Venkys London Ltd accounts

[scotchrover]

Christ, can you imagine if they’d have given Allaradyce £250 million to spend, alongside some of the TV money? I feel sick about where we’d probably be sat now. Instead, we’ve enjoyed away days at Walsall, Southend and Oldham. How someone hasn’t taken those ‘advisors’ to court yet, from Venky’s, is unbelievable! 

Edited March 21, 2019 by scotchrover

[Stuart]

19 minutes ago, scotchrover said:

Christ, can you imagine if they’d have given Allaradyce £250 million to spend, alongside some of the TV money? I feel sick about where we’d probably be sat now. Instead, we’ve enjoyed away days at Walsall, Southend and Oldham. How someone hasn’t taken those ‘advisors’ to court yet, from Venky’s, is unbelievable! 

Football is littered with enough ‘money is no guarantee of success’ stories to make a legal case difficult I’s expect.

Or maybe they are happy with a loss-making enterprise? Tax deductible?

Luckily we have honourable owners and an honourable manager so we shouldn’t worry. Our future is in good hands.

[McClarky]

So in summary we owe £125M or so and are worth probably about £25M.  Does that sound like a reasonable estimate?  

We are insolvent to the tune of £100M and are only propped up by VLLs share capital which isn't really worth the paper it is written on as it's main asset is a football club which is worth bobbins.  Excuse my lack of understanding of accounting principles but this sounds like a fair summary.

What a mess, Venkys would have to stand a loss of more than £200M if they were to sell, I can't see that happening so we're stuck with them for the foreseeable.  

[scotchrover]

20 minutes ago, Stuart said:

Football is littered with enough ‘money is no guarantee of success’ stories to make a legal case difficult I’s expect.

Or maybe they are happy with a loss-making enterprise? Tax deductible?

Luckily we have honourable owners and an honourable manager so we shouldn’t worry. Our future is in good hands.

Maybe it comes down to the sheer embarrassment of what’s happened, that they feel they have to put it right. I once spoke to an Indian chap at a Tube station, who’d emigrated to London; he was embarrassed about what they’d done to us. It was on the relegation day at Brentford, after the game. 

I also wonder about the dirty agent deals that have happened too, and whether much of that was legal. 

Not to compare the two, but how much Uncle Jack spend over the course of his ownership? Surely it can’t too dissimilar to what these clowns have spaffed up the wall, taking out the fact Jack would have spent more in today’s game. 

Edited March 21, 2019 by scotchrover

[Vinjay]

1 hour ago, scotchrover said:

How someone hasn’t taken those ‘advisors’ to court yet, from Venky’s, is unbelievable! 

Except they did.

[Herbie6590]

4 hours ago, MCMC1875 said:

Someone who can appoint a management team that can sign defenders who can head the ball.

These people are idiots. The club will never be a force under these people because they are clueless about running a football club.

This is of their own making. They got rid of Allardyce and appointed Coco. They got rid of the best Chief Exec in the Premier League.

They've put us in this mess, no one else. Fans should be ashamed of backing them.

#VenkysOut

What about the bit where the new owners put in £17m per annum ? 

[Herbie6590]

5 hours ago, tomphil said:

And it would all depend on the wealth and ambition of a new owner as the model Venkys fund is the one they've created. Someone with clout might pay off any external debt then pay off and cut away a lot of deadwood as there is still plenty around wasting resources.  Then we'd be starting off in better shape than right now and ongoing costs would've been reduced.  We are reliant on Venkys funding their model at this level but that doesn't mean there isn't better out there who has to come in and just chuck money into the mess they've created and carry on the same.

Chances of finding them are slim and chances of these lot doing a generous deal even slimmer but in an ideal world it would be doable.

It all gets a bit like the May brexit deal at times, Venkys way or no way at all and bust instead, not true but for now we are stuck with them and their death grip on the club until they jack it in.

 The only external debt is the overdraft which costs us £400k p.a. - Venky’s don’t charge interest on their debt. The losses that they fund are the running costs of the club (in other words wages). 

Any new owner would still have to decide between funding that £17m gap themselves, reducing costs by that amount or increasing turnover (& profit) sufficient to bring in roughly £17m pa.

