Clarets in the black

[Chester Perry]

Personally I've always gone on the turf to watch Burnley play football. I think the club is in Good hands. Long gone are the collection buckets.

If we finish this season at the expense of next season - i.e. miss a whole season - we will be needing more than the 500 mile campaign

[Grumps]

Three scenarios regarding the 2019/20 season.

Wait and play it to a conclusion under normal conditions - no concerns financially
Play the games behind closed doors - some loss of match day revenue from the four remaining games
End the season - much more serious because of a loss of TV revenue

And that's exactly why the Premier league want to finish the season asap

[tim_noone]

If we finish this season at the expense of next season - i.e. miss a whole season - we will be needing more than the 500 mile campaign

Personally I dont think that will Happen. Que sera for most clubs in the worst case scenario.

[TVC15]

I am struck by this though - the only reason the club posted a profit last year was the sale of Sam Vokes and signing of Crouch

One way of looking it I suppose but even more the case the year before with the sale of Keane and Gray. Selling players at a profit has always been a big part of a financial model.
I don’t think there are any big surprises in the accounts and there is still lots of positives. Our operating profit was still £35m and as you know our net profit was reduced to £5m mainly because of the technicality of player amortisation - and we also don’t have to pay £7m or £8m in tax to HMRC !
Obviously Corvid 19 is a worry but as said it is for most clubs.
Personally I think these are still a strong set of results and continue to demonstrate a well run club. We have a few big contracts coming to an end which gives us a bit of leeway and our creditor and debtor amounts in terms of player purchases and sales look pretty balanced to me.

[Chester Perry]

One way of looking it I suppose but even more the case the year before with the sale of Keane and Gray. Selling players at a profit has always been a big part of a financial model.
I don’t think there are any big surprises in the accounts and there is still lots of positives. Our operating profit was still £35m and as you know our net profit was reduced to £5m mainly because of the technicality of player amortisation - and we also don’t have to pay £7m or £8m in tax to HMRC !
Obviously Corvid 19 is a worry but as said it is for most clubs.
Personally I think these are still a strong set of results and continue to demonstrate a well run club. We have a few big contracts coming to an end which gives us a bit of leeway and our creditor and debtor amounts in terms of player purchases and sales look pretty balanced to me.

I think that is on the money - the two key figures for me are the operating profit and cash position combine that with no debt and we are a fantastically well run club.

[Claret-On-A-T-Rex]

You look at the accounts and then see people on here demanding we loosen the purse strings and go out and spend. The minute we do that then we are running at losses. We can only make profits when we sell players.

I think it is common knowledge that the wages are structured like that with bonus payments. I'd have assumed that the wage bill at £59 million would have been the case had we been relegated with no bonuses paid.

I think the only players who, at the moment, can leave without a fee are Hendrick, Lennon & Bardsley.

We can still get a few million for Gibson, Bardsley looks like he's enjoying himself and probably wants to stay if the deal is good.
I'd hate to lose Hendrick.
I think we've got a great first team, I'm happy with all of them, the fact we were going to fork out m on Cucarella last Summer shows the ambition is there if the right player is available. I used to think Cork was possibly a weak link in midfield but he's alright, our strikers are great, defenders, everyone. Dwight has raised us to another level. Pope is awesome and we look like a very solid top-half team. I've said before, I think this was our best season, I love watching this team play. Beating Man U and the surprising yet magical emergence of Vydra.
What a way to get to safety, that run we went on was fantastic, I enjoyed every one of those games and if it ends voided as "the season that never was" I'll still be buying the blu-ray highlights

[ClaretLoup]

Obviously Corvid 19 is a worry but as said it is for most clubs.

It certainly is nothing to crow about.

[TVC15]

CT - I thought Joe Hart was also end of contract / can leave for free. That’s £2m to £2.5m a year saving in wages (and another £10k in head and shoulders shampoo saving ?)

[ClaretTony]

Claret Tony or others will perhaps know better, but I don't think the Club shares have paid a dividend since the late 1960's ....

