a cash flow dimension. The Published Club accounts don't need to provide Cash Flow reports.

Home League ticket sales were +£2.8m, but the club made -£2.7m on Cup ticket sales.
The club drove +£1.2m on Commercial/Sponsorship, +£0.4m on Merchandising and +£0.5m on Broadcasting. Better results for Bausor.
Overall Turnover +£1.7m or +6.3%. (Cup windfalls are just that and shouldn't be budgeted for).

Cost of Sales was £45.0m +£9.7m versus previous year or +27.4%.
The Wage Bill within Cost of Sales was +£1.2m at £29.6m or +4.2%.
There is no further breakdown of Cost of Sales (never is), but this is where the Total Cost of Loan Players will sit.
It is not clear what else makes up the Total Cost of sales, but the Non Wage element was £15.4m +£8.5m versus previous year or +123.2%
It is too simplistic to say, but directionally true that the 6 loans (Steffen, Giles, Muniz, Mowatt, Archer and Ramsey) cost £8.5m more (fees and wages) for the season than the previous year's loans. This seems believable, but there could of course be other Cost of Sales factors that reduce their impact.
Amortisation of contracts was £9.1m for the year +£2.8m, or +45.1%.
The Club also took a £3.6m Impairment charge against Player Valuation, which was £1.8m more than they took the previous year. This appears to be writing off Payero value as he was by far the biggest recent spend? (This would indicate a scope for his subsequent sale to be reflected as profit in next Accounts).
Other Operating Income was £3.9m or +£2.7m or +218.7% versus previous year. This increase was purely down to the £2.7m settlement fee from Morris.

Profit before Tax (Start point for P&S/FFP) was -£6.4m, so £13.1m better than previous year.
Despite losing money, as usual the Club benefitted from Group Tax management by £1.9m (£2.2m less than they did in 2022).
There was no other Comprehensive Income, so Total Comprehensive Income was -£4.5m, £10.9m better than previous year.
The Club still loses money, just much less, based on better Commercial performance and sale of players without book value.

This is reflected in the Balance Sheet.
The Club have lost £250.3m since 1986.
They owed Group £148.9 at 30th June 2023 an increase of £6.5m. (Group converted £106.7m of this Debt to new Equity in Oct 2023. We will see this in the Balance Sheet of the next accounts).
Negative Nett shareholder value obviously increased (by the £4.5m Loss of Total Comprehensive Income) to -£136.4m. This again will collapse, following the Debt to Equity move Gibson made, and be reflected in the next Accounts.

It is worth noting our entire squad at 30th June 2023 had a book value of just £10.6m. Clearly that has risen following the summer acquisitions, but I would estimate Hackney alone to have a market value significantly more than the entire book value of our current squad, let alone the one at June 30th 2023.
This is a very good position. Fry, Jones, Hackney, Coburn, all have no book value, but huge combined market value.
Championship clubs will all lose money. We can't change the environment we operate in. Promotion allows us to.
In real terms MFC have lost £59.1m in just 3 years, offset by Tax magic by Group of £9.6m.
Without promotion, the club needs either continued Equity injection, or continued Profit from player sales to maintain a competitive playing squad and budget.

Profit & Sustainability (FFP)

The position here is much more rosy in the crazy world where huge losses are permissable.
The allowances that can be added back to Profit Before Tax are:
Community Spend, Women's Football, U21/Academy spend, Depreciation of Fixed Assets, Covid Allowance and Fixed Asset Revaluation Surplus.
The calculation is a rolling 3 year one. Covid rules mean we average 2020 and 2021 to provide 2021 input.
Profit Before Tax for 3 years to June 30th 2023 is indisputably -£59.1m
Community Spend at £1m pa is c £3m.
Women's Football currently Nil.
U21/Academy for Cat A is £5m pa so c £15m.
Depreciation across 3 years is actually £8.7m.
Covid Allowance for those 3 years is £7.5m.
The P&S Nett Figure is thus c-£22.2m.
The Club is allowed to lose £15m on this measure.
The Club can also inject up to £24m in either Equity or Loans converting to equity, so the max permitted loss is £39m across the 3 years.
As I have already shown Group Undertakings increased by £6.5m, (which alone would have kept us within that £15m permitted loss).
The fact is it is clear that a large chunk of the Group Undertakings were convertible to Equity at some future point, so qualified as relief for FFP.
That Gibson O'Neill converted £107m of Loan to Equity shows the club have been kept nowhere near danger from an FFP perspective.

The really good news is that we lose the Covid ravaged history of 2020/21 in the 3 year calculation to 2024.
Turnover is on the rise, Squad market value is way above book and Gibson has injected the equity since these last accounts.

No real surprises in the Accounts, but overall very good progress and vitally, a massive injection by Gibson/Parent.
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Brilliant analysis.
 