[Herbie6590]

1 hour ago, Stuart said:

How can they take money out and add it to the debt? It’s like they are robbing Peter to pay Peter!

They are not taking money out...they are moving it around their group companies. It’s the corporate equivalent of moving money between a cheque account and a savings account. It’s a transfer.

[perthblue02]

30 minutes ago, Herbie6590 said:

What about the bit where the new owners put in £17m per annum ? 

That was covered in part of the  MCMC 1875 post that you quoted that said "This is of their own making"

Every decision since November 2010 is on their heads obviously with a little help from their just like a family members. But still they had the final say, apparently. So keeping the mess they created afloat is the least they can do.

 

Nearly a decade later, quarter of a billion for a 3rd division runner up trophy, and some worldwide publicity for being monumental bellends  , Bargain!

Edited March 21, 2019 by perthblue02

[sympatheticclaret]

In peace, as ever ...

Since the end of this accounting period,( 30/6/2018 ), Venkys London Ltd ( Rovers holding Company ), has issued further shares to the value of £16,112, 500. This has been done in 3 Tranches, on 19th July & 16th November last year, and 28th February this year. One must only assume this is to further underwrite the day to day running of the Club ..

The previous post really brought it home regarding what might have happened if Mssrs: Williams and Finn had been given the monies the Venkys have spent, with Big Sam ( or some one of similar competence ), especially if you add back in the compensation monies paid out to the various departed managers.

BFC's accounts will be published c. 5th April, will probably show a decent surplus, but there'll be no end of folk wanting us to spend more on transfers, wages, rebuilding of stands etc. It's been said on here many times what a good job our Directors have done, I just wish some of our lot would realise it ...

Wishing you well, and enjoy the rest of the season ...

[tomphil]

23 minutes ago, perthblue02 said:

That was covered in part of the  MCMC 1875 post that you quoted that said "This is of their own making"

Every decision since November 2010 is on their heads obviously with a little help from their just like a family members. But still they had the final say, apparently. So keeping the mess they created afloat is the least they can do.

 

Nearly a decade later, quarter of a billion for a 3rd division runner up trophy, and some worldwide publicity for being monumental bellends  , Bargain!

Don't forget an audience with Her Maj !

[Stuart]

Just now, sympatheticclaret said:

Wishing you well, and enjoy the rest of the season ...

Thanks... we won’t.

[Herbie6590]

34 minutes ago, perthblue02 said:

That was covered in part of the  MCMC 1875 post that you quoted that said "This is of their own making"

Every decision since November 2010 is on their heads obviously with a little help from their just like a family members. But still they had the final say, apparently. So keeping the mess they created afloat is the least they can do.

 

Nearly a decade later, quarter of a billion for a 3rd division runner up trophy, and some worldwide publicity for being monumental bellends  , Bargain!

I agree totally, it’s of their own making, they are effectively paying a tax on their own naivety but my comment was relating to what we would need from a new owner. A new owner would either have to decide whether to reduce costs to breakeven, fund the difference or somehow persuade fans to contribute £300k per week.

Realistically, the only viable source for £300k per week is Premier League TV money....

[47er]

3 hours ago, Stuart said:

I just can’t see any other way out Paul.

No ned for such pessimism imo. I honestly believe there will always be a Blackburn Rovers. Accrington Stanley did it, so can we. Short-term ?,long-term 

There will be people who will say that its not the same Accrington Stanley that died, and from the lawyers' point of view they are right.

From the fans' point of view, there is absolutely no difference at all.

[Stuart]

Just now, 47er said:

No ned for such pessimism imo. I honestly believe there will always be a Blackburn Rovers. Accrington Stanley did it, so can we. Short-term ?,long-term 

There will be people who will say that its not the same Accrington Stanley that died, and from the lawyers' point of view they are right.

From the fans' point of view, there is absolutely no difference at all.

It took Stanley 38 years to return to league football.

Dont get me wrong, I’m with you, and I’d put up with that if it meant being rid of Venkys but it still means it’s curtains rather than any kind of handing over of the baton.

[47er]

Just now, Stuart said:

It took Stanley 38 years to return to league football.

Dont get me wrong, I’m with you, and I’d put up with that if it meant being rid of Venkys but it still means it’s curtains rather than any kind of handing over of the baton.