They paid a dividend right up to 1980 which was the last year's accounts with Lord as chairman. Despite big losses in some seasons, being a huge shareholder, he always made sure he got his dividend. No dividend has ever been paid since.

[Bordeauxclaret]

The word is profit how much of a loss would we make if we were in the championship ?

Difficult to say but I would think all the squad would have it in their contracts that their wages would reduce.
However even with the parachute payments I’d assume we’d be looking at sales to break even.

[ClaretTony]

CT - I thought Joe Hart was also end of contract / can leave for free. That’s £2m to £2.5m a year saving in wages (and another £10k in head and shoulders shampoo saving ?)

He is - I was only including the players who have played in the first team this season. I'm just assuming Hart will leave in any case.

[Leo the Lion]

According to today’s Daily Mail wages were £37m which accounts for 27 percent of annual turnover. If this is just players wages we spend around £50m on others wage costs.

[Dy1geo]

So I don't go too deep into finances, but in a nutshell we have:

£35 million profit tax year 17/18
5 million profit for tax year 18/19

So roughly £40 million in the bank + squad value of around £250 million ?

Plus a £10-15 million pound training facility, don't owe any money to anyone, are gradually improving our scouting network...
And we own our own ground

Not bad for where we were 10 years ago

My biggest worry is that Bolton are 10 years ahead of us

[TVC15]

According to today’s Daily Mail wages were £37m which accounts for 27 percent of annual turnover. If this is just players wages we spend around £50m on others wage costs.

That would mean we are paying are non playing staff an average of £250k a year...which bearing in mind a fair chunk of them work in the store, ticket office etc sounds way off the mark.

Those guesses say more about the Daily Mail than anything else. They would have the same access to the details of players wages that we do - zero.

[BurnleyFC]

That wage bill is frightening.

If there’s one thing good that might come out of this Coronavirus pandemic it’ll hopefully be footballer’s wages returning to a more ‘realistic’ level.

[Quickenthetempo]

Reading the Price of football twitter thread posted further up, he reckons each club will lose 40m in the premier league if we don't finish the season.

[Clarets4me]

According to today’s Daily Mail wages were £37m which accounts for 27 percent of annual turnover. If this is just players wages we spend around £50m on others wage costs.

Wages, Salaries and associated Social Security & Pension costs were £ 86,619,000 ( Note 6 on p.20 of the Accounts ) ... as virtually everyone knows, our Management and Players have a generous bonus structure based on the " on field " performance ...

[Rileybobs]

But our tight fisted directors are taking the PL money and lining their pockets, remember?

[CrosspoolClarets]

A fairly easy to predict set of accounts. Doesn’t really warrant analysis.

Now, if I were Mike Garlick, what better gesture than to reimburse 20% of fans season tickets immediately. A fair handout to fans, when some will be in desperate need (even with the government help). Help fans cash flow now rather than waiting to see the end game of all the Sky money and where it ends up. That would be a great gesture, we would be the first club to do it, and affordable (clubs are going to end up doing it anyway). If the 4 games go ahead with fans, they can sell tickets and make up the cash then. They would earn it all back and more in goodwill afterwards.

Would be great to be pleasantly surprised that money can actually flow in both directions.

[Woonderbah]

I'll start panicking when the twix reserves are running low

[KateR]

Club very well done, 40MM in the bank is good in normal times, these are not normal times, we/I don't know what income is still coming in, sponsors, TV money etc. but we do know regarding match day receipts and club merchandise are well down towards zero. The bills however remain, utilities for one again, not known, add whatever salaries are still being paid and you quickly have a drain on the 40MM so cash flow (as always) is the most important issue. Of course the really big unknown is the virus C-19 effect, and the fastest way to get cash flow back into the club is to play behind closed doors and televised, this I am assuming can happen much quicker than the it's free to start playing normal again. This is why on the poll I chose that option, nothing to do with league places, trying to stop Liverpool/Leeds, etc. but simply because I firmly believe it is in the clubs best interests.

