Burnley make £22.2 million profit in 2016/17

levraiclaret · Post by **levraiclaret** » Thu Mar 29, 2018 10:31 pm

Paul Waine wrote:Hi KRBFC, part of the answer is in note 12 - Intangible Fixed Assets.

That shows £39 million - at 30-June-2017.

In August though, we sold Keane for £20m and Gray for £18m so surely this amount is greatly understated, how can these accounts show a true and fair view?

Paul Waine · Post by **Paul Waine** » Thu Mar 29, 2018 10:33 pm

KRBFC wrote:Pope £15M
Tark £20M
Brady £15M
Defour £5M
Hendrick £5M
Mee £5M
Heaton £5M
Cork £5M
Barnes £5M
Wood £15M
JBG £5M

Total: £100M and those fees are very low valuations and I didn't mention the other half of the squad.

What are the numbers after each player's name? We didn't pay £15m for Nick Pope, we didn't pay £20m for Tarks. So, it looks like you are estimating current market value. But, then other figures are closer to what we understand was paid - or are perhaps low estimates of their current transfer market value...

An interesting "wonder." Where would we value Michael Keane almost 12 months after his transfer?

ElectroClaret · Post by **ElectroClaret** » Thu Mar 29, 2018 10:40 pm

Paul Waine wrote:
An interesting "wonder." Where would we value Michael Keane almost 12 months after his transfer?

A lot less than we flogged him for, Paul, thats for sure.

Another cracking bit of business.

Paul Waine · Post by **Paul Waine** » Thu Mar 29, 2018 10:55 pm

ElectroClaret wrote:A lot less than we flogged him for, Paul, thats for sure.

Another cracking bit of business.

And, another wonder, could we buy him back, "polish" him up and sell on again?

KRBFC · Post by **KRBFC** » Thu Mar 29, 2018 11:07 pm

Paul Waine wrote:What are the numbers after each player's name? We didn't pay £15m for Nick Pope, we didn't pay £20m for Tarks. So, it looks like you are estimating current market value. But, then other figures are closer to what we understand was paid - or are perhaps low estimates of their current transfer market value...

An interesting "wonder." Where would we value Michael Keane almost 12 months after his transfer?

Surely when evaluating current saleable assets you would value them at approximately the price you would sell them at?

Braindead · Post by **Braindead** » Thu Mar 29, 2018 11:07 pm

It is truly a great time to be a Burnley fan.

Chatting in my local the other night and realised our much lauded and excellent current back five plus Heaton cost approximately £5.5 million! They are the fourth best defence in the richest league in world football and the six players (four of which are internationals) cost less than Bastards paid for Kevin Davies 20 years ago.
That is a phenomenal stat and even more incredible when you factor in the two defenders we have sold on in recent seasons, Trippier and Keane, went for approximately 10 times what we paid for them giving us a £30 million profit give or take.
The business done by the club and the overall way we are run is the absolute blueprint of how to run a football club and still be (relatively) successful without a Russian criminal, Saudi prince or Chinese 'businessmen' ejaculating money into the void.
Well done all concerned and long may it continue.

ElectroClaret · Post by **ElectroClaret** » Thu Mar 29, 2018 11:25 pm

KRBFC wrote:Surely when evaluating current saleable assets you would value them at approximately the price you would sell them at?

But thats not what youve done. As you admit, youve undervalued them. We wouldnt sell any of em at your prices.

As for Keane, youve got to allow for depreciation. (i.e. now playing in a poor defence, where his deficiencies are evident.)

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 12:10 am

levraiclaret wrote:In August though, we sold Keane for £20m and Gray for £18m so surely this amount is greatly understated, how can these accounts show a true and fair view?

Hi levrai, the accounts are prepared under historic cost convention; simply expressed, money paid, less depreciation/amortisation for the assets. where the assets are players contracts, then the amortisation is spread over the length of the contract.

Keane and Gray hadn't been sold at the date of the accounts, 30-June-2017. I guess you know that, implied by your comment. But, the historic cost convention doesn't seek to estimate current market value (unless it is below the amount paid, i.e. asset has been impaired).

This year's accounts, 2017/18, will show the profits on the sale of Keane and Gray = transfer out value, less (cost to buy, less amortisation).

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 12:15 am

charlyt wrote:2016/17 - 16th place.