I'm like Parson----I'm taking the long view! That's the worst scenario by the way, quite possible that some other group will pick up the baton from Venkys and we can build again.

No-one knows when and from one point but I don't believe we will cease to exist permanently.

[AshleyClifford]

The money owed to the parent company, as this is the legal term that must be used; Has no period for repayment and has no interest. The liability will grow and grow.

The loss during this last period was budgeted for, decision were made to extend contracts sign various players for transfer fees- the loss will not have surprised anyone within the club or Venkys.

 The basic running of the club is around 6m, this fixed costs such as facilities and academy and before salaries. Salary’s will be at £18.5m - so we need a turnover of £24.5 to break even, I suspect we are nearer 19m. So really we should be operating with a wage bill of 11-12m. However would fans be happy ? Could we compete? Could we atract and retain decent players ? 

 

 

[scotchrover]

10 minutes ago, AshleyClifford said:

The money owed to the parent company, as this is the legal term that must be used; Has no period for repayment and has no interest. The liability will grow and grow.

The loss during this last period was budgeted for, decision were made to extend contracts sign various players for transfer fees- the loss will not have surprised anyone within the club or Venkys.

 The basic running of the club is around 6m, this fixed costs such as facilities and academy and before salaries. Salary’s will be at £18.5m - so we need a turnover of £24.5 to break even, I suspect we are nearer 19m. So really we should be operating with a wage bill of 11-12m. However would fans be happy ? Could we compete? Could we atract and retain decent players ? 

 

 

No- they tried that at the end of Bowyer’s period, bring in a load of cheap players who must have been on next  nothing. The result? We struggled and Bowyer got sacked.  The only club I’ve heard of making a profit away from the top flight is Walsall- I’ve no doubt there’s a few other tinpot outfits that do too.

Most football clubs will never make a profit outside the top flight, due to wage demands etc.,unless a completely different business model is adopted, meaning the incorporation of something like house rentals is placed under a club’s name, meaning tenants’ rents go directly into the club’s cash flow . I think that’s what Millwall are trying to do with their stadium redevelopment, and maybe Brentford. Don’t quote me on that though!

Would it be such a daft idea for Venky’s to put a couple of million into detached properties around England, and rent them out? They could use the money earnt to begin cutting the club’s debt (if that’s even legal). 

[awhom111]

I have done these summaries for a few years so I will do one again, but most of the relevant information has been covered here.  Of course, I do accounting related work 250 days a year already and the accounts have to finally be posted on one of the few weekdays where I am not working.  As an accountant who prepares financial statements, that is the perspective that I tend to take when looking at accounts and it is always beneficial to also look at the perspectives of people with other backgrounds in finance and accounting. 

 

Page number references are to the page in the accounts themselves and not to their page number of the electronic file.

 

Page 14 gives us key information about cash flow for the year.  We spent about 700k on transfers and received 1.05m on transfers.  We spent about 800k on payoffs, a decrease from the year before and page 6 tells us that new payoffs totaling 400k were agreed on during the year.  Page 22 has our purchases for the year at 867,500.  Dack was purchased before this period started so this should primarily include the likes of Samuel, Downing, and Bell and it looks like all of our business for this season did not start until July.  This season's business, which does not include January since that was after the date of the accounts, resulted in net purchases of 7.6m, which should only cover guaranteed payments.  Pages 24 and 25 give us more information about cash we owe or are owed for transfers.  We are still owed 1.3m this year and 10k in future years from sales and owe 1.2m this year and 375k in future years.  Potential add-ons that we could owe total 2.1m.  Obviously, with our purchases in the summer, the scale of transfers will change significantly.

 

Here is a chart of purchases per year:

 

 

Here is cash related to transfers and payoffs:

 

 

As expected, turnover decreased due to the difference in media deals in League One as shown on page 20.  That should recover this season while Matchday and Commericial income held well and should increase as well this season, but the graph shows just how far we have fallen over time.  The wage bill has fallen again, although it figures to increase this season and staffing levels continue to drop as well.