I 100% know that companies much bigger than BFC with a factor of 10+ X cash in the bank and with limited operations in play bringing in reduced revenue are scenario playing regarding the upturn in being able to increase revenue flow with various scenarios each month in the future. I am totally confident in the board that they will be planning and will arrive at the best outcome for the club and not for themselves.

stay safe everyone.

[MACCA]

But our tight fisted directors are taking the PL money and lining their pockets, remember?

In your opinion.

Many ( the vast majority ) probably see it completely different.

[TVC15]

In your opinion.

Many ( the vast majority ) probably see it completely different.

I think Riley was saying that with a big dollop of sarcasm Macca.

[tim_noone]

I think Riley was saying that with a big dollop of sarcasm Macca.

Easy spot....

[Bfc]

I don't know the date, but the last dividend 10p per share, might have been at the time Bob Lord held his last shareholders meeting, as chairman.

[Chester Perry]

The board get a few expenses paid when representing the club- that is reasonable, apart from that the only way they can get an financial reward is by making the club worth more than when they bought their shareholding, and then selling their shares

[MACCA]

I think Riley was saying that with a big dollop of sarcasm Macca.

I did try and reel him in so to speak, however forgot I had plans, happen a good job as the bait was poor.

Usual tackle shop is shut due to covid 19, and the new stuff isnt up to scratch.

Back to the tried and trusted methods on my next day on the bank.

[MACCA]

Easy spot....

As above.

You were on the ball Timothy

[NewClaret]

The big worry here is the yet to come effect of Covid 19. We obviously don't have any reserves and yet we are still paying wages during the shutdown.

The big clubs will just ask their backers for more money and will probably get it, whereas Burnley don't have anyone like that. I think a lot of hard work over the last few years could be lost and we could be forced to sell to survive again. What happens then though? Let's say we sell McNeil and Pope in the summer and raise 60 to £80 million? We end up with Hart in goal and no attacking threat. It would be so easy to slide into trouble.

The board have done fantastic over the last few years but even they couldn't have forseen the current situation.

Hard times ahead I fear.

Pretty pessimistic view, I’d say.

I’d be gutted if we sold both McNeil and Pope for £60m - £80m. When you think what Liverpool & Chelsea have paid for keepers recently, I’d say we should be looking for that region for Pope alone!

Another way of looking at it is:

- assuming we finish the season in some form, the TV money is secure. There’s a slim possibility it could increase if the PL restart behind closed doors and allow all fixtures to be televised. The TV money dwarfs gate receipts, so we should be fine in that regard.

- we have fairly small gates and our tickets are cheap as chips, comparatively. Relatively, this will impact us less than the bigger clubs with higher attendances/gate receipts. See Juve, Barca, etc. I’m hoping that leads to a lot less transfer activity in Summer from the big clubs, or that the PL elite look abroad for bargains, ignoring “little old Burnley”.

- the league will likely be extended and thus transfer window shortened. Potentially that increases our chances of holding on to the players we want to. Assuming we want to, of course.

- we have no debt and cash in the bank. That puts us in the best possible financial health. I doubt there are many other PL clubs that could boast of being in that position. There will be many chairman/managers twitching their sphincters more tightly than MG/SD. This type of situation is EXACTLY why we should be financially prudent and properly run.

- we have many high-earning players (5?) just a few weeks from their contract end dates. We can cut the wage bill drastically, if needed, in short order. Again, lots of other clubs will not be in this position and will need to pay their high-earners over the summer. That’s assuming that general pressure doesn’t rise on all footballers to take a pay cut through this period.

- the clubs with the rich owners are typically backed by oil rich nations. Oil hit a 17 year low yesterday. They’ll have bigger problems than propping up their trophy assets, like bailing out their nations airlines. And those that do will be in the form of director/shareholder loans. Still a debt that needs to be repaid at some point.