2017/18- 7th place.

Money worth spending imo..!

Hi charlyt, it's actual 2015/16 Champions in Championship, aggregate wages £39mm.

2016/17 16th in Premier League, wages £61 mm.

So, for 2017/18 7th in Premier League - because of all the transfers in, plus new contracts, my guess is we could be coming out closer to £80 million.
(Pure guess, I've not even attempted to estimate wages for each new signing).

chipbutty · Post by **chipbutty** » Fri Mar 30, 2018 12:43 am

KRBFC wrote:I'm not sure this would go down too well if we were currently bottom of the league, Dyche getting results has somewhat clouded the opinion on the way we're currently run.

What if we were currently top of the league, if we are speaking hypothetically? Would the way we are (fantastically) run still be clouded?

claretandy · Post by **claretandy** » Fri Mar 30, 2018 9:20 am

I would think this years wage bill would be above £70M, but with increased turnover of up to £140M, even at £61M i think there would possibly only be Brighton and Huddersfield with a lower wage bill.

levraiclaret · Post by **levraiclaret** » Fri Mar 30, 2018 10:25 am

Paul Waine wrote:Hi levrai, the accounts are prepared under historic cost convention; simply expressed, money paid, less depreciation/amortisation for the assets. where the assets are players contracts, then the amortisation is spread over the length of the contract.

Keane and Gray hadn't been sold at the date of the accounts, 30-June-2017. I guess you know that, implied by your comment. But, the historic cost convention doesn't seek to estimate current market value (unless it is below the amount paid, i.e. asset has been impaired).

This year's accounts, 2017/18, will show the profits on the sale of Keane and Gray = transfer out value, less (cost to buy, less amortisation).

Hi Paul,

I understand that, but surely there should be a note on post Balance Sheet events detailing the subsequent sales as these are material events. The accounts as they stand are misleading.

The Strategic Review notes that the Net Assets are £40m but does not mention that a surplus of £20m plus was realised on the disposals of Keane and Gray. The Report and Accounts were signed off on 2nd February 2018.

I wonder why the Board are understating the financial strength of the club?

bfcmartin · Post by **bfcmartin** » Fri Mar 30, 2018 11:32 am

We can all estimate a players value but you can't put it down on the accounts as it would show as profit even if you haven't sold anyone. Say for example we think Pope is worth £20 million if he saw out his contract he would be worth nothing so until you sell a player it makes no sense to put what we think is their value on the accounts. I honestly think we have a squad worth around £200 million at today's values and if the club put that down on the accounts it would show as profit even if we sell no one and would pay tax on that without having any income from a sale.

bob-the-scutter · Post by **bob-the-scutter** » Fri Mar 30, 2018 11:56 am

pushpinpussy wrote:Wages up from £38m to £61M.

that's a worry.

Is it pure coincidence Doddy's no longer with us and you've got his shoes on?

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 11:58 am

levraiclaret wrote:Hi Paul,

I understand that, but surely there should be a note on post Balance Sheet events detailing the subsequent sales as these are material events. The accounts as they stand are misleading.

The Strategic Review notes that the Net Assets are £40m but does not mention that a surplus of £20m plus was realised on the disposals of Keane and Gray. The Report and Accounts were signed off on 2nd February 2018.

I wonder why the Board are understating the financial strength of the club?

Hi levrai, it's all in accordance with the accounting rules; the accounts report the profit and loss and cash flow for the period ending 30-June-2017 and the balance sheet on that date. The accounts are required to refer to post-balance sheet events and the player transfers after 30-June-2017 are reported in the Directors' Report: Post Balance Sheet Events. They are also mentioned in the Notes to the Accounts: Note 29 Non-Adjusting Events After the Financial Period.

There is no suggestion that the Directors' are "understating the financial strength of the club." Company report and accounts - whoever they are - are always backward looking.

There are a couple of items that are reported even though the financial obligation will only arise after the end of the accouting period. In both case these are obligations that arise under contracts that have already been signed before the balance sheet date.

Note 26. Commitments, including Capital Commitments £11.8 million. The largest part of this (perhaps all) will be for Barnfield development.

