Will we still be one of Europe's richest clubs?

[Spijed]

I presume with another guaranteed £100 million for next season it will make us quite cash rich in comparison to other clubs.

http://www.bbc.co.uk/sport/football/38605455" onclick="window.open(this.href);return false;

[BleedingClaret]

Those lists would look good on a large advertising board on a Blackburn Roadside

[Buxtonclaret]

All this 'Rich Club's stuff is really misleading.
I personally hate those labels.
It's all relative to where we are. And what we are.
We can only evolve at the rate the Prem does.
Relegation would see us back amongst the paupers pretty quick.

It's why prudence is so important.

[Royboyclaret]

The problem is that those figures relate to a period almost two years ago, to Jun'15.

Our Operating Profit was £34.7m and Net Profit after tax £30.1m, compared to last year a Loss of £4.8m and £3.7m respectively.

Nevertheless, I'd forecast an Operating Profit of between £50m and £55m for the year to Jun'17, which would place us in the top five in Europe again.

[Chester Perry]

Not rich at all - This is rich in football terms

http://www.bbc.co.uk/news/business-39933026" onclick="window.open(this.href);return false;

Man Utd - 1st quarter turnover £127m+ expected annual revenue £560m - £570m and expected profit of £185m - £195m and that after taking a shocking hit on foreign exchange hedges (more than we have spent in transfers in last 2 seasons) yes they have debt but very manageable for them. If the qualify for Champions league they will earn over £600m next season

[karatekid]

^^^ and don't forget all the profit they make from prawn sandwiches.

[ClaretTony]

Nevertheless, I'd forecast an Operating Profit of between £50m and £55m for the year to Jun'17, which would place us in the top five in Europe again.

That's a hell of a profit given the size of the wage bill and the amount we spent in the transfer market during this season.

[South West Claret.]

That's a hell of a profit given the size of the wage bill and the amount we spent in the transfer market during this season.

Does sound toppy doesn't it.

[Royboyclaret]

Broad brush projection but hopefully will look something like :-

Turnover......£125m
less
Wages.....£45m (after staying up bonuses)
Overheads......£10m
Player Depreciation.......£20m (significant increase based on new player three year contracts)

Op.Profit.......£50m.

[South West Claret.]

Well I do hope your right RBC but can't help thinking there is another outgoing not accounted for, don't ask me what it's just a feeling.

[aggi]

That's a lot of tax to pay.

I'm guessing nearer £40m than £50m (higher wages, higher overheads, a bit of depreciation on fixed assets, loan (player) fees) but we're only talking a few million here and there, either way it will be substantial.

[IanMcL]

Let's hope we invest it in that 'Never Go Down Again Fund!

[Royboyclaret]

".......That's a lot of tax to pay......."

It is but I guess that's the price to pay for having a highly successful year. Last time in the Prem we paid £4.5m tax on an Operating Profit of £34.6m and of course those accounts were based on the previous TV deal.

Anyway, I understand the £50m profit appears to be a substantial figure on first look, so I'll try and add some substance behind the headline figures later.

[randomclaret2]

As CT said, what about transfer fees Roy ?

[aggi]

Transfer fees don't affect the profit directly, only through amortisation over the whole life of the contract, which Roy has suggested will be about £20m which sounds about right.

[randomclaret2]

Thanks aggi

[Royboyclaret]

Ok, here goes......

1. Turnover......I've assumed we beat West Ham on the final day and have a finishing position of 14th. That provides a TV Income of £109m or thereabouts and that figure added to other revenue streams of £16m (match-day and commercial, a small increase on last time in the PL) gives an overall Turnover of £125m.

2. Wages......Last year's base Wage figure was £27.1m before bonuses. Using our historical information for annual increases, plus new players, I've added around a third to give a figure for the year of £37m and then added in a 'staying up' bonus of £8m for a total for the year of £45m.

3. Overheads......Pretty steady year on year so increased by 25% for a total of £10m.

4. Depreciation........Always a bit tricky due to all incoming transfer fees being undisclosed, but assuming the net spend to be say £35m (JBG, Defour, Hendrick, Brady and Westwood, all on three year contracts) then first year depreciation on those plus existing depreciation of £8m gives a revised figure of some £20m. I take aggi's point regarding new depreciation on fixed assets (assumed to be the new training ground), but any such costs based on 2.5% per annum for new buildings will be pretty much insignificant in the grand scheme of things.

5. No interest payable, of course, since we have zero debt.

So, based on the above, a forecast Operating Profit of £50m for year to Jun'17. (£125m - £45m - £10m - £20m).

[Paul Waine]

Ok, here goes......