 

After a few seasons with not much in way of transfers, we are back to adding in a lot of expense other than wages.  Income should increase to a higher level than our relegation season, but still below the parachute payment days.  Our wage bill will probably not be as high as it was during the relegation season either, but presumably will get there soon after new contracts and signings.  More importantly, after a few years of clearing out some of the costs from past moves, we are committing ourselves to more costs now and in the near future.

[north_ender]

8 hours ago, JHRover said:

I pointed out earlier that even Preston, held up as an example of a well run 'locally owned' club doing quite well on a limited budget, still managed to lose £7 million last year in the Championship despite not really spending much on transfers.

So this is where we are at. Ideas of self-sustainability are pipe dream stuff. Even the so-called well run clubs with minimal spending are still running up big losses.

 

Apparently this figure does not take into account the sales of Hugill (£9.5m) and Cunningham (£3.5m). After paying a bit to Port Vale and Bristol City in sell ons, I suspect it was around £8-9m in overall.

Overall your point is right though that it's almost impossible to be self-sustainable at this level.

Edited March 22, 2019 by north_ender

[Herbie6590]

6 hours ago, scotchrover said:

No- they tried that at the end of Bowyer’s period, bring in a load of cheap players who must have been on next  nothing. The result? We struggled and Bowyer got sacked.  The only club I’ve heard of making a profit away from the top flight is Walsall- I’ve no doubt there’s a few other tinpot outfits that do too.

Most football clubs will never make a profit outside the top flight, due to wage demands etc.,unless a completely different business model is adopted, meaning the incorporation of something like house rentals is placed under a club’s name, meaning tenants’ rents go directly into the club’s cash flow . I think that’s what Millwall are trying to do with their stadium redevelopment, and maybe Brentford. Don’t quote me on that though!

Would it be such a daft idea for Venky’s to put a couple of million into detached properties around England, and rent them out? They could use the money earnt to begin cutting the club’s debt (if that’s even legal). 

Accrington Stanley make a profit 

[tomphil]

8 hours ago, AshleyClifford said:

The money owed to the parent company, as this is the legal term that must be used; Has no period for repayment and has no interest. The liability will grow and grow.

The loss during this last period was budgeted for, decision were made to extend contracts sign various players for transfer fees- the loss will not have surprised anyone within the club or Venkys.

 The basic running of the club is around 6m, this fixed costs such as facilities and academy and before salaries. Salary’s will be at £18.5m - so we need a turnover of £24.5 to break even, I suspect we are nearer 19m. So really we should be operating with a wage bill of 11-12m. However would fans be happy ? Could we compete? Could we atract and retain decent players ? 

 

 

Not forgetting the fact that the wage still contains pay offs of former people and god knows what else so the actual football wage bill IS less.   Didn't TM say it was closer to 8 mill last season ?

Other clubs manage ok on those figures it's all about how it's run from top to bottom.

[tomphil]

Graph number 2 supports the long held beliefs that over Venkys time sales cover purchases more or less so they haven't really shelled out a bean to buy players.  Guaranteeing the wages in the absence of Prem income has been their main task which doesn't seem to bother them at all probably seeing as it's just syphoned off weekly turnover from elsewhere and written off against tax.

Sell to buy if we want big moves in summer ?

[SIMON GARNERS 194]

#financialclusterfcuk

[JHRover]

37 minutes ago, tomphil said:

Graph number 2 supports the long held beliefs that over Venkys time sales cover purchases more or less so they haven't really shelled out a bean to buy players.  Guaranteeing the wages in the absence of Prem income has been their main task which doesn't seem to bother them at all probably seeing as it's just syphoned off weekly turnover from elsewhere and written off against tax.

Sell to buy if we want big moves in summer ?

Of course 'big' moves by our standards in recent years have usually come about in the same way - by the manager traipsing out to India to meet with Madame and her husband over a few days and receiving approval for additional expenditure. The sort of things that require cash in the bank and an injection of extra funds from above. The wages and running costs seem to get heaped onto the debt mountain as losses every year and on it seems to go with no end in sight. Of course we've seen it before how when the manager wants some cash to strengthen the team with 'big' signings.

So their investment in the club is usually just to keep the bills being paid and keep the place ticking over - investment to actually improve the club - whether that be on quality players, infrastructure, staffing - appears to be very little and only comes through if the manager they trust goes out there with a request.