Note 28 Contingent Liabilities: "Additional transfer fees of up to £7,080,000 (2016 - £3,945,000) that may become payable upon achievement of certain conditions contained within transfer contracts if the respective players are still in service of the club on specific future dates, are accounted for in the year in which those conditions are satisfied."

So, the profit on transfer of Micheal Keane and Andre Gray will be accounted for in the accounts for the period ending 30-June-2018 - and we will, most likely, see these accounts for the first time in March-2019. Similarly we will see how much the wage bill has increased for this season (2017-18) and the increased player amortisation for the players signed in the past 3 transfer windows (Amortisation on Jan-17 transfers are only partly accounted for in 2017-18 accounts).

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 11:59 am

bfcmartin wrote:We can all estimate a players value but you can't put it down on the accounts as it would show as profit even if you haven't sold anyone. Say for example we think Pope is worth £20 million if he saw out his contract he would be worth nothing so until you sell a player it makes no sense to put what we think is their value on the accounts. I honestly think we have a squad worth around £200 million at today's values and if the club put that down on the accounts it would show as profit even if we sell no one and would pay tax on that without having any income from a sale.

And, it's not allowed under the accounting rules.

bob-the-scutter · Post by **bob-the-scutter** » Fri Mar 30, 2018 12:07 pm

pushpinpussy wrote:the wage increase is very significant. a lot of claret tinted specs on here tonight.

You'll understand it better when you go to big school!

levraiclaret · Post by **levraiclaret** » Fri Mar 30, 2018 1:54 pm

Paul Waine wrote:Hi levrai, it's all in accordance with the accounting rules; the accounts report the profit and loss and cash flow for the period ending 30-June-2017 and the balance sheet on that date. The accounts are required to refer to post-balance sheet events and the player transfers after 30-June-2017 are reported in the Directors' Report: Post Balance Sheet Events. They are also mentioned in the Notes to the Accounts: Note 29 Non-Adjusting Events After the Financial Period.

There is no suggestion that the Directors' are "understating the financial strength of the club." Company report and accounts - whoever they are - are always backward looking.

There are a couple of items that are reported even though the financial obligation will only arise after the end of the accouting period. In both case these are obligations that arise under contracts that have already been signed before the balance sheet date.

Note 26. Commitments, including Capital Commitments £11.8 million. The largest part of this (perhaps all) will be for Barnfield development.

Note 28 Contingent Liabilities: "Additional transfer fees of up to £7,080,000 (2016 - £3,945,000) that may become payable upon achievement of certain conditions contained within transfer contracts if the respective players are still in service of the club on specific future dates, are accounted for in the year in which those conditions are satisfied."

So, the profit on transfer of Micheal Keane and Andre Gray will be accounted for in the accounts for the period ending 30-June-2018 - and we will, most likely, see these accounts for the first time in March-2019. Similarly we will see how much the wage bill has increased for this season (2017-18) and the increased player amortisation for the players signed in the past 3 transfer windows (Amortisation on Jan-17 transfers are only partly accounted for in 2017-18 accounts).

Hi Paul,

It would be good practice to disclose the financial outcome of post balance sheet date asset disposals that have a material impact on the Net Assets shown on the Balance Sheet.

In fact the normal practice is to include the information in the Directors Report, I think.

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 2:14 pm

levraiclaret wrote:Hi Paul,

It would be good practice to disclose the financial outcome of post balance sheet date asset disposals that have a material impact on the Net Assets shown on the Balance Sheet.

In fact the normal practice is to include the information in the Directors Report, I think.

Hi levrai, I see what you mean. However, in my experience, it's a lot better to stick to the minimum reporting requirement. If there was choice on what is disclosed in post balance sheet events, I'm sure there would be many occasions when all the "positive news" was reported but any negatives left out.

If we look at Burnley's two transfers out, they would result in increase in the new assets, i.e. the net profit on MK and AG sales. But, the transfers in, plus the new contracts for existing players will both impact outgoings, but wouldn't be quantified until the next year's accounts are published.

So, we are all left with estimates and guestimates of the financial impact of changes since the end of the period covered by the accounts.

Of course, the club's management accounts should include (1) budget for the year ahead; (2) monthly tracking of actuals and variances from the budget and (3) a longer term look ahead, maybe 3 to 5 years, including scenarios including "what if we club is relegated?" "what if we lose 2 or 3 players with long term injuries?" etc etc.

