[Albion] Albion accounts 2021/22

[mejonaNO12 aka riskit]

No, I think I must've made a poor explanation on my previous post. To put it as simply as possible: As far as the bottom line for the books for 21/22 are concerned, all of the circa 63m for the combination of the Burn and White sales will be included. Doesn't matter whether all the money was paid up front or not.

Thanks. No, you explained it fine, it's me getting my head round it!

 

[Bozza]

Thanks. No, you explained it fine, it's me getting my head round it!

So we could in theory show a profit, but in reality have not been in receipt of the funds yet.

The reason it confused me is that, as I understand it, Chelsea are amortizing their payments for players over 7 years or so, so I assumed this meant their P&L is showing lower outgoing costs because they are spreading the payments over those 7 years, yet we get to show all income in one period, even if we are receiving payments over several periods. Happy to accept I've misunderstood again!

100% of a player sale is reflected in the P&L at the time the transaction takes place, regardless of how long the actual cash takes to arrive.

A player purchase hits the P&L, bit by bit, in line with the player contractual length. So, a £100m purchase of a player on a 5-year contract, will see a £20m cost in the P&L this year, £20m next year and so on for the full five years. Unless the player is sold, anyway, but keeping it simple, let's assume he stays for the full five years. Again, it doesn't matter how and when the actual cash is paid over. This is broadly the same process for any asset a business buys, be it a computer or a truck.

In short, a P&L reflects business transactions, not cash flow.

 

[nwgull]

Thanks. No, you explained it fine, it's me getting my head round it!

So we could in theory show a profit, but in reality have not been in receipt of the funds yet.

The reason it confused me is that, as I understand it, Chelsea are amortizing their payments for players over 7 years or so, so I assumed this meant their P&L is showing lower outgoing costs because they are spreading the payments over those 7 years, yet we get to show all income in one period, even if we are receiving payments over several periods. Happy to accept I've misunderstood again!

That is correct. Players registrations are assets, so when you pay a fee for a player the asset decreases in value each year as the registration/contract comes to an end, and for the accounts the cost is amortised in a straight line over the term of the contract - e.g. 5m a year if a 20m player was on a 4 year deal. For player sales, the upfront fee (ie not inlcuding the add ons) is all considered in a single hit.

 

[mejonaNO12 aka riskit]

100% of a player sale is reflected in the P&L at the time the transaction takes place, regardless of how long the actual cash takes to arrive.

A player purchase hits the P&L, bit by bit, in line with the player contractual length. So, a £100m purchase of a player on a 5-year contract, will see a £20m cost in the P&L this year, £20m next year and so on for the full five years. Unless the player is sold, anyway, but keeping it simple, let's assume he stays for the full five years. Again, it doesn't matter how and when the actual cash is paid over. This is broadly the same process for any asset a business buys, be it a computer or a truck.

In short, a P&L reflects business transactions, not cash flow.

Perfect. Thank you. Makes sense with the whole Chelsea thing. Seems slightly skewed you can 'improve' your P&L by representing a full future transfer fee to be received but don't have to represent a full future transfer fee that has to be paid.

Thanks for summing up.

 

[Live by the sea]

Ron Pavey will be spinning in his grave


But in all seriousness, whilst there’s a touch of marmite about all of us, PB is very very good at what he does, he’s no doubt the envy of many of the EPL clubs who would pay far more for his services. (Chelsea are currently paying the 2nd best ever Albion manager £12 million a year)


Like the League form, cup run etc, let’s enjoy it while we can, unfortunately those old enough can remember the fallow times after Wembley 83.

Funny enough CEO’s are not paid as much as you might think by the big 6 . I’m lead to believe that PB is one of the highest paid CEO in the PL & wouldn’t get a massive pay rise even if he went to any of the so called big 6 teams .

 

[Bozza]

Perfect. Thank you. Makes sense with the whole Chelsea thing. Seems slightly skewed you can 'improve' your P&L by representing a full future transfer fee to be received but don't have to represent a full future transfer fee that has to be paid.

Thanks for summing up.

It's only a short-term "improvement". You can delay the P&L impact, but you can't escape it entirely.

And that's where the sale of the player comes into play....

Say you buy a £100m player on a 5-year contract, but he turns out to be a bit of a flop. Two years later you sell him for £50m. At that point you still have £60m of P&L impact stored up for future years, £20m per year. So, the P&L impact of that sale isn't a nice £50m positive, but actually a £10m negative (£50m - £60m) as you now have to crystallise that remaining £60m as the "asset" has been disposed of.