- Finally, we’re a PL club supported by TV revenue. Its the Championship clubs (and downwards), relying on match day income that will be really hurt. The clubs in the PL will come out of this and prosper - the rich get richer, etc. We should be very grateful because those outside the PL will suffer most.

To conclude: I think this could be an absolute god send for us. A leveller, if we use our financial prudence to our advantage. I hope our board are actively looking at committing to deals now for the best Championship players/targets in the summer, while they need the financial certainty, catching our rivals napping. I also hope player wages will soften to more realistic levels across the board, improving our ability to compete more generally for years to come. That may be a too optimistic view - but we should certainly be looking to take advantage, not be taken advantage of.

[dsr]

To go back to the "old" way of doing the sums:

2017-18: Income £140m, Wages £82m, other costs £16m, operating profit £42m.
2018-19: Income £139m, Wages £87m, other costs £17m, operating profit £35m.

From that, player sales and purchases:

2017-18: Players purchased £44m, Players sold £34m, Retained Profit £32m.
2018-19: Players purchased £33m, Players sold £11m, Retained Profit £13m.

That IMO gives a better view of what we are spending and receiving on players. The accounting treatment is logical but unhelpful; for example, if you sell a player for £10m and buy a direct replacement for £10m, how much profit have you made? The "football fan in the real world" view would be £nothing. The "accountant in his ivory tower" view would be £7.5m.

[Chester Perry]

The accounting treatment is logical but unhelpful; for example, if you sell a player for £10m and buy a direct replacement for £10m, how much profit have you made? The "football fan in the real world" view would be £nothing. The "accountant in his ivory tower" view would be £7.5m.

that is not quite right

If the first Player was signed on a 4 year contract and sold at the end of year 2 and not signed an extension in the interim he would have a book value of £5m - sell him for £10m - you get a profit of £5m in the accounts

Sign a replacement for £10m on a 5 year deal - that means a £2m amortisation.

At the end of the year for those 2 transactions the book profit is £3m (£5m minus £2m) ceteris paribus

[Chester Perry]

There are a lot of posts missing from this thread - if it is for what I think then one of mine above should be removed too

[dsr]

that is not quite right

If the first Player was signed on a 4 year contract and sold at the end of year 2 and not signed an extension in the interim he would have a book value of £5m - sell him for £10m - you get a profit of £5m in the accounts

Sign a replacement for £10m on a 5 year deal - that means a £2m amortisation.

At the end of the year for those 2 transactions the book profit is £3m (£5m minus £2m) ceteris paribus

All right, let me be quite specific that in my example the first player was on his second contract, and he was sold on or after 1st July and the replacement was signed on or after 1st July on a four year contract. Which means my deliberately simple example was right, just as your more involved example is also right.

[Chester Perry]

All right, let me be quite specific that in my example the first player was on his second contract, and he was sold on or after 1st July and the replacement was signed on or after 1st July on a four year contract. Which means my deliberately simple example was right, just as your more involved example is also right.

that depends on when he signed his 2nd contract - all remaining amortisation is spread across that contract - it only becomes zero if it is signed at the end of his first. So if he signed a 2 year extension at the end of year 2 of a 4 year contract amortisation would become £1.25m a year

it might seem like nit-picking but it is important to be precise otherwise what is being said can be misconstrued not by you but others

[jojomk1]

Wage bill and net profit pretty much as I predicted months ago.
Again our directors have not taken a penny out in dividends or salaries.

Doesn;t Mr Garlick now take a salary in his new position of Executive Chairman ?

[TVC15]

“Doesn't Mr Garlick now take a salary in his new position of Executive Chairman ?”

The accounts are for year end June 19 and he hasn’t taken any salary in that year.
I am not sure whether he is now taking a salary or not ? Unless Garlick or someone else at the club tells us this we won’t know till we see future year end accounts.

Even if he does take a salary now it would be a surprise if this was anything significant in the context of the amount of profits and revenue generated by the club under his tenure and the fact that if the board were looking to profiteer from the last decades windfalls they would have probably done this by now by way of dividends rather than salaries.