Based on comments in Chairman's and Directors' reports, we can be sure that these things are managed properly at Burnley FC. Other clubs might not be so well informed in their financial planning.

levraiclaret · Post by **levraiclaret** » Fri Mar 30, 2018 8:51 pm

[quote="Paul Waine"]Hi levrai, I see what you mean. However, in my experience, it's a lot better to stick to the minimum reporting requirement. /quote]

Hi Paul,
Why better? Surely transparency is better unless there is something to hide?
This brings me back to the nub of my query, why have the Board chosen not to highlight this positive?

Paul Waine · Post by **Paul Waine** » Fri Mar 30, 2018 11:08 pm

levraiclaret wrote:

Hi levrai, my views:

Always, always stick to the accounting rules - deviating from the rules will only end in "trouble" one way or another.

If the club was to highlight some positive news, which relates to a future accounting period - beyond what has already been disclosed according to the rules - will almost always lead to two questions. The first will be asked when the news is disclosed, "Where is the highlighting of the other things that are "not positives?" Then, secondly, when the next set of accounts are released, there will always be comments about either "why no positive news this year, what has gone wrong?" or "But you've already told us that last year, why are you counting it twice?"

Publicly listed companies are subject to more stringent rules: 1) get the accounts out early; 2) let the market know about negatives quickly - so, there are rules about "profit warnings." 3) restrictions on timings of directors and other insiders share dealings and more. These rules are all aimed at ensuring there is a fair market in the shares, no one has an advantage over other shareholders and potential shareholders.

Thus, publicly quoted football clubs are required to make formal stock exchange announcements immediately events that could impact the share price happen. From memory, I think ManU announced Ferguson's decision to retire when he made that decision.

It's the role of the equity/stock analyst to follow publicly traded companies and estimate those companies future earnings (positives and negatives) and provide the markets with a view of the "fair" price for a company's shares. Investors can also make their own decisions.

claretandy · Post by **claretandy** » Sat Mar 31, 2018 2:12 pm

For comparison Bournemouth last season

Turnover £136.5M
Profit £14M
Wages £71M

mikeS · Post by **mikeS** » Sat Mar 31, 2018 2:56 pm

Good sensible financial management from the club.

The dry powder store looks like it needs an extension.

Well done Clarets

Clarets4me · Post by **Clarets4me** » Sun Apr 01, 2018 12:50 am

One of the new corner sections at Turf Moor will, I'm told, include a new permanent Dry Powder storage facility !!

aggi · Post by **aggi** » Tue Apr 03, 2018 2:18 pm

Fairly much as expected in terms of wages and profits although I think a fair few on here were expecting/hoping for wages nearer £45-50m and a commensurate increase in profits.

The main takeaway is how much the Premier League and TV money means to us. The revenue from fans on the day is tiny compared to that coming from TV. I'd expect another jump in wages this year, I'd be surprised if we aren't topping £75-80m. It's not going to be long before people will have to stop saying we can no longer compete with established PL teams on wages, we're in a healthier position than many of them.

The plan that we're going to buy unfinished talent and develop it seems sensible and is a continuation on our current policy which is working well.

iluva64 · Post by **iluva64** » Tue Apr 03, 2018 2:34 pm

The large part of this thread is all about wage structure increases.

The cynical part of me, in looking at the bigger picture sees a club that is making a healthy profit with very good tangible assets in a ground and training facilities.

Our current Directors may wish to cash in their shares to some foreign investor, what better time than now. We have all seen where that leads.

How on earth we try to prevent that I'm not sure. We are a Town Club and without us, the Club is nothing has to be the mantra.

OUR TOWN, OUR TURF, OUR CLUB

houseboy · Post by **houseboy** » Tue Apr 03, 2018 3:05 pm

Sausage wrote:The assurance is right there in the Annual Report:

I wonder how much this clause has affected the players with regard to motivation? I think most normal people would work their backsides off to make sure they didn't get a cut in wages. So now we have it, Dyche isn't a great motivator it's down to the board saying 'if we get relegated you gonna get your wage halved'. Brilliant plan.

Colburn_Claret · Post by **Colburn_Claret** » Tue Apr 03, 2018 3:33 pm

iluva64 wrote:The large part of this thread is all about wage structure increases.