Chelsea's approach may help them now, but in a few years it could all unwind quite horribly for them.

 

[Uh_huh_him]

My assumption is that the £400m "debt" is there for any potential takeover/buyout.
The club don't incur any costs, but the Bloom family's money is retrievable from any future sale.

Is that correct?

 

[jackalbion]

My assumption is that the £400m "debt" is there for any potential takeover/buyout.
The club don't incur any costs, but the Bloom family's money is retrievable from any future sale.

Is that correct?

A load of Pompey fans deciding that our owners money is going to run out and we are going to go bust. Obviously they've only got their own experience to take from.

 

[Silverhatch]

The club

Funny enough CEO’s are not paid as much as you might think by the big 6 . I’m lead to believe that PB is one of the highest paid CEO in the PL & wouldn’t get a massive pay rise even if he went to any of the so called big 6 teams .

He’s also deputy chairman, so operating above even a CEO level.

 

[Mancgull]

My assumption is that the £400m "debt" is there for any potential takeover/buyout.
The club don't incur any costs, but the Bloom family's money is retrievable from any future sale.

Is that correct?

That was my assumption too.
The Albion Roar podcast with Kieran is incredibly insightful in terms of some comparisons.
Eg our Semi Final opponents.
Man United’s squad cost c £990m and ours at circa £190m.
Their wage Bill being more than three times ours.
Kieran relates the finances to KPIs and if there was a league table on this we’d be celebrating top spot I’d imagine.

 

[rool]

A load of Pompey fans deciding that our owners money is going to run out and we are going to go bust. Obviously they've only got their own experience to take from.

It's the only thing some other team's fans have to cling onto and throw at us.
There was a talksport (I think) tweet the other day about how well run we are and it took only three replies before a Palace fan stated we had something like the third largest debt in the PL.

 

[dazzer6666]

9th on the second lowest wage bill is simply astonishing. Geniuses running the club

 

[El Presidente]

I am sorry El Pres - but can you explain (again) about the £499 TB investment (or point me in the right direction). £499m is the amount TB has put in from his own pocket to cover infrastructure and previous day to day losses. Initially the money TB put in was interest free - is that still the case ?

Initially the headline figures were £150m or so for the Amex and Lancing - there has been additional investment of course - but is the bulk of the £499m ongoing operating losses - and if so will there be a time where TB can reduce the £499m - or could that only come from a sale ?

£184m in Stadium/Lancing etc
about £220m in operational losses
A LOT invested in the squad.

 

[Uh_huh_him]

9th on the second lowest wage bill is simply astonishing. Geniuses running the club

Until all the agents get together and start looking at renegotiating contracts..

 

[Uh_huh_him]

£184m in Stadium/Lancing etc
about £220m in operational losses
A LOT invested in the squad.

So, theoretically the Cucurella/Bissouma/trossard/Potter money could offset £130m of the £220m losses.

 

[El Presidente]

In terms of CHARTS, this may be of some/no/much interest.

Albion have overtaken Palace in terms of revenue, and not far behind Villa. A lot of this is due to the 9th place finish last season.

Some clubs still to publish 2022 accounts, remember those from 2021 distorted by lockdown and no match tickets sold, so expect to see Newcastle and The Leeds United potentially rise, although there are technical reasons why broadcast income could go down.

 

[El Presidente]

Compared to the first time in the Premier League, it takes the Albion 3 days and 8 hours to earn the same amount of income as the club generated in the whole of the 1979.80 season.

 

[S.T.U cgull]

My assumption is that the £400m "debt" is there for any potential takeover/buyout.
The club don't incur any costs, but the Bloom family's money is retrievable from any future sale.

Is that correct?

Theoretically I think, yes..

But I would question what exactly would external investors see as a great appeal to acquire a partial shareholding in the club?

I cannot imagine Tony selling the majority stake to a 3rd party.. so who would want to come in as a minority shareholder to a business that has not historically recorded profits, this year aside, and whose only means to grow revenues, to combat rising costs is to keep selling players or hope for better Tv deals.. as those are the only meaningful items on the revenue side, season tickets + commercial revenues will not adjust that much..!

Sportswashing PetroStates aside, not many shrewd investors would look at this current model and think wow what an opportunity?

 

[El Presidente]

Wages have also increased significantly since those days of Peter Ward, Gerry Ryan and Eric Steele. My figures are very much estimates so take them as such.

 

[Frankie]

Thanks to those explaining all the financial questions .