1. Turnover......I've assumed we beat West Ham on the final day and have a finishing position of 14th. That provides a TV Income of £109m or thereabouts and that figure added to other revenue streams of £16m (match-day and commercial, a small increase on last time in the PL) gives an overall Turnover of £125m.

2. Wages......Last year's base Wage figure was £27.1m before bonuses. Using our historical information for annual increases, plus new players, I've added around a third to give a figure for the year of £37m and then added in a 'staying up' bonus of £8m for a total for the year of £45m.

3. Overheads......Pretty steady year on year so increased by 25% for a total of £10m.

4. Depreciation........Always a bit tricky due to all incoming transfer fees being undisclosed, but assuming the net spend to be say £35m (JBG, Defour, Hendrick, Brady and Westwood, all on three year contracts) then first year depreciation on those plus existing depreciation of £8m gives a revised figure of some £20m. I take aggi's point regarding new depreciation on fixed assets (assumed to be the new training ground), but any such costs based on 2.5% per annum for new buildings will be pretty much insignificant in the grand scheme of things.

5. No interest payable, of course, since we have zero debt.

So, based on the above, a forecast Operating Profit of £50m for year to Jun'17. (£125m - £45m - £10m - £20m).

Hi Royboy, I like your analysis.

Where do outgoing players figure? I guess you've assumed that Michael Keane will leave after 30-Jun?

UTC

[Royboyclaret]

".......Where do outgoing players figure? I guess you've assumed that Michael Keane will leave after 30-Jun?......"


Reasonable enough to suggest Keane will leave but you'd like to believe that a bidding war will develop and delay any transfer beyond the current year end. Of course, if he departs before the end of June then any Profit on Sale (hopefully some £25m/£30m) is added as a separate item on the P&L account. An interesting summer lies ahead for sure.

[Paul Waine]

".......Where do outgoing players figure? I guess you've assumed that Michael Keane will leave after 30-Jun?......"


Reasonable enough to suggest Keane will leave but you'd like to believe that a bidding war will develop and delay any transfer beyond the current year end. Of course, if he departs before the end of June then any Profit on Sale (hopefully some £25m/£30m) is added as a separate item on the P&L account. An interesting summer lies ahead for sure.

I'm thinking now I may be wrong in asking the question. When does the summer transfer window open?

[Royboyclaret]

Officially opens July 1st but players, agents and clubs will be discussing contract terms and final fees long before then.

Probably, on the basis we're going to have a brilliant financial year anyway, the Board may well have a preference to defer any deal until after June anyway.

[ewanrob]

What a great time to be a Claret, amazing amount of money in the pot prior to the start of a new season.

[Transpennine]

Broad brush projection but hopefully will look something like :-

Turnover......£125m
less
Wages.....£45m (after staying up bonuses)
Overheads......£10m
Player Depreciation.......£20m (significant increase based on new player three year contracts)

Op.Profit.......£50m.

Excellent figures for us as a club. However does anyone have any idea how these compare with the other smaller clubs in the premier league? It's all relative after all...

[Royboyclaret]

"............Excellent figures for us as a club. However does anyone have any idea how these compare with the other smaller clubs in the premier league? It's all relative after all......"

Probably best answered by comparing our Wage bill to all the other so-called smaller clubs. With the exception of Hull City, the rest will have a Wage bill twice the size of ours. As a result all of them will struggle to even break-even as opposed to the healthy profit shown at Burnley.

[Sidney1st]

Its a tad surreal reading this thread and then seeing the one about Rovers having the accountants in...

[Oshkoshclaret]

Good analysis Royboy. I'm estimating £5m more on wages than you.

[aggi]

There aren't that many teams making losses in the Premier League nowadays I don't think, it mainly tends to be those in decline. A lot tend to be around the break-even point.

[Claretforever]

All this talk about profit and potentially being paupers again within a few years is exactly why we have to consider spending money on the ground now. If we don't (this is the glass half full bit...look away) we may find ourselves sat in the same crumbling ground in 20 years time. Okay, that's an exaggeration, but it needs some serious TLC.

[Transpennine]

"............Excellent figures for us as a club. However does anyone have any idea how these compare with the other smaller clubs in the premier league? It's all relative after all......"

Probably best answered by comparing our Wage bill to all the other so-called smaller clubs. With the exception of Hull City, the rest will have a Wage bill twice the size of ours. As a result all of them will struggle to even break-even as opposed to the healthy profit shown at Burnley.

Thanks Royboy

[KippaxFifaHD]

With all this money coming in we could even pay off all of Rovers' debt If we wanted to

[Stayingup]

Most profitable. Not richest.