The cynical part of me, in looking at the bigger picture sees a club that is making a healthy profit with very good tangible assets in a ground and training facilities.

Our current Directors may wish to cash in their shares to some foreign investor, what better time than now. We have all seen where that leads.

How on earth we try to prevent that I'm not sure. We are a Town Club and without us, the Club is nothing has to be the mantra.

OUR TOWN, OUR TURF, OUR CLUB

Very difficult to achieve, but I'm sure somebody in Government suggested that fans should be allowed to own 50% of the shares in any club. It isn't completely fool proof, but would restrict the incompetent money grabbers from dragging down clubs by betting the ranch on success.
Although Barry Kilby and his successors have done an unbelievable job, I always look at them as present custodians of the club, rather than owners.
Naive maybe, but I'm certain they didn't pick up the challenge to try and make a profit. They could have done that far easier than investing in BFC. So hopefully the urge to sell up isn't in their conscience. Whatever the truth we should be forever grateful.
UTC

ClaretTony · Post by **ClaretTony** » Tue Apr 03, 2018 5:35 pm

levraiclaret wrote:In August though, we sold Keane for £20m and Gray for £18m so surely this amount is greatly understated, how can these accounts show a true and fair view?

There is reference to Keane, Gray and others in the accounts but they were sold after the accounting yer so couldn't be included. The accounts are a true view as at end June 2017.

Saxoman · Post by **Saxoman** » Tue Apr 03, 2018 5:52 pm

pushpinpussy wrote:Wages up from £38m to £61M.

that's a worry.

And a necessity. Soon you'll find out how rovers got into such a mess. You are one bad season from being in a similar position.

jdrobbo · Post by **jdrobbo** » Tue Apr 03, 2018 5:57 pm

JBG-5 million? I'm biased as I rate him massively, but five million? I would be disappointed if we sold him for four times that valuation. Top, top player with so much more to come.

RocketLawnChair · Post by **RocketLawnChair** » Tue Apr 03, 2018 6:11 pm

Saxoman wrote:And a necessity. Soon you'll find out how rovers got into such a mess. You are one bad season from being in a similar position.

One subtle difference, we buy and pay for everything with our own money. Contracts are adjusted accordingly for starters because of that very reason. Rovers were throwing somebody else’s money at overrated players on ridiculous unsustainable contracts and managers as well. Have you not worked out that’s what your problem was yet ?

Saxoman · Post by **Saxoman** » Tue Apr 03, 2018 6:23 pm

Jacks family contributed 5m per season. The rest was money earned.

RocketLawnChair · Post by **RocketLawnChair** » Tue Apr 03, 2018 6:28 pm

Saxoman wrote:Jacks family contributed 5m per season. The rest was money earned.

OK!

Saxoman · Post by **Saxoman** » Tue Apr 03, 2018 6:34 pm

David Bentley, paid £700,000 sold for 17.5m.. Roque Santa Cruz, paid 3m sold for 18m..

Sidney1st · Post by **Sidney1st** » Tue Apr 03, 2018 6:35 pm

Saxoman wrote:Jacks family contributed 5m per season. The rest was money earned.

Close, but still wrong.

It was approx £3 million a season from the trust on top of the debts they bankrolled which rose to £100 million before it was written off a couple of years before Venkys rocked up.
The club then accrued another £20 million ish of debt which the Venkys took over as part of the sale.

That's the thing Rovers fans struggle to understand, the club hasn't been run financially well since Jack took over.

Sidney1st · Post by **Sidney1st** » Tue Apr 03, 2018 6:36 pm

Saxoman wrote:David Bentley, paid £700,000 sold for 17.5m.. Roque Santa Cruz, paid 3m sold for 18m..

Yet the wage bill far exceeded incoming monies.

Couple with poor revenue streams, low season ticket prices and bang, financial implosion

RocketLawnChair · Post by **RocketLawnChair** » Tue Apr 03, 2018 6:40 pm

Saxoman wrote:David Bentley, paid £700,000 sold for 17.5m.. Roque Santa Cruz, paid 3m sold for 18m..

You've just proved my point you moron !!

RocketLawnChair · Post by **RocketLawnChair** » Tue Apr 03, 2018 6:43 pm

Sidney1st wrote:Close, but still wrong.