Humpty said:
You’d rather not have to rely on unearthing an 8 figure talent or two every season to keep yourself afloat. As a means of progressing the squad yes of course but not keeping us solvent. Maybe that is just the nature of the beast now regardless.
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Yes. It is impossible in the current Championship to run a team challenging for promotion without making a significant loss on normal trading. We would need 30K fans per match and a wage bill less than Rotherham's to break even without player sales.
 
Bruce said:
Yes. It is impossible in the current Championship to run a team challenging for promotion without making a significant loss on normal trading. We would need 30K fans per match and a wage bill less than Rotherham's to break even without player sales.
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That pretty succinctly sums up life as a Championship Club without Parachute Payments, or a philanthropic/speculative owner who is shovelling equity/or loan converting to equity into a club they already own.
 
Just saw this post.
Thanks for that in depth analysis Indeedio. (y)

I wonder if anyone can provide figures showing how our current salary bill now compares to similar clubs?
Obviously things now feel a lot better than the post-PL seasons when we were getting iffy performances but carrying perhaps the largest wage bill in the league. Those were tough times for everyone.....especially the Chairman :oops:

Football industry has changed - not necessarily for the better - but it is what it is (thanks Mogga).
We seem to be getting our act together financially which is great.

One thing that got reported when we got relegated was that we didn't have relegation clauses in player contracts?
ie, I'm reading now its fairly typical that player salaries are cut by approx. 50% on relegation.
At the time this seemed rather incredible and meant that we had huge legacy contracts to pay up (does anyone know if these reports were true?)
I could believe this as the idea of relegation clauses is/was highly contentious.

Over the last few years it feels like we have hit ground zero and started again with our financial model.
It takes years for these previous playing contract terms to play out.
But we have run with a relatively thin squad for a good few years - until this summer really.
(remember the one/three month initial contract offered to Watmore.....starting without a recognised left back until Neil Taylor signed on a short term deal etc).

Time passing should have helped us move to the 'new approach'? I reckon those relegation clauses will now be in place?
Maybe Paddy McNair and Howson just a couple on the older deals?
Howson has re-signed since the 'old days' and it tends to be just 12month extensions so I guess no need for a relegation clause etc.

All-in-all it feels very positive.
It feels we are ahead of the game compared to most other Clubs in a similar position to ourselves.
It's a shame that money has pretty much ruined football (to think that despite strong transfer income we have lost £59 million over the last three years is absolutely crazy).

I'd like to think Carrick/Gibson/Scott are 'on the same page' regarding financial realties and the strategy going forward.
It feels like it's all good (then again I thought naiively that all was well behind the scenes with Wilder pre-BurnleyGate :()
Fingers crossed we now have proper 'teamwork' going on off the pitch as well as on it.

Thanks must go once again to Steve Gibson for his incredible support.
 
forest
Expanding my comment above it looks like Forest will struggle with some PL wages in the Championship if they go down.
I'd have thought that relegation clauses would be pretty standard these days?
Sounds like we didn't have them back in 2017 but then again we were getting all sorts of things wrong back then.
 
Badonde said:
Just saw this post.
Thanks for that in depth analysis Indeedio. (y)

I wonder if anyone can provide figures showing how our current salary bill now compares to similar clubs?
Obviously things now feel a lot better than the post-PL seasons when we were getting iffy performances but carrying perhaps the largest wage bill in the league. Those were tough times for everyone.....especially the Chairman :oops:

Football industry has changed - not necessarily for the better - but it is what it is (thanks Mogga).
We seem to be getting our act together financially which is great.

One thing that got reported when we got relegated was that we didn't have relegation clauses in player contracts?
ie, I'm reading now its fairly typical that player salaries are cut by approx. 50% on relegation.
At the time this seemed rather incredible and meant that we had huge legacy contracts to pay up (does anyone know if these reports were true?)
I could believe this as the idea of relegation clauses is/was highly contentious.

Over the last few years it feels like we have hit ground zero and started again with our financial model.
It takes years for these previous playing contract terms to play out.
But we have run with a relatively thin squad for a good few years - until this summer really.
(remember the one/three month initial contract offered to Watmore.....starting without a recognised left back until Neil Taylor signed on a short term deal etc).

Time passing should have helped us move to the 'new approach'? I reckon those relegation clauses will now be in place?
Maybe Paddy McNair and Howson just a couple on the older deals?
Howson has re-signed since the 'old days' and it tends to be just 12month extensions so I guess no need for a relegation clause etc.

All-in-all it feels very positive.
It feels we are ahead of the game compared to most other Clubs in a similar position to ourselves.
It's a shame that money has pretty much ruined football (to think that despite strong transfer income we have lost £59 million over the last three years is absolutely crazy).