[Chester Perry]

If you listen to that spitting Feathers podcast CT posted yesterday - Garlick isn't working at/for the club everyday - Barry Kilby is the one that is there most days. He seemed very proud that the directors don't get paid if I remember rightly

[Rileybobs]

I did try and reel him in so to speak, however forgot I had plans, happen a good job as the bait was poor.

Usual tackle shop is shut due to covid 19, and the new stuff isnt up to scratch.

Back to the tried and trusted methods on my next day on the bank.

That was bait? It looked like a big shiny hook.

[Mala591]

If you listen to that spitting Feathers podcast CT posted yesterday - Garlick isn't working at/for the club everyday - Barry Kilby is the one that is there most days. He seemed very proud that the directors don't get paid if I remember rightly

The directors don't need the money but maybe the minority shareholders do?

[Chester Perry]

The directors don't need the money but maybe the minority shareholders do?

depends on how much you think the dividend per share is (after the cost of producing the cheques and sending out the letters). I suspect there are few with enough shares to make a dividend meaningful without going into a myriad of other reasons for not paying one at our club

[ewanrob]

Said it on many occasions, very difficult to keep dining at the top table on the tv revenue only....we will in time become an uncontrollable beast.

[MACCA]

That was bait? It looked like a big shiny hook.

I conceded it was poor, its almost like I knew you were being sarcastic...
some still fell for it though, but they were playing the man not the ball.
Got flustered by the name.

[BOYSIE31]

Shows to me paying big wages to some mediocre players - get shut

[TVC15]

I conceded it was poor, its almost like I knew you were being sarcastic...
some still fell for it though, but they were playing the man not the ball.
Got flustered by the name.

It gets very complicated when you are ironically replying to an already ironic post Macca.
Do 2 ironic posts cancel each other out like double negatives ?

[MACCA]

It gets very complicated when you are ironically replying to an already ironic post Macca.
Do 2 ironic posts cancel each other out like double negatives ?

I know 2 wrongs dont make a right, but other than that I'm not sure.

[Clarets4me]

The directors don't need the money but maybe the minority shareholders do?

There are 1,732 individual shareholders, according to the statement filed at Company's House in December, who hold 122,478 shares between them ...

Glancing at the list of shareholders, a large number are historic, some are long deceased and I suspect current addresses are not held for a sizable number. I've read the price of a share has remained at £200 for a number of years, so if a dividend of £10 a share was paid, it would cost the Club £1,224,780 plus all the admin/postage charges ... the major shareholders don't want it, and it's their " train set " !

Let's not pay any dividends ....

[Chester Perry]

@KieranMaguire of Price of Football fame looks at the clarets financial results

https://twitter.com/KieranMaguire/statu ... 8981610497

[Tricky Trevor]

Dont forget the flop signings and wages going straight down the drain.
Will be a scary figure.

Hindsight a wonderful thing, however I doubt we would want to be making those mistakes again.
The approach and plan has changed now.

We have had what on paper look like flop signings almost every year under SD yet we keep improving. Are they brought in just for the dressing room or coaching on the pitch. We’ll never know but it has worked.

[Dy1geo]

I'll start panicking when the twix reserves are running low

The sales of Twix makes up a large part of match day revenue and soon the club will start to panic when they start reaching the Best Before End dates, expect to see them soon on the online shop.

[Mala591]

There are 1,732 individual shareholders, according to the statement filed at Company's House in December, who hold 122,478 shares between them ...

Glancing at the list of shareholders, a large number are historic, some are long deceased and I suspect current addresses are not held for a sizable number. I've read the price of a share has remained at £200 for a number of years, so if a dividend of £10 a share was paid, it would cost the Club £1,224,780 plus all the admin/postage charges ... the major shareholders don't want it, and it's their " train set " !

Let's not pay any dividends ....

If there are 122,478 shares worth £200 each does that mean the share value of the club is £24,495,600 ?

And how does this figure appear on the annual accounts?