It was approx £3 million a season from the trust on top of the debts they bankrolled which rose to £100 million before it was written off a couple of years before Venkys rocked up.
The club then accrued another £20 million ish of debt which the Venkys took over as part of the sale.

That's the thing Rovers fans struggle to understand, the club hasn't been run financially well since Jack took over.

They will wake up one day Sid and realise Jack Walkers business model was only sustainable with Jack Walker. Its like buying ******* bananas and expecting them to last forever.

Saxoman · Post by **Saxoman** » Tue Apr 03, 2018 6:54 pm

You'll find out quick enough its unsustainable for you too if you wish to be top 10 regularly.

Sidney1st · Post by **Sidney1st** » Tue Apr 03, 2018 7:03 pm

Notice the thread title...

There's no need to run the club at a loss consistently, there never has been.
Clubs are duped into over paying in wages and fees for average players.

An English version of Defour would cost either silly wages or transfer fees, I'd name someone but I'd be accused of being obsessed.

Look at what we paid for Lowton and Westwood, yet both players are providing excellent value for money.

Have we made some poor signings?
Yes without a doubt, but they haven't cost us an horrendous amount of money.

Dyche and his team do very well overall with players and we don't appear to have any dick heads at the club, no dressing room discontent from the sub's etc.
Even our big money players have provided value for money.

Even players who've left haven't said anything out of turn.

RocketLawnChair · Post by **RocketLawnChair** » Tue Apr 03, 2018 7:09 pm

Saxoman wrote:You'll find out quick enough its unsustainable for you too if you wish to be top 10 regularly.

Not necessarily we are far more grounded than you muppets. Our next big tests will be when Dyche moves on and there are changes at boardroom level. We have to get that right which is obviously no guarantee One thing I can guarantee is we won’t be impressed by talk of signing a semi retired Messi or Ronaldo like you clowns were with Beckham and Ronaldihio!

BleedingClaret · Post by **BleedingClaret** » Tue Apr 03, 2018 7:31 pm

Saxoman wrote:You'll find out quick enough its unsustainable for you too if you wish to be top 10 regularly.

Not sure anyone really expected a top 10 finish, hoped yes, expected, not really.
When we start believing that we're Man Utd s main rivals that's when the delusion will have kicked in.

levraiclaret · Post by **levraiclaret** » Tue Apr 03, 2018 8:03 pm

ClaretTony wrote:There is reference to Keane, Gray and others in the accounts but they were sold after the accounting yer so couldn't be included. The accounts are a true view as at end June 2017.

The report and accounts were not signed until 2 February 2018 and there is a section in both the report and the accounts for post Balance Sheet events. These notes could have included a reference to the surplus on disposal as it is material in the context of the net assets at the year end and the profit for the year.

I have not said that the surplus should be included in the profit for the accounting year.

dsr · Post by **dsr** » Tue Apr 03, 2018 8:07 pm

levraiclaret wrote:The report and accounts were not signed until 2 February 2018 and there is a section in both the report and the accounts for post Balance Sheet events. These notes could have included a reference to the surplus on disposal as it is material in the context of the net assets at the year end and the profit for the year.

I have not said that the surplus should be included in the profit for the accounting year.

You only report post balance sheet events in detail if their effect is so substantial that it would make a reader of the accounts come to a different conclusion about what they show. Since the money received on transfers was matched (more or less) by amounts paid out, I don't think that would apply.

levraiclaret · Post by **levraiclaret** » Tue Apr 03, 2018 8:14 pm

dsr wrote:You only report post balance sheet events in detail if their effect is so substantial that it would make a reader of the accounts come to a different conclusion about what they show. Since the money received on transfers was matched (more or less) by amounts paid out, I don't think that would apply.

The carrying value of the asset is materially higher.

dsr · Post by **dsr** » Tue Apr 03, 2018 9:14 pm

levraiclaret wrote:The carrying value of the asset is materially higher.

The carrying value of the asset is the most meaningless figure in the books. The carrying value of Ben Mee and Ashley Barnes, for example, is less than the the carrying value of Jon Walters of Nahki Wells. How is that ever meaningful? In real life, we sold players for £40m and bought players for £40m - that seems pretty much like break even. But according to the books when they come out, we will have made £30m profit on players in 2017-18 and £10m loss in the following three years. Would it help understanding of the accounts to say so?