I'd like to think Carrick/Gibson/Scott are 'on the same page' regarding financial realties and the strategy going forward.
It feels like it's all good (then again I thought naiively that all was well behind the scenes with Wilder pre-BurnleyGate :()
Fingers crossed we now have proper 'teamwork' going on off the pitch as well as on it.

Thanks must go once again to Steve Gibson for his incredible support.
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I seem to remember it was Mowbray who brought to light our lack of a relegation clause in contracts.
Along with our lack of a database of players around the world.
Didn't he try and smuggle his out of Celtic after they claimed it was their property? Or have I got it confused with an episode of Succession?
 
Badonde said:
I wonder if anyone can provide figures showing how our current salary bill now compares to similar clubs?
Click to expand...
Hard to say. Most clubs don't break out player wages vs non-player wages but you can probably guess that 85-90% of all wages are player wages.
Bristol city wage bill (all included, including NI) in 21-22 was £33M but I think they had one or two stupid high earners at that point.
Luton's wages when promoted last season were £27.5m but that includes chunky promotion bonuses
Preston NE 22-23 had player wages of around £18.5m
Our all-inclusive wages last season were £29.5m

So we paid more than Luton despite them having to pay out promotion bonuses.

You can probably figure that clubs relegated in the last two seasons are paying out more than us but after them we'll be somewhere near to the top wage bill.
 
Its interesting our turnover was £28m compare that with Chelsea's turnover which was £513m for the same period. I expect the gap could be bigger for this season.
 
Relegation clauses are standard but I think it’s fairly common for players to have it removed when signing for clubs likely to be relegated. It’s hard enough for struggling teams to sign players at the best of times but negotiations in the January window would be all but impossible if players thought they would probably be down to 50% wages in 6 months.
 
Bruce said:
Hard to say. Most clubs don't break out player wages vs non-player wages but you can probably guess that 85-90% of all wages are player wages.
Bristol city wage bill (all included, including NI) in 21-22 was £33M but I think they had one or two stupid high earners at that point.
Luton's wages when promoted last season were £27.5m but that includes chunky promotion bonuses
Preston NE 22-23 had player wages of around £18.5m
Our all-inclusive wages last season were £29.5m

So we paid more than Luton despite them having to pay out promotion bonuses.

You can probably figure that clubs relegated in the last two seasons are paying out more than us but after them we'll be somewhere near to the top wage bill.
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I guess being near the top of the chmpionship (non-parachute) wage bill table is partly because we are near the top of the attendance and revenue table, partly that we have an expensive category one academy, and partly because we have a chairmen who invests, I don't think we are any more of a basket case than the rest of the championship sides to be honest
 
We had a problem when we had players on contracts from the Monk/Pulis era and in effect parachute payments allowed the club to give out generous contracts. I think these contracts have all now finished. Luton's wage bill would not have been along way from ours, even though their crowds were only half of ours.
 
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Modern football financials are absolutely crazy.
Running a Club was always a risky business for the owner back in the day.
But now with a global audience /international owners/Billionaires/State-ownership it really has got out of hand.

Good to see Gibson O'Neil publish a strong set of figures. Looks like Gibbo will have to inject even more cash if he wants us to compete.
Meanwhile, accounts for the Gibson O’Neill Company - also for the year up to June 30, 2023 - saw turnover rise from £320m to £341.3m, while operating profit went from £39.4m to £72.9m.
 
indeedido said:
That's not what I posted, or true. Take another look. League receipts were +£2.8m, Cup receipts were -£2.7m.
Not having a go, you just mis-read the numbers.
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Does that mean we made a loss from staging cup matches - seems pretty sizeable considering we got knocked out early in both rounds, even if there were cheap prices in both comps. Surely the other running costs don't cost us that much??? Funny to have such a large negative number for 'receipts'. Are they comparing it to full ticket prices and deducting the difference? (funny way of accounting). Just curious.
 
MVBoro said:
Does that mean we made a loss from staging cup matches - seems pretty sizeable considering we got knocked out early in both rounds, even if there were cheap prices in both comps. Surely the other running costs don't cost us that much??? Funny to have such a large negative number for 'receipts'. Are they comparing it to full ticket prices and deducting the difference? (funny way of accounting). Just curious.
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Cup receipts were £332k.
See post #53.
 
MVBoro said:
Does that mean we made a loss from staging cup matches - seems pretty sizeable considering we got knocked out early in both rounds, even if there were cheap prices in both comps. Surely the other running costs don't cost us that much??? Funny to have such a large negative number for 'receipts'. Are they comparing it to full ticket prices and deducting the difference? (funny way of accounting). Just curious.
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No, not at all.
The numbers are versus previous year.
See post 36.
 
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