The problem with company accounts nowadays is that accounting standards are developed by people who value logic above all else. They have a logical rule for fixed assets, and they are determined that the rule for an earth moving machine should be the same for a footballer. Football clubs may not take into account the fact that footballers and bulldozers work in different ways.

Here's an example of how stupid accounts can be. If a director lends his company £10m, interest free, to be repaid in 10 years' time, how would you expect the accounts to look? Obviously with £10m cash coming in, £10m creditor on the balance sheet. Well, no. The crazy world of accountancy would have it that (in round numbers) £10m cash coming in, £8m creditor on the balance sheet, £2m PROFIT. Yes, profit. Then over the next 10 years the company's accounts show £200k loss per year even though no money is changing hands and no interest is being charged. That's the biggest idiocy in current accountancy rules, but it's one reason why accounts need to be looked at very much sideways.

But as far as this issue goes, we know how much the players listed in post-balance sheet events cost, and we know how much they were sold for, because that's all in the public domain. Whether they were included in detail or not, doesn't make much difference.

aggi · Post by **aggi** » Wed Apr 04, 2018 10:06 am

Paul Waine wrote: We should all take note of note 6:

DIRECTORS’ AND KEY MANAGEMENT REMUNERATION
The directors of Burnley FC Holdings Limited are considered to be the key management personnel of the group. None of the directors received remuneration from the group during the current or previous year.

(My underline)

Yes, all very impressive. I can only echo Mike Garlick's conclusion to his Chairman's Report:

Let’s enjoy this journey we are all on TOGETHER! Up the Clarets!

I see Daniel Levy at Spurs has bumped up his wage somewhat:

https://twitter.com/SwissRamble/status/ ... 3868066817" onclick="window.open(this.href);return false;

JohnMac · Post by **JohnMac** » Wed Apr 04, 2018 1:38 pm

I don't blame Daniel Levy though, at least he keeps Spurs on an even keel and limits payments to Agents at a sensible level as opposed to the remainder of the top echelon. I am sure I read this is due to him refusing to bow to their often outrageous demands

Paul Waine · Post by **Paul Waine** » Wed Apr 04, 2018 8:41 pm

dsr wrote:The carrying value of the asset is the most meaningless figure in the books. The carrying value of Ben Mee and Ashley Barnes, for example, is less than the the carrying value of Jon Walters of Nahki Wells. How is that ever meaningful? In real life, we sold players for £40m and bought players for £40m - that seems pretty much like break even. But according to the books when they come out, we will have made £30m profit on players in 2017-18 and £10m loss in the following three years. Would it help understanding of the accounts to say so?

The problem with company accounts nowadays is that accounting standards are developed by people who value logic above all else. They have a logical rule for fixed assets, and they are determined that the rule for an earth moving machine should be the same for a footballer. Football clubs may not take into account the fact that footballers and bulldozers work in different ways.

Here's an example of how stupid accounts can be. If a director lends his company £10m, interest free, to be repaid in 10 years' time, how would you expect the accounts to look? Obviously with £10m cash coming in, £10m creditor on the balance sheet. Well, no. The crazy world of accountancy would have it that (in round numbers) £10m cash coming in, £8m creditor on the balance sheet, £2m PROFIT. Yes, profit. Then over the next 10 years the company's accounts show £200k loss per year even though no money is changing hands and no interest is being charged. That's the biggest idiocy in current accountancy rules, but it's one reason why accounts need to be looked at very much sideways.

But as far as this issue goes, we know how much the players listed in post-balance sheet events cost, and we know how much they were sold for, because that's all in the public domain. Whether they were included in detail or not, doesn't make much difference.

Hi dsr, that's a bit of a challenge, quoting "fair value measurement" standards on a football mb - even if it is a Burnley fans mb.

I don't think it's quite an issue of bulldozers and footballers being given the same accounting treatment (I guess we can think of one of two centre halfs from days gone that would have performed like a bulldozer). The footballer asset is the contract and is treated as an intangible asset rather than, as the bulldozer, tangible asset.

You make a great point about the balance sheet value of Ben Mee and Ashley Barnes compared with some of the squad players who've recently been signed.

Of course, Burnley have used the historic cost convention rather than "fair value" (which is very different from "true and fair...").

UTC